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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)
March 31, 1998
WILMINGTON TRUST CORPORATION
(Exact name of registrant as specified in its charter)
Commission File No. 0-25442
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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)
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Registrant's telephone number, including area code:
(302) 651-1000
(Former names or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
a. First Quarter Results.
Wilmington Trust Corporation (the "Corporation") reported net income for
the first quarter of 1998 of $27.3 million, or $0.82 per share, an increase of
10% over the $24.9 million, or $.74 per share, reported for the first quarter
of 1997. Return on average assets and return on average stockholders' equity for
the first quarter of 1998 on an annualized basis were 1.81% and 21.81%,
respectively, compared to corresponding figures of 1.87% and 21.67%,
respectively, for the first quarter of 1997.
Net interest income for the first quarter of 1998 was $59.4 million, an
increase of $3.7 million, or 7%, above net interest income for the first
quarter of 1997. This increase primarily is attributable to growth of $269
million in the Corporation's loan portfolio and $443 million in the
Corporation's investment portfolio since March 31, 1997. The Corporation's
net interest margin for the first quarter of 1998 was 4.33%, a decrease of 24
basis points from the 4.57% reported for the first quarter of 1997. The
majority of this decrease was attributable to the increase in the
Corporation's investment portfolio, which carries narrower interest rate spreads
than its loan portfolio. Additional investments were added to the
investment portfolio to leverage the Corporation's expanding capital base.
Noninterest income for the first quarter of 1998 was $45.6 million, an
increase of $10.0 million, or 28%, over the $35.6 million reported for the
first quarter of 1997. Trust and asset management fees for the first quarter of
1998 were $30.0 million, an increase of $4.1 million, or 16%, over the $25.9
million reported for the first quarter of 1997. Noninterest expense for the
first quarter of 1998 was $59.5 million, an increase of $9.8 million, or 20%,
over the $49.7 million reported for the first quarter of 1997.
The Corporation established a provision for loan losses of $5.0 million
for the first quarter of 1998, compared to $4.5 million for the first quarter of
1997. Net chargeoffs for the first quarter of 1998 were $2.8 million, compared
to $3.5 million for the first quarter of 1997, reflecting continued improvement
in the Corporation's loan portfolios. Nonperforming assets for the first
quarter of 1998 were $30.7 million, a decrease of $12.7 million from the
$43.4 million for the first quarter of 1997. The reserve for loan losses at
March 31, 1998 was $66.1 million, representing 1.61% of the Corporation's total
loans, up from $55.4 million and 1.45%, respectively, at March 31, 1997.
The Corporation's first quarter results reflect, among other things, the
recognition of a gain of $5.5 million as a result of the transfer by Rodney
Square Management Corporation, an indirect subsidiary of the Corporation
("RSMC"), to PFPC, Inc., an indirect subsidiary of PNC Bank, N.A., of its
interest in certain agreements under which RSMC provided accounting,
administrative, custody, distribution and/or transfer agency services to mutual
funds. These results also reflect a provision of $5.5 million established in
connection with the anticipated settlement of the lawsuit relating to fees
charged to certain personal trust customer accounts during the period from
August 1983 through May 1987, described in Footnote 9 of the Corporation's
Annual Report to Stockholders for 1997.
At March 31, 1998, the Corporation's total assets were $6.4 billion, total
deposits were $4.3 billion and stockholders' equity was $518.7 million.
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b. Acquisition of Interest in Investment Advisor.
On April 24, 1998, WT Investments, Inc., an indirect subsidiary of the
Corporation ("WTI"), entered into an agreement with Roxbury Capital Management,
an asset management firm headquartered in Santa Monica, California ("Roxbury"),
and its principals. Under this agreement, a new entity, Roxbury Capital
Management, LLC ("RCM"), will assume Roxbury's investment management business.
Roxbury performs investment management services relating to large-capitalization
stocks for institutional and individual clients. The firm has a staff of 52
employees and currently manages over $4 billion in assets on a discretionary
basis.
Closing is subject to the satisfaction of several customary conditions.
At closing, WTI will obtain a preferred profits interest in RCM, with the
balance of those profits being retained by Roxbury and its current owners.
Options to acquire additional ownership interests in RCM will be distributed to
key employees. The Corporation will be able to purchase additional ownership
interests in RCM from its equity owners upon the occurrence of a number of
specified events, including the termination of employment, death, disability or
retirement of the individual.
RCM will be managed by a board of seven managers. Initially, the board
will consist of five people designated Roxbury and its principals and two
people designated by WTI. WTI will be entitled to elect a majority of the board
when it acquires a majority of the equity interests in RCM.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WILMINGTON TRUST CORPORATION
Dated: April 24, 1998 By: /s/ Ted T. Cecala
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Name: Ted T. Cecala
Title: Chairman of the Board
