Wilmington Trust posts 1st-qtr loss, reversing year-ago profit, missing Street expectations

Wilmington Trust posts wider 1Q loss than expected

WILMINGTON, Del. — Shares of Wilmington Trust Corp. sank Friday after the bank posted a far wider first-quarter loss than expected because it set aside more money to cover bad loans and the weak economy reduced new loan demand.

After paying preferred dividends, Wilmington Trust said the net loss available to common shareholders was $33.8 million, or 44 cents per share, reversing a year-ago profit of $17.2 million, or 25 cents per share.

The number of outstanding shares was 11 percent higher in the recent quarter, which had the effect of reducing the loss per share.

Analysts polled by Thomson Reuters, on average, expected a loss of 4 cents per share.

The results sent Wilmington Trust shares down $1.74, or 8.6 percent, to $18.42 in midday trading. The stock earlier traded as low as $17.57, 12.8 percent drop, before recovering a bit on heavy volume. Shares have changed hands between $9.75 and $20.23 in the past 52 weeks.

Wilmington Trust said first quarter net interest income, or earnings from deposits and loans, slipped 4 percent to $74.7 million, from $78.5 million last year.

Average deposits rose 23 percent to $7.24 billion, from $5.91 billion a year ago. Average loans dropped 7 percent to $8.83 billion, from $9.52 billion last year.

Non-interest income, money earned from fees and charges, slumped 19 percent to $89.5 million, from $110.7 million a year ago.

The bank’s investment portfolio tumbled 36 percent to $815.1 million, from $1.27 billion in the 2009 first quarter.

Revenue from its wealth advisory services business dropped 11 percent to $44.1 million. Wilmington Trust said the decline was mostly due to increased client preference for fixed-income instruments, exchange-traded funds, and other investment services on which pricing is lower than for equity investment management services.

The decreased also in part reflected its reduction of ownership of management firm Grant Tani Barash & Altman from 90 percent to 10 percent in February. The firm contributed about $3.4 million revenue per quarter last year.

Wilmington Trust increased its provision for loan losses, or money set aide to cover souring loans, to $77.4 million, more than double last year’s $29.5 million.

Net charge-offs, or loans written off as uncollectable, rose 37 percent to $29.1 million, from $21.2 million a year ago. But they fell 12 percent from the $33.1 million reported for the previous quarter.

Non-performing assets, or loans considered past due and in danger of being written off, more than doubled to $550.9 million, from $251.1 million a year earlier.