Despite a year-over-year profit decline, the latest quarter marked a turnaround from the fourth quarter, when the company posted a loss of $69.4 million, or $1.02 per share.
Wilmington Trust Corp. said Friday its first-quarter profit fell 57 percent from a year ago, but the result beat Wall Street expectations and shares surged in morning trading.
The financial services holding company also said it sharply reduced the amount of money set aside to cover bad loans, and wrote off fewer loans as unpaid.
For the three months ended March 31, the bank reported net income after paying preferred dividends of $17.7 million, or 26 cents per common share, down from $41.4 million, or 61 cents per common share, in the year-ago quarter.
Despite the year-over-year profit decline, the latest quarter's performance marked a turnaround from the fourth quarter, when the company posted a loss of $69.4 million, or $1.02 per share.
The latest quarter's result was boosted by a net gain of $7.6 million in Wilmington Trust's investment portfolio. Not counting that gain and write-downs, Wilmington Trust's first-quarter profit was $17.4 million, or 19 cents per common share.
Analysts surveyed by Thomson Reuters predicted a more modest profit of 4 cents per share, on average. Analysts' estimates typically exclude one-time items.
Wilmington Trust cut its provision for loan losses 56 percent to $29.5 million from $67.5 million in the fourth quarter. However, the $29.5 million is nearly triple the $10 million provision in the year-ago quarter. Net charge-offs fell nearly 17 percent to $21.2 million compared with the fourth quarter figure of $25.5 million, but were up sharply from $4.7 million in the year-ago quarter.
"All of our businesses did well in the first quarter, but extraordinary economic and market conditions prevented the full extent of these successes from translating into higher earnings," Chairman and Chief Executive Ted Cecala said.
Net interest income, or money earned from deposits and loans, fell to $78.5 million from $94.6 million in the fourth quarter, and from $86.9 million in the year-ago quarter. Lower interest rates reduced net interest margin to 2.91 percent from 3.34 percent in the fourth quarter, and from 3.37 percent in the year-ago quarter.
Shares of Wilmington Trust rose $4.35, or 40.8 percent, to $15.16 in morning trading. The stock has traded in a 52-week range of $6.76 to $35.75.
Wilmington Trust provides banking services throughout the mid-Atlantic region, as well wealth advisory services for clients in 36 countries, and corporate client services in 88 countries.
