Thursday, November 26, 2015

Busted Shore projects haunt biggest Philly-area bank

Failed Delaware Shore construction loans keep hurting Wilmington Trust

Busted Shore projects haunt biggest Philly-area bank


Wilmington Trust Corp., the biggest commercial bank still based in the Philadelphia area, financed the inflated construction boom at the Delaware Shore in the mid-2000s, and it's paying a high price now that the bubble has burst and unfinished, unsold developments litter Sussex County.

"Net charge-offs for construction loans totaled $145.1 million since 2008," or one-sixth of the bank's construction portfolio - and a larger proportion of the loans are still in trouble,  Janney Capital Markets analyst Stephen M. Moss told clients, adding that the latest losses made for "a brutal quarter." He urged investors to sell the stock.

Shares fell around 5%, to $10.30, in early afternoon trading after Wilmington Trust posted continuing losses for the past quarter. New chief executive Donald E. Foley and bank auditors are sorting through failed southern Delaware construction loans the bank made under Foley's departed predecessor, Ted T. Cecala, and aggressively writing them down.

There was better news from the bank's Corporate Client Services unit, which manages bankruptcies and tax shelters: Sales topped $51.3 million, a record for Wilmington Trust.

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at, 215.854.5194, @PhillyJoeD. Read his blog posts at and his Inquirer columns at Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph at or 215 854 5194.

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