SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15d of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 17, 2003 WILMINGTON TRUST CORPORATION -------------------------------------------------------------------------------- (Exact name of registrant as specified in its chapter) Commission File Number 1-14659 Delaware 51-0328154 ---------------------------------------------- ------------------------------------ (State or other jurisdiction of incorporation) (IRS Employer Identification Number) Wilmington Trust Corporation Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 ---------------------------------------- --------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (302) 651-1000 -------------------------------------------------------------------------------- (Former names or former address, if changed since last report) Item 12. Results of Operations and Financial Condition. The press release of Wilmington Trust Corporation reporting its financial condition and results of operations for the third quarter of 2003 is attached hereto as Exhibit A and is being furnished pursuant to Item 12 of form 8-K. 1 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WILMINGTON TRUST CORPORATION Dated: October 17, 2003 By: /s/ David R. Gibson ---------------------------------- Name: David R. Gibson, Title: Executive Vice President and Chief Financial Officer (Authorized Officer and Principal Financial Officer) 2 EXHIBIT A FOR IMMEDIATE RELEASE Contact: Ellen J. Roberts Investor Relations (302) 651-8069 eroberts@wilmingtontrust.com WILMINGTON TRUST REPORTS THIRD QUARTER EPS OF $0.52 Wilmington, Del., October 17, 2003 - Wilmington Trust Corporation (NYSE: WL) today reported third quarter 2003 earnings, on a diluted basis, of $0.52 per share, and net income of $34.4 million. This was level with third quarter 2002, when earnings per share were $0.52 and net income was $34.5 million. Loan balances continued to grow, advisory revenue increased, and expenses continued to decline. These achievements were offset by compression in the net interest margin. "Advisory revenue rose on the combination of solid business development, rising equity markets, and improved results from our affiliate money managers," said Ted T. Cecala, Wilmington Trust chairman and chief executive officer. "In our banking business, we marked the 10th consecutive quarter of increased loan balances, but a lower net interest margin caused net interest income to decline." Third quarter 2003 was the first quarter to reflect fully the decrease in interest rates that the Federal Reserve instituted in June. Low interest rates and the company's asset sensitivity caused the net interest margin to fall to 3.45%. This was 17 basis points lower than for the second quarter of 2003 and 57 basis points lower than for the third quarter of 2002. Loan balances were $6.1 billion, which was higher than for both the prior quarter and the year-ago quarter. Loan balances rose on both a period-end as well as an average basis. Credit quality remained stable. 1 Assets under management at Wilmington Trust and affiliate managers Cramer Rosenthal McGlynn and Roxbury Capital Management totaled $30.7 billion. Combined assets under management were 3.0% higher than at June 30, 2003, and 7.0% higher than at September 30, 2002. Advisory revenue totaled $53.1 million, which was 7.3% higher than for the prior quarter and 1% higher than for the year-ago quarter. Most of the growth occurred in the Wealth Advisory Services business. Revenue from affiliate money manager Cramer Rosenthal McGlynn rose 18.2% from the prior quarter. Affiliate manager Roxbury Capital Management reduced its loss from $1.2 million for the prior quarter to $100,000 for the 2003 third quarter. Expenses totaled $75.2 million, which was 2.5% lower than for the prior quarter as well as for the prior-year quarter. The decrease was due to the continuing emphasis on expense reduction initiatives. On an annualized basis, the third quarter 2003 return on average assets was 1.58% and return on average stockholders' equity was 17.64%, compared with 1.77% and 18.66%, respectively, for the 2002 third quarter. In other news, the Board of Directors declared a regular quarterly dividend of $0.27 per share, up 5.9% from the $0.255 per share paid in the third quarter of 2002. The dividend is payable on November 17, 2003, to shareholders of record on November 3, 2003. NET INTEREST MARGIN COMPRESSION IN LINE WITH PROJECTIONS With interest rates at historic lows, the yields on loans and investments fell for the sixth consecutive quarter, and deposit pricing remained at record-low levels. Even though loan balances rose, loan yields declined because refinancings and payoffs of older loans with higher yields offset new loans that were added at current rates. The average yield on assets from which the company earned revenue dropped 30 basis points from the prior quarter, but the average cost of funds used to support those assets fell only 13 2 basis points. Compared to the year-ago quarter, the average asset yield was 109 basis points lower, while the average cost of funds was only 52 basis points lower. These disparities were the primary cause of the decline in the net interest margin. In the investment portfolio, although average balances increased to $1.9 billion, the period-end balance declined 8.8% from the second quarter to $1.8 billion. Most of this decrease was in mortgage-backed securities. The company's overall exposure to mortgage-related instruments remained stable, as changes in the investment portfolio offset sales and refinancings in the residential mortgage portfolio. Compared to the year-ago third quarter, investment portfolio balances were higher because they included the invested proceeds of the April 2003 issue of $250 million in 10-year subordinated notes. The average life of the entire portfolio is 5.18 years and the duration is 2.57. "We expect the net interest margin to stabilize in the fourth quarter, barring no additional interest rate movements by the Federal Reserve," Cecala said. LOAN BALANCES RISE FOR 10TH CONSECUTIVE QUARTER Economic indicators, such as housing activity and unemployment rates, continued to be stronger in the Delaware Valley region, where the company's regional banking business is concentrated, than in many other parts of the United States. The relative health of the regional economy and its diversification among the financial services, life sciences, technology, manufacturing, retail, agricultural, and tourism sectors were factors in the growth in loan balances, which rose for the 10th consecutive quarter. Loan balances were $6.1 billion. Most of the growth was in the commercial loan portfolio. Commercial loan balances, on average, were $3.9 billion, which was nearly 1% higher than for the 2003 second quarter and nearly 11% higher than for the 2002 third quarter. Approximately 51% of the commercial loan growth came from the Delaware market, where Wilmington Trust is the dominant banking company. Approximately 49% of the commercial growth came from the 3 southeastern Pennsylvania market. In contrast, for the year-ago quarter, only 16% of new commercial loans were generated in the southeastern Pennsylvania market. More than half of the current quarter increase in commercial loan balances occurred in the construction and real estate portfolio. Construction and real estate balances, on average, were 5.8% higher than for the prior quarter and 39.3% higher than for the prior-year quarter. These loans were booked across a variety of residential, hotel, industrial, and retail projects on both a construction and permanent-financing basis. Retail loan balances, on average, were $2.2 billion, which was slightly lower than for the prior quarter and 3.6% lower than for the year-ago quarter. Almost all of the decrease occurred in residential mortgage balances, which continued to decline due to prepayments and the ongoing sale of all new residential mortgage production into the secondary market. The growth trend in core deposit balances that has occurred over the past 9 quarters continued, and core deposit balances, on average, rose to $4.4 billion, which was 3.3% higher than for the prior quarter, and 11.5% higher than for the prior-year quarter. NET CHARGE-OFFS, NONACCRUING LOANS, AND OREO DECLINE Credit quality remained stable. Net charge-offs totaled $2.0 million, which was less than half of what they were for the prior quarter and year-ago quarter. The net charge-off ratio was 3 basis points, which was lower than for the prior quarter and prior-year quarter. Year to date, the net charge-off ratio is 17 basis points, versus 19 basis points for the first 9 months of 2002. Nonaccruing loans totaled $50.2 million. This was a $10.2 million decrease from the prior quarter, which occurred because a payment was received on a $20 million commercial loan that was transferred to nonaccruing status at the end of the 2003 first quarter. 4 Other real estate owned (OREO) declined to $1.6 million for the current quarter from $3.2 million for the prior quarter. This decline reflected the successful work out of a residential resort project that was classified as OREO in December 2002. The loan loss reserve ratio was 1.50%. This was an increase of 6 basis points from the prior quarter, when the reserve ratio was 1.44%. The percentage of loans rated pass by the internal risk rating analysis increased from both the prior quarter and the prior-year quarter. The percentage of loans rated pass has been higher than 95% since 2000 and higher than 92% since 1998. The composition of the loan portfolio remained relatively unchanged and well diversified across commercial and consumer lines. LOAN PORTFOLIO COMPOSITION 9/30/03 6/30/03 3/31/03 ---------------------------------------- --------- --------- --------- Commercial, financial, and agricultural 36% 37% 36% Real estate - construction 11 10 10 Commercial mortgage 17 17 18 Residential mortgage 9 10 10 Consumer 27 26 26 ADVISORY REVENUE RISES ON SALES ACTIVITY AND EQUITY MARKET PERFORMANCE Advisory revenue totaled $53.1 million, which was 7.3% higher than for the prior quarter and 1% higher than for the year-ago quarter. Most of the linked-quarter increase and all of the prior year increase in total advisory revenue occurred in the Wealth Advisory Services business. Advisory revenue accounted for 41% of total third quarter net interest and noninterest income. Total noninterest income, including service charges and other noninterest income, accounted for 51.5% of total third quarter net interest and noninterest income. These percentages were slightly higher than for the 2002 third quarter. 5 Assets under management at Wilmington Trust were $23.6 billion, which was 4.0% higher than for the prior quarter and 11.8% higher than for the prior-year quarter. Revenue from the Wealth Advisory Services business totaled $35.5 million. This was 7.3% more than for the prior quarter and 13.8% more than for the prior-year quarter. In comparison, the Standard & Poor's 500 increased, on average, 5.5% from the prior quarter and 8.9% from the prior-year quarter. The increase in revenue, which resulted from a combination of business development with new and existing clients, as well as from asset appreciation, was broad-based and occurred in all major components of the Wealth Advisory business. The largest increases, both from the prior quarter and prior-year quarter, came from asset management, trust administration, and financial planning fees. Compared to the prior-year quarter, sales results were particularly strong from the Florida and Pennsylvania markets, and from Delaware-based fees, which represent clients throughout the U.S. By the end of the 2003 third quarter, sales in Florida and Pennsylvania had already exceeded the full-year 2002 levels achieved in those markets. Approximately 70% of Wealth Advisory income is derived from the market value of assets under management. Wealth Advisory fees are priced at the beginning of each month based on market valuations at the end of the previous month. In other Wealth Advisory Services activity during the third quarter, the California headquarters office was relocated from Santa Monica to Century City. In the Corporate Client Services business, revenue was $16.4 million, compared with $16.5 million for the 2003 second quarter and $17.2 million for the 2002 third quarter. "This business has counter-cyclical elements that got caught between the economic downturn and the economic recovery," Cecala said. "As prospects for the recovery began to improve in the third quarter, bankruptcy-related business waned. We saw a pick-up in the more traditional capital markets structures that we service, but not to the level we anticipated." 6 Revenue from capital markets activities was $8.8 million, which was equal to the prior quarter amount and $1.5 million lower than for the prior-year quarter, when approximately $1 million in bankruptcy-related fees was recorded. Entity management services generated $5.2 million of revenue, which was level with the prior quarter and 10.6% higher than for the prior-year quarter. Activity in European markets accounted for this increase. Corporate retirement services revenue was $2.4 million, which was 4.3% ahead of the prior quarter and 9.1% ahead of the prior-year quarter. Corporate Client services are performed on a fee-for-service basis that is priced according to the complexity of the services provided. Most are performed under multiyear contracts and generate an annuity-like stream of revenue. Approximately 25% of Corporate Client revenue is tied to asset valuations; most of that is associated with retirement plan assets for which the company serves as trustee. At affiliate money manager Cramer Rosenthal McGlynn (CRM), assets under management rose to $4.0 billion on a combination of market appreciation and new business development. CRM's assets were 5.2% higher than for the prior quarter and 8.1% higher than for the prior-year quarter. Revenue from CRM was $1.3 million, which was 18.2% higher than for the prior quarter, but 27.8% lower than the $1.8 million reported for the prior-year quarter. The year-over-year decrease was due to lower incentive payments related to hedge funds. Results from affiliate money manager Roxbury Capital Management (RCM) remained lower than the year-ago level, but improved significantly from the prior quarter. RCM recorded a loss of $100,000 for the 2003 third quarter, compared to a loss of $1.2 million for the 2003 second quarter. Monthly outflows continued to slow, expenses were lower, and the small-cap product that was launched in June 2002 continued to attract new assets. Assets under management at RCM were $3.1 billion, which was 6% lower than for the prior quarter and 20.5% lower than for the prior-year quarter. "Roxbury has taken the necessary steps to return to a positive operating margin," Cecala said. "We expect that Roxbury will return to profitability by the end of the year." 7 On a combined basis, revenue from the two affiliate money managers totaled $1.2 million for the 2003 third quarter, compared with $4.2 million for the 2002 third quarter. The difference represented approximately $0.03 per share. EXPENSE MANAGEMENT INITIATIVES CONTINUE As a result of the expense management initiatives begun at the end of the first quarter, expenses fell to $75.2 million. This was $1.9 million, or 2.5%, lower than for both the prior quarter and the prior-year quarter. Salary expense totaled $31.5 million, which was slightly higher than for the prior quarter and 4% higher than for the prior-year quarter. Incentives and bonus expense totaled $5.4 million. This was $2 million, or 27%, lower than for the 2002 third quarter. Employment benefit expense was slightly lower on a linked-quarter basis, but 12.8% higher than for the year-ago quarter, due to increased health insurance and pension costs. At September 30, the number of full-time equivalent staff was 2,302, which was 17 fewer than at June 30, 2003, and 49 fewer than at September 30, 2002. Furniture, equipment, and supplies expense declined 9.6% from the prior quarter and 19.5% from the prior-year quarter, primarily due to the roll-off of depreciation on desktop operating systems. For the first nine months of 2003, expenses totaled $231.9 million, compared with $228.2 million for the first nine months of 2002. "We continue to seek ways to minimize our expense growth," Cecala said. "Based on our year-to-date experience, we expect that expenses for the full year 2003 will be less than the $310 million we recorded for full-year 2002." 8 CONFERENCE CALL TODAY Management will discuss results in a conference call today at 10:00 a.m. (EDT). To access the call, dial 800-475-2151. Supporting materials, financial statements, and simultaneous streaming of the conference call audio will be available online at wilmingtontrust.com. A rebroadcast of the conference call will be available from 12:00 noon (EDT) today until 5:00 p.m. (EDT) on Friday, October 24, by calling 877-519-4471 and using PIN number 4221131. To access the rebroadcast from outside the United States, dial 973-341-3080 and use the same PIN number. FORWARD LOOKING STATEMENTS This release contains forward-looking statements which reflect the company's current expectations about its future performance. These statements rely on a number of assumptions and estimates and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Factors that could affect the company's future financial results are discussed more fully in the reports the company files with the Securities and Exchange Commission. The company disclaims any obligation or intent to update the forward-looking statements in order to reflect events or circumstances after the date of this release. ABOUT WILMINGTON TRUST Wilmington Trust Corporation (NYSE: WL) is a financial services holding company that provides wealth management and specialized corporate services to clients throughout the U.S. and in more than 50 other countries, and commercial banking services throughout the Delaware Valley region. Its wholly owned bank subsidiary, Wilmington Trust Company, which celebrates its 100th anniversary in 2003, is the 15th largest personal trust provider in the United States. Wilmington Trust and its affiliates have offices in California, Delaware, Florida, Georgia, Maryland, Nevada, New York, Pennsylvania, Tennessee, the Cayman Islands, the Channel Islands, and London, and other affiliates in Dublin and Milan. For more information, visit www.wilmingtontrust.com. # # # 9 WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY As of and for the nine months ended September 30, 2003 INCOME STATEMENT Three Months Ended ---------------------------------------------------------------------- Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (in millions, except per share amounts) 2003 2003 2003 2002 2002 --------------------------------------------------------------------------------------------------------------------------- Net Interest Income Interest income $ 90.5 $ 94.7 $ 92.8 $ 96.9 $ 100.1 Interest expense 22.4 24.5 24.5 27.0 29.3 --------------------------------------------------------------------------------------------------------------------------- Net interest income 68.1 70.2 68.3 69.9 70.8 Provision for loan losses (5.7) (5.9) (4.9) (5.5) (5.1) --------------------------------------------------------------------------------------------------------------------------- Net interest income after provision for loan losses 62.4 64.3 63.4 64.4 65.7 ---------------------------------------------------------------------- Noninterest Income Advisory fees: Wealth advisory services 35.5 33.1 33.6 32.7 31.2 Corporate client services 16.4 16.5 14.9 18.2 17.2 Cramer Rosenthal McGlynn 1.3 1.1 0.7 1.2 1.8 Roxbury Capital Management (0.1) (1.2) (0.9) (1.4) 2.4 --------------------------------------------------------------------------------------------------------------------------- Advisory fees 53.1 49.5 48.3 50.7 52.6 Amortization of other intangibles (0.7) (0.3) (0.3) (0.3) (0.7) --------------------------------------------------------------------------------------------------------------------------- Advisory fees after amortization of other intangibles 52.4 49.2 48.0 50.4 51.9 ---------------------------------------------------------------------- Service charges on deposit accounts 8.6 7.8 7.3 7.8 7.8 Other noninterest income 5.3 6.0 5.8 7.5 5.8 Securities gains ---- ---- ---- 2.0 ---- --------------------------------------------------------------------------------------------------------------------------- Total noninterest income 66.3 63.0 61.1 67.7 65.5 ---------------------------------------------------------------------- Net interest and noninterest income 128.7 127.3 124.5 132.1 131.2 ---------------------------------------------------------------------- Noninterest Expense Salaries and wages 31.5 31.2 29.8 30.3 30.3 Incentives and bonuses 5.4 4.3 9.5 6.6 7.4 Employment benefits 8.8 8.9 9.6 8.6 7.8 Net occupancy 4.8 5.0 5.4 5.6 5.3 Furniture, equipment, and supplies 6.6 7.3 7.3 7.6 8.2 Other noninterest expense 18.1 20.4 18.0 23.0 18.1 --------------------------------------------------------------------------------------------------------------------------- Total noninterest expense 75.2 77.1 79.6 81.7 77.1 ---------------------------------------------------------------------- Income before income taxes and minority interest 53.5 50.2 44.9 50.4 54.1 Applicable income taxes 18.8 17.4 15.3 17.9 19.4 --------------------------------------------------------------------------------------------------------------------------- Net income before minority interest 34.7 32.8 29.6 32.5 34.7 Minority interest 0.3 0.2 0.2 0.2 0.2 --------------------------------------------------------------------------------------------------------------------------- Net income $ 34.4 $ 32.6 $ 29.4 $ 32.3 $ 34.5 ====================================================================== Net income per share Basic $ 0.52 $ 0.50 $ 0.45 $ 0.49 $ 0.53 Diluted 0.52 0.49 0.44 0.49 0.52 Weighted average shares outstanding (in thousands) Basic 65,956 65,790 65,692 65,584 65,631 Diluted 66,670 66,195 66,174 66,148 66,174 Net income as a percentage of: Average assets 1.58% 1.53% 1.46% 1.60% 1.77% Average stockholders' equity 17.64 17.04 15.97 17.30 18.66 Three Months Ended -------------------- % Change From: -------------------- Prior Prior (in millions, except per share amounts) Quarter Year ------------------------------------------- ------- ----- Net Interest Income Interest income (4.4) (9.6) Interest expense (8.6) (23.5) Net interest income (3.0) (3.8) Provision for loan losses (3.4) 11.8 Net interest income after provision for loan losses (3.0) (5.0) Noninterest Income Advisory fees: Wealth advisory services 7.3 13.8 Corporate client services (0.6) (4.7) Cramer Rosenthal McGlynn 18.2 (27.8) Roxbury Capital Management (91.7) -- Advisory fees 7.3 1.0 Amortization of other intangibles 133.3 -- Advisory fees after amortization of other intangibles 6.5 1.0 Service charges on deposit accounts 10.3 10.3 Other noninterest income (11.7) (8.6) Securities gains -- -- Total noninterest income 5.2 1.2 Net interest and noninterest income 1.1 (1.9) Noninterest Expense Salaries and wages 1.0 4.0 Incentives and bonuses 25.6 (27.0) Employment benefits (1.1) 12.8 Net occupancy (4.0) (9.4) Furniture, equipment, and supplies (9.6) (19.5) Other noninterest expense (11.3) -- Total noninterest expense (2.5) (2.5) Income before income taxes and minority interest 6.6 (1.1) Applicable income taxes 8.0 (3.1) Net income before minority interest 5.8 -- Minority interest 50.0 50.0 Net income 5.5 (0.3) Net income per share Basic 4.0 (1.9) Diluted 6.1 -- WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY As of and for the nine months ended September 30, 2003 INCOME STATEMENT Nine Months Ended -------------------------------------- Sept. 30, Sept. 30, % (in millions, except per share amounts) 2003 2002 Change ------------------------------------------------------------------------------------------- Net Interest Income Interest income $ 278.1 $ 295.9 (6.0) Interest expense 71.4 89.3 (20.0) ----------------------------------------------------------------------------- Net interest income 206.7 206.6 -- Provision for loan losses (16.6) (16.5) 0.6 ----------------------------------------------------------------------------- Net interest income after provision for loan losses 190.1 190.1 -- ------------------------ Noninterest Income Advisory fees: Wealth advisory services 102.3 94.2 8.6 Corporate client services 47.8 46.0 3.9 Cramer Rosenthal McGlynn 3.2 6.5 (50.8) Roxbury Capital Management (2.3) 10.0 -- ----------------------------------------------------------------------------- Advisory fees 151.0 156.7 (3.6) Amortization of other intangibles (1.4) (0.9) 55.6 ----------------------------------------------------------------------------- Total advisory fees after amortization of other intangibles 149.6 155.8 (4.0) ------------------------ Service charges on deposit accounts 23.7 22.1 7.2 Other noninterest income 17.2 16.5 4.2 Securities gains -- -- -- ----------------------------------------------------------------------------- Total noninterest income 190.5 194.4 (2.0) ------------------------ Net interest and noninterest income 380.6 384.5 (1.0) ------------------------ Noninterest Expense Salaries and wages 92.5 89.2 3.7 Incentives and bonuses 19.2 23.7 (19.0) Employment benefits 27.3 24.1 13.3 Net occupancy 15.2 14.8 2.7 Furniture, equipment, and supplies 21.1 24.3 (13.2) Other noninterest expense 56.6 52.1 8.6 ----------------------------------------------------------------------------- Total noninterest expense 231.9 228.2 1.6 ------------------------ Income before income taxes and minority interest 148.7 156.3 (4.9) Applicable income taxes 51.5 55.1 (6.5) ----------------------------------------------------------------------------- Net income before minority interest 97.2 101.2 (4.0) Minority interest 0.8 0.3 166.7 ----------------------------------------------------------------------------- Net income $ 96.4 $ 100.9 (4.5) ======================== Net income per share Basic $ 1.46 $ 1.54 (5.2) Diluted 1.45 1.52 (4.6) Weighted average shares outstanding (in thousands) Basic 65,814 65,628 Diluted 66,348 66,354 Net income as a percentage of: Average assets 1.52% 1.79% Average stockholders' equity 16.90 18.93 WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY As of and for the nine months ended September 30, 2003 STATEMENT OF CONDITION Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (in millions) 2003 2003 2003 2002 2002 -------------------------------------------------------------------------------------------------------------------- Assets Cash and due from banks $ 228.5 $ 214.5 $ 207.3 $ 248.9 $ 253.1 ------------------------------------------------------------------ Federal funds sold and securities purchased under agreements to resell 477.7 180.9 3.8 ---- 105.4 ------------------------------------------------------------------ Investment securities: U.S. Treasury and government agencies 515.1 548.6 451.5 489.6 593.4 Obligations of state and political 16.1 16.6 16.6 16.6 17.3 subdivisions Preferred stock 119.4 122.4 119.2 111.8 93.5 Mortgage-backed securities 883.4 1,039.1 707.2 507.8 450.8 Other securities 262.5 244.2 250.2 222.9 200.1 -------------------------------------------------------------------------------------------------------------------- Total investment securities 1,796.5 1,970.9 1,544.7 1,348.7 1,355.1 ------------------------------------------------------------------ Loans: Commercial, financial and agricultural * 2,216.0 2,219.6 2,153.6 2,137.1 2,132.5 Real estate - construction * 663.4 602.1 604.0 591.9 450.4 Mortgage-commercial * 1,052.6 1,038.0 1,055.0 1,065.9 969.0 -------------------------------------------------------------------------------------------------------------------- Total commercial loans 3,932.0 3,859.7 3,812.6 3,794.9 3,551.9 ------------------------------------------------------------------ Mortgage-residential 545.9 592.3 627.1 677.2 740.9 Consumer 1,055.5 1,037.0 1,029.4 1,046.7 1,067.7 Secured with liquid collateral 565.8 574.6 539.1 506.3 500.5 -------------------------------------------------------------------------------------------------------------------- Total retail loans 2,167.2 2,203.9 2,195.6 2,230.2 2,309.1 ------------------------------------------------------------------ Total loans net of unearned income 6,099.2 6,063.6 6,008.2 6,025.1 5,861.0 Reserve for loan losses (91.2) (87.6) (86.0) (85.2) (86.8) -------------------------------------------------------------------------------------------------------------------- Net loans 6,008.0 5,976.0 5,922.2 5,939.9 5,774.2 ------------------------------------------------------------------ Premises and equipment 152.0 152.1 154.0 155.2 138.2 Goodwill 242.8 247.3 240.1 240.2 239.5 Other intangibles 24.2 21.3 21.4 21.7 17.5 Other assets 170.2 176.2 174.5 176.7 158.3 -------------------------------------------------------------------------------------------------------------------- Total assets $ 9,099.9 $ 8,939.2 $ 8,268.0 $ 8,131.3 $ 8,041.3 ================================================================== Liabilities and Stockholders' Equity Deposits: Noninterest-bearing demand: $ 1,440.0 $ 944.4 $ 919.1 $ 1,189.6 $ 919.4 Interest-bearing: Savings 364.9 368.7 366.5 349.3 343.3 Interest-bearing demand 2,246.9 2,302.5 2,129.9 1,833.6 1,846.0 Certificates under $100,000 805.6 836.7 867.5 884.1 898.6 Local certificates $100,000 and over 129.1 125.8 136.9 135.3 176.5 -------------------------------------------------------------------------------------------------------------------- Total core deposits 4,986.5 4,578.1 4,419.9 4,391.9 4,183.8 National certificates $100,000 and over 1,784.2 1,910.2 2,157.2 1,945.2 1,913.2 -------------------------------------------------------------------------------------------------------------------- Total deposits 6,770.7 6,488.3 6,577.1 6,337.1 6,097.0 ------------------------------------------------------------------ Short-term borrowings: Federal funds purchased and securities sold under agreements to repurchase 938.8 1,083.4 627.9 692.8 814.5 U.S. Treasury demand 55.6 32.5 10.7 41.9 91.7 -------------------------------------------------------------------------------------------------------------------- Total short-term borrowings 994.4 1,115.9 638.6 734.7 906.2 ------------------------------------------------------------------ Other liabilities 140.2 133.2 137.0 157.7 138.3 Long-term debt 410.7 420.8 160.5 160.5 160.5 -------------------------------------------------------------------------------------------------------------------- Total liabilities 8,316.0 8,158.2 7,513.2 7,390.0 7,302.0 Minority interest 0.3 (0.1) -- -- -- Stockholders' equity 783.6 781.1 754.8 741.3 739.3 -------------------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 9,099.9 $ 8,939.2 $ 8,268.0 $ 8,131.3 $ 8,041.3 ================================================================== % Change From ------------------------ Prior Prior (in millions) Quarter Year -------------------------------------------------------------------------- Assets Cash and due from banks 6.5 (9.7) Federal funds sold and securities purchased under agreements to resell 164.1 353.2 Investment securities: U.S. Treasury and government agencies (6.1) (13.2) Obligations of state and political subdivisions (3.0) (6.9) Preferred stock (2.5) 27.7 Mortgage-backed securities (15.0) 96.0 Other securities 7.5 31.2 Total investment securities (8.8) 32.6 Loans: Commercial, financial and agricultural * (0.2) 3.9 Real estate - construction * 10.2 47.3 Mortgage-commercial * 1.4 8.6 Total commercial loans 1.9 10.7 Mortgage-residential (7.8) (26.3) Consumer 1.8 (1.1) Secured with liquid collateral (1.5) 13.0 Total retail loans (1.7) (6.1) Total loans net of unearned income 0.6 4.1 Reserve for loan losses 4.1 5.1 Net loans 0.5 4.0 Premises and equipment (0.1) 10.0 Goodwill (1.8) 1.4 Other intangibles 13.6 38.3 Other assets (3.4) 7.5 Total assets 1.8 13.2 Liabilities and Stockholders' Equity Deposits: Noninterest-bearing demand: 52.5 56.6 Interest-bearing: Savings (1.0) 6.3 Interest-bearing demand (2.4) 21.7 Certificates under $ 100,000 (3.7) (10.3) Local certificates $100,000 and over 2.6 (26.9) Total core deposits 8.9 19.2 National certificates $100,000 and over (6.6) (6.7) Total deposits 4.4 11.0 Short-term borrowings: Federal funds purchased and securities sold under agreements to repurchase (13.3) 15.3 U.S. Treasury demand 71.1 (39.4) Total short-term borrowings (10.9) 9.7 Other liabilities 5.3 1.4 Long-term debt (2.4) 155.9 Total liabilities 1.9 13.9 Minority interest -- -- Stockholders' equity 0.3 6.0 Total liabilities and stockholders' equity 1.8 13.2 * Certain commercial loan balances reclassified ----------------------------------------------- Commercial loan balances for the 2003 first quarter reflect changes that were made after an analysis of ledger coding revealed inconsistencies in the categories in which loans were recorded. This resulted in a reclassification of approximately $192 million, or 5%, of the commercial portfolio. The $192 million was moved out of the general commercial and industrial category. Approximately $90 million of that amount was reclassified as commercial real estate loans, and the remaining $102 million was moved into the commercial mortgage category. WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY As of and for the nine months ended September 30, 2003 AVERAGE STATEMENT OF CONDITION % Change From 2003 2003 2003 2002 2002 ------------------ Third Second First Fourth Third Prior Prior (in millions) Quarter Quarter Quarter Quarter Quarter Quarter Year ------------------------------------------------------------------------------------------------------------- -------- -------- Assets Cash and due from banks $ 190.5 $ 182.4 $ 187.0 $ 201.1 $ 185.9 4.4 2.5 ------------------------------------------------------------- Federal funds sold and securities purchased under agreements to resell 35.6 38.4 24.1 63.5 16.4 (7.3) 117.1 ------------------------------------------------------------- Investment securities: U.S. Treasury and government agencies 517.1 528.8 461.0 588.4 591.9 (2.2) (12.6) Obligations of state and political subdivisions 16.2 16.6 16.5 16.8 17.2 (2.4) (5.8) Preferred stock 120.7 120.1 114.0 99.4 85.4 0.5 41.3 Mortgage-backed securities 961.2 888.8 642.6 434.5 447.6 8.1 114.7 Other securities 249.9 240.9 227.5 213.9 189.0 3.7 32.2 ------------------------------------------------------------------------------------------------------------- Total investment securities 1,865.1 1,795.2 1,461.6 1,353.0 1,331.1 3.9 40.1 ------------------------------------------------------------- Loans: Commercial, financial and agricultural 2,202.2 2,190.8 2,214.8 2,208.4 2,055.7 0.5 7.1 Real estate - construction 624.9 590.8 544.6 469.3 448.7 5.8 39.3 Mortgage-commercial 1,039.4 1,054.6 1,008.0 980.3 986.1 (1.4) 5.4 ------------------------------------------------------------------------------------------------------------- Total commercial loans 3,866.5 3,836.2 3,767.4 3,658.0 3,490.5 0.8 10.8 ------------------------------------------------------------- Mortgage-residential 573.9 604.7 649.0 708.9 759.0 (5.1) (24.4) Consumer 1,031.3 1,031.4 1,028.3 1,031.9 1,027.8 -- 0.3 Secured with liquid collateral 583.6 565.4 532.9 499.2 483.0 3.2 20.8 ------------------------------------------------------------------------------------------------------------- Total retail loans 2,188.8 2,201.5 2,210.2 2,240.0 2,269.8 (0.6) (3.6) ------------------------------------------------------------- Total loans net of unearned income 6,055.3 6,037.7 5,977.6 5,898.0 5,760.3 0.3 5.1 Reserve for loan losses (87.1) (84.7) (84.5) (84.9) (85.9) 2.8 1.4 ------------------------------------------------------------------------------------------------------------- Net loans 5,968.2 5,953.0 5,893.1 5,813.1 5,674.4 0.3 5.2 ------------------------------------------------------------- Premises and equipment 153.0 153.7 154.9 144.0 138.9 (0.5) 10.2 Goodwill 247.4 245.8 240.2 240.5 245.2 0.7 0.9 Other intangibles 21.2 21.3 21.6 16.6 11.1 (0.5) 91.0 Other assets 176.7 177.6 176.7 159.5 150.3 (0.5) 17.6 ------------------------------------------------------------------------------------------------------------- Total assets $ 8,657.7 $ 8,567.4 $ 8,159.2 $ 7,991.3 $ 7,753.3 1.1 11.7 ========= ========== ========== ========== ========== Liabilities and Stockholders' Equity Deposits: Noninterest-bearing demand $ 866.8 $ 796.4 $ 800.7 $ 970.3 $ 777.3 8.8 11.5 Interest-bearing: Savings 368.8 369.4 357.3 346.5 355.8 (0.2) 3.7 Interest-bearing demand 2,244.7 2,127.0 2,062.9 1,812.6 1,767.7 5.5 27.0 Certificates under $100,000 817.6 851.5 874.6 891.6 891.8 (4.0) (8.3) Local CDs $100,000 and over 128.4 139.6 151.1 168.7 178.8 (8.0) (28.2) ------------------------------------------------------------------------------------------------------------- Total core deposits 4,426.3 4,283.9 4,246.6 4,189.7 3,971.4 3.3 11.5 National CDs $100,000 and over 1,780.9 1,979.5 2,066.3 1,987.4 2,027.0 (10.0) (12.1) ------------------------------------------------------------------------------------------------------------- Total deposits 6,207.2 6,263.4 6,312.9 6,177.1 5,998.4 (0.9) 3.5 ------------------------------------------------------------- Short-term borrowings: Federal funds purchased and securities sold under agreements to repurchase 1,115.2 985.3 778.7 753.0 705.3 13.2 58.1 U.S. Treasury demand 20.0 8.4 8.1 16.3 27.3 138.1 (26.7) ------------------------------------------------------------------------------------------------------------- Total short-term borrowings 1,135.2 993.7 786.8 769.3 732.6 14.2 55.0 ------------------------------------------------------------- Other liabilities 136.1 135.0 152.5 143.5 128.2 0.8 6.2 Long-term debt 405.4 407.9 160.5 160.5 160.5 (0.6) 152.6 ------------------------------------------------------------- Total liabilities 7,883.9 7,800.0 7,412.7 7,250.4 7,019.7 1.1 12.3 Minority interest -- 0.1 0.1 0.1 0.1 (100.0) (100.0) Stockholders' equity 773.8 767.3 746.4 740.8 733.5 0.8 5.5 ------------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 8,657.7 $ 8,567.4 $ 8,159.2 $ 7,991.3 $ 7,753.3 1.1 11.7 ========= ========== ========== ========== ========== WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY As of and for the nine months ended September 30, 2003 RATES 2003 2003 2003 2002 2002 Third Second First Fourth Third YIELDS/RATES (TAX-EQUIVALENT BASIS) Quarter Quarter Quarter Quarter Quarter ------------------------------------------------ -------- ------- ------- ------- ------- Earning assets: FEDERAL FUNDS SOLD AND SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL 1.12% 1.32% 1.40% 1.65% 2.77% U.S. Treasury and government agencies 3.22 3.29 3.73 4.14 4.27 Obligations of state and political subdivisions 8.99 9.01 8.97 9.04 8.97 Preferred stock 7.39 7.40 7.68 7.99 8.13 Mortgage-backed securities 3.64 4.47 4.97 5.38 5.68 Other securities 2.88 2.93 3.17 3.58 3.55 TOTAL INVESTMENT SECURITIES 3.71 4.15 4.55 4.80 4.95 Commercial, financial and agricultural 4.18 4.45 4.53 4.83 5.20 Real estate - construction 4.37 4.56 4.45 4.62 5.23 Mortgage-commercial 5.08 5.47 5.63 5.88 6.34 TOTAL COMMERCIAL LOANS 4.45 4.75 4.81 5.08 5.53 Mortgage-residential 6.63 6.77 6.82 6.83 6.82 Consumer 6.58 6.68 6.85 7.03 7.20 Secured with liquid collateral 2.52 2.73 2.87 3.17 3.35 TOTAL RETAIL LOANS 5.51 5.69 5.88 6.11 6.25 TOTAL LOANS 4.85 5.09 5.21 5.47 5.81 TOTAL EARNING ASSETS 4.56 4.86 5.07 5.32 5.65 Funds used to support earning assets Savings 0.13 0.15 0.23 0.24 0.25 Interest-bearing demand 0.39 0.45 0.47 0.51 0.60 Certificates under $100,000 2.50 2.80 3.05 3.29 3.46 Local certificates $100,000 and over 1.60 1.78 1.99 2.38 2.36 CORE INTEREST-BEARING DEPOSITS 0.89 1.05 1.17 1.35 1.46 National certificates $100,000 and over 1.48 1.56 1.69 1.92 2.14 TOTAL INTEREST-BEARING DEPOSITS 1.09 1.23 1.36 1.57 1.72 Federal funds purchased and securities sold under agreements to repurchase 1.39 1.54 1.64 1.86 2.04 U.S. Treasury demand 0.76 1.04 0.99 1.22 1.51 TOTAL SHORT-TERM BORROWINGS 1.38 1.54 1.64 1.85 2.02 Long-term debt 3.63 3.62 6.58 6.61 6.61 TOTAL INTEREST-BEARING LIABILITIES 1.29 1.42 1.52 1.73 1.89 TOTAL FUNDS USED TO SUPPORT EARNING ASSETS 1.11 1.24 1.32 1.46 1.63 NET INTEREST MARGIN (TAX-EQUIVALENT BASIS) 3.45 3.62 3.75 3.86 4.02 Tax-equivalent net interest income income (in millions) $ 69.3 $ 71.4 $ 69.6 $ 71.2 $ 72.1 Average rates are calculated using average balances based on historical cost and do not reflect market valuation adjustments. WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY As of and for the nine months ended September 30, 2003 SUPPLEMENTAL Three Months Ended --------------------------------------------------------------------------------- % Change From: -------------- Prior September 30, June 30, Mar. 31, Dec. 31, Sept. 30, Prior Year 2003 2003 2003 2002 2002 Quarter Quarter ------------- -------- -------- -------- --------- ------- ------- OTHER NONINTEREST EXPENSE (in millions) Advertising and contributions $ 1.4 $ 2.8 $ 1.9 $ 2.8 $ 2.1 (50.0) (33.3) Servicing and consulting fees 4.0 3.9 4.0 4.7 3.2 2.6 25.0 Travel, entertainment, and training 1.8 1.9 1.5 2.0 2.0 (5.3) (10.0) Originating and processing fees 2.1 1.8 1.8 2.0 1.7 16.7 23.5 Other noninterest expense 8.8 10.0 8.8 11.5 9.1 (12.0) (3.3) ------- ------- -------- -------- -------- Total $ 18.1 $ 20.4 $ 18.0 $ 23.0 $ 18.1 (11.3) -- ======= ======= ======== ======== ======== Staffing (FTE) 2,302 2,319 2,342 2,361 2,351 ASSETS UNDER MANAGEMENT (in billions) Wilmington Trust $ 23.6 $ 22.7 $ 21.6 $ 21.0 $ 21.1 4.0 11.8 Roxbury Capital Management 3.1 3.3 3.2 3.7 3.9 (6.1) (20.5) Cramer Rosenthal McGlynn 4.0 3.8 3.2 3.5 3.7 5.3 8.1 ------- ------- -------- -------- -------- Combined assets under management $ 30.7 $ 29.8 $ 28.0 $ 28.2 $ 28.7 3.0 7.0 ======= ======= ======== ======== ======== A routine analysis of assets under management determined that certain investment consulting assets had been reported both by Wilmington Trust and one of its affiliates. The problem has been corrected and the reported amounts were revised accordingly. CAPITAL (in millions, except per share amounts) Average stockholders' equity $ 773.8 $ 767.3 $ 746.4 $ 740.8 $ 733.5 0.8 5.5 Period-end primary capital 874.8 868.9 840.8 826.4 826.0 0.7 5.9 Per share: Book value 11.87 11.85 11.49 11.30 11.28 0.2 5.2 Dividends declared 0.27 0.27 0.255 0.255 0.255 -- 5.9 Average stockholders' equity to assets 8.94% 8.96% 9.15% 9.27% 9.46% Total risk-based capital ratio 12.15 11.90 10.20 10.19 10.57 Tier 1 risk-based capital ratio 7.27 7.09 7.11 7.07 7.36 Tier 1 leverage capital ratio 6.19 6.01 6.15 6.11 6.25 CREDIT QUALITY (in millions) Period-end reserve for loan losses $ 91.2 $ 87.6 $ 86.0 $ 85.2 $ 86.8 Period-end non-performing assets: Nonaccrual 50.2 60.4 64.6 42.4 44.4 OREO 1.6 3.2 3.9 3.1 0.3 Period-end past due 90 days 7.3 7.1 8.3 12.5 22.3 Period-end renegotiated loans -- -- -- -- -- Gross charge-offs 3.3 5.1 5.3 7.9 5.8 Recoveries 1.3 0.7 1.2 0.8 0.8 Net charge-offs 2.0 4.4 4.1 7.1 5.0 Ratios: Period-end reserve to loans 1.50% 1.44% 1.43% 1.41% 1.48% Period-end non-performing assets to loans 0.85 1.05 1.14 0.76 0.76 Period-end loans past due 90 days to total loans 0.12 0.12 0.14 0.21 0.38 Net charge-offs to average loans 0.03 0.07 0.07 0.12 0.09 INTERNAL RISK RATING Pass 95.81% 95.62% 95.52% 95.65% 95.62% Watchlisted 2.53 2.60 2.48 2.57 2.29 Substandard 1.25 1.23 1.79 1.53 1.83 Doubtful 0.41 0.55 0.21 0.25 0.26