Wilmington Trust Corp. said Thursday that a unit has entered into a supervisory agreement with regulators requiring it to boost capital and reduce bad loans.
The $1.9 billion-asset Wilmington Trust FSB entered into the agreement with the Office of Thrift Supervision on Feb. 17 after a recent regulatory exam. The order requires it to raise its Tier 1 capital ratio to 9% and total risk-based capital ratio to 14% by June 30. The Baltimore unit must craft a written plan — with specific targets, strategies and time frames — to reduce problem assets, and it must develop or revise workout plans for each problem credit or loan of $1 million or more.
The unit must tap an independent director and independent senior executive officer and have a committee with at least one independent director to oversee compliance.
The $10.5 billion-asset parent company has suffered from higher losses on bad construction loans. In November, M&T Bank Corp. agreed to buy the Delaware company for $351 million in a deal that is set to close by midyear.