“We have strengthened our credit risk management practices, and our provisioning and reserve levels reflect the increased risk in our loan portfolio”
The primary causes of the loss were:
- Continued deterioration in commercial credit quality, which resulted in a loan loss provision of $281.5 million.
- Income tax expense of $100.7 million, as the company established a valuation allowance on deferred tax assets.
“For all these reasons, management and the Board of Directors have carefully studied the company’s strategic options, and we reviewed a wide range of alternatives. Ultimately, the Board determined that the best option for our shareholders, as well as our clients and the employees of Wilmington Trust, was a merger with M&T. We announced separately this morning that Wilmington Trust and M&T have signed a definitive merger agreement. This agreement is subject to certain conditions, including approval by shareholders and regulators.
The Wilmington Trust Corporation is 107 years old and was founded by the du Pont family. Loans that went sour and produced losses for six quarters in a row prompted the bank to merge itself with M&T Bank. Even the eldest companies are having a hard time. But age of company has nothing to do with wrong management, as this example shows.
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