Wilmington Trust Shareholders May See Stock Drop Newsletter Highlights Bank's Exposure to Bad Loans

WILMINGTON, Del., July 23 /PRNewswire-USNewswire/ -- Wilmington Trust's (WT) shareholders may see stock drop due to a dilution of their ownership if management pulls out of the federal bailout program that helped bolster its capital base, and due to high exposure to commercial and real estate loans, according to a newsletter issued today. The second issue of Wilmington Trust Exposed was distributed to 400 shareholders, market analysts, media outlets, and business leaders by 32BJ SEIU -- the largest property service workers union in the country.

(Logo: http://www.newscom.com/cgi-bin/prnh/20020918/SEIULOGO )

As detailed in the newsletter, WT has reported that in the second quarter its nonperforming loans jumped 32%, net charge-offs increased nearly 70%, and downgrades in internal credit ratings, warning that its second-quarter earnings will come in below market expectations due to "an expected increase in the provision for loan losses from $29.5 million for the 2009 first quarter to approximately $54 million." Furthermore, WT reported that "pre-tax charge of approximately $23 million for other-than-temporary impairments on pooled trust-preferred investment securities are expected", along with "a special assessment by the Federal Deposit Insurance Corporation (FDIC) of approximately $5 million."

As detailed in the newsletter, shares of Wilmington Trust stock have lost more than a quarter of their value since June 5, 2009 when Wilmington Trust Exposed, Issue 1, was released. During the same period, the S&P MidCap 400 Index did not experienced losses.

The stock analysis firm, Zacks Investment Research explains that, "as a result of a rise in charge-offs the levels of reserve coverage have fallen over the past quarters and the banks will have to make higher provisions in the coming quarters, affecting their profitability." Zacks has also cautioned that banks like Wilmington Trust, with "high exposure to housing and Commercial Real Estate loan ... will remain under pressure."

With more than 110,000 members in nine states, including Delaware, 32BJ is the largest property service workers union in the country.

SOURCE SEIU Local 32BJ



RELATED LINKS
http://www.seiu32bj.org

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