When Marvin N. Schoenhals, chairman and chief executive of Wilmington Savings Fund Society, started pounding the pavement to raise capital for his ailing thrift. he found an unusual taker.

Wilmington Trust Co., the major local competitor, wanted in on the action.

Last September, $4.1 billion-asset Wilmington Trust paid $500,000 for 55,556 shares of convertible preferred stock, or a 2.8% stake in the thrift.

Share Price More than Doubled

"We felt it was a good investment," said Charles W. King, a spokesman for Wilmington Trust. "They were under-valued. What they needed was some more time to implement their plan. We felt that the risk-reward ratio was favorable."

So far, the investment appears promising. Shares of the thinly traded convertible preferred stock that were bought for $9 each now are trading at around $22 a share.

"The test of the investment will be when we do sell," Mr. King said. "So far, they look like they are doing very well."

A Friendly Rivalry

Managers at the two institutions regard one another as friends. In fact, - Wilmington Savings has an $18 million line of credit with Wilmington Trust. That's one reason Wilmington Trust had no problem making the investment.

Although the two institutions do compete head on in retail banking and mortgage lending, Wilmington Trust's specialist are personal and corporate trust, and commercial business lending.

Wilmington Trust also has distinguished itself as a bank free of problems, and one of the nation's top-performing banks.

Last year, it had a return on average assets of 1.55%, ranking it sixth on American Banker's list of the 100 most profitable bank holding companies with assets less than $5 billion. In return on average equity, it ranked eighth at 17.44%.

In this year's first quarter, Wilmington Trust earned $19.7 million, up 10% from the same time a year ago. On an annualized basis, the banking company reported a 1.95% ROA, and a whopping 20.84% ROE.

Besides Wilmington Trust, other investors included John W. Rollins, a local businessman who holds 14.9% of the company; Verino Pettinaro, a local real estate developer and builder, 4.3%; and the Hillman Co., a private investment fund, 4.5%.

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