Fitch Upgrades Wilmington Trust Upon Closing of Sale to M&T Bank Corp.

CHICAGO--()--Fitch Ratings has upgraded the long- and short-term Issuer Default Ratings (IDRs) of Wilmington Trust (WL) to 'A-' and 'F1', respectively, following the close of the company's sale to M&T Bank Corporation (MTB). The ratings have also been removed from Rating Watch Positive, where they were placed on the announcement of the transaction, and assigned a Negative Rating Outlook. MTB's ratings are unaffected by the sale, and today's upgrade equalizes WL's ratings with MTB's. A complete list of rating actions follows at the end of this release.

MTB recently received approval from all of its regulators to complete its pending acquisition of Wilmington Trust Corporation, and with this closing, also agreed to repurchase WL's capital purchase program, or TARP, shares from the U.S. Treasury, which amount to $330 million. As part of closing this deal, MTB recently priced $500 million of non-cumulative preferred stock in order to augment its capital ratios as well as address the additional forecasted TARP repayments.

Fitch affirmed MTB's long-term IDR at 'A-' with a Negative Outlook upon the announcement of the transaction, which recognized the potential franchise enhancement that could result from a successful integration of the WL business. MTB will now have an expanded presence throughout WL's Maryland and Delaware footprint, as well as a much larger trust business. It is expected that the combined entity will have total assets of greater than $78 billion, total deposits of approximately $57 billion, and total assets under management of more than $80 billion. Nonetheless, MTB is acquiring a troubled institution, and therefore, it will be important to consider whether loan marks are appropriate as well as MTB's ability to integrate WL.

MTB expects that the capital ratios of the combined entity will approximate MTB's capital ratios as of the end of the third quarter of 2010. As of Sept. 30, 2010, MTB had a tangible equity to tangible asset ratio of 5.96%, and a Tier 1 risk-based capital ratio of 9.45%, which are lower than the company's current capital ratios and still remain at the lower end of MTB's Fitch-rated peer group.

Through its subsidiary banks, Wilmington Trust Company and Wilmington Trust, FSB, WL operates 55 branches with $10.9 billion in assets.

MTB is a bank holding company headquartered in Buffalo, New York, with operations in New York, Pennsylvania, Maryland, Virginia, West Virginia, New Jersey, Delaware, the District of Columbia, and Ontario, Canada. As of March 31, 2011, MTB had total assets of $67.9 billion and total gross loans of $52.1 billion.

Fitch has removed from Rating Watch Positive and upgraded the following ratings:

Wilmington Trust Corporation

--Long-term IDR to 'A-' from 'BBB+';

--Subordinated debt to 'BBB+' from 'BBB';

--Short-term IDR to 'F1' from 'F2';

--Individual to 'B/C' from `C'.

Wilmington Trust Company

--Long-term IDR to 'A-' from 'BBB+';

--Short-term IDR to 'F1' from 'F2';

--Individual to 'B/C' from `C';

--Long-term deposits to 'A' from 'A-'.

Fitch has removed from Rating Watch Positive, upgraded and subsequently withdrawn the following rating:

Wilmington Trust Corporation

--Preferred stock to 'BBB' from 'BBB-' and subsequently withdrawn.

Fitch has affirmed the following ratings:

Wilmington Trust Corporation

--Support at `5';

--Support Floor at `NF'.

Wilmington Trust Company

-Short-Term deposits at `F1';

--Support at `5';

--Support floor at `NF'.

The Rating Outlook for all ratings is Negative.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

--'Global Financial Institutions Rating Criteria' (Aug. 16, 2010);

--'Bank Holding Companies' (Dec. 30, 2009);

--'Equity Credit for Hybrids & Other Capital Securities-Amended' (Dec. 29, 2009);

--'Rating Hybrid Securities' (Dec. 29, 2009);

--'Short-Term Ratings Criteria for Corporate Finance' (Nov. 2, 2010).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=547685

Bank Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=493324

Equity Credit for Hybrids & Other Capital Securities - Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=493112

Rating Hybrid Securities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=493086

Short-Term Ratings Criteria for Corporate Finance ¬タヤ Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=568726

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Contacts

Fitch Ratings
Primary Analyst
Doriana Gamboa, +1-212-908-0865
Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Justin Fuller, CFA, +1-312-368-2057
Director
or
Committee Chairperson
Thomas Abruzzo, +1-212-908-0793
Managing Director
or
Media Relations:
Brian Bertsch, +1-212-908-0549
Email: brian.bertsch@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Doriana Gamboa, +1-212-908-0865
Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Justin Fuller, CFA, +1-312-368-2057
Director
or
Committee Chairperson
Thomas Abruzzo, +1-212-908-0793
Managing Director
or
Media Relations:
Brian Bertsch, +1-212-908-0549
Email: brian.bertsch@fitchratings.com