Wilmington Trust 4Q Profit Slips

Wilmington Trust earned $44 million, or 65 cents per share, in the fourth quarter, compared with profit of $47.5 million, or 68 cents per share, in the fourth quarter of 2006.

Analysts expected profit of 64 cents per share, according to a Thomson Financial survey.

Profit from lending shrank 1.4 percent to $91.1 million, even as the bank's loan balance grew about 2 percent to $8.37 billion.

Banks typically raise money through deposits and funnel it into loans. A bank's profit margin is based on the spread of how much it collects on loans over how much it pays on deposits. The bank's profit margin on the loan portfolio compressed to 3.56 percent from 3.73 percent.

Of the company's $7.86 billion in deposits, savings accounts that bear interest rates more than doubled, while accounts with no interest grew at a much slower pace.

Even though the Federal Reserve cut its target for bank lending rates, there is a lag between the cuts and when the company's deposit prices reset, the bank said.

The corporate client services unit "prevailed against the near-absence of capital markets activity," with revenue jumping 12 percent to $26.2 million. The company collected more fees for retirement and cash management services.

The investment management division's revenue rose 15 percent to $59.1 million, buttressed by the acquisition of a consulting firm in Boston.