(Bloomberg) Wilmington Trust Co., a unit of M&T Bank Corp., agreed to pay $18.5 million to settle U.S. regulatory claims that the bank failed to report construction loans that weren’t being repaid.
Wilmington Trust in the second half of 2009 omitted about $669 million in loans that were 90 days or more past due, the Securities and Exchange Commission said today in a statement. The bank also understated its loan-loss provision during that period, the agency said.
“Investors must know when banking institutions are unable to recover on material amounts of outstanding loans, which means those institutions must carefully adhere to relevant accounting rules,” said Andrew Ceresney, director of the SEC’s enforcement division.
M&T, which counts Warren Buffett’s Berkshire Hathaway Inc. among its largest shareholders, completed its purchase of Wilmington Trust in 2011. The Delaware bank had put itself up for sale amid losses fueled by soured commercial real estate loans and investments in pools of trust-preferred securities.
M&T said in a 2012 filing that it had received a notice of potential regulatory action by the SEC. The bank also said at the time that the Justice Department was conducting a related probe.
“While we cannot speak to things that happened at the former company, it’s important to resolve issues from the past so we can continue to build on Wilmington Trust’s legacy both in Delaware and the wealth trust management business.” said Michael Zabel, a spokesman for M&T.
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