Edgar Filing: WILMINGTON TRUST CORP

e10vq

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q


(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended June 30, 2008
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

Commission File Number: 1-14659

WILMINGTON TRUST CORPORATION

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		51-0328154 (I.R.S. Employer Identification No.)

Rodney Square North, 1100 North Market Street, Wilmington, Delaware (Address of principal executive offices)		19890 (Zip Code)

(302) 651-1000

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class	Outstanding as of June 30, 2008

Common stock — Par Value $1.00		67,335,460

WILMINGTON TRUST CORPORATION AND SUBSIDIARIES

Form 10-Q for the three and six months ended June 30, 2008

TABLE OF CONTENTS


			Page

PART I. FINANCIAL INFORMATION
	Item 1	Financial Statements (unaudited)		1
		Consolidated Statements of Condition		1
		Consolidated Statements of Income		3
		Consolidated Statements of Cash Flows		5
		Notes to Consolidated Financial Statements		9
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations
		Company overview		33
		Quarterly results		35
		Regional Banking		45
		Net interest income and net interest margin		54
		Noninterest income		62
		Corporate Client Services		62
		Wealth Advisory Services		64
		Assets under management and administration		66
		Affiliate money managers		67
		Noninterest expenses		70
		Capital resources		71
		Liquidity and funding		73
		Asset quality		76
	Item 3	Quantitative and Qualitative Disclosures About Market Risk		85
	Item 4	Controls and Procedures		88

PART II. OTHER INFORMATION
	Item 1	Legal Proceedings		88
	Item 1A	Risk Factors		88
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		88
	Item 3	Defaults upon Senior Securities		89
	Item 4	Submission of Matters to a Vote of Security Holders		89
	Item 5	Other Information		90
	Item 6	Exhibits		91

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

PART I — FINANCIAL INFORMATION


Item 1.	*Financial Statements*

CONSOLIDATED STATEMENTS OF CONDITION

Wilmington Trust Corporation and subsidiaries


	June 30,			December 31,
	2008			2007
	(In millions, except
	share amounts)
	(Unaudited)

ASSETS
Cash and due from banks	$	249.3		$	260.5
Interest-bearing deposits in other banks		167.8			4.4
Federal funds sold and securities purchased under agreements to resell		110.7			129.6
Investment securities available for sale:
U.S. Treasury		48.6			60.2
Government agencies		473.0			647.0
Obligations of state and political subdivisions		6.5			16.9
Mortgage-backed securities		702.5			730.4
Other securities		293.5			390.2

Total investment securities available for sale		1,524.1			1,844.7

Investment securities held to maturity:
Government agencies (fair value of $0.5 in 2008)		0.5			—
Obligations of state and political subdivisions (fair value of $0.9 in 2008 and $0.9 in 2007)		0.8			0.9
Other securities (fair value of $1.2 in 2008 and $1.2 in 2007)		1.2			1.2

Total investment securities held to maturity		2.5			2.1

FHLB and FRB stock, at cost		22.4			22.4
Loans:
Commercial, financial, and agricultural		2,808.6			2,594.9
Real estate — construction		1,847.0			1,780.4
Mortgage — commercial		1,704.0			1,463.4

Total commercial loans		6,359.6			5,838.7

Mortgage — residential		561.1			562.0
Consumer loans		1,790.3			1,571.6
Loans secured with liquid collateral		569.4			503.5

Total retail loans		2,920.8			2,637.1

Total loans, net of unearned income of $5.2 in 2008 and $5.4 in 2007		9,280.4			8,475.8
Reserve for loan losses		(113.1	)		(101.1	)

Net loans		9,167.3			8,374.7

Premises and equipment, net		154.1			152.1
Goodwill, net of accumulated amortization of $29.8 in 2008 and 2007		345.2			330.0
Other intangible assets, net of accumulated amortization of $35.4 in 2008 and $31.6 in 2007		49.7			38.3
Accrued interest receivable		78.0			80.0
Other assets		262.2			246.9

Total assets	$	12,133.3		$	11,485.7

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

CONSOLIDATED STATEMENTS OF CONDITION — (Continued)


	June 30,			December 31,
	2008			2007
	(In millions, except
	share amounts)
	(Unaudited)

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	994.5		$	966.2
Interest-bearing:
Savings		798.9			659.8
Interest-bearing demand		2,692.3			2,471.8
Certificates under $100,000		977.6			1,011.4
Local certificates $100,000 and over		278.0			356.3

Total core deposits		5,741.3			5,465.5
National certificates $100,000 and over		2,874.4			2,392.0

Total deposits		8,615.7			7,857.5

Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase		1,695.4			1,775.3
U.S. Treasury demand deposits		70.3			77.3
Line of credit and other debt		10.0			139.5

Total short-term borrowings		1,775.7			1,992.1

Accrued interest payable		74.9			78.8
Other liabilities		132.6			169.1
Long-term debt		467.8			267.8

Total liabilities		11,066.7			10,365.3

Minority interest		0.2			0.1

Stockholders’ equity:
Common stock: $1.00 par value, authorized 150,000,000 shares, issued 78,528,346 shares		78.5			78.5
Capital surplus		194.0			188.1
Retained earnings		1,197.3			1,221.1
Accumulated other comprehensive loss		(67.7	)		(28.4	)

Total contributed capital and retained earnings		1,402.1			1,459.3
Less: treasury stock: 11,192,886 shares in 2008 and 11,441,800 shares in 2007, at cost		(335.7	)		(339.0	)

Total stockholders’ equity		1,066.4			1,120.3

Total liabilities and stockholders’ equity	$	12,133.3		$	11,485.7

See Notes to Consolidated Financial Statements

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

CONSOLIDATED STATEMENTS OF INCOME
Wilmington Trust Corporation and subsidiaries


	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2008			2007			2008			2007
	(In millions, except share amounts)
	(Unaudited)

NET INTEREST INCOME
Interest and fees on loans	$	130.0		$	157.4		$	270.4		$	312.4
Interest and dividends on investment securities:
Taxable interest		18.4			21.6			38.7			44.4
Tax-exempt interest		0.1			0.1			0.2			0.3
Dividends		0.8			1.1			1.6			2.4
Interest on deposits in other banks		0.3			0.1			0.4			0.2
Interest on federal funds sold and securities purchased under agreements to resell		0.2			0.4			0.5			1.0
Dividends on FHLB and FRB stock		0.2			0.1			0.5			0.2

Total interest income		150.0			180.8			312.3			360.9

Interest on deposits		44.6			65.8			100.3			132.1
Interest on short-term borrowings		11.8			17.3			27.3			33.6
Interest on long-term debt		8.4			4.9			12.6			11.5

Total interest expense		64.8			88.0			140.2			177.2

Net interest income		85.2			92.8			172.1			183.7
Provision for loan losses		(18.5	)		(6.5	)		(28.4	)		(10.1	)

Net interest income after provision for loan losses		66.7			86.3			143.7			173.6

NONINTEREST INCOME
Advisory fees:
Wealth Advisory Services:
Trust and investment advisory fees		40.2			38.4			79.5			75.4
Mutual fund fees		6.4			5.1			12.8			10.1
Planning and other services		11.2			9.9			21.3			19.4

Total Wealth Advisory Services		57.8			53.4			113.6			104.9

Corporate Client Services:
Capital markets services		12.2			11.2			23.8			21.4
Entity management services		8.6			7.4			16.4			14.5
Retirement services		7.5			3.2			10.7			6.6
Investment/cash management services		3.4			3.0			6.8			6.3

Total Corporate Client Services		31.7			24.8			57.7			48.8

Cramer Rosenthal McGlynn		5.5			6.3			9.5			11.0
Roxbury Capital Management		(1.1	)		0.2			(0.8	)		0.3

Total advisory fees		93.9			84.7			180.0			165.0
Amortization of affiliate intangibles		(2.0	)		(1.1	)		(3.3	)		(2.2	)

Advisory fees after amortization of affiliate intangibles		91.9			83.6			176.7			162.8

Service charges on deposit accounts		7.5			7.0			15.0			13.8
Loan fees and late charges		2.4			2.0			4.4			4.1
Card fees		2.4			2.1			4.6			4.0
Other noninterest income		1.5			2.1			7.7			3.6
Securities (losses)/gains		(12.5	)		0.1			(12.5	)		0.1

Total noninterest income		93.2			96.9			195.9			188.4

Net interest and noninterest income	$	159.9		$	183.2		$	339.6		$	362.0

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

CONSOLIDATED STATEMENTS OF INCOME — (Continued)


	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
	2008			2007		2008		2007
	(In millions, except share amounts)
	(Unaudited)

NONINTEREST EXPENSE
Salaries and wages	$	48.3		$	41.9	$	94.0	$	83.7
Incentives and bonuses		13.2			11.4		27.7		25.4
Employment benefits		12.4			11.5		26.7		26.2
Net occupancy		8.0			6.8		15.5		13.6
Furniture, equipment, and supplies		10.3			9.8		20.1		19.4
Advertising and contributions		3.0			2.8		5.1		5.5
Servicing and consulting fees		3.2			2.8		5.7		5.2
Subadvisor expense		3.5			2.5		6.1		5.0
Travel, entertainment, and training		2.9			2.4		5.3		4.6
Originating and processing fees		2.6			2.7		5.0		5.3
Legal and auditing fees		3.1			2.3		4.9		4.1
Other noninterest expense		11.1			9.1		21.0		18.4

Total noninterest expense before impairment		121.6			106.0		237.1		216.4

Impairment write-down		66.9			—		66.9		—

Total noninterest expense		188.5			106.0		304.0		216.4


NET (LOSS)/INCOME
(Loss)/income before income taxes and minority interest		(28.6	)		77.2		35.6		145.6
Income tax (benefit)/expense		(9.3	)		28.3		13.4		53.1

Net (loss)/income before minority interest		(19.3	)		48.9		22.2		92.5
Minority interest		0.2			—		0.3		0.7

Net(loss)/income	$	(19.5	)	$	48.9	$	21.9	$	91.8

Net (loss)/income per share:
Basic	$	(0.29	)	$	0.71	$	0.33	$	1.34

Diluted	$	(0.29	)	$	0.70	$	0.33	$	1.32

Weighted average shares outstanding (in thousands):
Basic		67,167			68,397		67,117		68,464
Diluted		67,167			69,435		67,390		69,546

See Notes to Consolidated Financial Statements

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

CONSOLIDATED STATEMENTS OF CASH FLOWS
Wilmington Trust Corporation and Subsidiaries


	For the Six Months
	Ended June 30,
	2008			2007
	(In millions)
	(Unaudited)


OPERATING ACTIVITIES


Net income	$	21.9		$	91.8

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for loan losses		28.4			10.1

Provision for depreciation and other amortization		11.1			11.3

Amortization of other intangible assets		3.8			2.8

Minority interest in net income		0.3			0.7

Amortization/(accretion) of discounts and premiums on investment securities available for sale		0.2			(0.3	)

Impairment write-down		66.9			—

Deferred income taxes		(39.2	)		(3.0	)

Originations of residential mortgages available for sale		(54.3	)		(54.2	)

Gross proceeds from sales of residential mortgages		54.9			54.7

Gains on sales of residential mortgages		(0.6	)		(0.5	)

Investment securities impairment		12.6			—

Securities gains		(0.1	)		(0.1	)

Reclassification from accumulated other comprehensive income into earnings of discontinued cash flow hedges		(4.9	)		—

Stock-based compensation expense		4.4			4.6

Tax expense/(benefit) realized on employee exercise of stock options		0.2			(1.0	)

Decrease/(increase) in other assets		4.7			(28.0	)

(Decrease)/increase in other liabilities		(26.4	)		11.9


Net cash provided by operating activities	$	83.9		$	100.8

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)


	For the Six Months
	Ended June 30,
	2008			2007
	(In millions)
	(Unaudited)


INVESTING ACTIVITIES

Proceeds from sales of investment securities available for sale	$	11.9		$	4.1

Proceeds from sales of FHLB and FRB stock, at cost		6.8			—

Proceeds from maturities of investment securities available for sale		612.0			677.3

Proceeds from maturities of investment securities held to maturity		0.1			0.1

Purchases of investment securities available for sale		(388.3	)		(390.3	)

Purchases of investment securities held to maturity		(0.5	)		(0.9	)

Purchases of FHLB and FRB stock, at cost		(6.8	)		—

Cash paid for acquisitions		(93.3	)		(27.5	)

Investment in affiliates		(14.3	)		(17.9	)

Sale of affiliate interest		0.3			—

Purchases of residential mortgages		—			(7.0	)

Net increase in loans		(821.0	)		(179.6	)

Purchases of premises and equipment		(12.7	)		(7.7	)

Dispositions of premises and equipment		1.1			—

Proceeds from sales of interest rate floors		55.1			—


Net cash (used for)/provided by investing activities	$	(649.6	)	$	50.6

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)


	For the Six Months
	Ended June 30,
	2008			2007
	(In millions)
	(Unaudited)


FINANCING ACTIVITIES

Net increase in demand, savings, and interest-bearing demand deposits	$	387.9		$	4.9

Net increase/(decrease) in certificates of deposit		370.3			(171.2	)

Net (decrease)/increase in federal funds purchased and securities sold under agreements to repurchase		(79.9	)		18.6

Net decrease in U.S. Treasury demand		(7.0	)		(10.5	)

Proceeds from issuance of long-term debt		198.7			—

Maturity of other debt		(125.0	)		—

Net decrease in line of credit		(5.0	)		10.0

Cash dividends		(45.7	)		(44.6	)

Distributions to minority shareholders		(0.2	)		(0.5	)

Proceeds from common stock issued under employment benefit plans		5.1			14.7

Tax (expense)/benefit realized on employee exercise of stock options		(0.2	)		1.0

Acquisition of treasury stock		(0.1	)		(42.7	)


Net cash provided by/(used for) financing activities	$	698.9		$	(220.3	)


Effect of foreign currency translation on cash		0.1			0.1


Increase/(decrease) in cash and cash equivalents		133.3			(68.8	)

Cash and cash equivalents at beginning of period		394.5			318.6


Cash and cash equivalents at end of period	$	527.8		$	249.8

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION


Cash Paid During the Six Months Ended June 30	2008		2007
	(In millions) (Unaudited)

Interest	$	144.1	$	180.3
Taxes		58.8		49.2

Liabilities were assumed in connection with our interests in Cramer Rosenthal McGlynn, LLC; Roxbury Capital Management, LLC; and Camden Partners Holdings, LLC; and with our acquisitions of AST Capital Trust Company; Bingham Legg Advisers, LLC; Grant Tani Barash & Altman, LLC; and Amaco (Luxembourg) S.A., as follows:


Liabilities Assumed During the Six Months Ended June 30	2008			2007
	(In millions) (Unaudited)

Fair value of assets acquired	$	112.3		$	4.6
Goodwill and other intangible assets from acquisitions		96.6			43.3
Cash paid		(107.3	)		(45.4	)

Liabilities assumed	$	101.6		$	2.5


Non-Cash Items During the Six Months Ended June 30	2008			2007
	(In millions) (Unaudited)

Net unrealized losses on securities, net of tax of $(30.6) and $(3.9), respectively	$	(54.3	)	$	(6.7	)
Net unrealized gain on equity method investment, net of tax of $0.3 and $0.0, respectively		0.5			—
Investment securities impairment, net of tax of $4.5 and $0.0, respectively		8.1			—
Net unrealized holding gains/(losses) on derivatives used for cash flow hedges, net of tax of $4.9 and $(2.6), respectively		8.8			(5.0	)
Reclassification from accumulated other comprehensive income into earnings of discontinued cash flow hedges, net of tax of $(1.8) and $0.0, respectively		(3.2	)		—
Foreign currency translation adjustment, net of tax of $0.1 and $0.1, respectively		0.3			0.3
Adoption of FASB Interpretation No. 48		—			1.4
Reclassification adjustment of derivative costs, net of tax of $0.0 and $0.2, respectively		0.2			0.5
Postretirement benefits liability adjustment, net of tax of $0.1 and $0.0, respectively		0.1			(0.6	)
Minimum pension liability adjustment, net of tax of $0.1 and $0.5, respectively		0.1			0.8
SERP¹ liability adjustment, net of tax of $0.1 and $0.1, respectively		0.2			0.2


¹		Supplemental Executive Retirement Plan

See Notes to Consolidated Financial Statements

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 1 —	Accounting and reporting policies

We maintain our accounting records and prepare our financial statements in accordance with U.S. generally accepted accounting principles (GAAP) and reporting practices prescribed for the banking industry. Using these principles, we make subjective judgments about uncertainties and trends and we make estimates and assumptions about the amounts we report in our financial statements and notes, including amounts for revenue recognition, the reserve for loan losses, stock-based employee compensation, investment securities valuations, goodwill impairment, loan origination fees, income taxes, and other items. We evaluate these estimates on an ongoing basis.

The precision of these estimates and the likelihood of future changes depend on a number of underlying variables and a range of possible outcomes. Circumstances that differ significantly from our judgments and estimates could cause our actual financial results to differ from our expectations. Our financial results could be affected adversely by, among other things, changes in national or regional economic conditions; changes in market interest rates; significant changes in banking laws or regulations; the effects of accounting pronouncements; increased competition for business; 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 (CRM) and Roxbury Capital Management (RCM); unanticipated changes in the regulatory, judicial, legislative, or tax treatment of business transactions; and uncertainty created by unrest in other parts of the world.

Our consolidated financial statements include the accounts of Wilmington Trust Corporation, our wholly owned subsidiaries, and the subsidiaries in which we are majority owner. We eliminate intercompany balances and transactions in consolidation. For more information about our accounting policies, read Note 2, “Summary of significant accounting policies,” in our 2007 Annual Report to Shareholders.

Although we are majority owner of CRM, we do not consolidate its results because CRM owners retain control over certain governance matters. We do not consolidate the results of RCM because we are not majority owner and RCM owners retain control over certain governance matters. For information on how we account for CRM, RCM, and other subsidiaries and affiliates, read Note 4, “Affiliates and acquisitions,” in our 2007 Annual Report to Shareholders.

We have applied our critical accounting policies and estimation methods consistently in all periods presented in this report and we have discussed these policies with our Audit Committee. The information in this report has not been audited. It includes all adjustments of a normal recurring nature that we believe are necessary for fair presentation. We have reclassified certain prior-year amounts to conform to the current-year presentation. The consolidated financial statements in this report should be read in conjunction with the “Consolidated Financial Statements” and the “Notes to Consolidated Financial Statements” in our 2007 Annual Report to Shareholders.

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We may use the following abbreviations throughout this report:


APB		Accounting Principles Board
ARB		Accounting Research Bulletin
EITF		Emerging Issues Task Force
FASB		The Financial Accounting Standards Board
FHLB		Federal Home Loan Bank
FIN		FASB Interpretation (Number)
FRB		Federal Reserve Board
FSP		FASB Staff Position
GAAP		U.S. generally accepted accounting principles
NYSE		New York Stock Exchange
SAB		Staff Accounting Bulletin
SEC		Securities and Exchange Commission
SFAS		Statement of Financial Accounting Standard


Note 2 —	Stock-based compensation plans

We offer four types of stock-based compensation plans: long-term stock-based incentive plans, an executive incentive plan, an employee stock purchase plan, and a directors’ deferred fee plan. The Compensation Committee and the Select Committee of our Board of Directors administer these plans. We account for these plans in accordance with SFAS No. 123(revised), “Share-Based Payment.” For more information about these plans and how we determine valuations of stock-based awards, read Note 19, “Stock-based compensation plans,” in our 2007 Annual Report to Shareholders.

At June 30, 2008, we held approximately 11.2 million shares of our stock in our treasury. This is more than adequate to meet the share requirements of our current stock-based compensation plans.


	For the Three					For the Six
	Months Ended					Months Ended
	June 30,					June 30,
Effects of Stock-Based Compensation	2008			2007		2008			2007
	(In millions)

Compensation expense
Stock options	$	1.2		$	1.0	$	2.7		$	2.6
Restricted stock		0.4			0.3		1.9			1.7
Employee stock purchase plan		(0.1	)		0.2		(0.2	)		0.3

Total compensation expense	$	1.5		$	1.5	$	4.4		$	4.6
Tax benefit		0.6			0.7		1.6			1.8

Net income effect	$	0.9		$	0.8	$	2.8		$	2.8

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	For the Three Months Ended June 30,		For the Six Months Ended June 30,
Stock Option Valuation Assumptions	2008	2007	2008	2007

Risk-free interest rate	2.95% - 2.95%	4.51% - 4.84%	2.49% - 3.64%	4.48% - 4.84%
Volatility of Corporation’s stock	14.55% - 14.55%	13.53% - 13.96%	13.71% -17.86%	13.53% - 18.25%
Expected dividend yield	4.11% - 4.11%	3.06% - 3.17%	3.85% - 4.34%	2.88% - 3.17%
Expected life of options	4.7 years	4.5 to 8.2 years	4.7 to 8.2 years	4.5 to 8.2 years

In the table above:


	•	We used the Black-Scholes valuation method.

	•	The risk-free interest rate is the U.S. Treasury rate commensurate with the expected life of options on the date of each grant.

	•	We based the volatility of our stock on historical volatility over a span of time equal to the expected life of options.

	•	We based the expected life of stock option awards on historical experience. Expected life is the period of time we estimate that stock options granted will remain outstanding.

Long-term stock-based incentive plans


	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
Options Exercised	2008		2007		2008		2007
	(Dollars in millions)

Number of options exercised		25,550		188,777		196,411		438,687
Total intrinsic value of options exercised	$	0.2	$	1.1	$	0.5	$	2.4
Cash received from options exercised	$	0.7	$	5.6	$	4.5	$	11.3
Tax benefit realized from tax deductions for options exercised	$	—	$	0.6	$	0.1	$	1.6


						Weighted
				Weighted		Average
				Average		Remaining
Stock Option Activity for the	Stock			Exercise		Contractual		Aggregate
Six Months Ended June 30, 2008	Options			Price		Term		Intrinsic Value
								(In millions)

Outstanding at January 1, 2008		6,313,109		$	35.21
Granted		1,100,156		$	33.06
Exercised		(196,411	)	$	30.62
Expired		(73,539	)	$	34.25
Forfeited		(66,686	)	$	40.80

Outstanding at June 30, 2008		7,076,629		$	34.96		3.7 years	$	0.5
Exercisable at June 30, 2008		4,156,053		$	31.79		2.2 years	$	0.5

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unvested stock options

At June 30, 2008, total unrecognized compensation cost related to unvested options was $7.5 million. We expect to record that expense over a weighted average period of 1.8 years.

Restricted stock grants

We amortize the value of restricted stock grants into stock-based compensation expense on a straight-line basis over the requisite service period for the entire award. At June 30, 2008, total unrecognized compensation cost related to restricted stock grants was $2.4 million. We expect to record that expense over a weighted average period of 1.3 years.

Under our incentive plans, the vesting period for restricted stock awards is accelerated upon retirement and in certain other circumstances. When we award restricted stock to people from whom we may not receive services in the future, such as those who are eligible for retirement, we recognize the expense of restricted stock grants when we make the award instead of amortizing the expense over the vesting period of the award. In the 2008 second quarter, we recorded $0.4 million of expense for restricted stock grants.


				Weighted Average
Restricted Stock Activity for				Fair Value at Grant
the Six Months Ended June 30, 2008	Restricted Shares			Date

Outstanding at January 1, 2008		86,131		$	42.77
Granted		84,538		$	32.88
Vested		(22,412	)	$	41.13
Forfeited		—			—

Outstanding at June 30, 2008		148,257		$	37.38

Employee stock purchase plan (ESPP)

For the ESPP, we record stock-based compensation expense that represents the fair value of plan participants’ options to purchase shares, amortized over the plan’s fiscal year. Due to forfeitures in the plan, we recorded net credits in compensation cost during the 2008 second quarter. For the three months ended June 30, 2008, total recognized compensation cost related to the ESPP was $(0.1) million and total unrecognized compensation cost related to this plan was $0.5 million. For the six months ended June 30, 2008, total recognized compensation cost related to the employee stock purchase plan was $(0.2) million and total unrecognized compensation cost related to this plan was $0.5 million.


	Shares Reserved			Subscriptions
Employee Stock Purchase Plan	for Future Subscriptions			Outstanding			Price per Share

Balance at January 1, 2007		500,777			94,001
Subscriptions entered into on June 1, 2007		(106,012	)		106,012		$	36.64
Forfeitures		14,110			(14,110	)	$	36.64 - 37.06
Shares issued		—			(91,911	)	$	37.06

Balance at January 1, 2008		408,875			93,992
New plan appropriation		800,000			—
Forfeitures		78,849			(78,849	)	$	36.64
Shares issued		—			(15,143	)	$	36.64
Expiration of 2004 ESPP		(487,724	)		—
Subscriptions entered into on June 1, 2008		(118,473	)		118,473		$	27.67

Balance at June 30, 2008		681,527			118,473

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Note 3 —	Comprehensive (loss)/income


	For the Three						For the Six
	Months Ended June 30,						Months Ended June 30,
Comprehensive (Loss)/Income	2008			2007			2008			2007
	(In millions)						(In millions)

Net (loss)/income	$	(19.5	)	$	48.9		$	21.9		$	91.8
Other comprehensive income, net of tax:
Net unrealized losses on securities, net of income taxes of $(24.8), $(5.8), $(30.6), and $(3.9)		(44.0	)		(10.1	)		(54.3	)		(6.7	)
Net unrealized gain on equity method investment, net of income taxes of $0.3, $0.0, $0.3, and $0.0		0.5			—			0.5			—
Reclassification adjustment for securities losses/(gains) included in net income, net of income taxes of $4.5, $0.0, $4.5, and $0.0		8.0			(0.1	)		8.0			(0.1	)
Net unrealized holding (losses)/gains arising during the period on derivatives used for cash flow hedges, net of income taxes of $0.0, $(2.7), $4.9, and $(2.6)		—			(5.2	)		8.8			(5.0	)
Reclassification from accumulated other comprehensive income into earnings of discontinued cash flow hedges, net of taxes of $(1.1), $0.0, $(1.8), and $0.0		(2.0	)		—			(3.2	)		—
Reclassification adjustment of derivative costs, net of income taxes of $0.0, $0.1, $0.0, and $0.2		—			0.3			0.2			0.5
Foreign currency translation adjustments, net of income taxes of $0.0, $0.1, $0.1, and $0.1		—			0.2			0.3			0.3
SERP¹ liability adjustment, net of income taxes of $0.1, $0.1, $0.1, and $0.1		0.1			0.2			0.2			0.2
Postretirement benefits liability adjustment, net of income taxes of $0.0, $0.0, $0.1, and $0.0		—			(0.6	)		0.1			(0.6	)
Minimum pension liability adjustment, net of income taxes of $0.0, $0.5, $0.1, and $0.5		0.1			0.8			0.1			0.8

Total comprehensive (loss)/income	$	(56.8	)	$	34.4		$	(17.4	)	$	81.2


¹		Supplemental Executive Retirement Plan

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Note 4 —	Earnings per share


	For the Three					For the Six
	Months Ended June 30,					Months Ended June 30,
Computation of Basic and Diluted Earnings per Share	2008			2007		2008		2007
	(In millions, except earnings per share
	and dividends per share)

Numerator:
Net (loss)/income	$	(19.5	)	$	48.9	$	21.9	$	91.8
Denominator for basic (loss)/earnings per share:
Weighted-average shares		67.2			68.4		67.1		68.5
Effect of dilutive securities:
Employee stock options, nonvested restricted stock, and ESPP¹ subscriptions		—			1.0		0.3		1.0

Denominator for diluted (loss)/earnings per share:
Adjusted weighted-average shares and assumed conversions		67.2			69.4		67.4		69.5
Basic (loss)/earnings per share	$	(0.29	)	$	0.71	$	0.33	$	1.34
Diluted (loss)/earnings per share	$	(0.29	)	$	0.70	$	0.33	$	1.32
Cash dividends declared per share	$	0.345		$	0.335	$	0.68	$	0.65
Anti-dilutive stock options excluded		7.4			0.2		4.5		0.2


¹		Employee Stock Purchase Plan


Note 5 —	Fair value measurement of assets and liabilities

On January 1, 2008, we adopted SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The definitions, framework, and disclosures required by SFAS No. 157 apply to other accounting pronouncements that require or permit fair value measurement. SFAS No. 157 does not require any new fair value measurements of reported balances. The adoption of SFAS No. 157 had no material effect on our financial statements.

In conjunction with the adoption of SFAS No. 157, we adopted FSP SFAS No. 157-2, which amends SFAS No. 157 to allow companies to delay the application of this statement until January 1, 2009, for certain nonfinancial assets and liabilities, such as items that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis.

SFAS No. 157 establishes a three-level hierarchy that prioritizes the factors (inputs) used to calculate the fair value of assets and liabilities.


	•	Level 1. Level 1 inputs are unadjusted quoted prices in active markets for identical assets, such as a New York Stock Exchange closing price. Level 1 is the highest priority in the hierarchy.

	•	Level 2. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as other significant inputs that are observable at commonly quoted intervals, such as interest rates, foreign exchange rates, and yield curves.

	•	Level 3. Level 3 inputs are unobservable inputs. Typically, our own assumptions determine these inputs, since there is little, if any, related market activity. Level 3 is the lowest priority in the hierarchy.

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

If we use multiple input levels to calculate the fair value of an asset or liability, then the lowest level input determines the level for the entire fair value measurement of that asset or liability. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

We determine the fair values and inputs to fair value calculations for investment securities available for sale, interest rate swap contracts, and loans as follows:


	•	Investment securities available for sale. For most of our investment securities, we use prices provided by a third-party vendor who is a global provider of financial market data, analytics, and related services to financial institutions and other market participants. This vendor evaluates a wide range of securities and draws parallels from the trades and quotes of securities with similar features. If the vendor is unable to provide prices, we base fair value on the market prices of comparable instruments as quoted by broker-dealers, with adjustments for maturity dates, underlying assets, credit ratings, and other items, if necessary.

	•	Interest rate swap contracts. To determine the fair values of our interest rate swaps, we obtain data from an independent third-party advisor on interest rate and foreign exchange risk management. This advisor determines the fair values of our interest rate swaps by using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). This advisor bases the variable cash payments (or receipts) on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

To comply with SFAS No. 157, the advisor incorporates credit valuation adjustments to reflect both our nonperformance risk and the respective counterparty’s nonperformance risk. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, the advisor considers the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although most of the inputs we use to value our derivative contracts fall within Level 2 of the fair value hierarchy, for the credit valuation adjustments we consider, we use Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties.


	•	Loans. We do not record loans at fair value on a recurring basis. We record fair value adjustments to loans on a nonrecurring basis to reflect full and partial charge-offs due to impairment. For impaired loans, we use a variety of techniques to measure fair value, such as using the current appraised value of the collateral, discounting the contractual cash flows, and analyzing market data that we may adjust due to the specific characteristics of the loan or collateral.

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of June 30, 2008, we used Level 1, Level 2, and Level 3 inputs to determine the fair value of our investment securities available for sale. For our derivative contracts, the credit valuation adjustments were not significant to the overall valuation, and we used Level 2 inputs to determine our derivative valuations.


	Quoted Prices		Significant		Significant
Fair Value of Assets and Liabilities	in Active Markets		Other Observable		Unobservable
Measured on a Recurring Basis as of	for Identical Assets		Inputs		Inputs
June 30, 2008	(Level 1)		(Level 2)		(Level 3)		Total
	(In millions)

Assets:
Investment securities available for sale	$	15.7	$	1,359.9	$	148.5	$	1,524.1
Interest rate swap contracts		—		16.5		—		16.5

Total assets	$	15.7	$	1,376.4	$	148.5	$	1,540.6
Liabilities:
Interest rate swap contracts	$	—	$	16.5	$	—	$	16.5

Total liabilities	$	—	$	16.5	$	—	$	16.5

As of June 30, 2008, we transferred pooled trust-preferred securities in the corporate securities portfolio from Level 2 to Level 3, using the estimated fair value of the securities at the end of the reporting period. Market prices of comparable instruments have become harder to identify, which has made it necessary for us to make adjustments to the prices obtained to compensate for maturity dates, credit ratings, and other items, as well as for market liquidity and volatility. We have utilized more Level 3 inputs of greater significance, which has required us to move the valuation of these securities from Level 2 to Level 3.


	Pooled
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)	Trust-Preferred
For the Three and Six Months Ended June 30, 2008	Securities
	(In millions)

Beginning balance	$	—
Total gains or losses (realized/unrealized):
Included in earnings (or changes in net assets)		—
Included in other comprehensive income		—
Purchases, issuances, and settlements		—
Transfers in and/or out of Level 3¹		148.5

Ending balance	$	148.5


¹		For financial assets transferred into Level 3, we use the fair value of the assets at the end of the reporting period. For financial assets that are transferred out of Level 3, we use the fair value of the assets at the beginning of the reporting period.

We record any securities gains or losses included in earnings in the securities (losses)/gains line of our income statement.

In accordance with GAAP, we may be required to measure certain assets and liabilities at fair value on a nonrecurring basis. These adjustments typically relate to lower-of-cost or fair value accounting, or write-downs of individual assets due to impairment.

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	Quoted Prices		Significant		Significant
Fair Value of Assets Measured on a	in Active Markets		Other Observable		Unobservable
Nonrecurring Basis as of	for Identical Assets		Inputs		Inputs
June 30, 2008	(Level 1)		(Level 2)		(Level 3)		Total
	(In millions)

Loans	$	—	$	11.8	$	—	$	11.8
Other real estate owned	$	—	$	6.0	$	—	$	6.0

Loan amounts in the table above do not include charged-off loans, because we carry fully charged-off loans at zero on our balance sheet. Also, according to SFAS No. 157, measurements for impaired loans, determined using a present value technique, are not considered fair value measurements under the standard and, therefore, are not included in the table above.


Note 6 —	Derivative and hedging activities

We use derivative financial instruments, primarily interest rate swaps and floors, to manage the effects of fluctuating interest rates on net interest income. We also use interest rate swap contracts to help commercial loan clients manage their interest rate risk. We do not hold or issue derivative financial instruments for trading purposes.

When we enter into an interest rate swap contract with a commercial loan client, we simultaneously enter into a “mirror” swap contract in the same amount with a third party, which exchanges the client’s fixed rate loan payments for floating rate loan payments. In these transactions, we retain the associated credit risk.

As of June 30, 2008, we had:


	•	Client swap contracts of $1,126.9 million and an equal amount of swap contracts with third-party financial institutions, for a total notional amount of $2,253.8 million in swaps associated with loans to clients.

	•	No interest rate floor contracts.

At year-end 2007, we had interest rate floor contracts with a notional amount of $1.00 billion. We sold these contracts in January 2008. We realized a gain on this sale of $35.5 million, which we are reclassifying from accumulated other comprehensive income to interest and fees on loans monthly from February 2008 until July 2014. For amortizing the gain on this sale into earnings, we use the method described by the Derivatives Implementation Group in DIG Issue G20 of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended.

Between July 1, 2008, and June 30, 2009, we expect to reclassify approximately $14.3 million of pretax net gains, or approximately $8.9 million after tax, on cash flow hedges reported in accumulated other comprehensive income. These estimates could differ from the amounts we actually recognize if we add other hedges. During the first six months of 2008, we reclassified $4.9 million into income.

For more information about our derivative and hedging activities, read Note 15, “Derivative and hedging activities,” in our 2007 Annual Report to Shareholders.

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Note 7 —	Reserve for loan losses


	For the Three						For the Six
	Months Ended						Months Ended
	June 30,						June 30,
Changes in the Reserve for Loan Losses	2008			2007			2008			2007
	(In millions)						(In millions)

Reserve for loan losses at beginning of period	$	106.4		$	94.5		$	101.1		$	94.2
Charge-offs		(14.2	)		(5.8	)		(20.5	)		(11.1	)
Recoveries		2.4			2.3			4.1			4.3

Net charge-offs		(11.8	)		(3.5	)		(16.4	)		(6.8	)
Provision charged to operations		18.5			6.5			28.4			10.1

Reserve for loan losses at end of period	$	113.1		$	97.5		$	113.1		$	97.5


Note 8 —	Acquisition

On April 30, 2008, Wilmington Trust FSB, our federally chartered savings bank subsidiary, acquired a 100% equity interest in AST Capital Trust Company (AST). AST’s results of operations were included in our results beginning May 1, 2008. AST is an Arizona-based provider of directed trustee, trust administration, and back-office services offered through financial advisors to retirement plans, high-net-worth individuals and families, and institutional investors. The acquisition expands our presence and service capabilities in the market for retirement plan services.

In accordance with SFAS No. 141, we accounted for this acquisition under the purchase method of accounting. Although we have determined that this acquisition is not a “material business combination” under SFAS 141, we feel that it is important to disclose certain information about this acquisition.

This acquisition was an all-cash transaction. We disclosed the terms of this transaction in Exhibit 10.28 to the 2007 Annual Report to Shareholders on Form 10-K we filed with the SEC on February 29, 2008. The purchase price to complete the transaction was $90 million, with $2.8 million of this amount placed in escrow in accordance with the purchase agreement.

We have allocated the purchase price to the assets acquired and liabilities assumed based on their estimated fair values as of April 30, 2008, the date the transaction closed. This allocation is based on our current estimation, which could change as the fair value calculations are finalized and more information becomes available.

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	As of
Statement of Net Assets Acquired (At Fair Value)	April 30, 2008
	(In millions)

ASSETS
Cash and due from banks	$	46.9
Interest-bearing deposits in other banks		53.4
U.S. Treasury securities available for sale		1.1
Premises and equipment, net		1.4
Goodwill		63.1
Other intangible assets		13.4
Accrued interest receivable		0.3
Other assets		9.2

Total assets	$	188.8


LIABILITIES
Demand deposits	$	93.1
Other liabilities		8.5

Total liabilities		101.6

Net assets acquired	$	87.2

PURCHASE PRICE AND GOODWILL
Purchase price	$	90.0
Less: amount in escrow		(2.8	)

Net purchase price		87.2
AST tangible stockholders’ equity		(11.3	)
Purchase accounting adjustments:
Fixed assets		0.3
Other assets		0.1
Other liabilities		0.2

Excess of purchase price over carrying amount of net tangible assets acquired		76.5
Customer relationship intangibles¹		(13.4	)

Goodwill²	$	63.1


¹		The customer relationship intangibles represent the fair value of AST’s client list at April 30, 2008. The client list will be amortized over a weighted-average period of six years.
²		The full amount of goodwill is expected to be deductible for tax purposes. Goodwill was allocated to the Wealth Advisory Services and Corporate Client Services business segments, as reflected in Note 9, “Goodwill and other intangible assets,” in this report.

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Pro forma Financial Information

The following unaudited pro forma condensed combined financial information presents our results of operations had the AST acquisition taken place at January 1, 2007.


	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
Pro forma Consolidated Condensed Statements of Income	2008			2007		2008		2007
	(In millions, except share amounts)
	(Unaudited)

Net interest income after provision for loan losses	$	66.8		$	87.3	$	144.8	$	175.8
Total noninterest income		95.5			102.4		204.7		199.6
Total noninterest expense¹		191.1			111.0		312.8		226.2
Income tax (benefit)/expense and minority interest²		(9.2	)		28.9		14.2		55.4
Net (loss)/income	$	(19.6	)	$	49.8	$	22.5	$	93.8
Net (loss)/ income per share:
Basic	$	(0.29	)	$	0.73	$	0.34	$	1.37
Diluted	$	(0.29	)	$	0.72	$	0.33	$	1.35
Weighted average shares outstanding (in thousands) Basic		67,167			68,397		67,117		68,464
Diluted		67,167			69,435		67,390		69,546


¹		In both the three- and six-month periods ended June 30, 2008, noninterest expense for AST was reduced by $7.5 million to adjust for a bonus paid by AST as a result of the acquisition.
²		Income tax expense for the three and six months ended June 30, 2008, includes adjustments of $0.0 and $0.4 million, respectively, to reflect federal and state income taxes for AST.


Note 9 —	Goodwill and other intangible assets


	At June 30, 2008						At December 31, 2007
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
Goodwill and Other Intangible Assets	Amount		Amortization		Amount		Amount		Amortization		Amount
	(In millions)

Goodwill (nonamortizing)	$	375.0	$	29.8	$	345.2	$	359.8	$	29.8	$	330.0
Other intangibles (amortizing):
Mortgage servicing rights	$	9.5	$	7.7	$	1.8	$	9.1	$	7.3	$	1.8
Client lists		72.0		24.7		47.3		57.2		21.3		35.9
Acquisition costs		1.7		1.7		—		1.7		1.7		—
Other intangibles		1.9		1.3		0.6		1.9		1.3		0.6

Total other intangibles	$	85.1	$	35.4	$	49.7	$	69.9	$	31.6	$	38.3


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
Amortization Expense of Other Intangible Assets	2008		2007		2008		2007
	(In millions)				(In millions)

Amortization expense of other intangible assets	$	2.3	$	1.4	$	3.8	$	2.8

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Future Amortization Expense of Other Intangible Assets for the
Year Ended December 31	2009		2010		2011		2012		2013
	(In millions)

Estimated annual amortization expense of other intangibles	$	8.8	$	7.5	$	6.3	$	5.1	$	4.0


			Wealth		Corporate		Affiliate
Changes in the Carrying Amount of Goodwill by	Regional		Advisory		Client		Money
Business Segment	Banking		Services		Services		Managers			Total
	(In millions)

Balance as of January 1, 2008	$	3.8	$	107.7	$	25.2	$	193.3		$	330.0
Goodwill acquired		—		18.0		49.8		14.3			82.1
Impairment write-down		—		—		—		(66.9	)		(66.9	)
Sale of affiliate interest		—		—		—		(0.3	)		(0.3	)
Increase in carrying value due to foreign currency translation adjustments		—		—		0.3		—			0.3

Balance as of June 30, 2008	$	3.8	$	125.7	$	75.3	$	140.4		$	345.2

The goodwill from acquisitions recorded for 2008 consists of:


	•	$13.3 million recorded under Wealth Advisory Services in connection with the acquisition of AST Capital Trust Company.

	•	A $3.6 million contingent payment recorded under Wealth Advisory Services in connection with the acquisition of Grant Tani Barash & Altman, LLC.

	•	A $1.1 million contingent payment recorded under Wealth Advisory Services in connection with the June 2007 acquisition of Bingham Legg Advisers, LLC.

	•	$49.8 million recorded under Corporate Client Services in connection with the acquisition of AST Capital Trust Company.

	•	$14.3 million recorded under Affiliate Money Managers in connection with the purchase of a portion of the Class B interests of principals of the Portland, Oregon, office of Roxbury Capital Management.

In the 2008 second quarter, business conditions at affiliate money manager Roxbury Capital Management (RCM) triggered a goodwill impairment. As a result of this test, we determined that the value of our investment in RCM had declined by $66.9 million. This amount, which was recorded as a non-cash impairment expense, reduced net income by $43.5 million, or $0.64 per share (on a diluted basis). We initially disclosed this charge in a June 19, 2008, filing with the Securities and Exchange Commission.

The $0.3 million reduction in the carrying amount of goodwill recorded under Affiliate Money Managers reflected Camden Partners’ repurchase of interests previously sold to us. For more information about our interest in Camden Partners, read Note 4, “Affiliates and acquisitions,” in our 2007 Annual Report to Shareholders.

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	2008						2007
					Weighted						Weighted
					Average						Average
Changes in Other Intangible Assets for the	Amount		Residual		Amortization		Amount		Residual		Amortization
Six Months Ended June 30	Assigned		Value		Period		Assigned		Value		Period
	(In millions)

Mortgage servicing rights	$	0.4		—		8 years	$	0.3		—		8 years
Client lists		14.8		—		7 years		7.0		—		16 years
Increase in carrying value of client lists due to foreign currency translation adjustments		—		—				0.1		—
Other intangibles		—		—				0.1		—		9 years

Total changes in other intangible assets	$	15.2		—			$	7.5		—

The amount recorded for client lists in 2008 consists of:


	•	$10.6 million recorded under Corporate Client Services in connection with the acquisition of AST Capital Trust Company.

	•	$2.8 million recorded under Wealth Advisory Services in connection with the acquisition of AST Capital Trust Company.

	•	$1.4 million recorded under Wealth Advisory Services for subsequent adjustments in connection with the June 2007 acquisition of Bingham Legg Advisers, LLC.

For more information about goodwill and other intangible assets, read Note 2, “Summary of significant accounting policies,” and Note 10, “Goodwill and other intangible assets,” in our 2007 Annual Report to Shareholders.


Note 10 —	Components of net periodic benefit cost

We offer a pension plan, a supplemental executive retirement plan (SERP), and a postretirement benefit plan for which we record net periodic benefit costs. For more information about these plans, read Note 18, “Pension and other postretirement benefits,” in our 2007 Annual Report to Shareholders.


											Postretirement
Components of Net Periodic Benefit Cost for the	Pension Benefits						SERP Benefits				Benefits
Three Months Ended June 30,	2008			2007			2008		2007		2008			2007
	(In millions)

Service cost	$	2.4		$	2.3		$	0.2	$	0.2	$	0.3		$	0.3
Interest cost		3.1			2.8			0.4		0.3		0.6			0.6
Expected return on plan assets		(4.5	)		(4.0	)		—		—		—			—
Amortization of prior service cost		—			0.2			0.1		0.1		(0.1	)		(0.1	)
Recognized actuarial losses		0.1			0.4			0.1		—		0.2			0.2

Net periodic benefit cost	$	1.1		$	1.7		$	0.8	$	0.6	$	1.0		$	1.0

Employer contributions	$	—		$	—		$	0.1	$	0.1	$	0.5		$	1.4

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


											Postretirement
Components of Net Periodic Benefit Cost for the	Pension Benefits						SERP Benefits				Benefits
Six Months Ended June 30,	2008			2007			2008		2007		2008			2007
	(In millions)

Service cost	$	4.9		$	4.5		$	0.4	$	0.3	$	0.7		$	0.7
Interest cost		6.1			5.6			0.8		0.7		1.2			1.2
Expected return on plan assets		(9.0	)		(8.0	)		—		—		—			—
Amortization of prior service cost		—			0.4			0.2		0.2		(0.3	)		(0.3	)
Recognized actuarial losses		0.2			0.9			0.2		0.1		0.4			0.4

Net periodic benefit cost	$	2.2		$	3.4		$	1.6	$	1.3	$	2.0		$	2.0
Employer contributions	$	—		$	—		$	0.3	$	0.3	$	1.2		$	2.7
Expected annual contribution	$	—					$	0.6			$	2.4


Note 11 —	Temporarily impaired investment securities

We periodically review the debt and equity securities in our investment portfolio in order to determine if their fair value is equal to, less than, or in excess of their amortized cost. When the fair value of a security falls below its book value, the security is considered impaired. If we determine that the impairment is temporary, we report an unrealized loss that represents the difference between the security’s fair value and its book value.

During the first six months of 2008, uncertainty in the financial markets increased the volatility in fair value estimates for the securities in our investment portfolio. Compared to year-end 2007, the fair value of securities classified as temporarily impaired was lower, and the associated estimated unrealized losses were higher. We believe these changes were due mainly to liquidity problems in the financial markets, not deterioration in the creditworthiness of the issuers.

At June 30, 2008, the largest concentration of securities with temporary impairments was in mortgage-backed and corporate debt securities. The securities with the most significant reductions in fair value and associated estimated unrealized losses were trust-preferred corporate debt securities held as available for sale. These securities are primarily pools and single issues of trust-preferred securities issued by regional banks, insurance companies, and other financial institutions.

Over the course of the first six months of 2008, the market for trust-preferred securities became increasingly illiquid, due to negative perceptions about the health of the financial sector in general, and the financial stability of the underlying issuers, in particular. This environment made it difficult to determine a fair value for these securities as of June 30, 2008, and to determine whether or not they had become other-than-temporarily impaired.

Using the valuation techniques we describe in this report in Note 5, “Fair value measurement of assets and liabilities,” we determined that, as of June 30, 2008, the fair value of these trust-preferred securities was approximately $100 million lower than their book value. Accordingly, we recorded this amount as a temporary impairment within other comprehensive income. We based our conclusion that these securities were temporarily impaired on a number of factors.

The primary consideration in determining whether a decline in fair value is other-than-temporary is whether or not the contractual cash flows on the structured securities have been impaired. The pooled trust-preferred securities in our portfolio are generally secured by over-collateralization or default protection provided by subordinated tranches, and we assess the individual securities within the pools for significant adverse changes in cash flow

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

projections. As of June 30, 2008, there were no adverse changes in estimated cash flows associated with these securities.

Other factors we considered were:


	•	The causes of the decline in fair value, such as credit problems, interest rate fluctuations, or market volatility.

	•	The severity and duration of the decline.

	•	Our ability and intent to hold these investments until they recovered in value, matured, or were called.

In our opinion, the decline in value of these trust-preferred securities is due to the absence of transactions involving them and the ensuing market illiquidity. Furthermore, we believe their impairment is temporary because:


	•	They have continued to meet their contractual cash flow obligations.

	•	We expect them to continue to meet these obligations in the future.

	•	We have the ability and intent to hold them to maturity.

Subsequent to June 30, 2008, we transferred our entire corporate debt securities portfolio from available-for-sale to held-to-maturity. This portfolio includes single-issue as well as the pooled trust-preferred securities. The original cost of this portfolio was $326.2 million. At the date of transfer, the estimated fair value of this portfolio was $189.1 million.

The difference between the fair value and the original cost basis will be treated like a discount and accreted into interest income over the remaining life of the security. The unrealized loss on these securities, which is in accumulated other comprehensive income, will be amortized as an adjustment of yield in a manner consistent with the discount, thus offsetting or mitigating the effect on interest income of the amortization of the discount. Additionally, the transfer will reduce the volatility and future negative effect on our capital ratios, because held-to-maturity securities are not marked-to-market through other comprehensive income, but carried at their amortized cost basis.

Under GAAP, we are required to assess held-to-maturity securities for impairment consistent with the manner for available-for-sale securities. The evaluation for other-than-temporary impairment is a quantitative and qualitative process, which is subject to various risks and uncertainties. The valuation of the trust-preferred portfolio requires substantial judgment and estimation of factors that are not currently observable in the market, given the illiquidity of these securities. Since June 30, 2008, general market and economic uncertainties have caused the estimated value of these securities to decline further. Because of these and other factors, it is possible that we could deem these securities to be other-than-temporarily impaired in future reporting periods. Such a determination would require us to write down the value of these securities.

The perpetual preferred stocks in our investment portfolio consist mostly of securities issued by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Sharp declines in the market valuations of these stocks and those of two other financial institutions in the portfolio, coupled with uncertainty about future market conditions, led us to determine that these stocks were other-than-temporarily impaired under GAAP as of June 30, 2008. We recorded the $12.6 million decline in their value as a securities loss for the 2008 second quarter.

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


	Fewer Than 12 Months					12 Months or More					Total
			Estimated					Estimated					Estimated
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Temporarily Impaired Securities at June 30, 2008	Value		Losses			Value		Losses			Value		Losses
	(In millions)

U.S. Treasury	$	3.1	$	—		$	—	$	—		$	3.1	$	—
Government agencies		36.5		(0.4	)		—		—			36.5		(0.4	)
Mortgage-backed securities		282.0		(4.1	)		220.1		(6.9	)		502.1		(11.0	)
Corporate securities		160.7		(70.3	)		66.5		(30.0	)		227.2		(100.3	)
Preferred stock		—		—			—		—			—		—

Total temporarily impaired securities	$	482.3	$	(74.8	)	$	286.6	$	(36.9	)	$	768.9	$	(111.7	)

At June 30, 2008, total securities available for sale had a fair value of $1,524.1 million, which included the temporarily impaired securities above of $768.9 million. Other securities in the portfolio had a fair value of $755.2 million, which included an unrealized gain of $6.2 million.


	Fewer Than 12 Months					12 Months or More					Total
			Estimated					Estimated					Estimated
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Temporarily Impaired Securities at December 31, 2007	Value		Losses			Value		Losses			Value		Losses
	(In millions)

U.S. Treasury	$	20.0	$	—		$	—	$	—		$	20.0	$	—
Government agencies		116.1		—			82.9		(0.1	)		199.0		(0.1	)
Mortgage-backed securities		68.3		(0.5	)		500.2		(12.8	)		568.5		(13.3	)
Corporate securities		189.3		(14.4	)		67.3		(4.4	)		256.6		(18.8	)
Preferred stock		29.6		(6.6	)		12.3		(2.7	)		41.9		(9.3	)

Total temporarily impaired securities	$	423.3	$	(21.5	)	$	662.7	$	(20.0	)	$	1,086.0	$	(41.5	)

At December 31, 2007, total securities available for sale had a fair value of $1,844.7 million, which included the temporarily impaired securities above of $1,086.0 million. Other securities in the portfolio had a fair value of $758.7 million, which included an unrealized gain of $8.4 million.

We retain temporarily impaired securities because we know when they will mature, they have no credit delinquencies, they generate strong cash flows, and because we have the ability and intent to hold them until they recover in value or mature, at which point their fair values equal their book values. While we have determined these unrealized losses to be temporary, a sustained and prolonged downturn in the financial markets could cause us to reassess our determination. For more information about our temporarily impaired investment securities, read Note 6, “Investment securities,” in our 2007 Annual Report to Shareholders.


Note 12 —	Borrowings

The long-term debt of $467.8 million on our balance sheet at June 30, 2008, included $28.0 million in FHLB advances, $(8.7) million of fair value adjustments related to interest rate swaps on our long-term debt, $(0.3) million of unamortized discounts on $250.0 million of subordinated long-term debt that matures on April 15, 2013, and

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$(1.2) million of unamortized discounts on $200.0 million of subordinated long-term debt that matures on April 2, 2018.

On April 1, 2008, we issued $200 million of subordinated long-term debt in 10-year, 8.50% notes. This offering was subscribed fully upon issue. These notes will mature on April 2, 2018.

We used part of the proceeds of this offering to repay an aggregate principal amount of $125 million in subordinated long-term debt that expired on May 1, 2008, and to fund, in part, our acquisition of AST Capital Trust Company. We intend to use the remaining proceeds for general corporate purposes.

Subordinated Long-Term Debt

Fixed

Amount Issued

Semiannual

Payment

Issue Date

and Outstanding

Term

Payment Dates

Rates

Maturity

(Dollars in millions)

April 4, 2003

250.0

10 years

April 15 and October 15

4.875

April 15, 2013

April 1, 2008

200.0

10 years

April 1 and October 1

8.50

April 2, 2018

None of our long-term debt is redeemable prior to maturity or subject to any sinking fund. For more information about our borrowings, read Note 12, “Borrowings,” in our 2007 Annual Report to Shareholders.


Note 13 —	Income taxes

Income tax expense and the effective tax rate changed from previous periods due to the non-cash write-down of our investment in Roxbury Capital Management and the associated tax benefits net of a valuation allowance.


Income Taxes and Tax Rate	2008 Q2			2007 Q2			2008 YTD			2007 YTD
	(Dollars in millions)

Pre-tax (loss)/income	$	(28.6	)	$	77.2		$	35.6		$	145.6
Income tax (benefit)/expense	$	(9.3	)	$	28.3		$	13.4		$	53.1
Effective tax rate		32.52	%		36.66	%		37.64	%		36.47	%

Under FIN 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109,” we classify interest expense and penalties related to uncertain tax positions as income tax expense. We have reviewed and, where necessary, accrued for tax liabilities for open periods, and we have applied our methodology consistently.

We file income tax returns in more than 30 tax jurisdictions. In some of these jurisdictions, we file returns for multiple legal entities. Generally, our income tax returns are subject to scrutiny by tax auditors in these jurisdictions for a period of three to six years (open tax years). As of June 30, 2008, there were no material changes to our financial position regarding uncertain tax positions. No open statutes of limitations have been extended materially in any of our significant locations. The tax years 2004 through 2006 remain subject to federal examination.


Note 14 —	Segment reporting

We report business segment results for four segments. There is a segment for each of our three businesses: Regional Banking, Wealth Advisory Services, and Corporate Client Services. The fourth segment combines the results from our affiliate money managers, Cramer Rosenthal McGlynn (CRM) and Roxbury Capital Management (RCM).

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We report segment assets on an average-balance basis, because we:


	•	Believe average balances offer a more relevant measure of business trends than period-end balances;

	•	Maintain and review all internal segment data on an average-balance basis; and

	•	Base some expense allocations on an average-balance basis.

During the 2008 first quarter, we recorded a gain of $3.5 million in noninterest income from the redemption of 81 shares related to Visa Inc.’s initial public offering (IPO). In addition, we reversed $1.4 million from other liabilities in connection with the IPO and recorded the release in noninterest income. Both items were recorded in the Regional Banking segment.

For more information about these segments, read Note 1, “Nature of business,” and Note 23, “Segment reporting,” in our 2007 Annual Report to Shareholders. Our business segment accounting policies are the same as those described in Note 2, “Summary of significant accounting policies,” in our 2007 Annual Report to Shareholders.

We have reported segment data on an operating basis consistent with our consolidated information. We believe that operating results — those that exclude the effects of the two write-downs incurred during the period — present a more relevant measure of ongoing business trends and offer a better basis of comparison with prior periods. For information about these write-downs, read Note 9, “Goodwill and other intangible assets,” and Note 11, “Temporarily impaired investment securities,” in this report.

We have adjusted segment data for prior periods, due to changes in reporting methodology and/or organizational structure.

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


				Wealth			Corporate			Affiliate
	Regional			Advisory			Client			Money
For the Three Months Ended June 30, 2008	Banking			Services			Services			Managers			Totals
	(In millions)

Net interest income/(loss)	$	80.7		$	5.3		$	1.8		$	(2.6	)	$	85.2
Provision for loan losses		(17.1	)		(1.4	)		—			—			(18.5	)

Net interest income/(loss) after provision		63.6			3.9			1.8			(2.6	)		66.7
Advisory fees:
Wealth Advisory Services		0.6			55.2			2.0			—			57.8
Corporate Client Services		0.4			—			31.3			—			31.7
Affiliate Money Managers		—			—			—			4.4			4.4

Advisory fees		1.0			55.2			33.3			4.4			93.9
Amortization of affiliate intangibles		—			(1.1	)		(0.7	)		(0.2	)		(2.0	)

Advisory fees after amortization of affiliate intangibles		1.0			54.1			32.6			4.2			91.9
Other noninterest income		12.9			0.5			0.4			—			13.8
Securities gains		0.1			—			—			—			0.1

Net interest and noninterest income		77.6			58.5			34.8			1.6			172.5
Noninterest expense		(41.9	)		(50.8	)		(28.9	)		—			(121.6	)

Segment profit before income taxes		35.7			7.7			5.9			1.6			50.9
Applicable income taxes and minority interest		13.1			2.9			2.0			0.9			18.9

Segment operating income	$	22.6		$	4.8		$	3.9		$	0.7		$	32.0
Investment securities impairment charge														(12.6	)
Roxbury Capital Management impairment charge														(66.9	)
Applicable income taxes for impairment charges														28.0

Reported net loss													$	(19.5	)


Depreciation and amortization	$	3.3		$	2.7		$	1.9		$	0.3		$	8.2

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


				Wealth			Corporate			Affiliate
	Regional			Advisory			Client			Money
For the Three Months Ended June 30, 2007	Banking			Services			Services			Managers			Totals
	(In millions)

Net interest income/(loss)	$	86.4		$	6.1		$	3.5		$	(3.2	)	$	92.8
Provision for loan losses		(6.1	)		(0.4	)		—			—			(6.5	)

Net interest income/(loss) after provision		80.3			5.7			3.5			(3.2	)		86.3
Total advisory fees:
Wealth Advisory Services		0.7			51.3			1.4			—			53.4
Corporate Client Services		0.3			—			24.5			—			24.8
Affiliate Money Managers		—			—			—			6.5			6.5

Advisory fees		1.0			51.3			25.9			6.5			84.7
Amortization of affiliate intangibles		—			(0.7	)		(0.2	)		(0.2	)		(1.1	)

Advisory fees after amortization of affiliate intangibles		1.0			50.6			25.7			6.3			83.6
Other noninterest income		12.6			0.4			0.2			—			13.2
Securities gains		0.1			—			—			—			0.1

Net interest and noninterest income		94.0			56.7			29.4			3.1			183.2
Noninterest expense		(40.3	)		(44.7	)		(21.0	)		—			(106.0	)

Segment profit before income taxes		53.7			12.0			8.4			3.1			77.2
Applicable income taxes and minority interest		19.6			4.5			2.8			1.4			28.3

Reported net income	$	34.1		$	7.5		$	5.6		$	1.7		$	48.9


Depreciation and amortization	$	3.4		$	2.3		$	1.2		$	0.3		$	7.2

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


				Wealth			Corporate			Affiliate
	Regional			Advisory			Client			Money
For the Six Months Ended June 30, 2008	Banking			Services			Services			Managers			Totals
	(In millions)

Net interest income/(loss)	$	161.0		$	11.3		$	4.7		$	(4.9	)	$	172.1
Provision for loan losses		(26.4	)		(2.0	)		—			—			(28.4	)

Net interest income/(loss) after provision		134.6			9.3			4.7			(4.9	)		143.7
Total advisory fees:
Wealth Advisory Services		1.4			108.2			4.0			—			113.6
Corporate Client Services		0.7			—			57.0			—			57.7
Affiliate Money Managers		—			—			—			8.7			8.7

Advisory fees		2.1			108.2			61.0			8.7			180.0
Amortization of affiliate intangibles		—			(2.0	)		(0.8	)		(0.5	)		(3.3	)

Advisory fees after amortization of affiliate intangibles		2.1			106.2			60.2			8.2			176.7
Other noninterest income		29.6			1.2			0.9			—			31.7
Securities gains		0.1			—			—			—			0.1

Net interest and noninterest income		166.4			116.7			65.8			3.3			352.2
Noninterest expense		(83.4	)		(101.5	)		(52.2	)		—			(237.1	)

Segment profit before income taxes		83.0			15.2			13.6			3.3			115.1
Applicable income taxes and minority interest		30.1			5.6			4.4			1.6			41.7

Segment operating income	$	52.9		$	9.6		$	9.2		$	1.7		$	73.4
Investment securities impairment charge														(12.6	)
Roxbury Capital Management impairment charge														(66.9	)
Applicable income taxes for impairment charges														28.0

Reported net income													$	21.9


Depreciation and amortization	$	6.5		$	5.0		$	3.1		$	0.5		$	15.1
Investment in equity method investees		—			—			—			163.7			163.7
Segment average assets		9,607.2			1,481.1			286.3			219.7			11,594.3

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


				Wealth			Corporate			Affiliate
	Regional			Advisory			Client			Money
For the Six Months Ended June 30, 2007	Banking			Services			Services			Managers			Totals
	(In millions)

Net interest income/(loss)	$	170.2		$	12.4		$	7.2		$	(6.1	)	$	183.7
Provision for loan losses		(9.7	)		(0.4	)		—			—			(10.1	)

Net interest income/(loss) after provision		160.5			12.0			7.2			(6.1	)		173.6
Total advisory fees:
Wealth Advisory Services		1.3			100.8			2.8			—			104.9
Corporate Client Services		0.6			—			48.2			—			48.8
Affiliate Money Managers		—			—			—			11.3			11.3

Advisory fees		1.9			100.8			51.0			11.3			165.0
Amortization of affiliate intangibles		—			(1.4	)		(0.3	)		(0.5	)		(2.2	)

Advisory fees after amortization of affiliate intangibles		1.9			99.4			50.7			10.8			162.8
Other noninterest income		24.1			0.9			0.5			—			25.5
Securities gains		0.1			—			—			—			0.1

Net interest and noninterest income		186.6			112.3			58.4			4.7			362.0
Noninterest expense		(82.0	)		(92.7	)		(41.7	)		—			(216.4	)

Segment profit before income taxes		104.6			19.6			16.7			4.7			145.6
Applicable income taxes and minority interest		38.2			7.4			6.2			2.0			53.8

Reported net income	$	66.4		$	12.2		$	10.5		$	2.7		$	91.8


Depreciation and amortization	$	6.5		$	4.5		$	2.3		$	0.5		$	13.8
Investment in equity method investees		—			—			—			218.8			218.8
Segment average assets		9,144.5			1,391.2			207.7			205.9			10,949.3


Note 15 —	Accounting pronouncements

The following recent accounting pronouncements may affect our financial condition and results of operations.

SFAS No. 158. In September 2006, FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(revised).” SFAS No. 158 requires employers to recognize a plan’s over-funded status as an asset, or a plan’s under-funded status as a liability, on its balance sheet. SFAS No. 158 also requires employers to measure, as of the end of the employer’s fiscal year, the assets and obligations that determine the plan’s funded status, and to recognize changes in the funded status of a defined benefit postretirement plan as other comprehensive income in the year in which the changes occur.

The requirement to recognize the funded status of plans was effective for us as of the fiscal year that ended December 31, 2006. For information about how the adoption of this requirement affected our financial statements, read Note 18, “Pension and other postretirement benefits,” in our 2007 Annual Report to Shareholders. The requirement to measure plan assets and benefit obligations as of the end of our fiscal year will be effective for us for

Wilmington Trust Corporation
Form 10-Q for the three and six months ended June 30, 2008

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the fiscal year ending December 31, 2008. We do not expect this requirement to have a material effect on our financial statements.

SFAS No. 160. In December 2007, FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51.” SFAS No. 160 amends ARB No. 51 and establishes the accounting and reporting standards for a noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 requires a noncontrolling interest, sometimes called a minority interest, in a subsidiary to be reported as a component of equity in the consolidated financial statements. SFAS No. 160 also changes the income statement presentation of noncontrolling interests, establishes a single method of accounting for a change in a parent’s ownership percentage in a subsidiary that does not result in deconsolidation, requires a parent to recognize a gain or loss in net income when a subsidiary is deconsolidated, and requires various other disclosures. SFAS No. 160 will be effective for us with the fiscal year that begins on January 1, 2009. It will change the presentation and accounting treatment of affiliates in which we have noncontrolling interests, and of our subsidiaries in which others hold noncontrolling interests.

SFAS No. 141(revised 2007). In December 2007, FASB issued SFAS No. 141(revised 2007), “Business Combinations.” SFAS No. 141(revised 2007) retains the fundamental requirement of SFAS No. 141 that the acquisition method of accounting be used for all business combinations. However, SFAS No. 141(revised 2007) does make significant changes to the accounting for a business combination achieved in stages, the treatment of contingent consideration, transaction and restructuring costs, and other aspects of business combination accounting. SFAS No. 141(revised 2007) will be effective for us with the fiscal year that begins on January 1, 2009, and will change our accounting treatment for business combinations on a prospective basis.

SFAS No. 161. In March 2008, FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133.” SFAS No. 161 amends SFAS No. 133 and its related guidance by requiring expanded disclosures about derivative instruments and hedging activities. This Statement will require us to provide additional disclosure about a) how and why we use derivative instruments; b) how we account for derivative instruments and related hedged items under SFAS No. 133 and its related interpretations; and c) how derivative instruments and related hedged items affect our financial condition, financial performance, and cash flows. SFAS No. 161 does not change the accounting for derivatives under SFAS No. 133. SFAS No. 161 will be effective for us with the fiscal year and interim periods beginning January 1, 2009, with early adoption encouraged.

SFAS No. 162. In May 2008, FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 is intended to correct flaws in the GAAP hierarchy which, up to now, had been defined in the U.S. auditing literature. The purpose of the new standard is to improve financial reporting by providing a consistent framework for determining what accounting principles should be used when preparing U.S. GAAP financial statements. SFAS No. 162 will be effective for us 60 days following the SEC’s approval of the PCAOB amendments to Audit Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.” The adoption of SFAS No. 162 will not have a material effect on our financial statements.

FSP EITF 03-6-1. In June 2008, FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” FSP EITF 03-6-1 holds that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities. Because the awards are considered participating securities, the issuing entity is required to apply the two-class method of computing basic and diluted earnings per share. FSP EITF 03-6-1 will be effective for us with the fiscal year that begins on January 1, 2009. We do not expect the adoption of FSP EITF 03-6-1 to have a material effect on our financial statements.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Item 2.	*Management’s Discussion and Analysis of Financial Condition and Results of Operations.*

COMPANY OVERVIEW

Wilmington Trust Corporation is (we are) a Delaware corporation and a financial holding company under the Bank Holding Company Act. Our primary wholly owned subsidiary, Wilmington Trust Company, was founded in 1903.

We are a relationship management company that helps clients increase and preserve their wealth. We do this through a variety of deposit-taking, lending, fiduciary, trustee, financial planning, investment consulting, asset management, insurance, broker-dealer, and administrative services.

Our mission is to help our clients succeed. Our driving force is sustainable earnings growth and consistent profitability with low volatility. Our strategy is to deliver consistent results by investing in businesses that have the most potential for long-term growth or high operating profit margins; being the market leader in each of our businesses; and increasing profitability without compromising our overall risk profile.

We deliver our services through three businesses: Regional Banking, Corporate Client Services, and Wealth Advisory Services. Separately, each of these businesses provides different kinds of services, has a different geographic scope, and targets specific kinds of clients. Collectively, these three businesses generate a diversified mix of revenue that helps us produce consistent results across changing economic cycles.

Regional Banking

Our Regional Banking activities are concentrated in the mid-Atlantic region of the United States.

Commercial banking services. We offer a variety of commercial, commercial construction, and commercial mortgage loans, as well as cash management and other banking services. Most of our commercial loans have floating rates, are secured by the borrower’s assets, and are supported by personal guarantees.

We target our commercial banking activities to middle-market clients throughout the mid-Atlantic region who have family-owned or closely held businesses with annual sales of up to $250 million. We define this region as the state of Delaware and the parts of Maryland, New Jersey, and Pennsylvania that are contiguous to Delaware, including those along the I-95 corridor from Princeton, New Jersey, to Baltimore, Maryland. We serve clients in this region with teams of commercial lenders and wealth advisors.

Consumer and other retail banking services. These services include a variety of deposit services, loans to individuals, and residential mortgage loans. On our balance sheet, loans secured with liquid collateral are recorded under retail loans, but these loans are mainly associated with Wealth Advisory Services clients. We focus our retail branch banking, residential mortgage lending, and core deposit-gathering activities in the state of Delaware. At June 30, 2008, we had 48 branch offices in Delaware.

We prefer to originate loans ourselves, rather than purchase loans from brokers or other banks. This helps ensure that our underwriting standards are applied consistently throughout the portfolio. In general, we do not pursue syndicated lending opportunities.

We consider average loan and deposit balances, rather than period-end balances, to be a better indicator of trends in the Regional Banking business, because average balances represent client activity over the longer term. This is especially true of core deposit balances, which can be affected by large short-term deposits made at month-ends by Corporate Client Services clients.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Most of the income from Regional Banking is net interest income. Regional Banking also generates noninterest income in the form of fees charged for loan and deposit services.

Corporate Client Services

The Corporate Client Services (CCS) business provides a variety of trustee, agency, asset management, and administrative services for institutional clients who:


	•	Use capital markets financing structures. For these clients, we provide owner trustee, indenture trustee, and other specialized services for securitizations, capital equipment financing, and other types of capital markets transactions. We also provide indenture, successor, collateral, or liquidating trustee services in corporate debt issuances, reorganizations, debt restructurings, mergers, and bankruptcies. In addition, we provide indenture trustee, administrative, and analytical services for collateralized debt obligations.

	•	Seek to establish and maintain legal residency (nexus) for special purpose entities and captive insurance companies in preferred jurisdictions. We provide office space, independent directors, and corporate governance and administrative services for these entities.

	•	Use independent trustees to hold retirement plan assets. Our clients are plan sponsors who prefer to use different providers for each of the investment management, record keeping, and trustee aspects of administering retirement and other employee benefit plans.

	•	Need investment and cash management services.

CCS has offices in Arizona, Delaware, Minnesota, Nevada, New York, South Carolina, Vermont, Grand Cayman, the Channel Islands (Jersey), Amsterdam (The Netherlands), Dublin (Ireland), London (England), Frankfurt (Germany), and Luxembourg. At the end of 2007, CCS had clients in 86 countries.

Wealth Advisory Services

The Wealth Advisory Services (WAS) business helps individuals and families who have substantial wealth preserve and protect their wealth, minimize taxes, transfer wealth to future generations, support charitable endeavors, and manage their business affairs. We target clients who have liquid assets of $10 million or more.

WAS services include:


	•	Asset management services. For our clients, managing investment risk is as important as increasing investment return. We help clients meet both objectives by emphasizing diversification, forward-looking asset allocation, tactical rebalancing, and a blend of active and passive funds. We provide objective advice by using a combination of third-party and in-house investment managers. We can structure investments in everything from limited partnerships to mutual funds, which means that all clients, regardless of account size, have access to our best thinking.

	•	Family office services that help clients identify, review, consolidate, and execute financial and life-style management needs. These services include family governance planning, investment consulting, real estate acquisition and disposition, cash flow management and budgeting, tax planning and compliance, risk assessment, insurance oversight, family security, bill payment and payroll management services, among others. Family office clients may or may not also use our asset management services.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

We specialize in four areas: legal structures for family offices; considerations for clients with inherited wealth; compensation strategies for corporate executives; and the needs of clients in the entertainment and sports industries.


	•	Fiduciary services. These services include trust, administrative, tax, philanthropic, and estate settlement services. We also provide financial planning, private banking, and custom lending services.

WAS has offices in California, Connecticut, Delaware, Florida, Georgia, Maryland, Massachusetts, New Jersey, New York, and Pennsylvania. At the end of 2007, WAS had clients in all 50 states and 35 other countries.

Affiliate money managers

We have ownership positions in two investment management firms: Cramer Rosenthal McGlynn, LLC (CRM) and Roxbury Capital Management, LLC (RCM). CRM and RCM are not part of our WAS business, and their managers and staff are not Wilmington Trust employees. Revenue reported on our income statement from CRM and RCM is recorded net of their expenses and is based on our ownership position in each. For the purposes of business profitability and segment reporting, we combine results from CRM and RCM into one segment called “Affiliate Money Managers.” For more information about CRM and RCM, read Note 4, “Affiliates and acquisitions,” in our 2007 Annual Report to Shareholders. For more information about segment reporting, read Note 13, “Segment reporting,” in this report.

Legal entities and subsidiaries

We provide our services through various legal entities and subsidiaries that we own wholly or in part. For more information about these entities and subsidiaries, the services they provide, and the regulations to which they are subject, read Note 1, “Nature of business,” in our 2007 Annual Report to Shareholders.

We acquired AST Capital Trust Company of Delaware on April 30, 2008. There have been no other changes to our legal entities and subsidiaries since December 31, 2007.

RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008

This report discusses:


	•	Changes in our financial condition (balance sheet) since December 31, 2007. All balances cited are period-end balances unless otherwise noted. In some cases, we present amounts as of June 30, 2007, for historical reference.

	•	The results of our operations (income statement) for the three and six months ended June 30, 2008 (year-to-date results), compared with the corresponding periods in 2007. In some cases, we provide amounts for other periods to provide historical context.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

EXECUTIVE SUMMARY

We reported a loss of $19.5 million, or $0.29 per share, for the 2008 second quarter. Two events caused this loss:


	•	Business conditions at affiliate money manager Roxbury Capital Management (RCM) led to a decline of $66.9 million in the value of our investment in that firm. This amount, which was recorded as a non-cash impairment expense, reduced net income by $43.5 million, or $0.64 per share (on a diluted basis). (We initially disclosed this charge in a June 19, 2008, filing with the Securities and Exchange Commission.)

	•	The carrying value of preferred stocks in our investment securities portfolio decreased by $12.6 million. Most of this decrease was in the carrying value of securities issued by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). This $12.6 million reduction, which was recorded as a securities loss, reduced net income by $8.0 million, or $0.12 per share (on a diluted basis).

These charges were a function of extraordinarily unsettled equity markets. They overshadowed very strong commercial and consumer loan growth, higher revenue from Corporate Client Services and Wealth Advisory Services, and other positive aspects of our second quarter results and ongoing operations.

On an operating basis (excluding the two charges), net income for the 2008 second quarter was $32.0 million, or $0.47 per share (diluted). We believe that operating results — those that exclude the effects of the two write-downs — present a more relevant measure of ongoing business trends and offer a better basis of comparison with prior periods. This report includes a reconciliation that compares our results with the securities loss and RCM impairment expense (GAAP results) with those that do not (operating results).

Our diversified business mix helped buffer the effects of rapidly declining market interest rates and volatile financial markets in the first six months of 2008, and our results were positive. Reported (GAAP) net income and earnings were $21.9 million and $0.33 per share (diluted), respectively. Operating net income and earnings were $73.4 million and $1.09 per share (diluted), respectively.

Our capital position remained strong. All regulatory capital ratios continued to exceed the amounts required by the Federal Reserve Board to be considered a well-capitalized institution. The two impairment charges did not affect client funds or our ability to pay dividends.

On July 17, 2008, the Board of Directors declared a regular quarterly cash dividend of $0.345 per share. This amount reflects the 3% increase the Board approved in April 2008, which marked the 27th consecutive year that we have raised our cash dividend. The quarterly dividend will be paid on August 15, 2008, to stockholders of record on August 1, 2008.

Significant factors in second quarter 2008 results

During the 2008 second quarter:


	•	The Regional Banking business added $483.0 million of loans. This was the largest three-month increase in our history. Loan balances topped $9 billion for the first time, on both a period-end and average-balance basis. Loan growth reflected the resilience of the well-diversified economy in the mid-Atlantic region, which has not experienced the levels of unemployment and housing pressure seen in some other parts of the United States.

	•	Driven by loan growth, total assets exceeded $12 billion for the first time.

	•	Corporate Client Services (CCS) revenue rose 22% from the first quarter and 28% from the year-ago second quarter, with all components of the business contributing to the growth. Demand for bankruptcy and

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


		corporate restructuring services helped counter continued weakness in capital markets activity. Retirement services revenue more than doubled from prior periods due to the acquisition of AST Capital Trust Company.


	•	Wealth Advisory Services (WAS) revenue increased 4% from the first quarter and 8% from the year-ago second quarter, due largely to continued growth in family office services as well as the June 2007 expansion into Boston.

	•	Advisory business revenue — revenue from CCS, WAS, and affiliate money manager Cramer Rosenthal McGlynn — accounted for 53% of total net interest and noninterest income (excluding securities losses and after amortization and the provision for loan losses). Advisory business revenue, combined with banking-related fee revenue, accounted for 61% of total net interest and noninterest income.

	•	Operating expenses (excluding the impairment charges) and the increase in the number of staff members reflected expansion investments made over the past 12 months, including the June 2007 acquisitions in Boston and Luxembourg, the AST Capital Trust Company acquisition, and the addition of Regional Banking staff in Baltimore.

These factors were offset by:


	•	The two impairment charges, which reduced pre-tax income by a combined $79.5 million.

	•	Net charge-offs and nonperforming asset levels that caused the provision for loan losses to increase to $18.5 million from $10.0 million for the 2008 first quarter.

	•	Compression in the net interest margin, which fell to 3.17% due to the market interest rate environment. This compression prevented the record-high loan growth from translating into higher net interest income.

	•	A $1.1 million loss associated with RCM.

Debt issue

On April 1, 2008, we issued $200 million of subordinated long-term debt in 10-year, 8.50% notes. This offering was subscribed fully upon issue. These notes will mature on April 2, 2018.

For more information about this debt issue, read Note 12, “Borrowings,” in this report.

Expansion initiatives

We are able to invest consistently in our company’s future — and increase our dividend every year — because our capital management practices are sound. In the wake of negative speculation about the strength and stability of many financial institutions, we completed one acquisition in the 2008 second quarter, announced another, and undertook a third expansion initiative, all of which are in the CCS business.

AST Capital Trust Company: On April 30, 2008, Wilmington Trust FSB, our federally chartered savings bank subsidiary, completed the acquisition of AST Capital Trust Company (AST) from the shareholders of American Stock Transfer & Trust Company.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

AST is an Arizona-based provider of directed trustee, trust administration, and back-office services offered through financial advisors to retirement plans, high-net-worth individuals and families, and institutional investors. As a result of this acquisition, which added $28 billion in assets under administration, we now provide trust, custody, trading, and paying agent services for approximately $41 billion in more than 3,000 retirement and employee benefit plans.

We expect this transaction to add approximately $18 million of revenue in 2008 (approximately $27 million on an annualized basis) and to be non-dilutive to earnings in 2008. We record most of the revenue from this acquisition as CCS retirement services revenue. We record the remainder in WAS trust and investment advisory revenue.

AST has 170 staff members. Approximately 140 of these staff members are based at AST’s Phoenix headquarters, and they have joined our CCS retirement services business. AST’s president, Gregory W. Tschider, has assumed management responsibility for the retirement services business.

Approximately 30 of AST’s staff members are based in Wilmington, Delaware, and they have joined our Wealth Advisory Services (WAS) business.

This was an all-cash transaction. For more information about its terms, read Note 8, “Acquisitions,” in this report.

UBS Fiduciary Trust Company (UBSFTC): On June 25, 2008, we announced that we have signed a definitive agreement to acquire UBSFTC from global financial services company UBS AG. UBSFTC is a New Jersey-based provider of trust, custody, and investment management services for retirement plans and employee benefit plans. This transaction will add another 800 retirement plans and approximately $5.5 billion in assets under administration to the CCS retirement services platform, bringing the total to more than 3,800 plans and $46 billion in assets under administration.

UBSFTC began to outsource its operations to AST in 2007. Since AST is already providing UBSFTC’s services, we expect this transaction will have little effect on CCS staffing. Pending regulatory approval, we expect to complete this transaction during the 2008 third quarter. It will be an all-cash transaction, and we expect it to be non-dilutive to earnings in 2008.

Capital markets services expansion: In early July 2008, we hired a team of 12 seasoned capital markets experts who specialize in the types of capital markets transactions where we see tremendous potential for growth: high-yield debt issuance, loan administration, distressed debt, and corporate restructuring, among others.

This team has worked together for many years. Most are based in Minneapolis, where we already have a small office because Minnesota is a preferred jurisdiction for insurance premium financing structures. The addition of the new staff members will expand our presence in that market and reinforce our commitment to that jurisdiction.

The rest of the new staff members are based in our Soho office in New York City and in New Haven, Connecticut, where we intend to open an office.

CHANGES IN FINANCIAL CONDITION

Total assets increased 6% in the first six months of 2008 and topped $12 billion for the first time, mainly because of loan growth. Liabilities increased 7% and topped $11 billion for the first time, with core deposits rising 5%.

On a GAAP basis, stockholders’ equity was $1.07 billion, which was 5% lower than at year-end 2007. The main causes of this decline were:


	•	The 2008 second quarter loss.

	•	Lower net interest income, due to compression in the net interest margin.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


	•	Higher unrealized losses associated with temporarily impaired securities.

Assets

Loan growth, which we discuss in more detail in the Regional Banking section of this report, was the main cause of the increase in total assets.


Assets	At 6/30/08			At 12/31/07			At 6/30/07
	(Dollars in millions)

Loan balances	$	9,280.4		$	8,475.8		$	8,274.7
Loans as a percentage of total assets		76	%		74	%		75	%
Investment securities portfolio balances	$	1,526.6		$	1,846.8		$	1,806.9
Investment securities as a percentage of total assets		13	%		16	%		16	%
Total assets	$	12,133.3		$	11,485.7		$	11,031.0


Earning Assets¹	At 6/30/08			At 12/31/07			At 6/30/07

Total earning assets (in millions)	$	11,107.9		$	10,479.0		$	10,106.7
Percentage in loans		84	%		81	%		82	%
Percentage in investment securities		14	%		18	%		18	%
As a percentage of total assets		92	%		91	%		92	%


¹		Includes loans, investment securities, FHLB and FRB stock, interest-bearing deposits in other banks, and federal funds sold and securities purchased under agreements to resell. Excludes the reserve for loan losses.

Investment securities portfolio

We maintain an investment securities portfolio for our own account to generate cash flow, to help manage interest rate risk, and to provide collateral for deposits and other liabilities. At June 30, 2008, investment securities balances were lower than for prior periods because:


	•	As holdings matured during the first half of the year, we found fewer reinvestment opportunities that satisfied our credit and duration risk preferences.

	•	We had less need for securities to collateralize client accounts that use short-term cash sweeps.

	•	We recorded higher unrealized losses associated with temporarily impaired securities.

	•	We wrote down the valuation of some of the perpetual preferred stocks in the portfolio.

Attrition in the portfolio caused the changes in its average life and duration.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Average Life in the Investment Securities Portfolio	At 6/30/08		At 12/31/07		At 6/30/07
	(In years)

Mortgage-backed instruments		3.39		3.48		3.74
Total portfolio		6.16		4.45		5.08


Duration in the Investment Securities Portfolio	At 6/30/08		At 12/31/07		At 6/30/07
	(In years)

Mortgage-backed instruments		3.14		3.20		3.49
Total portfolio		2.58		1.97		2.19

On a percentage basis, changes in the composition of the investment securities portfolio from year-end 2007 reflected the lower balance of U.S. government agency securities, which decreased due to the volume of calls and maturities in the first three months of 2008. Our policy is to invest in securities with an investment grade of “A” or better, as assigned by Standard & Poor’s or Moody’s Investors Service, at the time of purchase.


Composition of Investment Securities Portfolio	At 6/30/08			At 12/31/07			At 6/30/07

Collateralized mortgage obligations		12	%		13	%		12	%
Mortgage-backed securities		34	%		27	%		21	%
Corporate securities		15	%		17	%		19	%
U.S. government agencies		31	%		35	%		35	%
U.S. Treasury		3	%		3	%		6	%
Preferred stock		3	%		2	%		4	%
Municipal bonds		—	%		1	%		1	%
Other		2	%		2	%		2	%
Percentage invested in fixed-rate instruments		83	%		82	%		80	%

Balances of mortgage-related instruments in the investment securities portfolio tend to be higher than our residential mortgage balances, due to one element of our interest rate risk management strategies. We believe we can manage the duration and interest rate risk associated with mortgage-related instruments more efficiently in the investment securities portfolio than by retaining residential mortgages, most of which have terms of 15 to 30 years, on our balance sheet. More details about our interest rate risk management strategies are in this report in the discussion of quantitative and qualitative disclosures about market risk.

Of the mortgage-backed securities in the portfolio at June 30, 2008:


	•	All were issued by U.S. government-sponsored enterprises (GSEs). Because these securities are issued by U.S. GSEs, they carry an implied rating of AAA.

	•	All had residential mortgages as the underlying collateral.

	•	There were no subprime mortgages in this underlying collateral.

	•	Almost all were invested in fixed rate instruments with terms of 15 years or less.

Investment securities impairment

Sharp declines in the first half of 2008 in the market valuations of perpetual preferred stocks in our portfolio, coupled with uncertainty about future market conditions, led us to determine that, as of June 30, 2008, the value of these investments had decreased from $54.3 million to $41.7 million, and that they had become

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

“other-than-temporarily impaired” under GAAP. The amount of the decrease — $12.6 million — was recorded as a securities loss for the 2008 second quarter.

Most of this decrease was in perpetual preferred stocks issued by Fannie Mae, Freddie Mac, and two other financial institutions.

Perpetual preferred stocks, which we hold as available for sale, constituted approximately 3% of the investment securities portfolio at June 30, 2008. While the value of these investments has declined, we intend to retain them in our portfolio because they pay dividends, they have investment-grade credit ratings, and their valuations are expected to normalize over the course of market cycles.

Temporarily impaired securities

During the first six months of 2008, the number of securities classified as temporarily impaired declined, but changes in market valuations caused an increase in the estimated unrealized losses associated with temporarily impaired securities. At June 30, 2008, the largest concentration of securities with temporary impairments was in mortgage-backed and corporate debt securities. These changes were due mainly to liquidity problems in the financial markets, not deterioration in the creditworthiness of the issuers.


	Number of						Estimated
Temporarily Impaired Securities	Securities			Fair Value			Unrealized Losses
	(Dollars in millions)

At December 31, 2007		168		$	1,086.0		$	41.5
At June 30, 2008		166			768.9			111.7

Change		(2	)	$	(317.1	)	$	70.2

We retain temporarily impaired securities because we know when they will mature, they have no credit delinquencies, they generate strong cash flows, and because we have the ability and intent to hold them until they recover in value or mature, at which point their fair values equal their book values. For more information about our temporarily impaired investment securities, read Note 6, “Investment securities,” in our 2007 Annual Report to Shareholders, and Note 11, “Temporarily impaired investment securities,” in this report.

Liabilities and stockholders’ equity

Core deposits rose 5% in the first six months of 2008, continued to account for more than half of total liabilities, and continued to be our primary source of funding. For more information about core deposit balances, read the Regional Banking discussion in this report. For more information about other deposits and short-term borrowings, read the funding discussion in this report.


Liabilities	At 6/30/08			At 12/31/07			At 6/30/07
	(Dollars in millions)

Core deposits	$	5,741.3		$	5,465.5		$	5,183.5
Core deposits as a percentage of total liabilities		52	%		53	%		52	%
National funding and short-term borrowings (STBs)	$	4,650.1		$	4,384.1		$	4,279.4
National funding and STBs as a percentage of total liabilities		42	%		42	%		43	%
Total liabilities	$	11,066.7		$	10,365.3		$	9,958.7

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Our capital position, which we discuss in more detail in the capital resources section of this report, remained strong. All of our regulatory capital ratios continued to exceed the amounts required by the Federal Reserve Board to be considered a well-capitalized institution.

The decline in the returns on average stockholders’ equity and assets from year-end 2007 reflected the RCM and securities impairments, plus the lower net interest income due to compression in the net interest margin.


	June 30,			June 30,
Annualized Returns for the Six Months Ended	2008			2007

Return on average stockholders’ equity		3.92	%		16.96	%
Return on average assets		0.38	%		1.69	%

On an operating basis, the declines in the returns on stockholders’ equity and assets were much less severe, but the lower levels of net income still reduced these ratios from prior periods.


	Six Months Ended			Year Ended			Six Months Ended
Annualized Returns (operating basis)	6/30/08			12/31/07			6/30/07

Return on average stockholders’ equity (annualized)		13.12	%		16.68	%		16.96	%
Return on average assets (annualized)		1.27	%		1.65	%		1.69	%

For more information about stockholders’ equity, read the capital resources discussion in this report.

RESULTS OF OPERATIONS

The $66.9 million impairment charge for our investment in RCM, plus the $12.6 million write-down on perpetual preferred stocks in our investment securities portfolio, caused us to report (on a GAAP basis) a loss of $19.5 million, or $0.29 per share, for the 2008 second quarter. For the first six months of 2008, net income and earnings were $21.9 million and $0.33 per share (on a diluted basis), respectively (on a GAAP basis).

The RCM impairment charge resulted from changes in business conditions at RCM that necessitated a reassessment of the valuation of our investment in the firm. These changes, which became apparent in the 2008 second quarter, included a decline in assets under management, lower-than-expected operating performance, and projections that RCM would incur a loss for the 2008 second quarter.

We engaged Berkshire Capital Securities LLC, an independent third-party firm, to review the valuation of our investment in RCM. The valuation reassessment, conducted as an impairment test under GAAP, determined that our valuation had declined from $89.1 million to $22.2 million. The decrease in valuation — $66.9 million — was recorded as a non-cash expense for the 2008 second quarter.

This impairment charge did not affect our ownership position in RCM, which consists of 41.23% of RCM’s common shares and 100% of RCM’s preferred interests, which entitles Wilmington Trust to a preferred profits interest equal to 30% of RCM’s revenues.

We attributed the changes in business conditions at RCM to continued volatility in the financial markets. Since the burst of the technology stock bubble, the operating environment has been challenging for most growth-style managers, including RCM. While RCM’s mid-cap fund has experienced asset outflows, the firm has developed new products that are attracting assets, and early performance indicators are promising. We remain confident in Roxbury’s leadership and the firm’s long-term prospects for profitability.

On an operating basis (excluding the impairment charge and the securities write-down), net income for the 2008 second quarter was $32.0 million, or $0.47 per share (diluted). For the first six months of 2008, operating net income and earnings were $73.4 million and $1.09 per share (diluted), respectively.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Comparison of results with and without the RCM and investment securities impairment write-downs


	Three Months Ended June 30,									Six Months Ended June 30,
	2008									2008
	With			Without						With			Without
	impairment			impairment			Impairment			impairment			impairment			Impairment

OPERATING RESULTS (in millions)
Net interest income	$	85.2		$	85.2		$	—		$	172.1		$	172.1		$	—
Provision for loan losses		(18.5	)		(18.5	)		—			(28.4	)		(28.4	)		—
Noninterest income		93.2			105.8			(12.6	)		195.9			208.5			(12.6	)
Noninterest expense		188.5			121.6			66.9			304.0			237.1			66.9

(Loss)/income before taxes and minority interest		(28.6	)		50.9			(79.5	)		35.6			115.1			(79.5	)
Applicable income taxes		(9.3	)		18.7			(28.0	)		13.4			41.4			(28.0	)

Net (loss)/income before minority interest		(19.3	)		32.2			(51.5	)		22.2			73.7			(51.5	)
Minority interest		0.2			0.2			—			0.3			0.3			—

Net (loss)/income	$	(19.5	)	$	32.0		$	(51.5	)	$	21.9		$	73.4		$	(51.5	)

PER SHARE DATA
Diluted shares outstanding (in millions)		67.2			67.4			(0.2	)		67.4			67.4			—
Per share earnings	$	(0.29	)	$	0.47		$	(0.76	)	$	0.33		$	1.09		$	(0.76	)
STATISTICS AND RATIOS (dollars in millions)
Total assets, on average	$	11,825.4		$	11,834.1		$	(8.7	)	$	11,594.3		$	11,598.7		$	(4.4	)
Stockholders’ equity, on average		1,119.4			1,125.1			(5.7	)		1,122.4			1,125.3			(2.9	)
Return on average assets		(0.66	)%		1.09	%		(1.75	)%		0.38	%		1.27	%		(0.89	)%
Return on equity		(7.01	)%		11.44	%		(18.45	)%		3.92	%		13.12	%		(9.20	)%
Net interest income (before provision) and noninterest income	$	178.4		$	191.0		$	(12.6	)	$	368.0		$	380.6		$	(12.6	)
Tax equivalent interest income		0.8			0.8			—			1.6			1.6			—

	$	179.2		$	191.8		$	(12.6	)	$	369.6		$	382.2		$	(12.6	)
Noninterest expense	$	188.5		$	121.6		$	66.9		$	304.0		$	237.1		$	66.9

Efficiency ratio		105.19	%		63.40	%		41.79	%		82.25	%		62.04	%		20.21	%

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

On an operating basis, net income and earnings per share were lower for the second quarter and first half of 2008 than for the corresponding year-ago periods, primarily because compression in the interest margin reduced net interest income, and because the provision for loan losses was higher. For more information about changes in the provision, read the credit quality discussion in this report.


Operating Net Income	2008 Q2			2007 Q2			2008 YTD			2007 YTD
	(Dollars in millions, except share amounts)

Net interest income	$	85.2		$	92.8		$	172.1		$	183.7
Provision for loan losses		(18.5	)		(6.5	)		(28.4	)		(10.1	)
Noninterest income		105.8			96.9			208.5			188.4
Operating expense		121.6			106.0			237.1			216.4

Operating net income	$	32.0		$	48.9		$	73.4		$	91.8
Operating earnings per share (diluted)	$	0.47		$	0.70		$	1.09		$	1.32
Average shares outstanding (diluted, in thousands)		67,442	¹		69,435			67,390			69,546


¹		On an operating basis

Shares outstanding, on average, were lower than for the year-ago periods mainly because we repurchased 2,000,000 of our shares in 2007.

Noninterest income continued to account for more than half of total operating net interest and noninterest income, because:


	•	Corporate Client Services and Wealth Advisory Services revenue continued to increase.

	•	Reductions in short-term market interest rates compressed the net interest margin and reduced net interest income.

We discuss these factors in more detail throughout the following pages of this report.


As a Percentage of Total Operating Net Interest and Noninterest Income	2008 Q2			2007 Q4			2007 Q2

Net interest income¹		39	%		44	%		47	%
Noninterest income²		61	%		56	%		53	%


¹		After the provision for loan losses.
²		After amortization.

On an operating basis, profitability was lower than for prior periods, mainly because:


	•	Compression in the net interest margin reduced net interest income.

	•	The provision for loan losses was higher.

	•	Prior-period results did not reflect the staffing and related costs associated with the expansion activities we completed in the second half of 2007 and the first half of 2008. The largest of these initiatives was the acquisition of AST Capital Trust Company, which added 170 staff members. This transaction closed on April 30, 2008; second quarter 2008 expenses included two months of related expenses.


Efficiency and Profitability Ratios (Operating Basis)	2008 Q2			2007 Q2			2008 YTD			2007 YTD

Efficiency ratio		63.40	%		55.58	%		62.04	%		57.85	%
Profit margin		36.60	%		44.42	%		37.96	%		42.15	%

The efficiency ratio is the inverse of the profit margin.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

THE REGIONAL BANKING BUSINESS

The Regional Banking business continued to benefit from the well-diversified economy in the mid-Atlantic region, which has not experienced the level of economic downturn seen in some other parts of the United States. While the provision for loan losses rose, its increase did not result from any new or negative systemic trends in the regional economy or our portfolio. We discuss credit quality in greater detail in a separate section of this report.

Loan balances rose 9% during the first six months of 2008. During the 2008 second quarter, we added $483.0 million of loans, the largest three-month increase in our history. That brought loan growth for the first six months of 2008 to $804.6 million, a six-month record. Loan balances exceeded $9.0 billion on both a period-end and average-balance basis. Commercial loans accounted for 65% of total loan growth.

Most of the growth in the first six months of 2008 came from, in order of contribution, the Maryland market, the Pennsylvania market, and the New Jersey market. This reflected the significant expansion we have undertaken in recent years in these markets.


Period-End Loan Balances	At 6/30/08			At 12/31/07			At 6/30/07
	(Dollars in millions)

Commercial loans	$	6,359.6		$	5,838.7		$	5,621.2
Retail loans		2,920.8			2,637.1			2,653.5

Total loans outstanding	$	9,280.4		$	8,475.8		$	8,274.7
Delaware market loans	$	5,047.5		$	5,023.0		$	5,035.7
Delaware market loans as a % of total loans		55	%		59	%		61	%
Pennsylvania market loans	$	2,144.8		$	1,829.1		$	1,725.8
Pennsylvania market loans as a % of total loans		23	%		22	%		21	%
Maryland market loans	$	938.8		$	542.4		$	495.8
Maryland market loans as a % of total loans		10	%		6	%		6	%
New Jersey market loans	$	587.3		$	348.3		$	340.8
New Jersey market loans as a % of total loans		6	%		4	%		4	%
Other market loans	$	562.0		$	733.0		$	676.6
Other market loans as a % of total loans		6	%		9	%		8	%

On an average-balance basis, total loan balances increased for the 21st consecutive quarter, rising 11% from the year-ago second quarter and 9% on a year-to-date basis. For more detail on average balances, see the quarterly analysis of net interest income in this report.


Loan Balances, on Average	2008 Q2		2007 Q2		2008 YTD		2007 YTD
	(In millions)

Total loans outstanding	$	9,085.9	$	8,156.3	$	8,861.3	$	8,114.4

On a percentage basis, the composition of the loan portfolio at period-end remained well diversified and relatively unchanged from prior periods


Loan Portfolio Composition	6/30/08			12/31/07			6/30/07

Commercial, financial, and agricultural (C&I) loans		30	%		31	%		30	%
Commercial real estate — construction loans		20	%		21	%		21	%
Commercial mortgage loans		18	%		17	%		17	%
Residential mortgage loans		6	%		6	%		7	%
Consumer loans		20	%		19	%		18	%
Loans secured with liquid collateral		6	%		6	%		7	%

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Loans secured with liquid collateral are associated mainly with Wealth Advisory Services clients. We do not consider changes in the balances of these loans to be indicative of trends in the Regional Banking business.

Economic conditions in the mid-Atlantic region

The mid-Atlantic economy is broadly diversified among the life sciences, financial services, pharmaceutical, health care, education, construction, manufacturing, retail, agriculture, and tourism industry sectors. Historically, this diversification has provided a degree of economic stability and helped the region withstand the effect of a downturn in any single sector.

Unemployment rates in the region remained below the U.S. average. Delaware’s unemployment rate has been lower than the U.S. average since 2001.


	June 2008						June 2007
	Employment			Unemployment			Unemployment
Employment Indicators	Growth*			Rate			Rate

Delaware		(0.2	)%		4.2	%		3.3	%
New Jersey		(0.4	)%		5.3	%		4.3	%
Pennsylvania		0.0	%		5.2	%		4.1	%
United States		0.0	%		5.5	%		4.5	%


*		Year-over-year percent change

Sources: U.S. Bureau of Labor Statistics and Federal Reserve Bank of Philadelphia

Population growth continued in the region, especially in Delaware. According to the U.S. Census Bureau, Delaware was the 14th fastest-growing state in the United States for the 12 months ended July 2007. Delaware’s tax climate, among other attributes, continued to attract new residents and create housing demand. Delaware has no sales tax, and its property taxes are among the lowest in the United States. Delaware is one of 13 states that impose no state-wide property tax levy. Taxes are assessed at the county level and consist primarily of school district taxes. In addition, there is no recurring assessment of home values.

As changes in the U.S. House Price Index show, home prices in Delaware and Pennsylvania have not experienced the level of deterioration or volatility seen in some other parts of the United States. Home prices in Delaware and Pennsylvania have fluctuated less than 1% each quarter since the 2007 second quarter.


Percent Change in House Price Index
(quarter-to-quarter)	2007 Q2			2007 Q3			2007 Q4			2008 Q1

Delaware		1.3			0.0			0.4			(0.7	)
Pennsylvania		0.7			0.7			0.4			0.7
United States		0.1			(0.4	)		0.1			(0.2	)
California		(1.2	)		(1.8	)		(3.1	)		(4.4	)
Florida		(0.8	)		(2.1	)		(1.7	)		(3.3	)
Nevada		(1.6	)		(0.7	)		(3.0	)		(5.0	)

Source: Office of Federal Housing Enterprise Oversight

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

A comparison of home prices in Delaware with those of other areas within the mid-Atlantic region helps provide context for the Delaware housing market. In the table below, the average prices are based on a 2,400 square foot new home on an 8,000 square foot lot, in an urban area, with all utilities.


Location	Average Home Price (2008 Q1)

Wilmington, DE	$	277,240
Dover, DE	$	270,904
Sussex County, DE	$	239,240
Philadelphia, PA	$	418,883
Baltimore, MD	$	469,473
Washington, D.C.	$	651,047

Source: ACCRA Cost of Living Index/Delaware DataBook, July 2008,

Delaware Economic Development Office

The following tables show how price and absorption rates changed between the 2007 fourth quarter and the 2008 first quarter (the most recent data available).


Housing Market in New Castle County, DE	2007 Q4		2008 Q1

Average price	$	275,000	$	261,000
Number of homes on the market¹		2,968		3,448
Number of homes sold		1,556		1,080
Number of new homes built²		141		56
Average number of days on market		59		72


¹		As of March 31, 2008.
²		January and February 2008 only.

Source: TREND MLS


Housing Market in Kent County, DE	2007 Q4		2008 Q1

Average price	$	232,400	$	217,900
Number of homes on the market¹		1,610		1,802
Number of homes sold		397		296
Number of new homes built²		233		100
Average number of days on market		74		82


¹		As of March 31, 2008.
²		January and February 2008 only.

Source: TREND MLS

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Housing Market in Chester County, PA	2007 Q4		2008 Q1

Average price	$	361,600	$	359,400
Number of homes on the market¹		3,394		4,162
Number of homes sold		1,172		930
Number of new homes built²		361		110
Average number of days on market		70		90


¹		As of March 31, 2008.
²		January and February 2008 only.

Source: TREND MLS


Housing Market in Montgomery County, PA	2007 Q4		2008 Q1

Average price	$	334,000	$	311,900
Number of homes on the market¹		4,710		5,826
Number of homes sold		2,049		1,620
Number of new homes built²		84		103
Average number of days on market		67		82


¹		As of March 31, 2008.
²		January and February 2008 only.

Source: TREND MLS

Commercial Loans

Commercial loan balances, which exceeded $6.0 billion for the first time in the 2008 first quarter, reached $6.36 billion at June 30, 2008. This was 9% higher than at year-end 2007.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

All of our mid-Atlantic markets contributed to the commercial loan growth in the first six months of 2008. The Delaware and Pennsylvania markets accounted for the largest dollar amount increases, while the Maryland and New Jersey markets recorded the largest percentage increases.


Period-End Commercial Loans	At 6/30/08			At 12/31/07			At 6/30/07
	(Dollars in millions)

Commercial, financial, and agricultural (C&I) loans	$	2,808.6		$	2,594.9		$	2,483.7
Commercial real estate — construction loans		1,847.0			1,780.4			1,747.0
Commercial mortgage loans		1,704.0			1,463.4			1,390.5

Total commercial loans	$	6,359.6		$	5,838.7		$	5,621.2
Delaware market commercial loans	$	3,558.0		$	3,387.2		$	3,353.5
Delaware market commercial loans as a % of total commercial loans		56	%		58	%		60	%
Pennsylvania market commercial loans	$	1,693.1		$	1,569.0		$	1,462.9
Pennsylvania market commercial loans as a % of total commercial loans		27	%		27	%		26	%
Maryland market commercial loans	$	584.3		$	499.1		$	449.8
Maryland market commercial loans as a % of total commercial loans		9	%		9	%		8	%
New Jersey market commercial loans	$	385.6		$	305.8		$	294.2
New Jersey market commercial loans as a % of total commercial loans		6	%		5	%		5	%
Other market commercial loans	$	138.6		$	77.6		$	60.8
Other market commercial loans as a % of total loans		2	%		1	%		1	%

Most of the year-to-date growth in total commercial loans was in the C&I portfolio, which accounted for 41% of the increase, and in the commercial mortgage portfolio, which accounted for 46%.

The C&I loans added during the first six months of 2008 were to clients in a variety of businesses, including light manufacturing, service, and retail, and used for a variety of working capital, equipment purchase, inventory, and other needs. Geographically, these loans were spread throughout the mid-Atlantic region.

The growth in commercial mortgage balances reflected changes in the mortgage financing market. Until the availability of mortgage financing tightened in the latter half of 2007, our commercial mortgage terms were generally less favorable than what borrowers could obtain from specialty mortgage companies. We did not alter our terms, but changes in the market made our terms more comparable with those offered by the specialty lenders. Most of the commercial mortgage loans added during the first half of 2008 were for owner-occupied properties, including auto dealerships, schools, and manufacturing and industrial properties. More than half were for properties in Delaware. The rest were mainly in southeastern Pennsylvania and Maryland.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Within the commercial portfolio, approximately 73% of the loans were less than $10 million in size. The mix of loan sizes at June 30, 2008, was relatively unchanged from prior periods.


Commercial Loans by Size	At 6/30/08			At 12/31/07			At 6/30/07

More than $20 million		8	%		6	%		6	%
$10 million to $20 million		19	%		18	%		19	%
$5 million to $10 million		22	%		25	%		23	%
$1 million to $5 million		37	%		37	%		37	%
$250,000 to $1 million		11	%		11	%		11	%
Less than $250,000		3	%		3	%		4	%

Commercial construction loans

Commercial construction balances continued to increase, albeit at a much slower pace than in prior periods, and were 4% higher than at year-end 2007. At $1.85 billion, commercial construction loans accounted for 20% of total loans at June 30, 2008, down from 21% at year-end 2007. Most of the loans in the portfolio continued to be for residential construction, primarily for single-family homes, in Delaware.


Commercial Construction Loan Portfolio	At 6/30/08			At 12/31/07			At 6/30/07

Project type:
Residential real estate construction		53	%		52	%		53	%
Land development		22	%		21	%		18	%
Retail and office		13	%		14	%		13	%
Owner-occupied		4	%		5	%		6	%
Multi-family		2	%		2	%		2	%
Other		6	%		6	%		8	%
Geographic location:
Delaware		61	%		61	%		59	%
Pennsylvania		24	%		25	%		26	%
Maryland		6	%		7	%		8	%
New Jersey		6	%		4	%		5	%
Other		3	%		3	%		2	%

We have a high degree of confidence in our commercial construction portfolio and its integrity, because:


	•	We focus on clients with privately held or family-owned businesses that are well established and successful. We do not lend to large, national homebuilders.

	•	The geographic scope of our commercial lending activity is concentrated in the mid-Atlantic region. This region has not experienced the volume of speculative over-building seen in other parts of the United States. Generally, projects we fund are within a two-hour drive from our headquarters in Wilmington, Delaware.

	•	Most of the construction loans in our portfolio are for single-family homes in residential tract developments. Population growth is driving the demand for this type of housing and related services. We do very little condominium construction or conversion financing.

	•	We apply our underwriting standards consistently.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Of the loans that contributed the majority of the 2008 second quarter increase in nonperforming assets, only two were construction loans. For more information about this, read the credit quality discussion in this report.

Commercial construction loan underwriting standards


Maximum term:		Two years on unimproved land
		Three years on land development

Target loan size:		$1 million to $10 million

Maximum loan-to-value requirements		65% on unimproved land
		75% on land development
		80% on residential construction and income-producing properties

Construction limits on residential projects:		Pre-sold inventory plus a maximum of:
		• 6 unsold single-family homes or
		• 10 unsold townhomes

Consistent with industry practice, we generally fund the interest reserve on construction loans by including it in the loan-to-value calculation and as part of the total loan amount.

Consumer loans

We added $218.7 million of consumer loans during the first six months of 2008, and consumer balances were 14% higher at June 30, 2008, than at year-end 2007. Consumer loan balances topped $1.7 billion for the first time in the 2008 second quarter, on both a period-end and average-balance basis. Most of our consumer lending occurs in the Delaware market, where we focus our retail and branch banking business.


Period-End Consumer Loans	At 6/30/08		At 12/31/07		At 6/30/07
	(In millions)

Home equity lines of credit	$	338.5	$	302.8	$	302.4
Indirect loans		929.4		748.1		697.7
Credit card loans		69.4		69.1		58.1
Other consumer loans¹		453.0		451.6		458.8

Total consumer loans	$	1,790.3	$	1,571.6	$	1,517.0

¹ Includes home equity loans, installment loans, and other types of loans to individuals.


	At June 30,			At December 31,
Period-End Consumer Loans by Market	2008			2007

Percent from Delaware market		55	%		59	%
Percent from Maryland market		16	%		15	%
Percent from New Jersey market		8	%		7	%
Percent from Pennsylvania market		17	%		14	%
Percent from other markets		4	%		5	%

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Indirect lending accounted for most of the growth in consumer loan balances during the first six months of 2008. Most of this growth was split evenly between loans for new cars and loans for late-model used cars. We make the majority of our indirect loans through automobile dealers, as an extension of the commercial banking relationships we have with dealers throughout the mid-Atlantic region.


Indirect loans booked during the quarter by market	2008 Q2			2008 Q1

Delaware		39	%		35	%
Pennsylvania		23	%		25	%
Maryland		23	%		24	%
New Jersey		15	%		16	%

Residential mortgage loans

We are among the leading residential mortgage originators in Delaware, but changes in our origination volumes may not correspond directly with changes in residential mortgage balances. This is because, except for a portion of the Community Reinvestment Act mortgages we originate, we sell most newly originated fixed rate residential mortgages into the secondary market instead of retaining them in our loan portfolio. This ongoing practice is part of our interest rate risk management strategy, which we cover in more detail in this report in the discussion of quantitative and qualitative disclosures about market risk.


Residential Mortgage Activity	At 6/30/08			At 3/31/08			At 12/31/07			At 6/30/07
	(Dollars in millions)

Residential mortgage balances (at period-end)	$	561.1		$	559.6		$	562.0		$	563.1
Percent of residential mortgages at fixed rates		77	%		77	%		74	%		78	%


Residential Mortgage Originations	2008 Q2		2008 Q1		2007 Q4		2007 Q2
	(Dollars in millions)

Residential mortgage originations (dollar amount)	$	43.8	$	43.2	$	46.3	$	58.9
Residential mortgage originations (number of loans)		208		193		187		244


Residential Mortgage Delinquency Rates	At 6/30/08			At 3/31/08			At 12/31/07			At 6/30/07

Wilmington Trust		3.60	%		3.44	%		3.47	%		2.48	%

We do not engage in subprime residential mortgage lending and, as of June 30, 2008, there were no subprime loans in our residential mortgage portfolio.

Deposits

We record two types of deposits:


	•	Core deposits, which are deposits from our clients.

	•	National certificates of deposit (CDs) in amounts of $100,000 or more. We purchase these deposits on a wholesale or brokered basis. They are not associated with client activity.

We use national CDs because:


	•	In our Regional Banking business model, there is an inherent disparity between loan growth and core deposit growth. We are expanding our commercial banking activities throughout a four-state footprint, but we

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


		continue to concentrate our core deposit-gathering activities in Delaware, where we focus our consumer and other retail banking activities.


	•	They are a cost-effective way to add deposits without adding the expenses associated with a large-scale expansion of our branch office network outside of Delaware.

	•	They help us manage interest rate risk. We can match the repricing characteristics of our floating rate loans more easily with national CDs than with client deposits. Most of our national CDs have terms of 90 to 120 days.

For more information about this, read the net interest margin, funding, and interest rate risk management discussions in this report.

Core deposits

Core deposit balances rose 5% during the first six months of 2008. Most of the growth came from interest-bearing demand deposits and savings deposits.


Period-End Core Deposits	At 6/30/08			At 12/31/07			At 6/30/07
	(Dollars in millions)

Noninterest-bearing demand deposits	$	994.5		$	966.2		$	812.7
Savings deposits		798.9			659.8			497.1
Interest-bearing demand deposits		2,692.3			2,471.8			2,483.1
CDs < $100,000		977.6			1,011.4			1,019.8
Local CDs ³ $100,000		278.0			356.3			370.8

Total core deposits	$	5,741.3		$	5,465.5		$	5,183.5
Percentage from Delaware clients		84	%		87	%		89	%
Percentage from Pennsylvania clients		3	%		5	%		6	%
Percentage from clients in other markets		13	%		8	%		5	%

Most of the growth in savings deposits came from WTDirect, our Internet-only delivery channel. Launched at the end of November 2006, WTDirect balances at June 30, 2008, were approximately $517 million. WTDirect currently features a high-interest savings account for depositors who maintain average daily balances of at least $10,000. We target WTDirect to the mass-affluent consumer market, and we have WTDirect depositors from all 50 states.

We include balances of local CDs in amounts of $100,000 or more (local CDs) in core deposits because these CDs reflect client deposits, not wholesale or brokered deposits. Most local CDs are from clients in the Delaware Valley region, including commercial banking clients and local municipalities, which frequently use these CDs to generate returns on their excess cash.


Local CDs ³ $100,000 by
Client Category
(Average Balances)	2008 Q2			2007 Q4			2007 Q2

Consumer banking clients		60	%		54	%		66	%
DE commercial banking clients		7	%		9	%		8	%
PA commercial banking clients		9	%		10	%		8	%
Wealth Advisory Services clients		12	%		15	%		12	%
Other clients		12	%		12	%		6	%

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Generally, we consider core deposit balances on average to be a better indicator of trends in the Regional Banking business than period-end core deposits. This is because CCS clients may deposit large sums of cash near the ends of financial reporting periods. These deposits typically are noninterest-bearing demand deposits.


Core Deposits, on Average	2008 Q2		2007 Q2		2008 YTD		2007 YTD
	(In millions)

Noninterest-bearing demand deposits	$	870.2	$	702.6	$	798.3	$	725.6
Total core deposits	$	5,377.5	$	5,062.4	$	5,269.1	$	5,020.6


Core Deposits at Period End	At 6/30/08		At 12/31/07		At 6/30/07
	(In millions)

Noninterest-bearing demand deposits	$	994.5	$	966.2	$	812.7
Total core deposits	$	5,741.3	$	5,465.5	$	5,183.5

Other Regional Banking information


ATMs	At 6/30/08		At 12/31/07		At 6/30/07

Number of ATMs in Delaware		210		208		203
Total number of ATMs		254		255		249

Regional Banking profitability

Regional Banking’s profitability was slightly less than for prior periods, mainly because short-term market interest rates were 325 basis points, or 62%, lower at June 30, 2008, than at June 30, 2007. This decline compressed our net interest margin and caused net interest income to decrease, even though loan balances increased at a record pace. The higher loan loss provision also reduced profitability.


Regional Banking Profitability	2008 Q2			2007 Q2			2008 YTD			2007 YTD

Segment operating net income (in millions)	$	22.6		$	34.1		$	52.9		$	66.4
Efficiency ratio		43.87	%		39.90	%		42.95	%		41.39	%
Profit margin		56.13	%		60.10	%		57.05	%		58.61	%

The favorable efficiency ratio of the Regional Banking business reflects how our funding strategy reduces the operating expenses associated with building and maintaining a large-scale branch office network outside of Delaware. For more information about this, read the discussions of deposits and funding in this report.

NET INTEREST INCOME

Although loan balances reached a record high, net interest income was lower than for prior periods because:


	•	Reductions in short-term market interest rates compressed our net interest margin. For more information about this, read the following section on the net interest margin.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


	•	The provision for loan losses increased. For more information about this, read the credit quality discussion in this report.


Net Interest Income	2008 Q2			2007 Q2			2008 YTD			2007 YTD
	(Dollars in millions)

Interest income	$	150.0		$	180.8		$	312.3		$	360.9
Interest expense		64.8			88.0			140.2			177.2

Net interest income	$	85.2		$	92.8		$	172.1		$	183.7
Provision for loan losses		(18.5	)		(6.5	)		(28.4	)		(10.1	)

Net interest income (after provision)	$	66.7		$	86.3		$	143.7		$	173.6
Portion generated by Regional Banking¹		95	%		93	%		94	%		93	%

¹ Before the provision for loan losses.

We generate net interest income mainly through banking and funding activities. We attribute portions of net interest income to the Wealth Advisory Services and Corporate Client Services businesses, because these businesses have clients who use our banking services. For more information about how we allocate net interest income among our businesses, refer to Note 14, “Segment reporting,” in this report.

NET INTEREST MARGIN

Compression in the net interest margin in the second quarter and first half of 2008 prevented record-high loan growth from translating into higher net interest income. Loan balances at June 30, 2008, were $1.0 billion higher than at June 30, 2007. In comparison, net interest income (before the provision for loan losses) for the first six months of 2008 was 6% lower than for the first six months of 2007.


Net Interest Margin	2008 Q2			2008 Q1			2007 Q4			2007 Q3			2007 Q2

Quarterly net interest margin		3.17	%		3.37	%		3.56	%		3.73	%		3.73	%


Net Interest Margin	2008 YTD			2007 YTD

Year-to-date net interest margin		3.27	%		3.70	%

The net interest margin was compressed by the combination of substantial reductions in short-term interest rates and our asset-sensitive interest rate risk position:


	•	Between late September 2007 and May 2008, the Federal Open Market Committee (FOMC) reduced rates seven times. At June 30, 2008, short-term market interest rates were 325 basis points lower than they were at June 30, 2007.

	•	We are asset-sensitive because, when rates change, most of our loan repricing resets more quickly than our cost of funds. Most of our loans have floating rates that reprice within 30 days of a rate change, but it typically takes 90 to 120 days for the corresponding adjustments in deposit and other funding costs to occur. In a declining interest rate environment, this timing difference compresses the net interest margin, which historically has not stabilized until funding costs (rates on deposits and other liabilities) more closely match the yields on loans and other assets. The extent of the margin compression depends on the magnitude of rate changes and the pace at which they occur.

	•	Following the rate reductions the FOMC began to implement in September 2007, most of the downward pricing adjustments on our loans began in the 2007 fourth quarter and continued in the first half of 2008. In

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


		comparison, most of the corresponding decreases in funding costs did not begin until the 2008 first quarter, and continued to lag loan repricing for most of the second quarter.

Our asset sensitivity was evident in the disparity between the basis-point declines in the yield on earning assets and the cost of funds. Earning asset yields decreased much more rapidly.


Changes in Yields and Rates (In Basis Points)	2008 Q2 vs. 2007 Q4			2008 Q2 vs. 2007 Q2

Change in yield on total earning assets		(136	) bps		(167	) bps
Change in rate on total funds to support earning assets		(97	) bps		(111	) bps

We last lowered our prime lending rate on April 30, 2008, echoing the 25-basis-point reduction the FOMC made that day. Our prime lending rate serves as a point of reference for a substantial number of our commercial floating rate loans.


Wilmington Trust Prime Lending Rate	At 6/30/08			At 12/31/07			At 6/30/07

Prime lending rate (period end)		5.00	%		7.25	%		8.25	%
Prime lending rate (on average)		5.08	%		7.58	%		8.25	%

We estimate that each 25-basis-point drop in short-term rates causes a decrease in our net interest margin of approximately 3 basis points, and approximately $3 million in net interest income, over a 12-month period. The pressure on the margin is more dramatic immediately following a rate change, and then it moderates as liability rates reset.

Assuming no further rate reductions, we expect the pace of compression in the margin to slow substantially in the third quarter, and stabilize in the fourth quarter. A rising interest rate environment would accelerate the stabilization and potentially improve the margin. For more information about this, read the disclosures in this report about quantitative and qualitative market risk.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

QUARTERLY ANALYSIS OF NET INTEREST INCOME


	2008 Second Quarter								2007 Second Quarter
	Average			Income/		Average			Average			Income/		Average
	Balance			Expense		Rate			Balance			Expense		Rate
	(Dollar amounts in millions; rates on a tax-equivalent basis)

Earning assets
Interest-bearing deposits in other banks	$	63.1		$	0.3		2.09	%	$	3.9		$	0.1		8.32	%
Federal funds sold and securities purchased under agreements to resell		38.0			0.2		2.01			33.6			0.4		4.82

Total short-term investments		101.1			0.5		2.06			37.5			0.5		5.18

U.S. Treasury		50.5			0.5		3.79			106.1			1.0		3.89
Government agencies		487.5			5.9		4.85			655.6			7.7		4.73
Obligations of state and political subdivisions		7.2			0.1		8.85			12.4			0.2		7.83
Preferred stock		54.1			1.1		7.88			68.8			1.4		8.03
Mortgage-backed securities		727.9			8.2		4.53			654.4			6.9		4.22
Other securities		355.8			3.8		4.34			384.5			6.1		6.31

Total investment securities		1,683.0			19.6		4.69			1,881.8			23.3		4.97

FHLB and FRB stock, at cost		26.5			0.2		3.00			7.1			0.1		7.33

Commercial, financial, and agricultural		2,765.4			40.9		5.94			2,500.1			49.3		7.90
Real estate – construction		1,837.1			24.6		5.38			1,696.7			36.2		8.56
Mortgage – commercial		1,654.1			24.1		5.87			1,376.9			27.5		8.02

Total commercial loans		6,256.6			89.6		5.76			5,573.7			113.0		8.13

Mortgage – residential		560.5			8.1		5.83			553.9			8.1		5.87
Consumer loans		1,729.8			27.3		6.34			1,503.9			27.9		7.44
Loans secured with liquid collateral		539.0			5.5		4.09			524.8			8.9		6.83

Total retail loans		2,829.3			40.9		5.81			2,582.6			44.9		6.98

Total loans net of unearned income		9,085.9			130.5		5.77			8,156.3			157.9		7.77

Total earning assets at historical cost	$	10,896.5		$	150.8		5.56	%	$	10,082.7		$	181.8		7.23	%

Fair value adjustment on investment securities available for sale		(84.5	)							(22.8	)

Total earning assets	$	10,812.0							$	10,059.9

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


	2008 Second Quarter								2007 Second Quarter
	Average		Income/			Average			Average		Income/			Average
	Balance		Expense			Rate			Balance		Expense			Rate
	(Dollar amounts in millions; rates on a tax-equivalent basis)

Funds supporting earning assets
Savings	$	795.2	$	4.3			2.17	%	$	463.4	$	2.4			2.07	%
Interest-bearing demand		2,417.0		4.5			0.75			2,454.7		8.8			1.44
Certificates under $100,000		988.2		9.0			3.64			1,014.5		11.2			4.45
Local certificates $100,000 and over		306.9		2.9			3.82			427.2		4.9			4.55

Total core interest-bearing deposits		4,507.3		20.7			1.85			4,359.8		27.3			2.51
National certificates $100,000 and over		2,719.2		23.9			3.53			2,853.8		38.5			5.40

Total interest-bearing deposits		7,226.5		44.6			2.48			7,213.6		65.8			3.66

Federal funds purchased and securities sold under agreements to repurchase		1,847.9		10.8			2.35			1,270.0		15.3			4.83
U.S. Treasury demand deposits		11.6		0.1			1.94			10.4		0.1			5.11
Line of credit and other debt		50.1		0.9			7.13			83.2		1.9			9.09

Total short-term borrowings		1,909.6		11.8			2.47			1,363.6		17.3			5.09

Long-term debt		467.4		8.4			7.25			307.3		4.9			6.43

Total interest-bearing liabilities		9,603.5		64.8			2.71			8,884.5		88.0			3.97

Other noninterest funds		1,293.0		—			—			1,198.2		—			—

Total funds used to support earning assets	$	10,896.5	$	64.8			2.39	%	$	10,082.7	$	88.0			3.50	%

Net interest income/margin				86.0			3.17	%				93.8			3.73	%
Tax-equivalent adjustment				(0.8	)							(1.0	)

Net interest income			$	85.2							$	92.8

In order to ensure the comparability of yields and rates and their impact on net interest income, average rates are calculated using average balances based on historical cost and do not reflect the market valuation adjustment required by SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.”

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

YEAR-TO-DATE ANALYSIS OF NET INTEREST INCOME


	Year-to-Date 2008								Year-to-Date 2007
	Average			Income/		Average			Average			Income/		Average
	Balance			Expense		Rate			Balance			Expense		Rate
	(Dollar amounts in millions; rates on a tax-equivalent basis)

Earning assets
Interest-bearing deposits in other banks	$	33.2		$	0.4		2.30	%	$	4.9		$	0.2		7.37	%
Federal funds sold and securities purchased under agreements to resell		36.5			0.5		2.55			42.5			1.0		4.84

Total short-term investments		69.7			0.9		2.44			47.4			1.2		5.10

U.S. Treasury		55.3			1.1		3.93			115.6			2.3		4.01
Government agencies		515.1			12.5		4.89			694.1			16.2		4.71
Obligations of state and political subdivisions		10.7			0.4		7.73			10.6			0.4		8.31
Preferred stock		54.2			2.1		7.88			76.7			2.9		7.74
Mortgage-backed securities		732.3			16.3		4.48			673.0			14.3		4.23
Other securities		359.1			8.9		4.99			384.0			12.0		6.30

Total investment securities		1,726.7			41.3		4.82			1,954.0			48.1		4.96

FHLB and FRB stock, at cost		24.4			0.5		4.09			7.1			0.2		6.33

Commercial, financial, and agricultural		2,683.8			83.8		6.28			2,483.3			98.1		7.97
Real estate – construction		1,821.0			53.9		5.95			1,683.3			71.6		8.58
Mortgage – commercial		1,591.1			49.7		6.28			1,358.5			54.1		8.03

Total commercial loans		6,095.9			187.4		6.18			5,525.1			223.8		8.17

Mortgage – residential		561.6			16.3		5.82			548.0			16.1		5.91
Consumer loans		1,691.4			55.7		6.62			1,508.1			55.5		7.42
Loans secured with liquid collateral		512.4			11.8		4.65			533.2			18.0		6.82

Total retail loans		2,765.4			83.8		6.10			2,589.3			89.6		6.98

Total loans net of unearned income		8,861.3			271.2		6.15			8,114.4			313.4		7.79

Total earning assets at historical cost	$	10,682.1		$	313.9		5.91	%	$	10,122.9		$	362.9		7.23	%

Fair value adjustment on investment securities available for sale		(54.5	)							(25.5	)

Total earning assets	$	10,627.6							$	10,097.4

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


	Year-to-Date 2008								Year-to-Date 2007
	Average		Income/			Average			Average		Income/			Average
	Balance		Expense			Rate			Balance		Expense			Rate
	(Dollar amounts in millions; rates on a tax-equivalent basis)

Funds supporting earning assets
Savings	$	755.0	$	9.0			2.39	%	$	414.7	$	3.5			1.73	%
Interest-bearing demand		2,392.6		10.7			0.90			2,424.2		17.5			1.45
Certificates under $100,000		1,002.1		19.5			3.91			1,013.7		22.1			4.40
Local certificates $100,000 and over		321.1		6.6			4.15			442.4		10.5			4.79

Total core interest-bearing deposits		4,470.8		45.8			2.06			4,295.0		53.6			2.52
National certificates $100,000 and over		2,744.8		54.5			3.99			2,922.6		78.5			5.42

Total interest-bearing deposits		7,215.6		100.3			2.79			7,217.6		132.1			3.69

Federal funds purchased and securities sold under agreements to repurchase		1,736.7		23.8			2.77			1,288.3		31.3			4.90
U.S. Treasury demand deposits		12.2		0.2			2.52			7.9		0.2			5.08
Line of credit and other debt		93.2		3.3			7.09			47.7		2.1			8.69

Total short-term borrowings		1,842.1		27.3			2.98			1,343.9		33.6			5.03

Long-term debt		367.8		12.6			6.90			347.8		11.5			6.67

Total interest-bearing liabilities		9,425.5		140.2			2.99			8,909.3		177.2			4.01

Other noninterest funds		1,256.6		—			—			1,213.6		—			—

Total funds used to support earning assets	$	10,682.1	$	140.2			2.64	%	$	10,122.9	$	177.2			3.53	%

Net interest income/margin				173.7			3.27	%				185.7			3.70	%
Tax-equivalent adjustment				(1.6	)							(2.0	)

Net interest income			$	172.1							$	183.7

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE DUE TO VOLUME AND RATE


	For the Three Months Ended June 30,									For the Six Months Ended June 30,
	2008/2007									2008/2007
	Increase/(Decrease) Due to Change in									Increase/(Decrease) Due to Change in
	Volume¹			Rate²			Total			Volume¹			Rate²			Total
	(In millions)

Interest income:
Interest-bearing deposits in other banks	$	1.2		$	(1.0	)	$	0.2		$	1.0		$	(0.8	)	$	0.2
Federal funds sold and securities purchased under agreements to resell		0.1			(0.3	)		(0.2	)		(0.1	)		(0.4	)		(0.5	)

Total short-term investments		1.3			(1.3	)		—			0.9			(1.2	)		(0.3	)

U.S. Treasury		(0.5	)		—			(0.5	)		(1.2	)		—			(1.2	)
Government Agencies		(2.0	)		0.2			(1.8	)		(4.2	)		0.5			(3.7	)
Obligations of state and political subdivisions*		(0.1	)		—			(0.1	)		—			—			—
Preferred stock*		(0.3	)		—			(0.3	)		(0.9	)		0.1			(0.8	)
Mortgage-backed securities		0.8			0.5			1.3			1.2			0.8			2.0
Other securities*		(0.5	)		(1.8	)		(2.3	)		(0.8	)		(2.3	)		(3.1	)

Total investment securities		(2.6	)		(1.1	)		(3.7	)		(5.9	)		(0.9	)		(6.8	)

FHLB and FRB stock, at cost		0.4			(0.3	)		0.1			0.5			(0.2	)		0.3

Commercial, financial, and agricultural*		5.2			(13.6	)		(8.4	)		7.9			(22.2	)		(14.3	)
Real estate – construction		3.0			(14.6	)		(11.6	)		5.9			(23.6	)		(17.7	)
Mortgage – commercial*		5.5			(8.9	)		(3.4	)		9.3			(13.7	)		(4.4	)

Total commercial loans		13.7			(37.1	)		(23.4	)		23.1			(59.5	)		(36.4	)

Mortgage – residential		0.1			(0.1	)		—			0.4			(0.2	)		0.2
Consumer loans		4.2			(4.8	)		(0.6	)		6.8			(6.6	)		0.2
Loans secured with liquid collateral		0.2			(3.6	)		(3.4	)		(0.7	)		(5.5	)		(6.2	)

Total retail loans		4.5			(8.5	)		(4.0	)		6.5			(12.3	)		(5.8	)

Total loans net of unearned income		18.2			(45.6	)		(27.4	)		29.6			(71.8	)		(42.2	)

Total interest income	$	17.3		$	(48.3	)	$	(31.0	)	$	25.1		$	(74.1	)	$	(49.0	)

Interest expense:
Savings	$	1.7		$	0.2		$	1.9		$	2.9		$	2.6		$	5.5
Interest-bearing demand		(0.1	)		(4.2	)		(4.3	)		(0.2	)		(6.6	)		(6.8	)
Certificates under $100,000		(0.3	)		(1.9	)		(2.2	)		(0.3	)		(2.3	)		(2.6	)
Local certificates $100,000 and over		(1.4	)		(0.6	)		(2.0	)		(2.9	)		(1.0	)		(3.9	)

Total core interest-bearing deposits		(0.1	)		(6.5	)		(6.6	)		(0.5	)		(7.3	)		(7.8	)

National certificates $100,000 and over		(1.8	)		(12.8	)		(14.6	)		(4.8	)		(19.2	)		(24.0	)

Total interest-bearing deposits		(1.9	)		(19.3	)		(21.2	)		(5.3	)		(26.5	)		(31.8	)

Federal funds purchased and securities sold under agreements to repurchase		6.9			(11.4	)		(4.5	)		10.9			(18.4	)		(7.5	)
U.S. Treasury demand deposits		—			—			—			0.1			(0.1	)		—
Line of credit and other debt		(0.7	)		(0.3	)		(1.0	)		2.0			(0.8	)		1.2

Total short-term borrowings		6.2			(11.7	)		(5.5	)		13.0			(19.3	)		(6.3	)
Long-term debt		2.6			0.9			3.5			0.7			0.4			1.1

Total interest expense	$	6.9		$	(30.1	)	$	(23.2	)	$	8.4		$	(45.4	)	$	(37.0	)

Changes in net interest income	$	10.4		$	(18.2	)	$	(7.8	)	$	16.7		$	(28.7	)	$	(12.0	)


*		We calculate variances on a fully tax-equivalent basis, which includes the effects of any disallowed interest expense.
¹		We define changes attributable to volume as a change in average balance multiplied by the prior year’s rate.
²		We define changes attributable to rate as a change in rate multiplied by the average balance in the applicable period of the prior year. A change in rate/volume (change in rate multiplied by change in volume) has been allocated to the change in rate.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

NONINTEREST INCOME

Noninterest income accounted for a higher percentage of total revenue for the second quarter and first six months of 2007, but the total amount of noninterest income was lower than for the corresponding periods in 2007 because, in the 2008 second quarter:


	•	The write-down of preferred stocks in our investment securities portfolio caused us to record a securities loss.

	•	At Cramer Rosenthal McGlynn, performance fees were lower and equity market volatility reduced valuations of assets under management, which reduced the revenue contribution from that firm.

	•	We recorded a $1.1 million loss associated with Roxbury Capital Management.


Noninterest Income	2008 Q2			2007 Q2			2008 YTD			2007 YTD
	(Dollars in millions)

Wealth Advisory Services (WAS) revenue	$	57.8		$	53.4		$	113.6		$	104.9
Corporate Client Services (CCS) revenue		31.7			24.8			57.7			48.8
Affiliate money manager revenue		4.4			6.5			8.7			11.3
Amortization of affiliate intangibles		(2.0	)		(1.1	)		(3.3	)		(2.2	)
Service charges on deposit accounts		7.5			7.0			15.0			13.8
Other noninterest income		6.3			6.2			16.7			11.7
Securities (losses)/gains		(12.5	)		0.1			(12.5	)		0.1
Total noninterest income	$	93.2		$	96.9		$	195.9		$	188.4
Portion provided by WAS revenue		62	%		55	%		58	%		56	%
Portion provided by CCS revenue		34	%		26	%		29	%		26	%

The 2008 second quarter included two months of revenue and expenses associated with the acquisition of AST Capital Trust Company (AST), which we completed on April 30, 2008. We record most of the revenue from this acquisition as CCS retirement services revenue. We record the remainder in WAS trust and investment advisory revenue.

THE CORPORATE CLIENT SERVICES BUSINESS

We report Corporate Client Services (CCS) revenue in four categories:

1. Capital markets revenue. These fees are based on the complexity of trust and administrative services we provide, not on asset valuations. We perform most of these services under multiyear contracts.

2. Entity management revenue. These fees are based on the complexity of corporate governance and administrative services we provide for special purpose entities in preferred jurisdictions. These fees are not tied to asset valuations.

3. Retirement services revenue. A portion of this revenue is based on the market valuations of retirement plan assets for which we serve as trustee. The remainder is based on the level of service we provide.

4. Institutional investment and cash management. These fees reflect investment and cash management services we perform for retirement services and capital markets clients who have residual cash management needs. Some of these fees are based on money market fund balances and some are based on the valuations of investment-grade fixed income instruments.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

We do not:


	•	Have credit risk exposure to large capital markets transactions.
	•	Own the assets or entities for which we serve as trustee or administrator.
	•	Record these assets on our balance sheet.
	•	Consolidate these entities.
	•	Issue, underwrite, set pricing, or establish valuations for the financing structures we support.

CCS in the second quarter and first six months of 2008

CCS revenue was 28% higher for the 2008 second quarter, and 18% higher year-to-date, than for the corresponding periods in 2007. All components of CCS recorded revenue increases, as:


	•	Product diversity helped offset general weakness in the structured finance market.

	•	Business activity in Europe generated higher entity management revenue.

	•	The AST acquisition boosted retirement services revenue.

	•	We continued to develop more institutional investment and cash management business.


Corporate Client Services Revenue	2008 Q2		2007 Q2		2008 YTD		2007 YTD
	(In millions)

Capital markets services	$	12.2	$	11.2	$	23.8	$	21.4
Entity management services		8.6		7.4		16.4		14.5
Retirement services		7.5		3.2		10.7		6.6
Institutional investment/cash management services		3.4		3.0		6.8		6.3

Total Corporate Client Services revenue	$	31.7	$	24.8	$	57.7	$	48.8

Revenue from capital markets services rose 9% for the quarter and 11% year-to-date, even though the overall volume of activity in the market was significantly lower than in 2007 and prior years. We were able to grow capital markets revenue because:


	•	We offer a diversified mix of products.

	•	There is a degree of counter-cyclicality in the capital markets services we offer, which include trust and administrative services for defaults, restructurings, and bankruptcies.

The major drivers of capital markets revenue growth in the second quarter and first half of 2008 were services that support tender option bonds, repackaged municipal and corporate debt, defaults and bankruptcies, and escrow administration.

Some of the ABS transactions for which CCS provides trust and administrative services hold a blend of prime and subprime residential mortgages. As a service provider, our involvement in these transactions is defined contractually. We do not underwrite or issue these instruments, nor do we have any associated balance sheet or credit risk. The lack of ABS activity affects the pace of capital markets revenue growth. For the second quarter and first half of 2008, fees for these services amounted to approximately $1.3 million and $2.5 million, respectively, or approximately 4% of total CCS revenue.

In the entity management component, the revenue increases reflected business development in Europe and the Luxembourg acquisition we completed in June 2007. In addition, in May 2008, we strengthened our presence in Europe and gained jurisdictional capabilities in The Netherlands by forming an alliance with ANT-Trust, an independent, Amsterdam-based supplier of corporate trust and administrative services.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

In the retirement services component, the two months of revenue from AST more than offset the impact on fees from financial market volatility that reduced the valuations of some client retirement plan assets. The portion of retirement services fees that are based on market valuations was 77% for the second quarter of 2008, and 72% for the first six months of 2008.

Most CCS investment and cash management services are for short-term investments, and revenue from these services can fluctuate from period to period. For the second quarter and first six months of 2008, approximately 33% of this revenue was tied to U.S. investment grade fixed income securities. The remainder was based on money market fund balances.

CCS and Bear Stearns

Bear Stearns hired us in early 2008 to serve as trustee for The Bear Stearns Companies Inc. 2008 Trust, into which approximately 27.3 million shares of Bear Stearns Company common stock had been contributed for certain compensation plans. When JPMorgan Chase & Co. completed its acquisition of Bear Stearns on May 30, 2008, these shares were converted to JPMorgan Chase & Co. common stock.

We do not own these shares. They are held by the trust, not in our investment securities portfolio.

As trustee, we provide custody and other administrative services that support this trust. The nature and extent of the services we provide are directed by the client (JPMorgan Chase) and specified in the legal documents that govern this trust.

Our fee for serving as trustee on this engagement is less than $500,000 per year. Our fee consists of a base (flat) fee plus a basis-point fee that is tied to the market valuation of the shares held in the trust. In other words, the base fee serves as a “floor” below which our fee will not drop. Fluctuations in the market value of the shares held in the trust could increase or decrease the revenue we receive from this engagement, because a portion, but not all, of that revenue is based on market valuations.

Since this engagement was new in 2008, no periods prior to 2008 included any revenue from this engagement.

Corporate Client Services profitability

CCS profitability was lower than for prior periods because 2007 results did not reflect:


	•	Expenses associated with the AST acquisition, which was completed on April 30, 2008.

	•	Expenses associated with the Luxembourg acquisition until the third quarter of 2007.


Corporate Client Services Profitability	2008 Q2			2007 Q2			2008 YTD			2007 YTD

Segment operating net income (in millions)	$	3.9		$	5.6		$	9.2		$	10.5
Efficiency ratio		83.05	%		71.43	%		79.21	%		71.28	%
Profit margin		16.95	%		28.57	%		20.79	%		28.72	%

THE WEALTH ADVISORY SERVICES BUSINESS

We report Wealth Advisory Services (WAS) revenue in three categories:

1. Trust and investment advisory revenue. This is the portion of WAS revenue that is generated by our core asset management, asset allocation, and trust management services. Trust and investment advisory fees

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

are based on the market valuations of client assets we manage, direct, or hold in custody, and the valuations are tied to movements in the financial markets.

Assets we manage for clients include equities, fixed income instruments, cash and cash equivalents, and other assets. Depending on the mix of assets in client accounts, changes in trust and investment advisory revenue may or may not correspond with changes in financial markets such as the Dow Jones Industrial Average, the Standard & Poor’s 500 (S&P 500), NASDAQ, or other markets. For more information about this, read the assets under management section of this report.

2. Planning and other services revenue. This revenue is from family office, financial planning, estate settlement, tax, and other services. Fees for these services are based on the level and complexity of the services we provide, not on the valuations of the assets we manage or hold in custody. In some cases, these fees are based on the client’s annual income. These fees can vary widely in amount, and portions may be nonrecurring. Because these fees reflect client demand at any given point in time, it is not unusual for them to fluctuate up or down from period to period.

3. Mutual fund revenue. This revenue is tied primarily to money market mutual fund and cash balances, and does not reflect equity market movements.

WAS in the second quarter and first six months of 2008

WAS revenue was 8% higher for the second quarter and first six months of 2008 than for the corresponding year-ago periods. This growth was due largely to business from our family office practice and our expansion into New England, which began in June 2007 when we opened an office in Boston.


Wealth Advisory Services Revenue	2008 Q2		2007 Q2		2008 YTD		2007 YTD
			(In millions)

Trust and investment advisory fees	$	40.2	$	38.4	$	79.5	$	75.4
Planning and other services fees		11.2		9.9		21.3		19.4
Mutual fund fees		6.4		5.1		12.8		10.1

Total Wealth Advisory Services revenue	$	57.8	$	53.4	$	113.6	$	104.9

Revenue from WAS trust and investment advisory services was 5% higher for the quarter and on a year-to-date basis on the strength of new business, especially from the New England market. The full effect of this revenue growth was masked by equity market declines in the corresponding periods, as the following comparison with the S&P 500 illustrates:


Trust and investment advisory revenue vs. S&P 500	2008 Q2 vs. 2008 Q1			2008 YTD vs. 2007 YTD

Change in WAS trust and investment advisory revenue		3	%		5	%
Change in S&P 500		(3	)%		(15	)%

We use the S&P 500 as a benchmark for comparison because its composition mirrors, to a large extent, the mix of equities in our clients’ portfolios.

WAS sales (new business, annualized) were lower than for the corresponding year-ago periods, mainly because we recorded several very large family office fees early in 2007. Fees for family office services can vary widely, and some fees may be nonrecurring, which causes revenue from these services to fluctuate from period to period.

The percentage of new business from markets outside the mid-Atlantic region was higher than for prior periods. This reflected the inroads we are making in the markets in which we have been expanding and adding staff in recent years.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Total WAS Sales¹	2008 Q2			2007 Q2			2008 YTD			2007 YTD

Percentage from family wealth services²		45	%		45	%		47	%		51	%
Percentage from mid-Atlantic market clients³		23	%		29	%		22	%		24	%
Percentage from national market clients⁴		32	%		26	%		31	%		25	%
Total WAS sales (in millions)	$	6.0		$	6.3		$	11.5		$	12.4


¹		New business, annualized.
²		Includes clients throughout the United States with liquid assets of $100 million or more.
³		Includes clients in Delaware, Maryland, New Jersey, and Pennsylvania.
⁴		Includes clients in California, Florida, Georgia, Massachusetts, and New York, and clients from throughout the United States whose accounts are located in and serviced from Delaware. These clients choose to establish accounts in Delaware to benefit from Delaware’s trust, tax, and legal advantages, many of which are not available for trusts governed by the laws of other states.

Wealth Advisory Services profitability

WAS profitability decreased from prior periods mainly because WAS results did not include expenses associated with the Boston office until the third quarter of 2007.


Wealth Advisory Services Profitability	2008 Q2			2007 Q2			2008 YTD			2007 YTD

Segment operating net income (in millions)	$	4.8		$	7.5		$	9.6		$	12.2
Efficiency ratio		84.81	%		78.15	%		85.44	%		82.18	%
Profit margin		15.19	%		21.85	%		14.56	%		17.82	%

ASSETS UNDER MANAGEMENT AND ADMINISTRATION AT WILMINGTON TRUST

Assets under management (AUM) are assets for which we make investment decisions on behalf of clients. Most of the clients who use our asset management services are WAS clients.

Assets under administration (AUA) are assets we hold in custody or for which we serve as fiduciary on behalf of clients. Most of these assets are from CCS retirement services clients.


Client Assets at Wilmington Trust¹	At 6/30/08		At 3/31/08		At 12/31/07		At 6/30/07
	(In billions)

Assets under management	$	37.5	$	35.0	$	35.9	$	33.2
Assets under administration		109.1		85.7		88.4		86.9

Total client assets at Wilmington Trust	$	146.6	$	120.7	$	124.3	$	120.1


¹		Excludes Cramer Rosenthal McGlynn and Roxbury Capital Management. Includes estimates of asset values that are not readily available, such as those held in limited partnerships.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


	At 6/30/08					At 12/31/07					At 6/30/07
Assets Under Management by Business Line¹	Amount		Percent			Amount		Percent			Amount		Percent
	(In billions)

Wealth Advisory Services	$	33.0		88	%	$	32.9		92	%	$	26.8		81	%
Corporate Client Services		4.5		12	%		3.0		8	%		6.4		19	%

Total	$	37.5				$	35.9				$	33.2


¹		Excludes Cramer Rosenthal McGlynn and Roxbury Capital Management. Includes estimates of asset values that are not readily available, such as those held in limited partnerships.

On a percentage basis, the investment mix of managed assets at Wilmington Trust (excluding CRM and RCM) remained relatively unchanged.


Investment Mix of Wilmington Trust Managed Assets¹	At 6/30/08			At 3/31/08			At 12/31/07			At 6/30/07

Equities		44	%		45	%		47	%		49	%
Fixed income		24	%		23	%		23	%		22	%
Cash and cash equivalents		18	%		18	%		15	%		16	%
Other assets		14	%		14	%		15	%		13	%


¹		Excludes Cramer Rosenthal McGlynn and Roxbury Capital Management.

Changes in AUM or AUA levels do not necessarily indicate that we have gained or lost business. Most of the assets we manage or administer are held in trusts, which means these assets are affected by fund distributions as well as changes in market valuations. Fund distributions typically are made for tax payments, philanthropic obligations, discretionary spending, trust terminations, and other purposes. Asset levels also are affected by the duration of trust agreements, which can range from a few months to 99 years or more.

We believe that changes in revenue, rather than changes in AUM or AUA, are better indicators of trends in the WAS and CCS businesses because:


	•	Asset management is only one of the wealth management services we offer, and only a portion of WAS revenue — trust and investment advisory revenue — is based on asset valuations.

	•	WAS and CCS revenue may include fees for direction trust services, but direction trust assets are not included in our AUM or AUA amounts. Direction trusts, which are not permitted in all states, allow clients to have their assets and fiduciary matters managed separately by different providers.

	•	In the CCS business, except for revenue from investment and cash management services, the majority of revenue is generated on a fee-for-service basis regardless of the value of any associated asset.

	•	Monetary assets we manage or administer for CCS clients can fluctuate by hundreds of millions of dollars from one reporting period to the next, depending on the cash management needs of these clients.

For more information about the portion of our revenue that is based on financial market valuations, read the financial market risk discussion in this report.

AFFILIATE MONEY MANAGERS

We have ownership positions in two money management firms:


	•	Cramer Rosenthal McGlynn (CRM), a value-style manager based in New York; and

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


	•	Roxbury Capital Management (RCM), a growth-style manager based in Santa Monica, California.


Affiliate Money Manager Revenue	2008 Q2		2007 Q2		2008 YTD		2007 YTD
	(In millions)

Total revenue from affiliate money managers (net of expenses)	$	4.4	$	6.5	$	8.7	$	11.3

The revenue we record from CRM and RCM is net of their expenses and based on our ownership position in each. We do not consolidate CRM’s or RCM’s results in our financial statements because the principals of these firms retain management controls, including veto powers, over a variety of matters.

CRM and RCM are not part of our WAS business. We affiliated with CRM and RCM in 1998 to gain expertise in stylized investment management, and to help us establish offices in New York and southern California. We subsequently adopted an investment consulting process that uses a variety of independent, third-party money managers. Although we no longer rely as heavily on CRM and RCM for investment management services, we value their contributions to our revenue.

For more information about our investments in CRM and RCM, read the affiliate money managers discussion and Notes 4, 10, and 23 in our 2007 Annual Report to Shareholders.

CRAMER ROSENTHAL MCGLYNN (CRM)

Business inflows at CRM remained strong. Managed asset levels increased 2% during the 2008 second quarter, but were lower than at end of the year-ago second quarter because equity market volatility reduced the market valuations of assets held in clients’ portfolios. This, in turn, reduced the revenue contribution from CRM. The lower levels of revenue from CRM also reflected lower performance fees the firm earned on its real estate hedge fund investments.


Revenue from Cramer Rosenthal McGlynn	2008 Q2		2007 Q2		2008 YTD		2007 YTD

Revenue (In millions, net of expenses)	$	5.5	$	6.3	$	9.5	$	11.0


Cramer Rosenthal McGlynn	At 6/30/08			At 3/31/08			At 12/31/07			At 6/30/07

Assets under management (in millions)	$	11,154.1		$	10,891.1		$	11,417.3		$	11,928.7
Wilmington Trust’s ownership position		80.99	%		82.41	%		82.41	%		82.41	%

Some CRM managers exercised their CRM stock options during the 2008 second quarter, which is why our ownership position declined slightly.

ROXBURY CAPITAL MANAGEMENT (RCM)

Like most growth-style managers, RCM has faced a difficult operating environment in recent years, due to the collapse of the technology stock bubble and continued volatility in equity markets. Amid this environment, RCM has developed and launched several new products recently. The new products are attracting assets, and early performance indicators are positive, but the new products are not yet at a stage in their life cycles where they are strong enough to counter asset declines in RCM’s mid-cap fund.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

This was evident in RCM’s managed asset levels, which were lower than at the end of the year-ago second quarter and the end of 2007, but slightly higher at June 30, 2008, than at March 31, 2008. This improvement, however, was not strong enough to prevent RCM from recording a loss for the 2008 second quarter.

As RCM continues to adapt to market changes, we remain confident in the firm’s leadership and long-term prospects for profitability.


Revenue from Roxbury Capital Management	2008 Q2			2007 Q2		2008 YTD			2007 YTD

Revenue (in millions, net of expenses)	$	(1.1	)	$	0.2	$	(0.8	)	$	0.3


Roxbury Capital Management	At 6/30/08			At 3/31/08			At 12/31/07			At 6/30/07

Assets under management (in millions)	$	2,062.3		$	2,061.7		$	2,466.0		$	3,005.3
Wilmington Trust’s ownership position
Ownership of preferred profits		30	%		30	%		30	%		30	%
Ownership of common interests		41.23	%		41.23	%		41.23	%		41.23	%

In the 2008 second quarter, the combination of RCM’s asset declines, lower-than-expected operating performance and near-term projections, and the anticipated second quarter loss triggered the need for goodwill impairment testing under GAAP. The results of this test, which was conducted by Berkshire Capital Securities LLC, determined that the value of our investment in RCM had declined from $89.1 million to $22.2 million. We recorded this $66.9 million decrease in valuation as a non-cash impairment charge (expense) for the 2008 second quarter. The impairment did not affect our capital ratios or our ownership position in RCM.

Our agreement with RCM includes provisions that permit some of the firm’s portfolio managers to put (relinquish) their ownership of certain free cash flow interests (Class B interests) to us. These Class B interests are in addition to our equity ownership position in RCM. The exercises of these puts add to the revenue we receive from RCM. On April 1, 2008, principals of RCM’s office in Portland, Oregon, put approximately $14.3 million of their Class B interests to us. Since the revenue we receive from RCM increases when these puts are exercised, the put activity in the second quarter of 2008 helped offset the impact of RCM’s second quarter loss on its revenue contribution to us.

COMBINED AUM AT WILMINGTON TRUST AND AFFILIATE MONEY MANAGERS

Changes in AUM at Wilmington Trust do not necessarily reflect business inflows or outflows, as noted earlier. In contrast, at the affiliate money managers, managed asset levels reflect business flows as well as financial market movements. On a combined basis, total assets under management at Wilmington Trust and the affiliate money managers were 6% higher than at March 31, 2008, and at June 30, 2007.


Assets Under Management	At 6/30/08		At 3/31/08		At 12/31/07		At 6/30/07
	(In billions)

Wilmington Trust¹	$	37.5	$	35.0	$	35.9	$	33.2
Cramer Rosenthal McGlynn		11.2		10.9		11.4		11.9
Roxbury Capital Management		2.1		2.1		2.5		3.0

Total assets under management	$	50.8	$	48.0	$	49.8	$	48.1


¹		Includes estimates of asset values that are not readily available, such as those held in limited partnerships.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

NONINTEREST EXPENSE

On a GAAP basis, expenses were significantly higher than for prior periods because of the $66.9 million impairment charge we recorded against the valuation of our investment in RCM.

On an operating basis, expenses were 15% higher than for the year-ago second quarter, and 10% higher on a year-to-date basis. These increases were due to expansion-related costs that were not fully evident in the corresponding year-ago periods, including:


	•	The acquisitions in June 2007 in Boston and Luxembourg.

	•	Regional Banking staff additions, primarily in the Baltimore market, made toward the end of 2007.

	•	The AST acquisition on April 30, 2008, which added 170 staff members.

Staffing-related costs continued to constitute our single largest concentration of expenses.


Noninterest Expenses (operating basis)	2008 Q2			2007 Q2			2008 YTD			2007 YTD
	(Dollars in millions)

Full-time-equivalent staff members		2,879			2,597			2,879			2,597
Salaries and wages expense	$	48.3		$	41.9		$	94.0		$	83.7
Incentives and bonuses expense		13.2			11.4			27.7			25.4
Employment benefits expense		12.4			11.5			26.7			26.2

Total staffing-related expense	$	73.9		$	64.8		$	148.4		$	135.3
Total noninterest operating expenses	$	121.6		$	106.0		$	237.1		$	216.4
Staffing-related expense as a percentage of total expenses		61	%		61	%		63	%		63	%

In other categories of noninterest expense:


	•	Increases in servicing and consulting fees and subadvisor expense were associated primarily with AST.

	•	Increases in legal expense were associated with ongoing litigation as well as commercial loan recovery and foreclosure activities. For more information about these activities, read the credit quality discussion in this report.

INCOME TAXES

On a GAAP basis, income tax expense and the effective tax rate changed from prior periods primarily because of:


	•	The non-cash impairment write-down of the valuation of our investment in RCM.

	•	Changes to tax reserves and state income tax rates.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Income Taxes and Tax Rate	2008 Q2			2007 Q2			2008 YTD			2007 YTD
	(Dollars in millions)

Pre-tax (loss)/income	$	(28.6	)	$	77.2		$	35.6		$	145.6
Income tax (benefit)/expense	$	(9.3	)	$	28.3		$	13.4		$	53.1
Effective tax rate		32.52	%		36.66	%		37.64	%		36.47	%

On an operating basis, our effective tax rate was 36.74% for the second quarter of 2008 and 35.97% for the first six months of 2008.

CAPITAL RESOURCES

Our capital position remained strong in the first six months of 2008, even though net income was lower, due mainly to:


	•	The reduction in net interest income due to compression in the net interest margin.

	•	The $66.9 million non-cash impairment charge (expense) against the valuation of our investment in RCM.

	•	The investment securities impairment of $12.6 million.

These factors reduced stockholders’ equity, the return on stockholders’ equity, and the return on assets.


	Six Months Ended			Year Ended			Six Months Ended
Capital Strength	6/30/08			12/31/07			6/30/07
	(Dollars in millions)

Stockholders’ equity (period end)	$	1,066.4		$	1,120.3		$	1,072.1
Stockholders’ equity (on average)	$	1,122.4		$	1,091.0		$	1,091.3
Return on average stockholders’ equity (annualized)		3.92	%		16.68	%		16.96	%
Return on average assets (annualized)		0.38	%		1.65	%		1.69	%
Capital generation ratio (annualized)		(4.23	)%		8.69	%		9.06	%
Dividend payout ratio (operating basis)		62.26	%		49.40	%		48.58	%

On an operating basis, the declines in the returns on stockholders’ equity and assets were much less severe, but the lower levels of net income still reduced these ratios from prior periods.


	Six Months Ended			Year Ended			Six Months Ended
Capital Strength (operating basis)	6/30/08			12/31/07			6/30/07
	(Dollars in millions)

Return on average stockholders’ equity (annualized)		13.12	%		16.68	%		16.96	%
Return on average assets (annualized)		1.27	%		1.65	%		1.69	%

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

All regulatory capital ratios continued to exceed the amounts required by the Federal Reserve Board to be considered a well-capitalized institution, as the following table shows. The AST acquisition, which was an all-cash transaction, was the main cause of the decline in Tier 1 risk-based capital from year-end 2007.


	At			At			Minimum to be			Minimum to be
Regulatory Capital Ratios	6/30/08			12/31/07			Adequately Capitalized			Well Capitalized

Total risk-based capital		11.14	%		11.21	%		8	%		10	%
Tier 1 risk-based capital		6.74	%		7.73	%		4	%		6	%
Tier 1 leverage capital		6.45	%		7.18	%		4	%		5	%

The Federal Reserve’s guidelines are intended to reflect the varying degrees of risk associated with different on- and off-balance sheet items. For more information about these guidelines, read the capital resources discussion and Note 16, “Capital requirements,” in our 2007 Annual Report to Shareholders.

Changes to capital

During the first six months of 2008, we added $42.4 million to capital, which consisted of:


	•	$21.9 million of net income.

	•	$8.7 million of derivative gains included in other comprehensive income, net of taxes.

	•	$6.7 million from common stock issued under employment benefit plans.

	•	A credit to capital surplus of $4.2 million of stock-based compensation expense, net of taxes.

	•	$0.4 million in adjustments to minimum pension, supplemental executive retirement plan, and postretirement benefits plan liabilities, net of taxes.

	•	$0.3 million in foreign currency adjustments.

	•	A reclassification adjustment of $0.2 million in derivative costs, net of taxes.

Offsetting these additions was a $96.3 million reduction in capital, which consisted of:


	•	$45.8 million in unrealized losses on securities, net of taxes.

	•	$45.7 million of dividends paid.

	•	A $3.1 million reclassification from accumulated other comprehensive income into earnings of discontinued cash flow hedges, net of taxes.

	•	$1.7 million for the acquisition of treasury shares.

We manage capital to meet or exceed appropriate standards of financial safety and soundness, comply with existing and impending regulatory requirements, and provide for future growth. We review our capital position and make adjustments as needed to ensure we can achieve these goals.

Our wholly owned bank subsidiaries are the main users of our capital, and they are subject to regulatory capital requirements. The advisory businesses are not as capital-intensive, and they are not subject to regulatory capital requirements, although some of our trust agreements include specific capital requirements. For more information, read the capital resources section of our 2007 Annual Report to Shareholders.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Share repurchase program

Our current share repurchase plan, which was authorized by our Board of Directors in April 2002, permits us to buy back up to 8 million shares of Wilmington Trust stock. Our share repurchase activity reflects how we choose to deploy capital, and is not driven solely by share price.

During the first six months of 2008, we did not repurchase any of our shares under this program, mainly because:


	•	The May 1, 2008, maturity of an aggregate principal amount of $125 million in subordinated long-term debt was approaching.

	•	The all-cash purchase of AST Capital Trust Company was pending.

	•	Our goal is to maintain capital ratios that exceed the federal minimums for well-capitalized institutions.

	•	We opted to retain capital to fund loan growth, which was higher than anticipated.


Current 8-Million-Share Repurchase Plan Activity	2008 Q2		2007 Q4		2007 Q2

Number of shares repurchased		—		600,000		1,000,000
Average price per share repurchased	$	—	$	35.70	$	42.22
Total cost of shares repurchased	$	—	$	21,446,761	$	42,218,160
Total shares purchased under current plan		3,043,796		3,043,796		2,043,796
Shares available for repurchase at period end		4,956,204		4,956,204		5,956,204

In 2007, we repurchased 2,000,000 of our shares under this plan. It is unlikely that we will repurchase as many shares in 2008.

Figures in the table above do not match the figures reported under Part II, Item 2, in this report, because that report includes shares we use when recipients of stock-based compensation exercise their options. We consider those share acquisitions to be outside the parameters of our authorized share repurchase plan, because those shares are not trading on the open market when we acquire them.

LIQUIDITY AND FUNDING

As a bank holding company, we need liquidity to support operating and investing activities, comply with regulatory requirements, and minimize the risk of having insufficient funds to conduct business. We believe we have a strong liquidity position because:


	•	Our capital ratios demonstrate that we are well capitalized.

	•	We have access to diverse sources of funding, which mitigates our liquidity risk and gives us the ability to adjust the mix and amount of funding as we deem appropriate.

	•	Our long-term credit ratings are investment grade, and have been since 1998, when the ratings were first issued.

One of the tools we use to manage the risk of having insufficient liquidity is a wholesale funding coverage ratio (formerly the funds-at-risk ratio), which expresses liquid assets and other dedicated funding sources as a percentage of wholesale liabilities in three-month, six-month, and one-year time horizons.

Factors or conditions that could affect our liquidity include changes in the types of assets and liabilities on our balance sheet; our investment, loan, and deposit balances; our reputation; and our credit ratings. A significant

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

change in our financial performance or credit ratings could reduce the availability or increase the cost of funding. We monitor our existing and projected liquidity requirements continually. We believe our liquidity management practices give us the flexibility to react to changes that might affect our liquidity adversely.

For more information, read the discussion of liquidity and funding in our 2007 Annual Report to Shareholders.

Liquidity in the first six months of 2008

At June 30, 2008, we were operating within Level 1 parameters (the level with the least risk) of our liquidity management policy. Our wholesale funding average ratio also placed our liquidity position within Level 1 parameters. We have maintained a Level 1 position since the levels were established in 2004.

Our credit ratings remained favorable. The ratings of Wilmington Trust Corporation and Wilmington Trust Company were reaffirmed by Standard & Poor’s on January 15, 2008, and by Moody’s Investors Service on February 29, 2008. Fitch Ratings last reaffirmed our ratings in August 2007. Our long-term credit ratings have been investment grade since 1998, when they were first issued.


		Moody’s
	Fitch	Investors	Standard &
Wilmington Trust Corporation	Ratings¹	Service²	Poor’s³

Outlook	Stable	Stable	Stable
Issuer rating (long-term/short-term)	A+/F1	A2/ *	A-/A-2
Subordinated debt	A	A3	BBB+


		Moody’s
	Fitch	Investors	Standard &
Wilmington Trust Company	Ratings¹	Service²	Poor’s³

Outlook	Stable	Stable	Stable
Bank financial strength	A/B	B-	*
Issuer rating (long-term/short-term)	A+/F1	A1	A/A-1
Bank deposits (long-term/short-term)	AA-/*	A1/P-1	A/A-1


*		No rating in this category
¹		As of August 2007
²		As of February 2008
³		As of January 2008

Our sources of liquidity remained diversified.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Sources of Liquidity	At 6/30/08		At 12/31/07
	(In millions)

Core deposit balances	$	5,741.3	$	5,465.5
National CDs ³ $100,000		2,874.4		2,392.0
Short-term borrowings		1,775.7		1,992.1
Long-term debt		467.8		267.8
Stockholders’ equity		1,066.4		1,120.3
Investment securities		1,526.6		1,846.8
Borrowing capacity from lines of credit with U.S. financial institutions		90.0		85.0
Borrowing capacity secured with collateral from the Federal Home Loan Bank of Pittsburgh (FHLB)¹		311.0		445.0

Total	$	13,853.2	$	13,614.5


¹		As of March 31, 2008, and December 31, 2007, respectively. The FHLB adjusts our borrowing capacity quarterly, but we do not receive the adjustment calculations until after the filing dates of our quarterly and annual reports. Wilmington Trust Company and Wilmington Trust of Pennsylvania are FHLB members.

At June 30, 2008, our long-term debt included:


	•	An aggregate principal amount of $250.0 million in 10-year, 4.875% subordinated notes that mature on April 15, 2013.

	•	An aggregate principal amount of $200.0 million of 10-year, 8.50% subordinated notes that mature on April 2, 2018. We issued these notes on April 1, 2008, under a registration statement and prospectus initially filed with the SEC on November 29, 2007, and under a prospectus supplement filed with the SEC on March 28, 2008. We used part of the proceeds of this offering to repay debt that matured on May 1, 2008, and to fund, in part, our acquisition of AST Capital Trust Company. We intend to use the remaining proceeds for general corporate purposes.

For more information about our long-term debt, read Note 11, “Borrowings,” in this report.

Among the risks to our liquidity is a partial guaranty of a line of credit obligation for Cramer Rosenthal McGlynn (CRM). At June 30, 2008, this line of credit was $3.0 million, the balance was zero, and our guaranty was for 80.99%, an amount equal to our ownership interest in CRM. This line of credit is scheduled to expire on December 2, 2008.

Managing funding

We use a mix of funding sources to support our Regional Banking business and to help us manage interest rate risk. There is an inherent disparity between loan growth and core deposit growth in the Regional Banking business model, because we make commercial loans in four states, but gather core deposits mainly in Delaware. To compensate, we augment core deposits with national funding because:


	•	It is a cost-effective way to add deposits without having to invest capital in a large-scale expansion of our branch office network.

	•	It helps us curb annual operating expense growth. On an absolute basis, national funding rates tend to be higher than core deposit rates, but core deposit rates do not include the all-in expense of staffing and operating a branch office network.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


	•	It helps our Regional Banking business produce an efficiency ratio that is better than our peer average. For more information about this, see the Regional Banking discussion in this report.

	•	It helps us manage interest rate risk, because we can match the repricing characteristics of wholesale funds closely with the repricing characteristics of floating rate loans. We adjust the mix between national CDs ³ $100,000 and short-term borrowings, depending on which has more favorable terms. For more information on how we manage interest rate risk, refer to the discussion in the “Quantitative and Qualitative Disclosures about Market Risk” section of this report.

As we expand our commercial banking business throughout the Delaware Valley region, we expect that loan growth will continue to outpace core deposit growth, and we will continue to use a blend of core deposits and national funding to support loan growth.

Funding in the first six months of 2008

During the first six months of 2008, core deposits (demand deposits, interest-bearing demand deposits, time deposits, and local CDs ³ $100,000) continued to be our primary source of funding.


Funding (On Average)	2008 Q2			2007 Q4			2007 Q2

Percentage from core deposits		54	%		54	%		58	%
Percentage from national funding		27	%		25	%		27	%
Percentage from short-term borrowings		19	%		21	%		15	%
Loan-to-deposit ratio		1.12	%		1.12	%		1.10	%

On an absolute basis, the rates on national funding tend to be higher than the rates on core deposits. Using rates alone to compare funding costs, however, can be misleading. While core deposit rates express the absolute cost of the funds, they do not reflect the associated staffing and other operating expenses. For a comparison of core deposit and national funding rates, refer to the interest rate risk discussion in the “Quantitative and Qualitative Disclosures about Market Risk” section of this report.

ASSET QUALITY, LOAN LOSS RESERVE, AND LOAN LOSS PROVISION

The assets on our balance sheet consist primarily of loans and investment securities, which we discuss elsewhere in this report. At June 30, 2008, loans accounted for 76% of our assets, and most of our asset quality remained tied to loan, or credit, quality.

Lending money is inherently risky. When we make a loan, we make subjective judgments about the borrower’s ability to repay the loan. No matter how financially sound a client or lending decision may seem, a borrower’s ability to repay can be affected adversely by economic changes and other external factors. For a more complete overview of the various risks we encounter in the normal course of business, and for more details on the steps we take to mitigate credit risk, read the risk discussion in our 2007 Annual Report to Shareholders.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

We regard net charge-offs as the primary indicator of credit quality.

Credit quality in the second quarter of 2008

No negative systemic credit quality trends emerged during the second quarter. While net charge-offs and some categories of nonperforming assets were higher in the 2008 second quarter than for prior periods, fewer than 15 loans accounted for these increases. The most significant changes were in nonaccruing loans, renegotiated loans, other real estate owned (OREO), and net charge-offs.

Nonperforming assets

In the 2008 second quarter, we transferred two large loans from renegotiated to nonaccruing status. As a result, nonaccruing loans were $18.2 million higher than at the end of the 2008 first quarter, but renegotiated loans were $23.9 million lower. At 95 basis points, the nonperforming asset ratio was the same as at year-end 2007.

The renegotiated loans transferred to nonaccruing status during the 2008 second quarter were:


	•	A commercial construction loan for a single family/townhome development in Sussex County, Delaware. This loan was renegotiated in the third quarter of 2007. In the second quarter of 2008, approximately $16.0 million of this loan was transferred from renegotiated to nonaccruing status, and approximately $3.6 million was charged off.

	•	A retail loan to an individual.

Nonaccruing loans also included three loans that were transferred from performing status in the 2008 second quarter:


	•	A commercial loan to a textile manufacturer. Approximately $1.8 million associated with this loan was charged off during the 2008 second quarter.

	•	A commercial loan to a sports equipment retailer.

	•	A commercial construction loan for a health club in Ocean City, Maryland.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Nonperforming Assets	At 6/30/08		At 3/31/08		At 12/31/07		At 6/30/07
	(Dollars in millions)

Nonaccruing loans:
Commercial, financial, and agricultural	$	27.0	$	25.6	$	23.8	$	11.0
Commercial real estate – construction		22.6		9.9		9.9		13.6
Commercial mortgage		8.1		8.2		7.1		9.1
Consumer and other retail		13.9		9.7		7.0		11.6

Total nonaccruing loans		71.6		53.4		47.8		45.3
Renegotiated loans		0.2		24.1		23.7		0.2

Total nonaccruing and renegotiated loans		71.8		77.5		71.5		45.5

Other real estate owned (OREO)		16.7		0.2		9.1		0.2

Total nonperforming assets	$	88.5	$	77.7	$	80.6	$	45.7

Nonperforming asset ratio		95 basis points		88 basis points		95 basis points		55 basis points

OREO increased during the 2008 second quarter mainly because we foreclosed on two properties with loans that had been nonaccruing since the third quarter of 2007:


	•	An income-producing hotel and retail property in Ocean City, Maryland, which accounted for approximately $9.2 million of the second quarter increase in OREO.

	•	A luxury home development in Montgomery County, Pennsylvania. This project accounted for approximately $4.5 million of the second quarter increase in OREO. In addition, we charged off approximately $1.4 million associated with this loan. Since we foreclosed on this property, home buyers have signed contracts on seven of this development’s 17 remaining properties.

Three smaller properties in the mid-Atlantic region accounted for the remainder of the second quarter increase in OREO. The amount recorded for OREO represents the net realizable value of the underlying assets.

The $8.9 million reduction in OREO between year-end 2007 and March 31, 2008, reflected the successful disposition of two properties formerly owned by the Pennsylvania-based Elliott Building Group, which filed for bankruptcy in June 2007. At that time, we transferred the full amount of our exposure to this client, $10.3 million, to nonaccruing status. Our loans to this client were for two housing developments under construction in southern New Jersey. We foreclosed on both of these properties in the 2007 fourth quarter, at which time we transferred $8.9 million to OREO and charged off the remaining $1.4 million. In March 2008, we sold each property to a different buyer. We did not finance either buyer’s purchase of these properties. We have no additional exposure to the Elliott Building Group or any of its other properties.

Although the market often views OREO negatively, we view it as a positive step in the loan work-out process, because:


	•	Moving properties to OREO gives us control.
	•	Negotiations with the borrower cease.
	•	Legal expenses associated with collection efforts cease.
	•	We gain the ability to facilitate disposition of these properties, recover our cash, and return it to an earning basis.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Net charge-offs

Net charge-offs were $7.1 million higher than for the 2008 first quarter mainly because of three previously mentioned loans:


	•	A commercial construction loan for a single family/townhome development in Sussex County, Delaware, accounted for approximately $3.6 million of the increase. (The remainder of this loan was transferred from renegotiated to nonaccruing status.)

	•	A commercial loan to a textile manufacturer accounted for approximately $1.8 million of the increase. (The remainder of this loan was transferred from performing to nonaccruing status.)

	•	A commercial construction loan for a luxury home development in Montgomery County, Pennsylvania, accounted for approximately $1.4 million of the increase. (The remainder of this loan was transferred from renegotiated status to OREO.)

Most of the consumer loans charged off during the second quarter and first six months of 2008 were indirect auto loans. The increase in problem loans in the indirect portfolio corresponds, to a degree, with the indirect lending growth we have experienced in the last two years from the Pennsylvania, Maryland, and New Jersey markets. In light of this growth, we implemented new indirect auto pricing standards in June 2007 to ensure we are attracting high-quality loans.


Charge-Offs for the Three Months Ended	6/30/08		3/31/08		12/31/07		6/30/07
	(Dollars in millions)

Loans charged off:
Commercial, financial, and agricultural	$	2.9	$	0.7	$	1.3	$	1.4
Commercial real estate – construction		5.2		0.3		2.3		—
Commercial mortgage		0.1		—		1.2		—
Consumer and other retail		6.0		5.4		6.7		4.4

Total loans charged off	$	14.2	$	6.4	$	11.5	$	5.8
Recoveries on loans previously charged off:
Commercial, financial, and agricultural	$	0.2	$	0.1	$	—	$	0.3
Commercial real estate – construction		—		—		—		—
Commercial mortgage		0.8		—		—		—
Consumer and other retail		1.4		1.6		1.8		2.0

Total recoveries	$	2.4	$	1.7	$	1.8	$	2.3

Net loans charged off	$	11.8	$	4.7	$	9.7	$	3.5
Net charge-off ratio for the quarter		13 basis points		5 basis points		12 basis points		4 basis points
Year-to-date net charge-off ratio		19 basis points		5 basis points		26 basis points		8 basis points

In our experience, commercial loan charge-offs are very unpredictable, because:


	•	Negotiations with commercial borrowers can affect the timing and extent of charge-offs, or avert them altogether.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


	•	Associated legal proceedings can also affect the timing and extent of charge-offs.

Given the unpredictability of commercial loan charge-offs, we do not believe the 2008 second quarter net charge-off ratio indicates a trend. We expect the net charge-off ratio to remain within its historical range of 24 to 31 basis points over a 12-month period.

Past-due loans

Loans past due 90 days or more were $7.2 million higher at the end of the 2008 second quarter than at the end of the first. Three loans — a commercial loan to a chemical manufacturer, a commercial construction loan to a tubing manufacturer, and a commercial mortgage loan to a retailer — accounted for most of this increase.


Loans Past due 90 Days or More	At 6/30/08		At 3/31/08		At 12/31/07		At 6/30/07
	(Dollars in millions)

Commercial, financial, and agricultural	$	6.1	$	3.7	$	2.4	$	6.4
Commercial real estate – construction		0.6		0.3		0.7		1.0
Commercial mortgage		1.3		—		1.3		1.4
Consumer and other retail		13.8		10.6		9.3		4.8

Total loans past due 90 days or more	$	21.8	$	14.6	$	13.7	$	13.6
Past-due loan ratio		23 basis points		17 basis points		16 basis points		16 basis points

Internal risk rating analysis

The combination of loan growth, OREO, and charge-offs caused the percentage of loans with pass ratings in the internal risk rating analysis to increase. The percentage of loans with doubtful ratings did not change.


Internal Risk Rating Analysis	At 6/30/08			At 3/31/08			At 12/31/07			At 6/30/07

Pass		96.28	%		95.62	%		96.03	%		96.81	%
Watchlisted		2.29	%		2.98	%		2.69	%		2.27	%
Substandard		1.42	%		1.39	%		1.27	%		0.91	%
Doubtful		0.01	%		0.01	%		0.01	%		0.01	%

We apply the internal risk rating classifications consistently. For more information about these classifications, read the credit risk discussion in our 2007 Annual Report to Shareholders.

Serious-Doubt Loans

Serious-doubt loans are loans that we do not think will be repaid in full, even though they are performing in accordance with their contractual terms or are fewer than 90 days past due. Most of our serious-doubt loans are commercial loans.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

The amount of serious-doubt loans was 53% lower at the end of the 2008 second quarter than at the end of the first. This reduction reflected the reclassifications into nonaccruing and past-due loans discussed previously. The remaining serious-doubt loans mainly consisted of commercial loans to a variety of clients with retail, service, and light manufacturing businesses.


Serious-Doubt Loans	At 6/30/08			At 3/31/08			At 12/31/07			At 6/30/07
				(Dollars in millions)

Commercial, financial, and agricultural	$	16.4		$	37.7		$	11.3		$	12.7
Commercial real estate – construction		—			5.7			—			—
Commercial mortgage		—			—			—			—
Residential mortgage		—			—			—			—
Consumer and other retail		4.3			4.5			—			—
Contingency allocation		3.0			3.0			3.0			3.0

Total serious-doubt loans	$	23.7		$	50.9		$	14.3		$	15.7
Ratio of serious-doubt loans to total loan balances		0.26	%		0.58	%		0.17	%		0.19	%

Loan portfolio composition

On a percentage basis, the composition of the loan portfolio remained well diversified and relatively unchanged.


Composition of the Loan Portfolio	At 6/30/08			At 3/31/08			At 12/31/07			At 6/30/07

Commercial, financial, and agricultural		30	%		30	%		31	%		30	%
Commercial real estate – construction		20	%		21	%		21	%		21	%
Commercial mortgage		18	%		18	%		17	%		17	%
Residential mortgage		6	%		6	%		6	%		7	%
Home equity		4	%		3	%		4	%		4	%
Indirect loans		10	%		10	%		9	%		8	%
Credit card		1	%		1	%		1	%		1	%
Other consumer		5	%		5	%		5	%		5	%
Secured with liquid collateral		6	%		6	%		6	%		7	%

LOAN LOSS RESERVE AND LOAN LOSS PROVISION

The provision and the reserve for loan losses rose due to the substantial growth in loan balances, higher levels of nonperforming assets, downgrades in the internal risk rating analysis, and charge-offs. The provision for loan losses increased from $10.0 million for the 2008 first quarter to $18.5 million for the 2008 second quarter.


Provision for Loan Losses	2008 Q2		2007 Q2		2008 YTD		2007 YTD

Provision for loan losses (in millions)	$	18.5	$	6.5	$	28.4	$	10.1

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Reserve for Loan Losses	At 6/30/08			At 3/31/08			At 12/31/07			At 6/30/07

Reserve for loan losses (in millions)	$	113.1		$	106.4		$	101.1		$	97.5
Loan loss reserve ratio		1.22	%		1.21	%		1.19	%		1.18	%

We reserve an amount for loan losses that represents our best estimate of known and inherent estimated losses and we make subjective judgments about amounts we might be able to recover. We also consider loan growth, the results of the internal risk rating analysis, the levels of loan recoveries and repayments, the stability of the mid-Atlantic regional economy, market interest rates, and regulatory guidelines. For more information about how we establish and account for the loan loss reserve, read Note 2, “Summary of significant accounting policies,” in our 2007 Annual Report to Shareholders.

The reserve and provision for loan losses do not necessarily increase in conjunction with loan growth, because newly added loans do not automatically carry the same or a higher degree of risk than loans already in the portfolio.

DERIVATIVES, HEDGING INSTRUMENTS, OTHER OFF-BALANCE-SHEET ARRANGEMENTS, AND OTHER CONTRACTUAL OBLIGATIONS

We use a variety of financial instruments and contracts to help us manage capital, liquidity, interest rate risk, credit risk, and other aspects of our day-to-day operations. As permissible under regulatory guidelines, we include these instruments in our calculations of regulatory risk-based capital ratios. For more information about these instruments and contracts, read the discussion that begins on page 58 of the 2007 Annual Report to Shareholders.

The derivative instruments we use are primarily interest rate swap and interest rate floor contracts. These instruments help us manage the effects of fluctuating interest rates on net interest income. We also use interest rate swap contracts to help commercial loan clients manage their interest rate risk. We do not hold or issue derivative financial instruments for trading purposes.


Notional Value of Derivative Financial Instruments	At 6/30/08		At 12/31/07
	(In millions)

Client-related swaps
Swap contracts with clients	$	1,126.9	$	425.0
Swaps that mirror swap contracts with clients		1,126.9		425.0

Total client-related swaps	$	2,253.8	$	850.0
Fair value hedge swaps associated with the subordinated long-term debt that expired on May 1, 2008	$	—	$	125.0
Interest rate floor contracts	$	—	$	1,000.0

We sold all of our interest rate floor contracts in January 2008. For more information about this, read Note 6, “Derivatives and hedging activities,” in this report.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Other Contractual Obligations	At 6/30/08		At 12/31/07
	(In millions)

Federal Home Loan Bank of Pittsburgh loan¹	$	28.0	$	28.0
Lease commitments for offices, net of sublease arrangements²	$	68.8	$	67.9
80.99% guaranty on CRM $3.0 million line of credit³	$	2.4	$	2.5
Certificates of deposit	$	4,130.0	$	3,759.7
Letters of credit, unfunded loan commitments, and unadvanced lines of credit	$	3,783.8	$	4,000.0


¹		We used these funds to construct Wilmington Trust Plaza, our operations center in downtown Wilmington, Delaware, which was completed in 1998.
²		We lease many of our branch offices in Delaware. We lease all of our branch and other offices outside of Delaware.
³		This amount represents our current ownership interest in affiliate money manager Cramer Rosenthal McGlynn. At June 30, 2008, the balance of this line of credit was zero and it was scheduled to expire on December 2, 2008.


Amount and Duration of Payments Due on Current Contractual Obligations	Total		Less Than 1 Year		1 to 3 Years		3 to 5 Years		More Than 5 Years
					(In millions)

Certificates of deposit	$	4,130.0	$	3,945.6	$	150.3	$	28.6	$	5.5
Debt obligations	$	478.0	$	—	$	28.0	$	250.0	$	200.0
Interest on debt obligations	$	228.9	$	31.0	$	60.8	$	56.4	$	80.7
Operating lease obligations	$	68.8	$	12.7	$	21.1	$	14.0	$	21.0
Benefit plan obligations	$	1.5	$	1.5	$	—	$	—	$	—
Guaranty obligations	$	2.4	$	2.4	$	—	$	—	$	—

Total	$	4,909.6	$	3,993.2	$	260.2	$	349.0	$	307.2

The debt obligations in the table above consist of:


	•	$250.0 million of subordinated long-term debt that was issued in 2003, was used for general liquidity purposes, and is due in 2013.

	•	$200.0 million of subordinated long-term debt that was issued on April 1, 2008, and is due on April 2, 2018. We used part of the proceeds of this issue to repay an aggregate principal amount of $125.0 million in subordinated long-term debt that expired on May 1, 2008, and to fund, in part, the AST acquisition. We intend to use the remaining proceeds for general corporate purposes.

	•	FHLB advances of $28.0 million.

All of this debt is included in the amount of long-term debt recorded on our balance sheet.

Our agreements with CRM, RCM, Grant Tani Barash & Altman, and Wilmington Trust Conduit Services permit principal members and designated key employees of each firm, subject to certain restrictions, to put (relinquish) their interests in their respective firms to our company. For more information about these agreements, refer to Note 4, “Affiliates and acquisitions,” which begins on page 84 of our 2007 Annual Report to Shareholders.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

OTHER INFORMATION

ACCOUNTING PRONOUNCEMENTS

Refer to Note 15, “Accounting pronouncements,” of this report for a discussion of the effects of recent accounting pronouncements on our financial condition and results of operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our critical accounting policies conform with U.S. generally accepted accounting principles (GAAP), and with reporting practices prescribed for the banking industry. We maintain our accounting records and prepare our financial statements using the accrual basis of accounting. In applying our critical accounting policies, we make estimates and assumptions about revenue recognition, the reserve for loan losses, stock-based employee compensation, investment securities valuations, goodwill impairment, loan origination fees, income taxes, and other items.

For more information about our critical accounting policies, refer to:


	•	Note 2, “Summary of significant accounting policies,” which begins on page 79 of our 2007 Annual Report to Shareholders;

	•	Note 1, “Accounting and reporting policies,” in this report; and

	•	Note 15, “Accounting pronouncements,” in this report.

CAUTIONARY STATEMENT

This report contains estimates, predictions, opinions, or other statements that might be construed as “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include references to our financial goals, dividend policy, financial and business trends, new business results and outlook, business prospects, market positioning, pricing trends, strategic initiatives, credit quality and the reserve for loan losses, the effects of changes in market interest rates, the effects of changes in securities valuations, the impact of accounting pronouncements, and other internal and external factors that could affect our financial performance.

These statements are based on a number of assumptions, estimates, expectations, and assessments of potential developments, and are subject to various risks and uncertainties that could cause our actual results to differ from our expectations. Our ability to achieve the results reflected in these statements could be affected adversely by, among other things, changes in national or regional economic conditions; changes in market interest rates; significant changes in banking laws or regulations; the impact of accounting pronouncements; increased competition for business; 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 the regulatory, judicial, legislative, or tax treatment of business transactions; and uncertainty created by unrest in other parts of the world.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Item 3.	*Quantitative and Qualitative Disclosures about Market Risk.*

The normal course of business exposes us to a variety of operational, reputational, legal, and regulatory risks. We monitor these risks closely to safeguard our company’s and our clients’ assets. All of these risks could affect our financial performance and condition adversely. Our primary risks are:


	•	The risk that borrowers will be unable to repay their loans. For more information about this, read the credit quality discussion in this report.

	•	The effects of market interest rates on income.

	•	The effects on income of volatility in the financial markets.

	•	The risk that economic conditions will affect our ability to conduct business.

Market interest rates present more risk to us than inflation. As a financial institution, nearly all of our assets and liabilities are monetary in nature. Declines in market interest rates are more likely to erode their valuations than the effects of inflation on currency valuations.

INTEREST RATE RISK

Changes in market interest rates, and the pace at which they occur, can affect the yields we earn on loans and investments and the rates we pay on deposits and other borrowings. These changes can affect our net interest margin and net interest income, positively or negatively, and ultimately affect our financial performance.

The main way we manage interest rate risk is to match, as closely as possible, the pricing and maturity characteristics of our assets with those of our liabilities. We do this by:


	•	Maintaining a mix of assets and liabilities that gives us flexibility in a dynamic market place.

	•	Managing the relative proportion of fixed and floating rate assets and liabilities, so that we can match the repricing characteristics of assets and liabilities as closely as possible.

	•	Using a blend of core deposits and national funding. For more information about this, read the section on funding in this report.

	•	Managing the size of our investment securities portfolio and the mix of instruments in it. For more information about this, read the discussion of changes in financial condition in this report.

	•	Selling most of our new fixed rate residential mortgage production into the secondary market. By limiting the fixed rate residential mortgages in our loan portfolio, we eliminate much of the long-term risk inherent in fixed rate instruments that typically have 15- to 30-year maturities.

	•	Using off-balance-sheet derivative instruments. For more information about this, read Note 6, “Derivative and hedging activities,” and the discussion of derivatives and hedging instruments in this report.

Our interest rate risk management objective is to minimize the negative effect on net interest income from changes in market interest rates. To achieve this objective, we follow guidelines set by our asset/liability management policy. Under the current policy, our objective is to limit any reduction in net interest income from changes in market interest rates to less than 10% in any 12-month period.

The primary tool we use to assess our exposure to interest rate risk is a computer modeling technique that simulates the effects on net interest income of gradual and sustained changes in market interest rates. We perform simulations quarterly that compare a stable interest rate environment to multiple hypothetical interest rate scenarios. As a rule, our model employs scenarios in which rates gradually move up or down 250 basis points over a period of 10 months.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

For more information about our interest rate risk management strategies, read the discussion that begins on page 51 of our 2007 Annual Report to Shareholders.

Interest rate risk in the first six months of 2008

We remained asset-sensitive, as our commercial floating rate loans continued to reprice more quickly than national funding. The rapid pace of reductions in short-term market interest rates — 225 basis points in the first six months of 2008 — exacerbated this timing mismatch and compressed our net interest margin.

We estimate that each 25-basis-point drop in short-term rates causes decreases in our net interest margin of approximately 3 basis points and approximately $3 million in net interest income over a 12-month period. The pressure on the margin is more dramatic immediately following a rate change, and then it moderates as liability rates reset. For more information about this, read the net interest margin discussion in this report.

Our use of national funding helped offset the pricing mismatch somewhat. As of June 30, 2008, approximately $5.2 billion of commercial loans were repricing within 30 or fewer days, while approximately $3.9 billion of national CDs and short-term borrowings were repricing in 90 or fewer days.


As a Percentage of Total Balances	At 6/30/08			At 12/31/07			At 6/30/07

Total loans outstanding with floating rates		72	%		71	%		73	%
Commercial loans with floating rates		87	%		85	%		87	%
Commercial loans tied to a prime rate		56	%		59	%		61	%
Commercial loans tied to the 30-day LIBOR		38	%		36	%		33	%
National CDs and short-term borrowings maturing in £ 90 days		92	%		78	%¹		74	%


¹		Excluding debt maturing in 2008.

Customarily we present quarterly comparisons of our interest rate risk simulation, but here we compare the projection at June 30, 2008, with those at January 31, 2008, as well as at year-end 2007. We added the January 2008 simulation because two events in January 2008 altered our interest rate risk position:


	•	The FOMC lowered rates 125 basis points, an uncharacteristically large cut.

	•	We sold all of our interest rate floor contracts.

On April 30, 2008, the FOMC reduced the federal funds target rate to 2.00%. Accordingly, the scenario in which rates decline by 250 basis points would have been unreasonable, since it would have created negative interest rates within the model. Our downward simulation, therefore, modeled a gradual decrease until the federal funds target rate equaled zero.

As of June 30, 2008, our interest rate risk simulation model projected that:


	•	If short-term rates were to increase gradually over a 10-month period in a series of moves that totaled 250 basis points, our net interest income would increase 6.65% over the 12 months beginning June 30, 2008.

	•	If short-term rates were to decrease gradually over a 10-month period in a series of moves that totaled 200 basis points, our net interest income would decline by (9.44)% over the 12 months beginning June 30, 2008.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


	For the 12 Months			For the 12 Months			For the 12 Months
Impact of Interest Rate Changes on Net Interest Income	Beginning 6/30/08			Beginning 1/31/08			Beginning 12/31/07

Gradual increase of 250 basis points		6.65	%		5.47	%		4.22	%
Gradual decrease of 250 basis points		Not applicable			(11.05	)%		(6.67	)%
Gradual decrease of 225 basis points		Not applicable			Not applicable			Not applicable
Gradual decrease of 200 basis points		(9.44	)%		Not applicable			Not applicable

Our discussion of the interest rate risk simulation contains forward-looking statements about the anticipated effects on net interest income that may result from hypothetical changes in market interest rates. Assumptions about retail deposit rates, loan prepayments, asset-backed securities, and collateralized mortgage obligations play a significant role in our interest rate simulations. Our assumptions about rates and the pace of changes in payments differ for assets and liabilities in rising as well as declining rate environments. These assumptions are inherently uncertain, and the simulations cannot predict precisely how actual interest rate changes might affect our net interest income.

FINANCIAL MARKET RISK

Some of our CCS and WAS revenue, and all of the revenue we receive from the affiliate money managers, is based on asset valuations. As a result, the performance of one or more of the financial markets can affect our noninterest income, positively or negatively, and ultimately affect our financial results. For more information about the portions of CCS and WAS revenue that are based on asset valuations, read the respective discussions of each business in this report.

Financial markets also determine the valuations of investments in our securities portfolio, and can have positive or negative effects on the amount of interest income the securities portfolio generates. For more information about income from the investment securities portfolio, see the “Quarterly analysis of net interest income” in this report.

The percentage of revenue subject to financial market risk was higher for the second quarter and first six months of 2008 than for prior periods because:


	•	Compression in the net interest margin reduced net interest income, even though we recorded significant loan growth.

	•	The AST acquisition added noninterest income for May and June 2008.


Revenue Subject to Financial Market Risk	2008 Q2			2007 Q2			2008 YTD			2007 YTD
	(Dollars in millions)

WAS trust and investment advisory revenue	$	40.2		$	38.4		$	79.5		$	75.4
CCS retirement services revenue		7.5			3.2			10.7			6.6
CCS investment/cash management revenue		3.4			3.0			6.8			6.3
Affiliate money manager revenue		4.4			6.5			8.7			11.3

Total revenue subject to financial market risk	$	55.5		$	51.1		$	105.7		$	99.6
Total noninterest income (after amortization)	$	93.2		$	96.9		$	195.9		$	188.4
Percent of total subject to financial market risk		60	%		53	%		54	%		53	%
Total net interest and noninterest income	$	159.9		$	183.2		$	339.6		$	362.0
Percent of total subject to financial market risk		35	%		28	%		31	%		28	%

Our exposure to financial market risk is mitigated by our mix of businesses, which produces a diversified stream of net interest and noninterest income.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

ECONOMIC RISK

Changes in economic conditions could change demand for the services we provide and, ultimately, affect loan and deposit balances, revenue, net income, and overall results, positively or negatively.

Among our businesses, Regional Banking has the most exposure to economic risk, and most of that risk is tied to economic conditions within the Regional Banking geographic footprint. We believe this exposure is mitigated by the region’s diversified economy, which provides a degree of economic stability and helps the region withstand the effects of downturns in any single sector. We discuss the regional economy in more detail in the Regional Banking section of this report.

Beyond the mid-Atlantic region, changes in economic conditions at the national and international level that eliminate or slow demand for our services could affect all of our businesses, loan and deposit balances, revenue, net income, and overall results.

OTHER RISK

For more information about our operational, fiduciary, regulatory, and legal risk, read the discussions that begin on page 57 and page 118 of our 2007 Annual Report to Shareholders.


Item 4.	*Controls and Procedures.*

Our chairman and chief executive officer, and our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2008, pursuant to Securities Exchange Act Rule 13a-15(e). Based on that evaluation, they concluded that our disclosure controls and procedures were effective in alerting them on a timely basis to any material information about our company (including our consolidated subsidiaries) that we are required to include in the periodic filings we make with the Securities and Exchange Commission. There was no change in our internal control over financial reporting during the second quarter of 2008 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION


Item 1.	*Legal Proceedings.*

We and our subsidiaries are subject to various legal proceedings that arise from time to time in the ordinary course of business. Some of these proceedings seek relief or damages in amounts that may be substantial. Because of the complex nature of some of these proceedings, it may be a number of years before they ultimately are resolved. While it is not feasible to predict the outcome of these proceedings, we do not believe the ultimate resolution of any legal matters outstanding as of June 30, 2008, will have a materially adverse effect on our consolidated financial statements. Furthermore, some of these proceedings involve claims that we believe may be covered by insurance, and we have advised our insurance carriers accordingly.


Item 1A.	*Risk Factors.*

There were no changes in our risk factors from those disclosed in our Form 10-K for 2007. We discuss these risk factors on pages 41-43 and page 120 of our 2007 Annual Report to Shareholders.


Item 2.	*Unregistered Sales of Equity Securities and Use of Proceeds.*

We had no unregistered sales of equity securities in the 2008 second quarter.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

ISSUER PURCHASES OF EQUITY SECURITIES

In the 2008 second quarter, we acquired 43,981 shares of our stock as recipients of stock-based compensation exercised their stock options. We consider these shares to be outside the parameters of our authorized share repurchase plan, because these shares are not trading on the open market when we acquire them.

We did not acquire any shares in the 2008 second quarter under our current 8-million-share repurchase plan, which our Board of Directors authorized in April 2002. At June 30, 2008, there were 4,956,204 shares available under our current repurchase program. For more information about this program, read the capital resources discussion in this report.

In the table below, the data in column (d) include shares available under all compensation plans, the Employee Stock Purchase Plan, repurchase plans, and other activities that could affect the maximum number of shares that we may purchase, including stock grants and forfeitures.

(d) Maximum

(c) Total Number

Number

of Shares

(or Approximate

(b)

(or Units)

Dollar Value) of

(a) Total

Average

Purchased as Part

Shares (or Units)

Number of

Price Paid

of Publicly

that May Yet Be

Shares (or Units)

per Share

Announced Plans or

Purchased Under the

Period

Purchased

(or Unit)

Programs

Plans or Programs

Month #1

April 1, 2008 – April 30, 2008

—

13,065,099

Month #2

May 1, 2008 – May 31, 2008

—

13,235,004

Month #3

June 1, 2008 – June 30, 2008

—

13,234,354

Total

—

13,234,354

The Federal Reserve Board’s policy is that bank holding companies should not pay dividends unless the institution’s prospective earnings retention rate is consistent with its capital needs, asset quality, and overall financial condition. We believe our payment of dividends during the second quarter of 2008 was consistent with the Federal Reserve Board’s policy.


Item 3.	*Defaults upon Senior Securities.*

There were no defaults on senior securities during the 2008 second quarter.


Item 4.	*Submission of Matters to a Vote of Security Holders.*

At our Annual Shareholders’ Meeting on April 17, 2008 (Annual Meeting), three proposals were submitted for shareholder voting:


	•	Proposal One: Election of Directors

	•	Proposal Two: 2008 Employee Stock Purchase Plan

	•	Proposal Three: 2008 Long-term Incentive Plan

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008

Proposal One: Election of Directors

The nominees proposed for directors of the Corporation were elected. Shareholders cast votes for those nominees as follows:


Nominee	For		Withheld

Carolyn S. Burger		56,218,404		1,168,312
Robert V.A. Harra Jr.		56,278,865		1,107,851
Rex L. Mears		55,969,331		1,417,385
Robert W. Tunnel Jr.		55,555,171		1,831,545
Susan D. Whiting		56,657,688		729,028

The terms of Ted T. Cecala, Thomas L. duPont, R. Keith Elliot, Donald E. Foley, Gailen Krug, Stacey J. Mobley, Michelle M. Rollins, David P. Roselle, and Oliver R. Sockwell continued after the Annual Meeting.

Proposal Two: 2008 Employee Stock Purchase Plan

The 2008 Employee Stock Purchase Plan, designed to give staff members the opportunity to purchase shares of our common stock at a discount, was approved. Shareholders cast votes for this plan as follows:

2008 Employee Stock Purchase Plan

For

Against

Abstain

Approval of 2008 Employee Stock Purchase Plan

44,181,914

1,636,792

956,940

Proposal Three: 2008 Long-term Incentive Plan

The 2008 Long-term Incentive Plan, designed to provide key staff members and others with incentives and to facilitate ownership of our stock, was not approved. In order to be approved, this proposal required that votes for a majority of our shares outstanding be cast in favor of it. As of our record date of February 19, 2008, there were 67,173,250 shares outstanding, which means this proposal would have needed at least 33,586,626 “for” votes in order to pass. Shareholders cast votes for this plan as follows:

2008 Long-term Incentive Plan

For

Against

Abstain

Approval of 2008 Long-term Incentive Plan

31,023,091

14,806,837

945,718

The total number of votes cast on this proposal (for, against, and abstain) represented only 46,775,646 shares, which was only 70% of total shares outstanding. We consider the lack of voting on this proposal to be a factor in its failure to pass.


Item 5.	*Other Information.*

We have no information to report in addition to what is disclosed elsewhere in this report.

Wilmington Trust Corporation

Form 10-Q for the three and six months ended June 30, 2008


Item 6.	*Exhibits.*


Exhibit
Number			Exhibit

	3	.1	Amended and Restated Certificate of Incorporation of the Corporation (Commission File Number 1-14659)¹
	3	.2	Amended Certificate of Designation of Series A Junior Participating Preferred Stock of the Corporation (Commission File Number 1-14659) ²
	3	.3	Amended and Restated Bylaws of the Corporation (Commission File Number 1-14659) ³
	23		Consent of Berkshire Capital Securities LLC ⁴
	31		Rule 13a-14(a)/15d-14(a) Certifications⁴
	32		Section 1350 Certifications⁴


¹		Incorporated by reference to Exhibit 3(a) to the Report on Form S-8 of Wilmington Trust Corporation filed on October 31, 1991.

²		Incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q of Wilmington Trust Corporation filed on May 9, 2005.

³		Incorporated by reference to Exhibit 1 to the Current Report on Form 8-K of Wilmington Trust Corporation filed on December 22, 2004.

⁴		Filed herewith.

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


		/s/ Ted T. Cecala

Name: Ted T. Cecala


	Title:	Chairman of the Board and Chief Executive Officer

Date: August 11, 2008


		/s/ David R. Gibson


	Name:	David R. Gibson


	Title:	Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date: August 11, 2008