Wilmington Trust Corp. announced Tuesday in a filing with the Securities & Exchange Commission that it expects to take a noncash impairment charge of $66.8 million this quarter related to its investment in one of its money management units.
The company said in an 8-K filing that the charge would be about $43.5 million, or 64 cents a share, after taxes.
The charge, related to the Santa Monica, Calif., growth manager Roxbury Capital Management, is not expected to affect risk-based capital, dividends, or debt covenants, Wilmington said. "All risk-based capital ratios are expected to remain higher than the minimums required for well-capitalized institutions."
The investment in Roxbury generated $0.3 million of revenue in the first quarter and $1.2 million last year for Wilmington.
The company said the charge was triggered by business conditions at Roxbury, including "a continued decline in assets under management," along with Roxbury's "operating performance and its near-term projections, both of which were below expectations."
The assets under management fell 8% in the first five months of this year, to $2.3 billion as of May 31.
Other conditions included
Roxbury is expected to record an operating loss for the second quarter.
Wilmington has retained Berkshire Capital Securities LLC to help determine the value of its investment in Roxbury.
