Wilmington Trust blames real estate for second quarter loss

The Sussex County real estate bust is the cause for most of the losses.

Wilmington Trust reports losses of $116.4 million for the second quarter of 2010.  The financial institution says a weakened real estate market in the southern part of Delaware is to blame for most of that.

Commercial real estate/construction loans accounted for almost two-thirds of the write offs for the second quarter.  Most of these loans, Wilmington Trust officials report, “were for residential projects in southern Delaware, and largely for parcels of land in various stages of development.”

The loans at risk include:

• A $166.3 million increase in substandard commercial, financial, and agricultural loans,

• A $149.1 million increase in substandard commercial real estate/construction loans,

• A $48.3 million increase in substandard commercial mortgage loans,

• A $1.5 million decrease in substandard consumer and other retail loans.

Wilmington Trust also reported $7.8 million in securities losses, although that number declines compared to the previous quarter.

Wilmington Trust’s new CEO Donald Foley says his priority is to return the bank to a position of profitability.  He says “we are fully committed to working through our credit issues.”