EX-99
3
w29023exv99.txt
EARNINGS RELEASE
(WILMINGTON TRUST LOGO) WILMINGTON TRUST Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
NEWS RELEASE
FOR IMMEDIATE RELEASE
WILMINGTON TRUST ANNOUNCES 2006 Q4 AND FULL YEAR RESULTS
Third quarter non-cash charge offsets 11% increase in annual operating profits
Wilmington, Del., January 19, 2007 - Wilmington Trust Corporation (NYSE: WL)
reported today that net income for the 2006 fourth quarter was $47.5 million and
earnings per share (on a diluted basis) were $0.68 per share.
"Loan balances, Wealth Advisory Services revenue, and Corporate Client Services
revenue reached record-high levels for the fourth quarter and full year, and
credit quality remained stable. Business growth in the fourth quarter was masked
by a decline in the net interest margin, which decreased as deposit rates rose
and spreads narrowed on investments that collateralize short-term borrowings,"
said Ted T. Cecala, Wilmington Trust's chairman and chief executive officer.
"The results from each of our businesses reflect how our expansion investments
are generating positive returns and creating additional momentum."
For the 2006 full year, net income totaled $143.8 million and earnings per share
(diluted) were $2.06. Results for 2006 were dampened by the non-cash goodwill
impairment write-down the company recorded during the third quarter against its
investment in affiliate money manager Roxbury Capital Management (RCM). This
charge reduced net income by $41.7 million and earnings per share (diluted) by
$0.60 per share.
Absent this charge, operating net income for 2006 would have been $185.5
million, 11% higher than for 2005. Earnings per share (diluted) would have been
$2.66 per share, a 9% increase. This release contains amounts that exclude the
non-cash impairment write-down in cases where management believes doing so
offers investors more relevant information about business trends and the
company's continuing operations.
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PERFORMANCE HIGHLIGHTS
- Two balance sheet benchmarks were surpassed: At year-end 2006, total assets
exceeded $11 billion for the first time and loan balances topped $8 billion
for the first time.
- At $7.91 billion for the 2006 fourth quarter and $7.70 billion for the full
year, on average, loan balances were 8% and 9% higher, respectively.
- Credit quality remained stable and the percentage of loans with pass
ratings continued to exceed 97%.
- The Wealth Advisory and Corporate Client Services businesses recorded
double digit increases in revenue for the 2006 fourth quarter and full
year.
- Value-style affiliate manager Cramer Rosenthal McGlynn had assets under
management of $10.6 billion at year-end 2006, a record high.
- Investments in new offices, products, services, and people throughout the
year caused expenses for the 2006 fourth quarter to be 11% higher than for
the year-ago fourth quarter, and 8% higher for the full year (excluding the
impairment write-down). Including the impairment write-down, expenses for
the 2006 full year were 27% higher than for 2005.
- The 2006 full-year efficiency ratios for Regional Banking, Wealth Advisory
Services, and Corporate Client Services improved from their 2005 levels.
The net interest margin for the 2006 fourth quarter was 3.65%. This was 9 basis
points lower than for the year-ago fourth quarter and 18 basis points lower than
for the 2006 third quarter. During the 2006 fourth quarter, the company added
approximately $277 million of investments to provide collateral for short-term
borrowings. The narrow spreads on these transactions contributed approximately
10 basis points of the margin decline.
For the 2006 full year, the net interest margin was 3.79%, which was 8 basis
points higher than for 2005. This happened mainly because loan repricing
outpaced deposit repricing during the first three quarters of 2006.
On an annualized basis, fourth quarter 2006 results produced a return on average
assets of 1.73% and a return on average equity of 17.66%. The corresponding
returns for the fourth quarter of 2005 were 1.82% and 18.77%, respectively. For
the 2006 full year, the return on
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average assets was 1.37% and the return on average equity was 13.58%. Excluding
the non-cash charge for RCM, the full-year return on average assets would have
been 1.76% and the return on average equity would have been 17.34%. The
corresponding returns for 2005 were 1.70% and 17.59%, respectively.
CASH DIVIDEND DECLARED
On January 18, 2007, the Board of Directors declared a regular quarterly cash
dividend of $0.315 per share. The quarterly dividend will be paid on February
15, 2007, to shareholders of record on February 1, 2007.
EFFICIENCY RATIO
The efficiency ratio, which measures how much a company spends to generate
revenue, showed that, for the 2006 fourth quarter, the company spent slightly
more than 56 cents for each dollar of revenue. This was fractionally higher than
for the year-ago fourth quarter because of expansion investments the Corporate
Client Services business made during the 2006 fourth quarter.
For the 2006 full year, efficiency was reduced by the impairment write-down on
RCM. Excluding this charge, efficiency improved, with the company spending
slightly less than 56 cents for each dollar of revenue recorded for the 2006
full year, down from more than 57 cents for each dollar of revenue recorded for
2005.
2006 2005 2006 2005
EFFICIENCY RATIOS Q4 Q4 FULL YEAR FULL YEAR
----------------- ----- ----- --------- ---------
Regional Banking 41.56% 42.38% 40.57% 42.56%
Wealth Advisory Services 76.47% 78.76% 77.63% 77.97%
Corporate Client Services 72.79% 68.80% 73.67% 76.48%
Wilmington Trust consolidated 56.40% 56.15% 66.10% 57.28%
Wilmington Trust consolidated absent non-cash charge -- -- 55.96% --
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All of the impairment write-down on RCM was attributed to the Affiliate Managers
business segment. The discussions on each business and the financial statements
in this release contain more information about business line profitability.
INVESTMENT SECURITIES PORTFOLIO
During the 2006 fourth quarter, the company added investments to collateralize
short-term cash sweeps, which increased due to higher client demand. This caused
the size of the investment securities portfolio to increase, and the composition
of the portfolio to shift on a percentage basis. For the 2006 fourth quarter,
investment securities balances were $2.02 billion, on average. This was
6% higher than for the year-ago fourth quarter and 9% higher than for the 2006
third quarter. For the 2006 full year, investment securities balances were
$1.89 billion, on average, which was slightly higher than for 2005.
At year-end 2006, the largest concentration of investments in the portfolio was
in government agencies, which comprised 38% of the portfolio, up from 21% at
year-end 2005. The percentage of the portfolio invested in mortgage-backed
instruments fell to 33% at year-end 2006 from 44% at year-end 2005. Other
categories of securities in the portfolio were relatively unchanged on a
percentage basis. Although investment securities balances were higher than for
prior periods, they were relatively unchanged as a percentage of total earning
assets.
INVESTMENT SECURITIES PORTFOLIO AT 12/31/06 AT 9/30/06 AT 12/31/05
------------------------------- ----------- ---------- -----------
Balances (in millions) $2,114.6 $1,982.3 $1,928.8
As a percentage of total earning assets 21% 20% 21%
Average life (in years) 4.93 5.39 6.14
Duration 2.24 2.39 2.63
Percentage invested in fixed income instruments 82% 80% 79%
Percentage of total assets 19% 19% 19%
The average life and duration declined because the balances of short-term
investments increased and the negative yield curve caused paydowns of
mortgage-backed instruments to accelerate.
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THE REGIONAL BANKING BUSINESS
The Delaware Valley region's economy remained well diversified and economic
indicators remained positive. According to the Federal Reserve Bank of
Philadelphia, economic activity improved in Delaware, Pennsylvania, and New
Jersey for the 12 months ended November 2006 (the most recent data available),
and modest economic growth is expected in 2007. According to the U.S.
Department of Labor, Delaware's unemployment rate for November 2006 (the most
recent data available) was 3.6%. In comparison, the U.S. rate was 4.5%.
Amid these favorable economic conditions, the Regional Banking business
generated its 23rd consecutive quarter of loan growth. Loan balances for the
2006 fourth quarter were $7.91 billion, on average. This was 8% higher than for
the year-ago fourth quarter, and 2% more than for the 2006 third quarter. For
the 2006 full year, loan balances were $7.70 billion, on average, an increase of
9% from 2005. Commercial real estate/construction loans and consumer loans
accounted for most of the growth, and more of the growth came from outside the
Delaware market than in 2005.
2006 2005 2006 2005
LOANS Q4 Q4 FULL YEAR FULL YEAR
----- ----- ----- --------- ---------
Total loans outstanding (in billions, on average) $7.91 $7.34 $7.70 $7.05
Delaware market loans (in billions, on average) $5.73 $5.42 $5.63 $5.24
Delaware market loans as a % of total loans 72% 74% 73% 74%
Pennsylvania market loans (in billions, on average) $1.78 $1.61 $1.72 $1.53
Pennsylvania market loans as a % of total loans 23% 22% 22% 22%
Other market loans as a % of total loans 5% 4% 5% 4%
COMMERCIAL LOANS
Commercial loan balances were $5.35 billion, on average, for the 2006 fourth
quarter. This was 10% higher than for the year-ago fourth quarter, and 2% higher
than for the 2006 third quarter. For the 2006 full year, commercial loan
balances were $5.20 billion, on average, which was
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11% higher than for 2005. Almost all of this growth was in commercial real
estate/construction (CRE) loans.
2006 2005 2006 2005
COMMERCIAL LOANS (in millions, on average) Q4 Q4 FULL YEAR FULL YEAR
------------------------------------------ -------- -------- --------- ---------
Commercial, industrial, and agricultural loans $2,430.5 $2,465.9 $2,437.4 $2,506.1
Commercial real estate/construction loans $1,634.9 $1,161.6 $1,516.8 $ 916.5
Commercial mortgage loans $1,281.4 $1,239.7 $1,240.8 $1,250.9
-------- -------- -------- --------
Total commercial loans $5,346.8 $4,867.2 $5,195.0 $4,673.5
======== ======== ======== ========
% of commercial loans from Delaware market 70% 70% 70% 70%
% of commercial loans from Pennsylvania market 29% 29% 29% 29%
% of commercial loans from other markets 1% 1% 1% 1%
CRE loan balances, on average, were 41% higher for the 2006 fourth quarter and
66% higher for the full year than for the corresponding periods in 2005.
Population growth, especially in Delaware, continued to drive housing demand,
and residential tract development and construction continued to account for most
of the growth in CRE balances.
The U.S. Census Bureau reported that, for the 12 months ended July 2006,
Delaware was the 15th fastest growing state in the United States, and that
Delaware's growth rate was more than double that of any state in the Bureau's
northeast geographic area. Within the Regional Banking geographic footprint,
Delaware's population growth rate was three times higher than Maryland's, four
times higher than Pennsylvania's, and seven times higher than New Jersey's.
Mayflower Transit's 2006 Customer Relocation Study ranked Delaware as the second
most popular U.S. relocation destination, after South Carolina.
On a period-end basis, CRE balances were 3% higher at the end of the 2006 fourth
quarter than at the end of the 2006 third quarter, and they were 35% higher than
at year-end 2005. Projects in Delaware and Pennsylvania accounted for most of
the growth. Most of the Pennsylvania growth was for projects in Philadelphia
County and Chester County, which borders Delaware.
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CRE LOAN GROWTH BY STATE (period-end balances) 12/31/06 VS. 9/30/06 12/31/06 VS. 12/31/05
---------------------------------------------- -------------------- ---------------------
Percentage of growth from Delaware 30% 53%
Percentage of growth from Pennsylvania 40% 33%
Percentage of growth from Maryland 15% 8%
Percentage of growth from New Jersey 15% 4%
Percentage of growth from other states -- 2%
The pace of growth in CRE lending slowed during the second half of 2006,
especially for residential tract development and construction projects. The pace
of growth in other types of CRE projects increased, as recent population growth
and the health of the regional economy spurred demand for leisure and
health-related services.
SELECTED CRE BALANCE INCREASES (period-end balances) 12/31/06 VS. 9/30/06 12/31/06 VS. 12/31/05
---------------------------------------------------- -------------------- ---------------------
Residential tract development and construction balances 2% 41%
Automobile dealership construction balances 39% 79%
Dining and recreation construction balances 86% 40%
Health and social services construction balances 13% 30%
Toward the end of 2006, demand began to rise for loans recorded as commercial,
financial, and agricultural loans (C and I loans). Between the ends of the third
and fourth quarters of 2006, CRE balances increased 3%. In comparison, the
corresponding increase in C and I balances was 7%, the largest linked-quarter
increase in that category of commercial loans since the fourth quarter of 2005.
RETAIL LOANS
Retail loans (consumer loans, residential mortgage loans, and loans secured with
liquid collateral) were $2.57 billion, on average, for the 2006 fourth quarter.
This was 4% higher than for the
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year-ago fourth quarter and 2% higher than for the 2006 third quarter. For the
2006 full year, retail loan balances were $2.50 billion, on average, which was
6% higher than for 2005.
The rate of growth in retail loan balances would have been higher, if not for:
- Less demand from Wealth Advisory Services clients for loans secured with
liquid collateral, which lowered the balances of that category of retail
loans; and
- The company's ongoing practice of selling most newly originated fixed rate
residential mortgages into the secondary market. Those loans are not
included in the residential mortgages recorded on the balance sheet.
As a result, consumer loans continued to account for more than half of total
retail loan balances and for most of the growth in the retail portfolio.
Consumer loan balances for the 2006 fourth quarter were $1.50 billion, on
average. This was 6% higher than for the year-ago fourth quarter and 2% higher
than for the 2006 third quarter. For the 2006 full year, consumer loan balances
were $1.46 billion, on average, which was 10% higher than for 2005.
2006 2005
CONSUMER LOANS (in millions, on average) 2006 Q4 2005 Q4 FULL YEAR FULL YEAR
---------------------------------------- -------- -------- --------- ---------
Home equity lines of credit $ 318.9 $ 328.2 $ 321.9 $ 323.3
Indirect loans 676.1 648.4 657.3 605.1
Credit card loans 62.6 60.4 60.9 59.0
Other consumer loans 438.5 375.5 418.1 341.9
-------- -------- -------- --------
Total consumer loans $1,496.1 $1,412.5 $1,458.2 $1,329.3
======== ======== ======== ========
% of consumer loans from Delaware market 79% 81% 80% 84%
% of consumer loans from Pennsylvania market 6% 7% 6% 5%
% of consumer loans from other markets 15% 12% 14% 11%
The category of consumer loans recorded as "other consumer loans" accounted for
the majority of the growth in consumer loan balances. On average, other consumer
loan balances were 17% higher for the 2006 fourth quarter and 22% higher for the
full year than for the corresponding periods in 2005. This category comprises a
variety of installment loans to
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individuals, most of which are fixed rate loans, and includes home equity loans.
Demand for fixed rate products rose, causing home equity loan balances to
increase, and home equity line-of-credit balances to decrease. Most home
equity lines of credit have floating rates.
Indirect lending was the other main contributor to the increases in total
consumer loans. Indirect loan balances, on average, were 4% higher for the 2006
fourth quarter and 9% higher for the full year than for the corresponding
periods in 2005. Higher volumes from the Pennsylvania and New Jersey markets
accounted for most of this growth. The majority of loans in the indirect
portfolio are for late-model used cars.
In the residential mortgage portfolio, balances rose but origination volumes
declined, in large part because:
- The company retains mortgages that qualify as low income mortgages for
Community Reinvestment Act (CRA) purposes in the residential mortgage
portfolio. CRA loans originated during 2006 were nearly twice as high as
for 2005.
- The average loan amount originated was 2% higher for the 2006 fourth
quarter and 13% higher for the 2006 full year than for the corresponding
year-ago periods.
- The pace of refinancings and paydowns slowed.
2006 2005
RESIDENTIAL MORTGAGES 2006 Q4 2005 Q4 FULL YEAR FULL YEAR
--------------------- ------- ------- --------- ---------
Balances (in millions, on average) $524.8 $450.8 $495.2 $438.6
Origination volumes (in millions) $ 52.2 $ 64.1 $225.3 $221.0
Origination units 244 305 972 1,077
At December 31, 2006, approximately 75% of the residential mortgage portfolio
consisted of fixed rate mortgages, compared with 75% at year-end 2005 and 74% at
September 30, 2006.
CORE DEPOSITS
For the 2006 fourth quarter, core deposits (deposits from clients) were $5.01
billion, on average, which was fractionally lower than for the year-ago fourth
quarter and $58.1 million higher than for the 2006 third quarter. For the 2006
full year, core deposits were $4.94 billion on average,
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slightly more than for the 2005 full year. Most core deposits continued to
come from the Delaware market.
2006 2005
TOTAL CORE DEPOSITS (on average) 2006 Q4 2005 Q4 FULL YEAR FULL YEAR
-------------------------------- ------- ------- --------- ---------
From Delaware clients 94% 94% 94% 94%
From Pennsylvania clients 5% 5% 5% 5%
From other markets 1% 1% 1% 1%
Compared to the 2005 fourth quarter and full year, changes in core deposit
balances reflected double-digit increases in certificate of deposit (CD)
balances which were offset by decreases in noninterest-bearing demand deposits.
On average, noninterest-bearing demand deposits were $223.8 million lower for
the 2006 fourth quarter than for the year-ago fourth quarter and $56.4 million
higher than for the 2006 third quarter.
The changes in noninterest-bearing demand deposit balances reflected account
sweeps that shift some noninterest-bearing demand deposits into money market
deposits. This practice lowers deposit reserve requirements mandated by the
Federal Reserve, and ultimately reduces the company's borrowing costs and
uninvested cash balances. These sweeps accounted for approximately $160 million
of the decline in noninterest-bearing demand deposits, on average, between the
fourth quarters of 2005 and 2006.
The changes in noninterest-bearing demand deposit balances also reflected
account sweeps that shift some noninterest-bearing demand deposits into money
market deposits. This practice lowers deposit reserve requirements mandated by
the Federal Reserve, and ultimately reduces the company's borrowing costs and
uninvested cash balances. These sweeps accounted for approximately $160 million
of the decline in noninterest-bearing demand deposits, on average, between the
fourth quarters of 2005 and 2006.
Balances of local CDs $100,000 and over (local CDs) were higher for the 2006
fourth quarter and full year than for the corresponding periods in 2005. Local
CDs are recorded as core deposits because they are client deposits, not brokered
deposits. Commercial banking clients in the Delaware Valley and local
municipalities, which frequently use these CDs to generate returns on their
excess cash, account for the majority of local CD balances.
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LOCAL CDS > or = $100,000
BY CLIENT CATEGORY AT 12/31/06 AT 9/30/06 AT 12/31/05
------------------------- ----------- ---------- -----------
Consumer banking clients 74% 73% 65%
DE commercial banking clients 11% 10% 12%
PA commercial banking clients 8% 10% 9%
Wealth Advisory Services clients 7% 7% 14%
Corporate Client Services clients -- -- --
Balances of national CDs of $100,000 or more (national CDs) are not recorded as
core deposits because they are brokered deposits, not client deposits. The
company supplements core deposits with national CDs, because the Regional
Banking business strategy is to make loans to clients in a four-state region
while gathering core deposits mainly from clients in Delaware. Using national
CDs is a cost-effective way to fund loan growth without incurring the expense of
building and operating a large-scale branch office network outside Delaware.
CREDIT QUALITY
Credit quality remained stable. The percentage of loans outstanding with pass
ratings from the internal risk rating analysis exceeded 97% for the fifth
consecutive quarter, and was higher than for the year-ago fourth quarter. At
year-end 2006, fewer loans were on the watch list than at the end of 2005, and
no loans were rated doubtful.
Net charge-offs for the 2006 fourth quarter were $5.9 million. This was $1.9
million more than for the 2005 fourth quarter, but $1.4 million less than for
the 2006 third quarter. A loan to an auto dealer in New Jersey accounted for the
increase from the year-ago fourth quarter.
For the 2006 full year, net charge-offs totaled $18.5 million, compared with
$10.1 million for 2005. The largest charge-off during 2006 was a commercial loan
of approximately $4.5 million that had been recorded in renegotiated loans from
the fourth quarter of 2004 until the third quarter of 2006. Because this
charge-off reduced the amount of renegotiated loans to zero, it caused total
nonperforming assets to decline for the 2006 fourth quarter and full year. The
period-end nonperforming asset ratio was 44 basis points at year-end 2006, down
from 60 basis points at year-end 2005 and 47 basis points at the end of the 2006
third quarter.
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The net charge-off ratio for the 2006 fourth quarter was 7 basis points. This
was 2 basis points higher than for the year-ago fourth quarter and 2 basis
points lower than for the 2006 third quarter. For the full-year 2006, the net
charge-off ratio was 24 basis points. While this was 14 basis points higher than
for the full-year 2005, it was in line with historical levels. Since 1995, the
annual net charge-off ratio has ranged from 14 to 44 basis points.
Nonaccruing loans totaled $31.0 million at year-end 2006, which was $8.3 million
lower than at year-end 2005, and $1.0 million lower than at the end of the 2006
third quarter. Loans past due 90 days or more amounted to $5.8 million at
year-end 2006. This was $1.7 million more than at year-end 2005, but $1.9
million less than at the end of the 2006 third quarter.
Commercial real estate/construction (CRE) loans accounted for approximately
$313,000, or less than 3%, of net charge-offs for the 2006 full year. As of
December 31, 2006, no CRE loans were nonaccruing or past due 90 days.
The $4.8 million asset recorded at year-end 2006 as other real estate owned
(OREO) is a parcel of agricultural land in New Jersey. The amount recorded for
OREO was unchanged from the second quarter of 2006, when this loan was
transferred to OREO from nonaccruing status.
The 2006 fourth quarter provision for loan losses was $6.5 million, compared
with $2.0 million for the year-ago fourth quarter, and $6.6 million for the 2006
third quarter. The reserve for loan losses was $94.2 million at December 31,
2006, compared with $91.4 million at year-end 2005 and $93.6 million at
September 30, 2006. The loan loss reserve ratio at year-end 2006 was 1.16%,
compared with 1.24% at year-end 2005 and 1.20% at September 30, 2006. Changes in
the provision and reserve for loan losses reflected management's assessment of
risk in light of loan growth, the internal risk rating analysis, the levels of
loan recoveries and repayments, the stability of the regional economy, and
regulatory guidelines.
REGIONAL BANKING EFFICIENCY AND PROFITABILITY
During 2006, Regional Banking added staff, opened new offices, and expanded
existing offices. While these investments increased expenses, they also helped
generate higher amounts of
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revenue. Revenue growth outpaced expense growth for
the 2006 fourth quarter and full year, and the corresponding efficiency ratios
improved.
EFFICIENCY RATIOS 2006 Q4 2005 Q4 2006 FULL YEAR 2005 FULL YEAR
----------------- ------- ------- -------------- --------------
Regional Banking 41.56% 42.38% 40.57% 42.56%
Pretax income from Regional Banking was 9% higher for the 2006 full year than
for 2005, but $0.5 million lower for the 2006 fourth quarter than for the
year-ago fourth quarter, because the provision for loan losses was $4.5 million
higher than for the 2005 fourth quarter.
NET INTEREST MARGIN
The net interest margin for the 2006 fourth quarter was 3.65%, a decline of 9
basis points from the year-ago fourth quarter and 18 basis points from the 2006
third quarter. The net interest margin for the 2006 full year was 3.79%, 8 basis
points higher than for 2005.
NET INTEREST MARGIN 2006 Q4 2006 Q3 2005 Q4 2006 FULL YEAR 2005 FULL YEAR
------------------- ------- ------- ------- -------------- --------------
Net interest margin 3.65% 3.83% 3.74% 3.79% 3.71%
Three factors caused the decline:
- The increase in investments to support collateralized short-term borrowings
accounted for approximately 10 basis points of the decline. These
transactions add to net interest income, but the difference between the
income and expense they generate is small, and these narrow spreads reduced
the margin.
- Continued growth in the loan portfolio accounted for approximately 2 basis
points of the decline. Because new loans, on average, are booked at spreads
that are lower than the current net interest margin, each new loan added
causes an incremental reduction in the margin.
- Deposit pricing increases, especially on interest-bearing demand deposits
and certificates of deposit (CDs) under $100,000, accounted for
approximately 6 basis points of the decline. In a rising market interest
rate environment, retail deposits reprice more slowly than floating
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rate loans. In 2006, the Federal Open Market Committee stopped raising
short-term interest rates in June. Most of the company's floating
rate loans repriced within 30 days of each rate increase, but retail
deposits continued to reprice throughout the second half of the year.
For the 2006 fourth quarter, the increases in funding costs outpaced the
increases in asset yields, which had a negative effect on the margin.
On a full-year basis, the margin was higher for 2006 than for 2005 mainly
because asset yields rose at a faster pace than funding costs for the first
three quarters of the year.
2006 Q4 2006 Q4
VS. VS. FULL YEAR
CHANGES IN YIELDS AND RATES (IN BASIS POINTS) 2005 Q4 2006 Q3 2006 VS. 2005
--------------------------------------------- ------- ------- -------------
Yield on earning assets (in basis points) 91 bps (2) bps 121 bps
2006 Q4 2006 Q4
VS. VS. FULL YEAR
CHANGES IN YIELDS AND RATES (IN BASIS POINTS) 2005 Q4 2006 Q3 2006 VS. 2005
--------------------------------------------- ------- ------- -------------
Rate on CDs, under $100,000 (in basis points) 126 bps 35 bps 117 bps
Rate on total funds to support earning assets
(in basis points) 100 bps 16 bps 113 bps
The majority of loans outstanding continued to be floating rate loans, and the
majority of these loans repriced within a timeframe that closely matched the
90-day maturations of a substantial portion of the company's funding.
AS A PERCENTAGE OF TOTAL BALANCES AT 12/31/06 AT 09/30/06 AT 12/31/05
--------------------------------- ----------- ----------- -----------
Loans outstanding with floating rates 74% 75% 77%
Floating rate loans that are commercial loans 82% 81% 80%
Commercial floating rate loans repricing
in < or = 30 days 93% 93% 92%
National CDs maturing < or = 90 days 55% 74% 87%
Short-term borrowings maturing < or = 90 days 92% 98% 86%
Commercial loans tied to a prime rate 61% 62% 63%
Commercial loans tied to the 30-day LIBOR 35% 34% 30%
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The decrease over the past 12 months in the percentage of national CDs maturing
in 90 days or less reflected changes in the yield curve. With little difference
between 90-day rates and longer-term rates, the company opted to purchase
instruments with longer terms.
At December 31, 2006, Wilmington Trust's prime lending rate was 8.25%.
THE WEALTH ADVISORY SERVICES BUSINESS
Wealth Advisory Services (WAS) revenue for the 2006 fourth quarter totaled $51.3
million. This was 20% more than for the year-ago fourth quarter and 9% more than
for the 2006 third quarter. Revenue from trust and investment advisory services
and from planning and other services were the main contributors of the
year-over-year and linked-quarter growth.
For the 2006 full year, WAS revenue totaled $192.0 million, up 12% from 2005.
All three categories of WAS revenue recorded double-digit increases. On a
full-year basis, trust and investment management services had the largest dollar
increase in total WAS revenue, while revenue from planning and other services
recorded the largest percentage increase.
Most of the growth in total WAS revenue came from trust and investment advisory
services. Business development and market appreciation produced trust and
investment advisory revenue of $35.6 million for the 2006 fourth quarter, up 15%
from the year-ago fourth quarter and 8% from the 2006 third quarter. These
increases outpaced the increases in the Standard & Poor's 500 index, which
increased an average of 14% and 6%, respectively, for the corresponding periods.
Approximately 48% of trust and investment advisory revenue was based on equity
market valuations, and management believes the S&P 500 is a good proxy for
equity investments in client portfolios.
For the 2006 full year, trust and investment advisory revenue was $136.1
million, up 10% from 2005. Lackluster performance in the equity markets during
the first nine months of the year masked the revenue from new business
development during that period.
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Revenue from planning and other services was $10.6 million for the 2006 fourth
quarter. This was 49% higher than for the year-ago fourth quarter and 21% higher
than for the 2006 third quarter. For the 2006 full year, planning revenue was
$35.7 million, a 17% increase from 2005.
Fees for these services are based on the nature and complexity of the service
provided, not on asset valuations. In some cases, these fees are based on the
client's annual income.
Most of the growth in planning revenue came from family office services,
reflecting a substantial expansion of these services. At year-end 2005, there
were 45 full-time-equivalent family office staff members. Most were in Beverly
Hills, and the focus was primarily on meeting the unique business management
needs of entertainment and sports figures. By year-end 2006, there were 79
full-time-equivalent family office staff members; they were located in Delaware,
Beverly Hills, New York, Princeton, and Stamford, Connecticut; and added to the
scope of services were expertise in structuring family offices as legal entities
and in developing executive compensation and inherited wealth strategies.
Business development remained solid. The Delaware, Florida, New York, and
Pennsylvania markets recorded the largest increases in sales. In Pennsylvania,
expansion of WAS activities in the Lehigh Valley area during the second half of
the year helped generate sales for the 2006 fourth quarter that were 58% higher
than for the 2006 third quarter. Sales attributed to Delaware include business
from clients in other states whose accounts are located in Delaware in order to
benefit from trust, tax, and legal advantages not available for trusts governed
by the laws of other states.
WEALTH ADVISORY SERVICES EFFICIENCY AND PROFITABILITY
WAS pretax income was 30% higher for the 2006 fourth quarter and 12% higher for
the full year than for the corresponding periods in 2005. Two new office
openings and the family office expansion increased WAS expenses for 2006, but
the business leveraged those initiatives, and investments made in prior years,
to generate revenue growth that outpaced expense growth. WAS profitability and
efficiency measures for the 2006 fourth quarter and full year improved as a
result.
16
EFFICIENCY RATIOS 2006 Q4 2005 Q4 2006 FULL YEAR 2005 FULL YEAR
----------------- ------- ------- -------------- --------------
Wealth Advisory Services 76.47% 78.76% 77.63% 77.97%
THE CORPORATE CLIENT SERVICES BUSINESS
Corporate Client Services (CCS) revenue for the 2006 fourth quarter totaled
$23.4 million. This was 14% more than for the year-ago fourth quarter and 11%
higher than for the 2006 third quarter. Revenue from capital markets services,
entity management services, and investment and cash management services were the
main contributors of the year-over-year and linked-quarter revenue growth.
For the 2006 full year, CCS revenue totaled $85.6 million, up 12% from 2005. All
four components of the CCS business recorded higher revenue, and each recorded
double-digit increases in sales. On a full-year basis, entity management
services recorded the largest dollar increase in total CCS revenue and revenue
from investment and cash management services increased at the fastest pace.
Revenue from the capital markets component for the 2006 fourth quarter was $10.4
million, which was 11% higher than for the year-ago fourth quarter and 20%
higher than for the 2006 third quarter. For the 2006 full year, capital markets
revenue was $37.0 million, an increase of 8%. Sales of capital markets services
for the 2006 fourth quarter were 30% higher than for the year-ago fourth quarter
and 21% higher than for the 2006 third quarter. For the 2006 full year, sales of
capital markets services were 30% higher than for 2005.
The capital markets services most in demand in the 2006 fourth quarter were
those that support issues of trust-preferred securities, collateral trusts and
defaults, and commercial mortgage-backed securitization defeasance. Higher sales
of these services offset continued decline in the volume of asset-backed
securitizations in the U.S. market.
17
Revenue from entity management services for the 2006 fourth quarter was $7.1
million, up 16% from the year-ago fourth quarter and 4% from the 2006 third
quarter. For the 2006 full year, entity management revenue was $26.8 million, a
14% increase from 2005. These increases resulted from strong demand for
independent directorships and administrative services for structured finance
securitizations in Europe, and reflected the company's expansion into Germany.
Expansion in the Cayman Islands and the May 2006 acquisition of PwC Corporate
Services (Cayman) from accounting firm PricewaterhouseCoopers also contributed
to the revenue increases.
More proactive efforts to develop institutional investment management business
continued to generate higher amounts of revenue from investment and cash
management services. Revenue from these services was $3.0 million for the 2006
fourth quarter, up 31% from the year-ago fourth quarter and 12% more than for
the 2006 third quarter. For the 2006 full year, revenue from these services rose
34% to $10.3 million.
Approximately 33% of the 2006 fourth quarter revenue and 30% of full-year
revenue from these services was tied to the valuations of domestic fixed income
instruments, and reflected the company's ability to leverage its fixed income
expertise on behalf of CCS clients. The remaining investment and cash management
revenue was based on money market mutual fund balances.
Revenue from the corporate retirement services component of the CCS business was
$2.9 million for the 2006 fourth quarter and $11.5 million for the full year,
increases of 4% and 8%, respectively. Market appreciation, additional retirement
plan contributions, and demand for executive compensation plan trust and custody
services accounted for these increases.
CORPORATE CLIENT SERVICES EFFICIENCY AND PROFITABILITY
For the 2006 full year, CCS efficiency and profitability improved because the
focus on marketing investment and cash management services, and expansion in
Europe and the Cayman Islands, yielded higher volumes of business. The full-year
increase in revenue was twice as high as the corresponding increase in expenses,
mainly because CCS leveraged existing infrastructure and capabilities to support
the growth in revenue from investment and cash management services.
18
For the 2006 fourth quarter, pre-tax income was the same as for the year-ago
fourth quarter, although the efficiency ratio declined, due to investments in
staff and technology to improve collateralized debt obligation capabilities.
EFFICIENCY RATIOS 2006 Q4 2005 Q4 2006 FULL YEAR 2005 FULL YEAR
----------------- ------- ------- -------------- --------------
Corporate Client Services 72.79% 68.80% 73.67% 76.48%
AFFILIATE MONEY MANAGERS
Revenue from the two affiliate money managers, Cramer Rosenthal McGlynn and
Roxbury Capital Management, totaled $5.4 million for the 2006 fourth quarter and
$20.5 million for the 2006 full year. These were increases of 10% and 17%,
respectively, from the corresponding periods of 2005.
AFFILIATE MANAGERS (in millions) AT 12/31/06 AT 9/30/06 AT 12/31/05
-------------------------------- ----------- ---------- -----------
Managed assets at Cramer Rosenthal McGlynn $10,623.8 $9,784.5 $8,899.0
Managed assets at Roxbury Capital Management $ 3,138.1 $3,122.9 $3,287.3
2006 2005 2006 2005
AFFILIATE MANAGERS (in millions) Q4 Q4 FULL YEAR FULL YEAR
-------------------------------- ---- ---- --------- ---------
Revenue from Cramer Rosenthal McGlynn $5.3 $4.3 $19.3 $16.1
Revenue from Roxbury Capital Management $0.1 $0.6 $ 1.2 $ 1.4
Total revenue from affiliate managers $5.4 $4.9 $20.5 $17.5
Value-style affiliate Cramer Rosenthal McGlynn (CRM) contributed nearly all of
the 2006 fourth quarter and full-year revenue from the affiliates. CRM's assets
under management were a record-high $10.6 billion at year-end 2006. This was
$1.7 billion, or 19%, higher than at year-end 2005, and $800 million, or 8%,
higher than at September 30, 2006. Asset inflows, particularly in the mid-cap
value product, and market appreciation accounted for the growth in managed
assets and drove the increases in revenue.
19
Fourth quarter and full-year 2006 results for Roxbury Capital Management (RCM)
reflected the firm's renewed focus on its market positioning and expertise as a
small-cap growth manager. During the second half of 2006, RCM terminated its
micro-cap and fixed income products, which reduced assets under management and
revenue for the fourth quarter and full year. The costs of terminating the two
products also contributed to the reduction in RCM's revenue.
NONINTEREST EXPENSES
Noninterest expenses were $104.9 million for the 2006 fourth quarter, which was
11% higher than for the year-ago fourth quarter. For the 2006 full year,
noninterest expenses were $471.6 million, a 27% increase from 2005. This amount
included the $72.3 million impairment write-down on RCM. Absent this non-cash
charge, noninterest expenses for 2006 would have been $399.3 million, or 8%
higher than for 2005.
Excluding the impairment write-down, expansion initiatives and additions to
staff in 2006 caused expenses to rise. These activities included:
- The East Coast launch of the family office practice in June.
- New office openings in Pennsylvania, New Jersey, Connecticut, and
Frankfurt, Germany, during the summer.
- Expansion of existing offices in Delaware, Pennsylvania, Maryland, and New
York, and additions to staff throughout the year.
- The acquisition of PwC Corporate Services (Cayman) in May.
- Investments in technology and staff beginning in August to expand
collateralized debt obligation services.
At December 31, 2006, there were 2,562 full time-equivalent staff members. This
was 93 more than at the end of the year-ago fourth quarter, and 42 more than at
the end of the 2006 third quarter. Staffing-related costs continued to account
for the majority of noninterest expenses and for the majority of the growth in
noninterest expenses, excluding the non-cash charge.
20
2006 2005 2006 2005
STAFFING-RELATED EXPENSES Q4 Q4 FULL YEAR FULL YEAR
------------------------- ------ ------ --------- ---------
Full-time equivalent staff members 2,562 2,469 2,562 2,469
Staffing-related expenses (in millions) $ 62.0 $ 56.7 $242.5 $225.0
Effective January 1, 2006, stock-based compensation expense was included in
incentive and bonus expense, in accordance with the company's adoption of
Statement of Financial Accounting Standards No. 123 (revised), "Share-Based
Payment," using the modified retrospective method. Prior-period amounts were
adjusted to reflect this accounting change.
2006 2005 2006 2005
INCENTIVES AND BONUSES (in millions) Q4 Q4 FULL YEAR FULL YEAR
------------------------------------ ----- ---- --------- ---------
Stock option expense $ 1.9 $1.8 $ 7.0 $ 6.6
Total incentives and bonuses $10.3 $8.8 $39.8 $38.0
Income tax expense for the 2006 full year was 22% lower than for 2005 mainly
because the non-cash impairment write-down recorded against the investment in
RCM reduced pre-tax income. In addition, higher volumes of stock options were
exercised during 2006 than 2005, which increased the tax-deductible portion of
stock-based compensation expense.
SHARE REPURCHASES
During the 2006 fourth quarter, the company spent $50,510 to repurchase 1,164 of
its shares, at an average price per share of $43.39. For the 2006 full year, the
company spent $29.1 million to purchase 662,996 of its shares, at an average
price per share of $43.93. This brought the total number of shares repurchased
under the current 8-million-share program, which commenced in April 2002, to
1,351,241, leaving 6,648,759 shares available for repurchase.
21
OUTLOOK FOR 2007
Commenting on the outlook for 2007, Cecala said:
- "Our focus on building and strengthening client relationships, plus the
expansion investments we have made, generated strong momentum in each of
our businesses for 2006. We expect that momentum to continue.
- "We have been experiencing solid loan growth, and we expect that to
continue, especially in Pennsylvania and Maryland, as we expand our
commercial banking presence in those markets.
- "In the second half of 2006, after the Federal Open Market Committee
(FOMC) stopped raising short-term interest rates, deposit pricing caught up
to floating rate loan repricing, almost all of which took place within 30
days of the last FOMC rate increase in June. We believe that substantially
all of the 2006 rate increases are now priced into our core deposits.
- "Our credit quality remains very positive. Net charge-offs and the
provision for loan losses for the 2006 fourth quarter were in line with our
long-term averages, and we expect this to continue in 2007.
- "We expect continued growth in revenue from Wealth Advisory Services,
due to strong sales momentum and high demand for our newer products and
services, such as family office services.
- "We remain very positive about Corporate Client Services. The success
of this business in 2006 created a lot of momentum for 2007, which should
continue due to new product development and expansion in Europe.
- "Expense growth for 2007 should be similar to the 2006 increase, which
was 8%, excluding the impairment charge. Expenses in 2007 will reflect
initiatives that came on line at various points in 2006, such as the family
office services expansion, the corporate services acquisition in the Cayman
Islands, new products and European expansion in Corporate Client Services,
and the new offices we opened in Pennsylvania and New Jersey.
- "Expenses for the first quarter are typically higher than for other
quarters, due to the timing of payroll taxes and 401(k) plan contributions.
These two items will add approximately $3 million to expenses for the first
quarter of 2007."
22
CONFERENCE CALL
Management will discuss the 2006 fourth quarter and full year results and
outlook for the future in a conference call today at 10:00 a.m. (EST).
Supporting materials, financial statements, and audio streaming will be
available at www.wilmingtontrust.com. To access the call from within the United
States, dial (877) 258-8842 and enter PIN 8259324. From outside the United
States, dial (973) 582-2839 and enter PIN 8259324.
A rebroadcast of the call will be available from 12:30 p.m. (EST) today until
5:00 p.m. (EST) on Friday, January 26, 2006, by calling (877) 519-4471 inside
the United States or (973) 341-3080 from outside the United States. Use PIN
8259324 to access the rebroadcast.
FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements that reflect our current
expectations about our future performance. These statements rely on a number of
assumptions and estimates and are subject to various risks and uncertainties
that could cause our actual results to differ from our expectations. Factors
that could affect our future financial results include, among other things,
changes in national or regional economic conditions; changes in market interest
rates; significant changes in banking laws or regulations; increased competition
in our businesses; higher-than- expected credit losses; the effects of
acquisitions; the effects of integrating acquired entities; a substantial and
permanent loss of either client accounts and/or assets under management at
Wilmington Trust and/or our affiliate money managers, Cramer Rosenthal McGlynn
and Roxbury Capital Management; unanticipated changes in regulatory, judicial,
or legislative tax treatment of business transactions; and economic uncertainty
created by unrest in other parts of the world.
ABOUT WILMINGTON TRUST
Wilmington Trust Corporation (NYSE: WL) is a financial services holding company
that provides Regional Banking services throughout the Delaware Valley region,
Wealth Advisory Services for high-net-worth clients in 22 countries, and
Corporate Client Services for institutional clients in 81 countries. Its wholly
owned bank subsidiary, Wilmington Trust
23
Company, which was founded in 1903, is one of the largest personal trust
providers in the United States and the leading retail and commercial bank in
Delaware. Wilmington Trust Corporation and its affiliates have offices in
California, Connecticut, Delaware, Florida, Georgia, Maryland, Nevada, New
Jersey, New York, Pennsylvania, South Carolina, Vermont, the Cayman Islands, the
Channel Islands, London, Dublin, and Frankfurt. For more information, visit
www.wilmingtontrust.com.
CONTACTS
Investors and analysts: News media:
Ellen J. Roberts Bill Benintende
Investor Relations Public Relations
(302) 651-8069 (302) 651-8268
eroberts@wilmingtontrust.com wbenintende@wilmingtontrust.com
###
24
EARNINGS RELEASE
EXHIBIT 99
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the twelve months ended December 31, 2006
HIGHLIGHTS
Three Months Ended Twelve Months Ended
----------------------------- ----------------------------
Dec. 31, Dec. 31, % Dec. 31, Dec. 31, %
2006 2005 Change 2006 2005 Change
------------------------------------------------------------------------------------------------------------
OPERATING RESULTS (IN MILLIONS)
Net interest income $ 92.4 $ 87.5 5.6 $ 363.1 $ 328.9 10.4
Provision for loan losses (6.5) (2.0) 225.0 (21.3) (11.8) 80.5
Noninterest income 92.5 79.8 15.9 346.1 313.3 10.5
Noninterest expense 104.9 94.5 11.0 471.6 370.1 27.4
Net income 47.5 46.5 2.2 143.8 167.0 (13.9)
PER SHARE DATA
Basic net income $ 0.69 $ 0.69 -- $ 2.10 $ 2.47 (15.0)
Diluted net income 0.68 0.67 1.5 2.06 2.43 (15.2)
Dividends paid 0.315 0.30 5.0 1.245 1.185 5.1
Book value at period end 15.47 14.99 3.2 15.47 14.99 3.2
Closing price at period end 42.17 38.91 8.4 42.17 38.91 8.4
Market range:
High 45.33 40.96 10.7 45.61 40.96 11.4
Low 40.54 34.65 17.0 38.54 33.01 16.8
AVERAGE SHARES OUTSTANDING (IN THOUSANDS)
Basic 68,455 67,861 0.9 68,413 67,688 1.1
Diluted 69,680 68,956 1.0 69,707 68,570 1.7
AVERAGE BALANCE SHEET (IN MILLIONS)
Investment portfolio $ 2,017.6 $1,907.0 5.8 $1,893.1 $1,876.6 0.9
Loans 7,912.9 7,344.9 7.7 7,699.8 7,047.1 9.3
Earning assets 10,075.3 9,292.1 8.4 9,645.7 8,957.4 7.7
Core deposits 5,008.1 5,012.6 (0.1) 4,936.7 4,866.6 1.4
Stockholders' equity 1,067.4 983.0 8.6 1,059.1 949.3 11.6
STATISTICS AND RATIOS (NET INCOME ANNUALIZED)
Return on average stockholders' equity 17.66% 18.77% (5.9) 13.58% 17.59% (22.8)
Return on average assets 1.73% 1.82% (4.9) 1.37% 1.70% (19.4)
Net interest margin (taxable equivalent) 3.65% 3.74% (2.4) 3.79% 3.71% 2.2
Dividend payout ratio 45.26% 43.87% 3.2 59.18% 48.02% 23.2
Full-time equivalent headcount 2,562 2,469 3.8 2,562 2,469 3.8
Prior period numbers have been adjusted throughout this report for the
restrospective adoption of stock-based compensation accounting.
25
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the twelve months ended December 31, 2006
QUARTERLY INCOME STATEMENT
Three Months Ended
-----------------------------------------------------------------------
% Change From:
---------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Prior Prior
(in millions) 2006 2006 2006 2006 2005 Quarter Year
---------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME
Interest income $182.0 $175.0 $165.0 $152.8 $146.2 4.0 24.5
Interest expense 89.6 82.0 74.6 65.5 58.7 9.3 52.6
--------------------------------------------------------------------------------------------------------
Net interest income 92.4 93.0 90.4 87.3 87.5 (0.6) 5.6
Provision for loan losses (6.5) (6.6) (4.2) (4.0) (2.0) (1.5) 225.0
--------------------------------------------------------------------------------------------------------
Net interest income after provision
for loan losses 85.9 86.4 86.2 83.3 85.5 (0.6) 0.5
---------------------------------------------------
NONINTEREST INCOME
Advisory fees:
Wealth Advisory Services
Trust and investment advisory fees 35.6 33.0 33.1 34.3 31.1 7.9 14.5
Mutual fund fees 5.1 5.3 5.0 4.7 4.5 (3.8) 13.3
Planning and other services 10.6 8.8 8.9 7.3 7.1 20.5 49.3
--------------------------------------------------------------------------------------------------------
Total Wealth Advisory Services 51.3 47.1 47.0 46.3 42.7 8.9 20.1
---------------------------------------------------
Corporate Client Services
Capital markets services 10.4 8.7 8.8 9.1 9.4 19.5 10.6
Entity management services 7.1 6.8 6.6 6.5 6.1 4.4 16.4
Retirement services 2.9 2.9 2.9 2.7 2.8 -- 3.6
Investment/cash management services 3.0 2.7 2.5 2.1 2.3 11.9 31.3
--------------------------------------------------------------------------------------------------------
Total Corporate Client Services 23.4 21.1 20.8 20.4 20.6 11.0 13.7
---------------------------------------------------
Cramer Rosenthal McGlynn 5.3 4.6 5.5 4.0 4.3 15.2 23.3
Roxbury Capital Management 0.1 -- 0.3 0.9 0.6 -- (83.3)
--------------------------------------------------------------------------------------------------------
Advisory fees 80.1 72.8 73.6 71.6 68.2 10.1 17.5
Amortization of affiliate other intangibles (1.1) (1.1) (1.0) (1.0) (1.0) -- 10.0
--------------------------------------------------------------------------------------------------------
Advisory fees after amortization
of affiliate other intangibles 79.0 71.7 72.6 70.6 67.2 10.2 17.6
---------------------------------------------------
Service charges on deposit accounts 7.1 7.3 7.0 6.9 7.3 (2.7) (2.7)
Other noninterest income 6.2 5.5 6.8 5.2 5.3 12.7 17.0
Securities gains/(losses) 0.2 0.1 (0.1) -- -- 100.0 --
--------------------------------------------------------------------------------------------------------
Total noninterest income 92.5 84.6 86.3 82.7 79.8 9.4 15.9
---------------------------------------------------
Net interest and noninterest income 178.4 171.0 172.5 166.0 165.3 4.3 7.9
---------------------------------------------------
NONINTEREST EXPENSE
Salaries and wages 40.3 39.5 37.8 36.9 36.4 2.0 10.7
Incentives and bonuses 10.3 8.9 10.3 10.3 8.8 15.7 17.0
Employment benefits 11.4 11.4 11.9 13.5 11.5 -- (0.9)
Net occupancy 6.7 6.7 6.3 5.9 6.1 -- 9.8
Furniture, equipment, and supplies 10.3 9.2 9.9 9.0 8.4 12.0 22.6
Other noninterest expense:
Advertising and contributions 3.2 2.2 2.1 1.9 2.5 45.5 28.0
Servicing and consulting fees 2.9 2.8 2.4 2.3 2.9 3.6 --
Subadvisor expense 2.3 2.7 2.9 2.8 2.5 (14.8) (8.0)
Travel, entertainment, and training 3.4 2.5 2.3 2.2 2.6 36.0 30.8
Originating and processing fees 3.1 2.8 2.4 2.8 2.8 10.7 10.7
Other expense 11.0 9.9 10.0 9.9 10.0 11.1 10.0
--------------------------------------------------------------------------------------------------------
Total other noninterest expense 25.9 22.9 22.1 21.9 23.3 13.1 11.2
---------------------------------------------------
Total noninterest expense before
impairment 104.9 98.6 98.3 97.5 94.5 6.4 11.0
Impairment write-down -- 72.3 -- -- -- (100.0) --
---------------------------------------------------
Total noninterest expense 104.9 170.9 98.3 97.5 94.5 (38.6) 11.0
---------------------------------------------------
Income before income taxes and
minority interest 73.5 0.1 74.2 68.5 70.8 N/M 3.8
Applicable income taxes 26.3 (5.0) 27.2 24.3 24.3 -- 8.2
--------------------------------------------------------------------------------------------------------
Net income before minority interest 47.2 5.1 47.0 44.2 46.5 N/M 1.5
Minority interest (0.3) (0.1) 0.1 0.1 -- 200.0 --
--------------------------------------------------------------------------------------------------------
Net income $ 47.5 $ 5.2 $ 46.9 $ 44.1 $ 46.5 N/M 2.2
===================================================
26
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the twelve months ended December 31, 2006
YEAR-TO-DATE INCOME STATEMENT
Twelve Months Ended
----------------------------
Dec. 31, Dec. 31, %
(in millions) 2006 2005 Change
--------------------------------------------------------------------------------
NET INTEREST INCOME
Interest income $674.8 $516.6 30.6
Interest expense 311.7 187.7 66.1
----------------------------------------------------------------------
Net interest income 363.1 328.9 10.4
Provision for loan losses (21.3) (11.8) 80.5
----------------------------------------------------------------------
Net interest income after provision
for loan losses 341.8 317.1 7.8
-----------------
NONINTEREST INCOME
Advisory fees:
Wealth Advisory Services
Trust and investment advisory fees 136.1 123.9 9.8
Mutual fund fees 20.2 17.8 13.5
Planning and other services 35.7 30.4 17.4
----------------------------------------------------------------------
Total Wealth Advisory Services 192.0 172.1 11.6
-----------------
Corporate Client Services
Capital markets services 37.0 34.3 7.9
Entity management services 26.8 23.6 13.6
Retirement services 11.5 10.7 7.5
Investment/cash management services 10.3 7.7 33.8
----------------------------------------------------------------------
Total Corporate Client Services 85.6 76.3 12.2
-----------------
Cramer Rosenthal McGlynn 19.3 16.1 19.9
Roxbury Capital Management 1.2 1.4 (14.3)
----------------------------------------------------------------------
Advisory fees 298.1 265.9 12.1
Amortization of affiliate other intangibles (4.2) (4.0) 5.0
----------------------------------------------------------------------
Advisory fees after amortization
of affiliate other intangibles 293.9 261.9 12.2
-----------------
Service charges on deposit accounts 28.2 28.1 0.4
Other noninterest income 23.8 22.5 5.8
Securities gains 0.2 0.8 (75.0)
----------------------------------------------------------------------
Total noninterest income 346.1 313.3 10.5
-----------------
Net interest and noninterest income 687.9 630.4 9.1
-----------------
NONINTEREST EXPENSE
Salaries and wages 154.4 139.8 10.4
Incentives and bonuses 39.8 38.0 4.7
Employment benefits 48.3 47.2 2.3
Net occupancy 25.7 22.4 14.7
Furniture, equipment, and supplies 38.3 34.7 10.4
Other noninterest expense:
Advertising and contributions 9.4 9.1 3.3
Servicing and consulting fees 10.4 10.2 2.0
Subadvisor expense 10.7 9.4 13.8
Travel, entertainment, and training 10.4 8.8 18.2
Originating and processing fees 11.1 10.5 5.7
Other expense 40.8 40.0 2.0
----------------------------------------------------------------------
Total other noninterest expense 92.8 88.0 5.5
-----------------
Total noninterest expense before
impairment 399.3 370.1 7.9
Impairment write-down 72.3 -- --
-----------------
Total noninterest expense 471.6 370.1 27.4
-----------------
Income before income taxes and
minority interest 216.3 260.3 (16.9)
Applicable income taxes 72.7 93.0 (21.8)
----------------------------------------------------------------------
Net income before minority interest 143.6 167.3 (14.2)
Minority interest (0.2) 0.3 --
----------------------------------------------------------------------
Net income $143.8 $167.0 (13.9)
=================
27
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the twelve months ended December 31, 2006
COMPARISON OF RESULTS WITH AND WITHOUT THE IMPAIRMENT WRITE-DOWN
Three months ended December 31, 2006 Twelve months ended December 31, 2006
------------------------------------ -------------------------------------
With Without With Without
impairment impairment Impairment impairment impairment Impairment
---------- ---------- ---------- ---------- ---------- ----------
OPERATING RESULTS (IN MILLIONS)
Net interest income $ 92.4 $ 92.4 $ -- $ 363.1 $ 363.1 $ --
Provision for loan losses (6.5) (6.5) -- (21.3) (21.3) --
Noninterest income 92.5 92.5 -- 346.1 346.1 --
Noninterest expense 104.9 104.9 -- 471.6 399.3 72.3
------------------------------------------------------------------------------------------------------------------------
Income before taxes
and minority interest 73.5 73.5 -- 216.3 288.6 (72.3)
Applicable income taxes 26.3 26.3 -- 72.7 103.3 (30.6)
------------------------------------------------------------------------------------------------------------------------
Net income before
minority interest 47.2 47.2 -- 143.6 185.3 (41.7)
Minority interest (0.3) (0.3) -- (0.2) (0.2) --
------------------------------------------------------------------------------------------------------------------------
Net income $ 47.5 $ 47.5 $ -- $ 143.8 $ 185.5 $(41.7)
==========================================================================
PER SHARE DATA
Diluted shares outstanding (in millions) 69.7 69.7 -- 69.7 69.7 --
Per-share earnings $ 0.68 $ 0.68 $ -- $ 2.06 $ 2.66 $(0.60)
STATISTICS AND RATIOS (DOLLARS IN MILLIONS)
Total assets, on average $10,912.9 $10,912.9 $ -- $10,495.1 $10,513.5 $(18.4)
Stockholders' equity, on average 1,067.4 1,067.4 -- 1,059.1 1,069.7 (10.6)
Return on average assets 1.73% 1.73% -- 1.37% 1.76% (0.39)%
Return on equity 17.66% 17.66% -- 13.58% 17.34% (3.76)%
Net interest before provision and
noninterest income $ 184.9 $ 184.9 $ -- $ 709.2 $ 709.2 $ --
Tax equivalent interest income 1.1 1.1 -- 4.3 4.3 --
------------------------------------------------------------------------------------------------------------------------
$ 186.0 $ 186.0 $ -- $ 713.5 $ 713.5 $ --
Noninterest expense $ 104.9 $ 104.9 $ -- $ 471.6 $ 399.3 $ 72.3
--------------------------------------------------------------------------
Efficiency ratio 56.40% 56.40% -- 66.10% 55.96% 10.13%
28
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the twelve months ended December 31, 2006
STATEMENT OF CONDITION
% Change From
---------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Prior Prior
(in millions) 2006 2006 2006 2006 2005 Quarter Year
---------------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 249.7 $ 268.4 $ 258.5 $ 219.2 $ 264.0 (7.0) (5.4)
---------------------------------------------------------
Federal funds sold and securities
purchased under agreements to resell 68.9 38.4 66.7 44.9 14.3 79.4 381.8
---------------------------------------------------------
Investment securities:
U.S. Treasury 125.2 230.8 181.4 136.8 161.1 (45.8) (22.3)
Government agencies 807.1 533.0 416.5 394.5 410.8 51.4 96.5
Obligations of state and political subdivisions 9.5 9.4 10.4 10.5 11.0 1.1 (13.6)
Preferred stock 90.5 91.0 88.1 90.2 90.6 (0.5) (0.1)
Mortgage-backed securities 689.5 726.8 751.0 806.4 852.1 (5.1) (19.1)
Other securities 392.8 391.3 389.8 401.9 403.2 0.4 (2.6)
---------------------------------------------------------------------------------------------------------------
Total investment securities 2,114.6 1,982.3 1,837.2 1,840.3 1,928.8 6.7 9.6
---------------------------------------------------------
Loans:
Commercial, financial, and agricultural 2,533.5 2,378.1 2,445.5 2,445.9 2,461.3 6.5 2.9
Real estate - construction 1,663.9 1,610.9 1,574.3 1,411.9 1,233.9 3.3 34.8
Mortgage - commercial 1,296.1 1,254.5 1,222.8 1,245.4 1,223.9 3.3 5.9
---------------------------------------------------------------------------------------------------------------
Total commercial loans 5,493.5 5,243.5 5,242.6 5,103.2 4,919.1 4.8 11.7
---------------------------------------------------------
Mortgage - residential 536.9 518.7 503.0 473.4 455.5 3.5 17.9
Consumer 1,517.0 1,489.7 1,452.4 1,408.5 1,438.3 1.8 5.5
Secured with liquid collateral 547.5 528.3 557.2 553.9 584.8 3.6 (6.4)
---------------------------------------------------------------------------------------------------------------
Total retail loans 2,601.4 2,536.7 2,512.6 2,435.8 2,478.6 2.6 5.0
---------------------------------------------------------
Total loans net of unearned income 8,094.9 7,780.2 7,755.2 7,539.0 7,397.7 4.0 9.4
Reserve for loan losses (94.2) (93.6) (94.3) (93.6) (91.4) 0.6 3.1
---------------------------------------------------------------------------------------------------------------
Net loans 8,000.7 7,686.6 7,660.9 7,445.4 7,306.3 4.1 9.5
---------------------------------------------------------
Premises and equipment 150.3 151.6 151.2 148.7 147.6 (0.9) 1.8
Goodwill 291.4 291.1 363.0 348.5 348.3 0.1 (16.3)
Other intangibles 35.4 38.8 38.9 35.0 36.2 (8.8) (2.2)
Other assets 246.0 251.9 236.9 200.2 199.9 (2.3) 23.1
---------------------------------------------------------------------------------------------------------------
Total assets $11,157.0 $10,709.1 $10,613.3 $10,282.2 $10,245.4 4.2 8.9
=========================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 913.6 $ 861.3 $ 813.8 $ 830.2 $ 1,014.8 6.1 (10.0)
Interest-bearing:
Savings 313.8 292.5 313.1 328.0 326.3 7.3 (3.8)
Interest-bearing demand 2,560.6 2,417.5 2,355.9 2,352.1 2,360.0 5.9 8.5
Certificates under $100,000 1,012.6 995.5 991.1 960.4 923.0 1.7 9.7
Local certificates $100,000 and over 474.4 574.7 550.6 513.3 436.5 (17.5) 8.7
---------------------------------------------------------------------------------------------------------------
Total core deposits 5,275.0 5,141.5 5,024.5 4,984.0 5,060.6 2.6 4.2
National certificates $100,000 and over 3,054.1 2,742.7 2,760.6 2,707.2 2,228.6 11.4 37.0
---------------------------------------------------------------------------------------------------------------
Total deposits 8,329.1 7,884.2 7,785.1 7,691.2 7,289.2 5.6 14.3
---------------------------------------------------------
Short-term borrowings:
Federal funds purchased and securities sold
under agreements to repurchase 1,145.8 1,161.7 1,160.0 984.2 1,355.6 (1.4) (15.5)
U.S. Treasury demand 13.0 7.0 24.5 0.6 18.1 85.7 (28.2)
---------------------------------------------------------------------------------------------------------------
Total short-term borrowings 1,158.8 1,168.7 1,184.5 984.8 1,373.7 (0.8) (15.6)
---------------------------------------------------------
Other liabilities 221.3 196.4 183.1 169.4 164.2 12.7 34.8
Long-term debt 388.5 395.2 393.4 393.2 400.4 (1.7) (3.0)
---------------------------------------------------------------------------------------------------------------
Total liabilities 10,097.7 9,644.5 9,546.1 9,238.6 9,227.5 4.7 9.4
---------------------------------------------------------
Minority interest -- 0.3 0.3 0.3 0.2 (100.0) (100.0)
Stockholders' equity 1,059.3 1,064.3 1,066.9 1,043.3 1,017.7 (0.5) 4.1
---------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $11,157.0 $10,709.1 $10,613.3 $10,282.2 $10,245.4 4.2 8.9
=========================================================
29
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the twelve months ended December 31, 2006
AVERAGE STATEMENT OF CONDITION
% Change From
2006 2006 2006 2006 2005 ----------------
Fourth Third Second First Fourth Prior Prior
(in millions) Quarter Quarter Quarter Quarter Quarter Quarter Year
---------------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 218.2 $ 206.9 $ 209.3 $ 208.0 $ 237.8 5.5 (8.2)
---------------------------------------------------------
Federal funds sold and securities
purchased under agreements to resell 144.8 28.8 18.8 17.5 40.2 402.8 260.2
---------------------------------------------------------
Investment securities:
U.S. Treasury 177.4 157.0 146.7 144.6 133.5 13.0 32.9
Government agencies 642.1 475.9 394.1 400.8 406.4 34.9 58.0
Obligations of state and political subdivisions 9.4 9.6 10.5 10.5 11.1 (2.1) (15.3)
Preferred stock 90.7 89.4 89.2 91.4 90.0 1.5 0.8
Mortgage-backed securities 705.5 735.1 780.1 828.4 878.6 (4.0) (19.7)
Other securities 392.5 390.0 397.3 403.2 387.4 0.6 1.3
--------------------------------------------------------------------------------------------------------------
Total investment securities 2,017.6 1,857.0 1,817.9 1,878.9 1,907.0 8.6 5.8
---------------------------------------------------------
Loans:
Commercial, financial, and agricultural 2,430.5 2,407.7 2,463.5 2,448.1 2,465.9 0.9 (1.4)
Real estate - construction 1,634.9 1,588.7 1,517.5 1,322.0 1,161.6 2.9 40.7
Mortgage - commercial 1,281.4 1,238.5 1,212.8 1,229.8 1,239.7 3.5 3.4
--------------------------------------------------------------------------------------------------------------
Total commercial loans 5,346.8 5,234.9 5,193.8 4,999.9 4,867.2 2.1 9.9
---------------------------------------------------------
Mortgage - residential 524.8 507.8 484.2 463.3 450.8 3.3 16.4
Consumer 1,496.1 1,470.5 1,441.6 1,423.9 1,412.5 1.7 5.9
Secured with liquid collateral 545.2 546.1 556.3 558.2 614.4 (0.2) (11.3)
--------------------------------------------------------------------------------------------------------------
Total retail loans 2,566.1 2,524.4 2,482.1 2,445.4 2,477.7 1.7 3.6
---------------------------------------------------------
Total loans net of unearned income 7,912.9 7,759.3 7,675.9 7,445.3 7,344.9 2.0 7.7
Reserve for loan losses (91.6) (93.5) (91.8) (90.4) (93.5) (2.0) (2.0)
--------------------------------------------------------------------------------------------------------------
Net loans 7,821.3 7,665.8 7,584.1 7,354.9 7,251.4 2.0 7.9
---------------------------------------------------------
Premises and equipment 151.5 152.1 150.3 148.5 147.6 (0.4) 2.6
Goodwill 290.7 362.3 357.3 348.3 344.4 (19.8) (15.6)
Other intangibles 38.1 38.5 37.3 35.6 39.7 (1.0) (4.0)
Other assets 230.7 210.8 190.0 180.3 172.1 9.4 34.0
--------------------------------------------------------------------------------------------------------------
Total assets $10,912.9 $10,522.2 $10,365.0 $10,172.0 $10,140.2 3.7 7.6
=========================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 793.6 $ 737.2 $ 742.0 $ 763.5 $ 1,017.4 7.7 (22.0)
Interest-bearing:
Savings 294.7 304.1 321.2 326.0 325.9 (3.1) (9.6)
Interest-bearing demand 2,374.7 2,374.1 2,364.4 2,346.8 2,321.2 -- 2.3
Certificates under $100,000 1,009.3 988.1 980.9 938.6 901.5 2.1 12.0
Local certificates $100,000 and over 535.8 546.5 540.0 463.3 446.6 (2.0) 20.0
--------------------------------------------------------------------------------------------------------------
Total core deposits 5,008.1 4,950.0 4,948.5 4,838.2 5,012.6 1.2 (0.1)
National certificates $100,000 and over 3,042.2 2,864.6 2,656.1 2,647.7 2,475.4 6.2 22.9
--------------------------------------------------------------------------------------------------------------
Total deposits 8,050.3 7,814.6 7,604.6 7,485.9 7,488.0 3.0 7.5
---------------------------------------------------------
Short-term borrowings:
Federal funds purchased and securities sold
under agreements to repurchase 1,221.4 1,048.8 1,146.0 1,082.0 1,098.0 16.5 11.2
U.S. Treasury demand 10.0 6.8 16.0 11.7 7.7 47.1 29.9
--------------------------------------------------------------------------------------------------------------
Total short-term borrowings 1,231.4 1,055.6 1,162.0 1,093.7 1,105.7 16.7 11.4
---------------------------------------------------------
Other liabilities 172.5 175.7 144.8 166.7 163.3 (1.8) 5.6
Long-term debt 391.1 394.2 393.3 399.0 400.0 (0.8) (2.2)
--------------------------------------------------------------------------------------------------------------
Total liabilities 9,845.3 9,440.1 9,304.7 9,145.3 9,157.0 4.3 7.5
---------------------------------------------------------
Minority interest 0.2 0.4 0.3 0.3 0.2 (50.0) --
Stockholders' equity 1,067.4 1,081.7 1,060.0 1,026.4 983.0 (1.3) 8.6
--------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $10,912.9 $10,522.2 $10,365.0 $10,172.0 $10,140.2 3.7 7.6
=========================================================
30
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the twelve months ended December 31, 2006
YIELDS AND RATES
2006 2006 2006 2006 2005
Fourth Third Second First Fourth
YIELDS/RATES (TAX-EQUIVALENT BASIS) Quarter Quarter Quarter Quarter Quarter
--------------------------------------------------------------------------------------------------------
EARNING ASSETS:
FEDERAL FUNDS SOLD AND SECURITIES
PURCHASED UNDER AGREEMENTS TO RESELL 5.16% 4.55% 4.93% 4.11% 4.02%
U.S. Treasury 4.00 4.06 3.53 3.38 3.27
Government agencies 4.54 4.23 3.93 3.95 3.95
Obligations of state and political subdivisions 8.86 8.75 8.79 8.77 8.78
Preferred stock 7.76 7.63 7.60 7.60 7.58
Mortgage-backed securities 4.21 4.05 4.16 4.17 4.10
Other securities 6.48 6.42 6.14 5.52 5.32
TOTAL INVESTMENT SECURITIES 4.91 4.78 4.67 4.53 4.44
Commercial, financial, and agricultural 7.92 7.96 7.61 7.24 6.80
Real estate - construction 8.56 8.60 8.26 7.90 7.39
Mortgage - commercial 7.99 7.98 7.71 7.34 6.96
TOTAL COMMERCIAL LOANS 8.13 8.16 7.82 7.44 6.97
Mortgage - residential 5.81 5.81 5.77 5.84 5.82
Consumer 7.38 7.31 7.09 6.85 6.60
Secured with liquid collateral 6.77 6.78 6.36 5.89 5.38
TOTAL RETAIL LOANS 6.93 6.89 6.67 6.44 6.16
TOTAL LOANS 7.74 7.75 7.45 7.11 6.70
TOTAL EARNING ASSETS 7.13 7.15 6.90 6.58 6.22
FUNDS USED TO SUPPORT EARNING ASSETS:
Savings 0.51 0.42 0.39 0.32 0.30
Interest-bearing demand 1.31 1.10 1.04 1.02 0.95
Certificates under $100,000 4.22 3.87 3.51 3.27 2.96
Local certificates $100,000 and over 4.74 4.65 4.29 3.89 3.53
CORE INTEREST-BEARING DEPOSITS 2.39 2.16 1.98 1.81 1.64
National certificates $100,000 and over 5.38 5.30 4.98 4.47 4.01
TOTAL INTEREST-BEARING DEPOSITS 3.64 3.43 3.15 2.86 2.55
Federal funds purchased and securities sold
under agreements to repurchase 4.96 4.98 4.67 4.19 3.80
U.S. Treasury demand 4.96 5.09 4.74 4.21 4.22
TOTAL SHORT-TERM BORROWINGS 4.96 4.98 4.67 4.20 3.80
Long-term debt 6.82 6.85 6.69 6.26 6.01
TOTAL INTEREST-BEARING LIABILITIES 3.97 3.78 3.52 3.20 2.89
TOTAL FUNDS USED TO SUPPORT EARNING ASSETS 3.48 3.32 3.10 2.81 2.48
NET INTEREST MARGIN (TAX-EQUIVALENT BASIS) 3.65 3.83 3.80 3.77 3.74
YEAR-TO-DATE NET INTEREST MARGIN 3.79 3.80 3.79 3.77 3.71
Prime rate 8.25 8.25 7.90 7.43 6.97
Tax-equivalent net interest income (in millions) $ 93.5 $ 94.1 $ 91.5 $ 88.3 $ 88.5
AVERAGE EARNING ASSETS 10,075.3 9,645.1 9,512.6 9,341.7 9,292.1
Average rates are calculated using average balances based on historical cost and
do not reflect market valuation adjustments.
31
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the twelve months ended December 31, 2006
SUPPLEMENTAL INFORMATION
Three Months Ended
-----------------------------------------------------------------
% Change From:
--------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Prior Prior
2006 2006 2006 2006 2005 Quarter Year
----------------------------------------------------------------------------------------------------------------------
NET INCOME
Net income per share
Basic $ 0.69 $ 0.08 $ 0.69 $ 0.65 $ 0.69 N/M --
Diluted 0.68 0.07 0.67 0.64 0.67 N/M 1.5
Weighted average shares outstanding (in thousands)
Basic 68,455 68,647 68,475 68,070 67,861
Diluted 69,680 69,933 69,776 69,434 68,956
Net income as a percentage of:
Average assets 1.73% 0.20% 1.81% 1.76% 1.82%
Average stockholders' equity 17.66 1.91 17.75 17.42 18.77
ASSETS UNDER MANAGEMENT * (IN BILLIONS)
Wilmington Trust $ 29.0 $ 27.2 $ 26.4 $ 27.2 $ 26.0 6.6 11.5
Roxbury Capital Management 3.1 3.1 3.3 3.5 3.3 -- (6.1)
Cramer Rosenthal McGlynn 10.6 9.8 9.4 9.7 8.9 8.2 19.1
------------------------------------------------------------------------------------------------------
Combined assets under management $ 42.7 $ 40.1 $ 39.1 $ 40.4 $ 38.2 6.5 11.8
=================================================
* Assets under management include estimates for values associated with certain assets that lack readily
ascertainable values, such as limited partnership interests.
ASSETS UNDER ADMINISTRATION ** (IN BILLIONS)
Wilmington Trust $ 105.3 $ 100.5 $ 100.7 $ 102.1 $ 100.9 4.8 4.4
** Includes Wilmington Trust assets under management
FULL-TIME EQUIVALENT HEADCOUNT
Full-time equivalent headcount 2,562 2,520 2,515 2,475 2,469
CAPITAL (IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Average stockholders' equity $1,067.4 $1,081.7 $1,060.0 $1,026.4 $ 983.0 (1.3) 8.6
Period-end primary capital 1,153.5 1,157.9 1,161.2 1,136.9 1,109.1 (0.4) 4.0
Per share:
Book value 15.47 15.55 15.54 15.30 14.99 (0.5) 3.2
Quarterly dividends declared 0.315 0.315 0.315 0.30 0.30 -- 5.0
Year-to-date dividends declared 1.245 0.93 0.615 0.30 1.185
Average stockholders' equity to assets 9.78% 10.28% 10.23% 10.09% 9.69%
Total risk-based capital ratio 12.11 12.32 11.70 12.10 11.84
Tier 1 risk-based capital ratio 8.25 8.28 7.67 7.70 7.43
Tier 1 leverage capital ratio 7.39 7.34 6.98 6.94 6.69
CREDIT QUALITY (IN MILLIONS)
Period-end reserve for loan losses $ 94.2 $ 93.6 $ 94.3 $ 93.6 $ 91.4
Period-end nonperforming assets:
Nonaccrual 31.0 32.0 29.5 35.5 39.3
OREO 4.8 4.8 4.8 0.2 0.2
Renegotiated loans -- -- 9.9 4.9 4.7
Period-end past due 90 days 5.8 7.7 4.7 10.1 4.1
Gross charge-offs 7.1 8.6 5.7 3.2 7.8
Recoveries 1.2 1.3 2.2 1.4 3.8
Net charge-offs 5.9 7.3 3.5 1.8 4.0
Year-to-date net charge-offs 18.5 12.6 5.3 1.8 10.1
Ratios:
Period-end reserve to loans 1.16% 1.20% 1.22% 1.24% 1.24%
Period-end non-performing assets to loans 0.44 0.47 0.57 0.54 0.60
Period-end loans past due 90 days to total loans 0.07 0.10 0.06 0.13 0.06
Net charge-offs to average loans 0.07 0.09 0.05 0.02 0.05
INTERNAL RISK RATING
Pass 97.39% 97.41% 97.28% 97.20% 97.24%
Watchlisted 1.82 1.73 1.89 1.97 1.96
Substandard 0.79 0.86 0.76 0.76 0.73
Doubtful -- -- 0.07 0.07 0.07
32
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the twelve months ended December 31, 2006
QUARTERLY BUSINESS SEGMENT REPORT
Three Months Ended
-----------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
(in millions) 2006 2006 2006 2006 2005
-----------------------------------------------------------------------------------------------------
REGIONAL BANKING
Net interest income $ 84.4 $ 85.7 $ 83.9 $ 81.0 $ 79.9
Provision for loan losses (6.4) (6.7) (3.7) (3.8) (1.9)
Noninterest income 13.6 13.1 13.1 12.1 12.5
Noninterest expense 41.1 39.9 38.5 39.1 39.5
-----------------------------------------------------------------------------------------------------
Income before taxes & minority interest 50.5 52.2 54.8 50.2 51.0
Regional Banking efficiency ratio 41.56% 40.02% 39.33% 41.60% 42.38%
WEALTH ADVISORY SERVICES
Net interest income $ 6.6 $ 6.4 $ 6.3 $ 6.5 $ 6.8
Provision for loan losses (0.1) 0.1 (0.5) (0.2) (0.1)
Noninterest income 47.7 43.6 44.5 43.4 39.7
Noninterest expense 41.6 38.8 40.5 38.4 36.7
-----------------------------------------------------------------------------------------------------
Income before taxes & minority interest 12.6 11.3 9.8 11.3 9.7
Wealth Advisory Services efficiency ratio 76.47% 77.45% 79.57% 76.80% 78.76%
CORPORATE CLIENT SERVICES
Net interest income $ 4.3 $ 4.4 $ 3.4 $ 2.8 $ 3.6
Provision for loan losses -- -- -- -- --
Noninterest income 26.1 23.6 23.1 22.5 22.9
Noninterest expense 22.2 19.9 19.3 20.0 18.3
-----------------------------------------------------------------------------------------------------
Income before taxes & minority interest 8.2 8.1 7.2 5.3 8.2
Corporate Client Services efficiency ratio 72.79% 70.82% 72.56% 79.05% 68.80%
AFFILIATE MANAGERS *
Net interest income $ (2.9) $ (3.5) $ (3.2) $ (3.0) $ (2.8)
Provision for loan losses -- -- -- -- --
Noninterest income 5.1 4.3 5.6 4.7 4.7
Noninterest expense -- 72.3 -- -- --
-----------------------------------------------------------------------------------------------------
Income before taxes & minority interest 2.2 (71.5) 2.4 1.7 1.9
TOTAL WILMINGTON TRUST CORPORATION
Net interest income $ 92.4 $ 93.0 $ 90.4 $ 87.3 $ 87.5
Provision for loan losses (6.5) (6.6) (4.2) (4.0) (2.0)
Noninterest income 92.5 84.6 86.3 82.7 79.8
Noninterest expense 104.9 170.9 98.3 97.5 94.5
----------------------------------------------------
Income before taxes & minority interest $ 73.5 $ 0.1 $ 74.2 $ 68.5 $ 70.8
===================================================
Corporation efficiency ratio 56.40% 95.64% 55.29% 57.02% 56.15%
* Affiliate managers comprise Cramer Rosenthal McGlynn and Roxbury Capital
Management.
Segment data for prior periods may differ from previously published figures due
to changes in reporting methodology and/or organizational structure as well as
the adjustment for the adoption of the accounting pronouncement for stock-based
compensation expense.
33
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the twelve months ended December 31, 2006
YEAR-TO-DATE BUSINESS SEGMENT REPORT
Twelve Months Ended
-------------------------------------
Dec. 31, Dec. 31, $ %
(in millions) 2006 2005 Change Change
-------------------------------------------------------------------------------------
REGIONAL BANKING
Net interest income $334.9 $303.1 $ 31.8 10.5%
Provision for loan losses (20.5) (11.2) 9.3 83.0
Noninterest income 52.0 51.1 0.9 1.8
Noninterest expense 158.5 152.2 6.3 4.1
-------------------------------------------------------------------------------------
Income before taxes & minority interest 207.9 190.8 17.1 9.0
Regional Banking efficiency ratio 40.57% 42.56%
WEALTH ADVISORY SERVICES
Net interest income $ 25.7 $ 24.1 $ 1.6 6.6%
Provision for loan losses (0.8) (0.6) 0.2 33.3
Noninterest income 179.2 160.8 18.4 11.4
Noninterest expense 159.3 144.4 14.9 10.3
------------------------------------------------------------------------------------
Income before taxes & minority interest 44.8 39.9 4.9 12.3
Wealth Advisory Services efficiency ratio 77.63% 77.97%
CORPORATE CLIENT SERVICES
Net interest income $ 15.0 $ 11.4 $ 3.6 31.6%
Provision for loan losses -- -- -- --
Noninterest income 95.3 84.5 10.8 12.8
Noninterest expense 81.4 73.5 7.9 10.7
------------------------------------------------------------------------------------
Income before taxes & minority interest 28.9 22.4 6.5 29.0
Corporate Client Services efficiency ratio 73.67% 76.48%
AFFILIATE MANAGERS *
Net interest income $(12.5) $ (9.7) $ (2.8) (28.9)%
Provision for loan losses -- -- -- --
Noninterest income 19.6 16.9 2.7 16.0
Noninterest expense 72.4 -- 72.4 --
------------------------------------------------------------------------------------
Income before taxes & minority interest (65.3) 7.2 (72.5) --
TOTAL WILMINGTON TRUST CORPORATION
Net interest income $363.1 $328.9 $ 34.2 10.4%
Provision for loan losses (21.3) (11.8) 9.5 80.5
Noninterest income 346.1 313.3 32.8 10.5
Noninterest expense 471.6 370.1 101.5 27.4
------------------------------------------------------------------------------------
Income before taxes & minority interest $216.3 $260.3 $(44.0) (16.9)
===================================
Corporation efficiency ratio 66.10% 57.28%
* Affiliate managers comprise Cramer Rosenthal McGlynn and Roxbury Capital
Management.
Segment data for prior periods may differ from previously published figures due
to changes in reporting methodology and/or organizational structure as well as
the adjustment for the adoption of the accounting pronouncement for stock-based
compensation expense.
34
The following information was filed by Wilmington Trust Corp (WL) on Friday, January 19, 2007 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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