Good morning – After years of delays and speculation, the trial of Wilmington Trust executives will get underway.
Barring some last-minute plea deal, a jury will decide whether the management practices of the bank rise to the level of criminal activity.
What we do know is that the bank’s regional lending side devolved into a casino culture, placing bets on raw land (largely downstate) and commercial developments that to even the casual observer looked shaky.
Along the way, the Wilmington Trust name blunted any doubts. After all, this was a bank that piled up earnings gains over a couple of decades and was at least indirectly controlled by duPont family interests during much of its existence.
Meanwhile, the trust side of the business perked along.
When it all came tumbling down, Buffalo-based M&T jumped in and acquired the company for $300 million, a fraction of its stock market value a few days earlier.
From the outside looking in, M&T has done a solid job in righting the ship. The trust side has gained momentum, picking up business from the Takata and Volkswagen airbag and diesel settlements among other things.
Jobs were lost, but a strong financial services sector helped lessen the pain.
M&T, with its roots in manufacturing, is also active in lending to smaller enterprises and has expertise in Small Business Administration-backed loans.
But a state loses something when a local bank is acquired. We came close a couple of decades ago when a spectacular reign of mismanagement at WSFS led to non-nonsense Michigander Marvin Schoenhals taking charge.
Schoenhals would later remark that while nothing illegal took place, but would shake his head at the level of incompetence and risk-taking. That hubris led to a planned 30-story office tower that ended up being a hole in the ground that became part of the short-lived headquarters site of MBNA.
WSFS went on to a spectacular run with Schoenhals deftly engineering the toughest job of all – the transition to an equally talented CEO, Mark Turner.
Meanwhile, the final chapter of the Wilmington Trust tragedy will play out in a Wilmington courtroom.
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