MILWAUKEE, July 17 /PRNewswire-FirstCall/ -- -- Net loss of $0.50
per share for 2009 second quarter. -- Aggressively addressed credit
issues by writing down problem credits and strengthening balance
sheet. -- Loan loss provision of $468 million, $15 million in
excess of net charge-offs. -- Allowance to loans ratio boosted to
2.83 percent, up 8 basis points from the prior quarter. -- Common
stock equity offering raised $552 million, increasing the tangible
common equity ratio to 7.3 percent. -- Reduced construction and
development exposure to 14.1 percent of total loans. -- Financial
results included after-tax special FDIC insurance assessment of $18
million or $0.07 per share, securities gains of $50 million or
$0.18 per share, favorable resolution of tax matter of $18 million
or $0.06 per share, and dividends paid to U.S. Treasury under
Capital Purchase Program of $25 million or $0.09 per share.
Marshall & Ilsley Corporation (NYSE:MI) (M&I) today
reported a 2009 second quarter net loss of $139.3 million, or $0.50
per share, as compared to a net loss of $393.8 million, or $1.52
per share, in the second quarter of 2008. "The second quarter of
2009 continued to be challenging for our nation's economy, the
financial services industry, and Marshall & Ilsley
Corporation," said Mark Furlong, president and CEO, Marshall &
Ilsley Corporation. "We continue to work hard to address the
challenges of this economic cycle, specifically focusing on the
proactive resolution of problem credits. We remain committed to
ensuring M&I emerges from this cycle in a position of strength
and believe we are continuing to make progress toward our goal of
returning to profitability." Loan and Deposit Growth M&I's
average loans and leases totaled $48.9 billion for the second
quarter of 2009, decreasing $1.1 billion or 2 percent compared to
the second quarter of 2008. When adjusted for the targeted
reduction in the Corporation's construction and development
portfolio, loan growth was $1.7 billion or 4 percent versus the
same period last year. The Corporation's average deposits totaled
$39.9 billion for the second quarter of 2009, rising $0.8 billion
or 2 percent versus the second quarter of 2008. M&I's average
noninterest bearing deposits totaled $7.4 billion for the second
quarter of 2009, increasing $1.5 billion or 26 percent compared to
the second quarter of 2008. Net Interest Income The Corporation's
net interest income (FTE) was $398.5 million for the second quarter
of 2009, down $56.1 million or 12 percent compared to the second
quarter of 2008. The net interest margin was 2.79 percent, down 35
basis points from the same period last year and 3 basis points from
the previous quarter. The margin contraction was primarily caused
by the late 2008 decline in short term interest rates. Asset
Quality M&I's construction and development portfolio continued
to experience deterioration in the estimated collateral values and
repayment abilities of some of the Corporation's customers,
particularly among small and mid-sized local residential
developers. M&I's provision for loan and lease losses was
$468.2 million in the second quarter of 2009 versus $477.9 million
in the previous quarter. Net charge-offs for the period were $452.6
million. Included in this number was an acceleration in charge-offs
related to consumer real estate nonperforming loans. This change
led to a one-time increase in charge-offs of $47 million, which
would otherwise have been taken in the following quarter. These
charge-offs were fully reserved. At June 30, 2009 and 2008, the
allowance for loan and lease losses was 2.83 percent and 2.05
percent, respectively, of total loans and leases. Nonperforming
loans and leases were 5.18 percent of total loans and leases at
June 30, 2009, compared to 2.00 percent at June 30, 2008.
Non-Interest Income The Corporation's non-interest income was
$267.2 million for the second quarter of 2009 compared to $187.0
million for the second quarter of 2008. Total net investment
securities gains were $82.7 million for the current quarter versus
$0.5 million in the same period last year. Excluding net investment
securities gains, non-interest income was relatively unchanged in
the second quarter of 2009 compared to the second quarter of 2008.
Wealth Management revenue was $65.8 million for the current
quarter, falling $9.0 million or 12 percent over the same period
last year. The decline was primarily driven by volatility in the
equity markets in late 2008 and early 2009. Assets under Management
and Assets under Administration were $31.7 billion and $109.3
billion, respectively, at June 30, 2009, compared to $25.4 billion
and $106.4 billion, respectively, at June 30, 2008. Non-Interest
Expense M&I's non-interest expense was $415.1 million for the
second quarter of 2009 compared to $380.4 million for the second
quarter of 2008. FDIC insurance expense was $49.2 million for the
current quarter versus $2.2 million in the same period last year.
Excluding FDIC insurance expense, non-interest expense fell $12.3
million or 3 percent in the second quarter of 2009 compared to the
second quarter of 2008. The Corporation's salaries and employee
benefits expense was $187.2 million for the second quarter of 2009,
an increase of $0.6 million or 0.4 percent from the same period
last year. Included in this number was severance expense of $6
million or $0.01 per share. After adjusting for certain net
credit-related expenses and other one-time expenses, M&I's
efficiency ratio was 55.9 percent in the current quarter.
Year-to-Date Results M&I reported a net loss of $256.3 million,
or $0.94 per share, as compared to a net loss of $247.6 million, or
$0.95 per share, for the six months ended June 30, 2009 and 2008,
respectively. Balance Sheet and Capital Management The
Corporation's consolidated assets and total equity were $59.8
billion and $6.7 billion, respectively, at June 30, 2009, compared
to $64.3 billion and $6.5 billion, respectively, at June 30, 2008.
M&I issued 100 million common shares in conjunction with an
equity offering on June 17, 2009. There were 368.1 million common
shares outstanding at June 30, 2009, compared to 259.4 million
outstanding at June 30, 2008. In the second quarter of 2009,
M&I paid $25 million or $0.09 per share for dividends on the
Corporation's Senior Preferred Stock, Series B, owned by the U.S.
Treasury under the Capital Purchase Program. M&I's tangible
common equity ratio was 7.3 percent at June 30, 2009. Conference
Call Marshall & Ilsley Corporation will hold a conference call
at 11:00 a.m. (Central Daylight Time) Friday, July 17, regarding
second quarter results. For those interested in listening, please
call 1-888-711-1825 and ask for M&I's quarterly results
conference call. If you are unable to join us at this time, a
replay of the call will be available beginning at 3:00 p.m. on July
17 and will run through 5:00 p.m. August 7, by calling
1-800-642-1687 and entering pass code 166 19 867. Supplemental
financial information referenced in the conference call can be
found at http://www.micorp.com/, Investor Relations, after 8:00
a.m. on July 17. About Marshall & Ilsley Corporation Marshall
& Ilsley Corporation (NYSE:MI) is a diversified financial
services corporation headquartered in Milwaukee, Wis., with $59.8
billion in assets. Founded in 1847, M&I Marshall & Ilsley
Bank is the largest Wisconsin-based bank, with 193 offices
throughout the state. In addition, M&I has 53 locations
throughout Arizona; 32 offices in Indianapolis and nearby
communities; 36 offices along Florida's west coast and in central
Florida; 16 offices in Kansas City and nearby communities; 26
offices in metropolitan Minneapolis/St. Paul, and one in Duluth,
Minn.; and one office in Las Vegas, Nev. M&I's Southwest Bank
subsidiary has 17 offices in the greater St. Louis area. M&I
also provides trust and investment management, equipment leasing,
mortgage banking, asset-based lending, financial planning,
investments, and insurance services from offices throughout the
country and on the Internet (http://www.mibank.com/ or
http://www.micorp.com/). M&I's customer-based approach,
internal growth, and strategic acquisitions have made M&I a
nationally recognized leader in the financial services industry.
Forward-Looking Statements This press release contains
forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements include, without limitation,
statements regarding expected financial and operating activities
and results that are preceded by, followed by, or that include
words such as "may," "expects," "anticipates," "estimates" or
"believes." Such statements are subject to important factors that
could cause M&I's actual results to differ materially from
those anticipated by the forward-looking statements. These factors
include: (i) M&I's exposure to the deterioration in the
commercial and residential real estate markets, along with the
deterioration in the U.S. economy as a whole, which could result in
increased charge-offs and increases in M&I's allowance for loan
and lease losses, (ii) various other factors, including changes in
economic conditions affecting borrowers, new information regarding
outstanding loans and identification of additional problem loans,
which could require an increase in M&I's allowance for loan and
lease losses, (iii) M&I's ability to maintain required levels
of capital, (iv) the impact of recent and future legislative
initiatives on the financial markets or on M&I, (v) M&I's
exposure to the actions and potential failure of other financial
institutions, (vi) volatility in M&I's stock price, and (vii)
those factors referenced in Item 1A. Risk Factors in M&I's
annual report on Form 10-K for the year ended December 31, 2008,
and as may be described from time to time in M&I's subsequent
SEC filings, which factors are incorporated herein by reference.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect only M&I's belief as
of the date of this press release. Except as required by federal
securities law, M&I undertakes no obligation to update these
forward-looking statements or reflect events or circumstances after
the date of this press release. Marshall & Ilsley Corporation
Financial Information (unaudited) Three Months Six Months Ended
June 30, Ended June 30, --------------- Percent --------------
Percent 2009 2008 Change 2009 2008 Change ---- ---- --------- ----
---- ------- PER COMMON SHARE DATA --------------------- Diluted:
Net Loss ($0.50) ($1.52) n.m. ($0.94) ($0.95) n.m. Basic: Net Loss
(0.50) (1.52) n.m. (0.94) (0.95) n.m. Dividend Declared per Common
Share 0.01 0.32 -96.9% 0.02 0.63 -96.8% Book Value per Common Share
13.78 25.26 -45.4 13.78 25.26 -45.4 Common Shares Outstanding
(millions): Average - Diluted 280.8 258.6 8.6 272.7 259.3 5.2 End
of Period 368.1 259.4 41.9 368.1 259.4 41.9 INCOME STATEMENT
($millions) ---------------------------- Net Interest Income (FTE)
$398.5 $454.6 -12.3% $807.3 $892.1 -9.5% Provision for Loan and
Lease Losses 468.2 886.0 -47.2 946.1 1,032.3 -8.3 Wealth Management
65.8 74.8 -11.9 128.5 146.6 -12.4 Service Charges on Deposits 34.1
37.9 -10.1 69.4 73.6 -5.7 Mortgage Banking 18.0 6.6 172.4 28.9 16.0
80.5 Net Investment Securities Gains 82.7 0.5 n.m. 82.7 26.2 216.2
Other 66.6 67.2 -1.0 134.4 135.8 -1.0 ---- ---- ----- ----- Total
Non- Interest Revenues 267.2 187.0 42.9 443.9 398.2 11.5 Salaries
and Employee Benefits 187.2 186.6 0.4 342.4 361.2 -5.2 Net
Occupancy and Equipment 32.4 31.2 3.8 66.2 62.5 6.0 FDIC Insurance
49.2 2.2 n.m. 64.3 4.0 n.m. Intangible Amortization 5.8 6.0 -2.2
11.6 11.9 -2.4 Other 140.5 154.4 -9.1 276.1 256.6 7.6 ----- -----
----- ----- Total Non- Interest Expenses 415.1 380.4 9.1 760.6
696.2 9.3 Tax Equivalent Adjustment 6.7 7.0 -4.2 13.8 14.1 -2.3 ---
--- ---- ---- Pre-Tax Loss (224.3) (631.8) n.m. (469.3) (452.3)
n.m. Benefit for Income Taxes (110.0) (238.0) n.m. (263.0) (204.7)
n.m. ------ ------ ------ ------ Net Loss Attributable to M&I
($114.3) ($393.8) n.m. ($206.3) ($247.6) n.m. ======= =======
======= ======= Preferred Dividends (25.0) - (50.0) - ----- ---
----- --- Net Loss Attributable to M&I Common Shareholders
($139.3) ($393.8) n.m.% ($256.3) ($247.6) n.m.% ======= =======
======= ======= KEY RATIOS ---------- Net Interest Margin (FTE)/
Avg. Earning Assets 2.79% 3.14% 2.81% 3.11% Interest Spread (FTE)
2.39 2.71 2.44 2.62 Efficiency Ratio 70.7% 59.3% 64.9% 55.0% Equity
/ Assets (End of Period) 11.19% 10.15% 11.19% 10.15% Marshall &
Ilsley Corporation Financial Information (unaudited) As of June 30,
-------------- Percent 2009 2008 Change ---- ---- ------ ASSETS
($millions) ------------------ Cash & Due From Banks $797
$1,316 -39.5% Trading Assets 261 133 96.1 Short - Term Investments
916 596 53.7 Investment Securities 6,125 7,695 -20.4 Loans and
Leases: Commercial Loans & Leases 14,792 15,842 -6.6 Commercial
Real Estate 17,728 17,246 2.8 Residential Real Estate 8,655 10,246
-15.5 Home Equity Loans & Lines 4,912 4,992 -1.6 Personal Loans
and Leases 2,247 1,907 17.8 ----- ----- Total Loans and Leases
48,334 50,233 -3.8 Reserve for Loan & Lease Losses (1,368)
(1,029) 32.9 Premises and Equipment, net 573 524 9.2 Goodwill and
Intangibles 757 2,242 -66.2 Other Assets 3,393 2,550 33.1 -----
----- Total Assets $59,788 $64,260 -7.0% ======= =======
LIABILITIES & EQUITY ($millions)
-------------------------------- Deposits: Noninterest Bearing
$7,848 $6,390 22.8% Interest Bearing: Savings and NOW 4,893 3,253
50.4 Money Market 9,979 10,774 -7.4 Time 18,080 17,478 3.4 Foreign
392 3,278 -88.0 --- ----- Total Interest Bearing 33,344 34,783 -4.1
------ ------ Total Deposits 41,192 41,173 0.0 Short - Term
Borrowings 1,475 6,036 -75.6 Long - Term Borrowings 9,297 9,565
-2.8 Other Liabilities 1,135 962 17.9 ----- --- Total Liabilities
53,099 57,736 -8.0 Equity: Marshall & Ilsley Corporation
Shareholders' Equity 6,678 6,514 2.5 Noncontrolling Interest in
Subsidiaries 11 10 8.2 -- -- Total Equity 6,689 6,524 2.5 -----
----- Total Liabilities & Equity $59,788 $64,260 -7.0% =======
======= Three Months Six Months Ended June 30, Ended June 30,
--------------- Percent --------------- Percent 2009 2008 Change
2009 2008 Change ---- ---- ------ ---- ---- ------ AVERAGE ASSETS
($millions) --------------- Cash & Due From Banks $748 $879
-14.9% $775 $916 -15.4% Trading Assets 581 162 258.6 583 170 242.6
Short - Term Investments 459 371 23.7 514 352 46.3 Investment
Securities 7,314 7,735 -5.4 7,501 7,823 -4.1 Loans and Leases:
Commercial Loans & Leases 14,926 15,603 -4.3 15,108 15,256 -1.0
Commercial Real Estate 17,737 17,126 3.6 17,715 17,035 4.0
Residential Real Estate 9,096 10,475 -13.2 9,356 10,386 -9.9 Home
Equity Loans and Lines 4,969 4,835 2.8 5,017 4,753 5.6 Personal
Loans and Leases 2,149 1,892 13.5 2,148 1,840 16.7 ----- -----
----- ----- Total Loans and Leases 48,877 49,931 -2.1 49,344 49,270
0.1 Reserve for Loan & Lease Losses (1,361) (682) 99.6 (1,304)
(620) 110.4 Premises and Equipment, net 572 521 9.8 571 515 10.8
Goodwill and Intangibles 757 2,244 -66.3 759 2,243 -66.2 Other
Assets 2,998 2,329 28.7 2,944 2,252 30.7 ----- ----- ----- -----
Total Assets $60,945 $63,490 -4.0% $61,687 $62,921 -2.0% =======
======= ======= ======= Memo: Average Earning Assets $57,231
$58,199 $57,942 $57,615 Average Earning Assets Excluding Investment
Securities Unrealized Gains/Losses $57,191 $58,198 $57,951 $57,598
AVG LIABILITIES & EQUITY ($millions) Deposits: Noninterest
Bearing $7,355 $5,828 26.2% $6,921 $5,728 20.8% Interest Bearing:
Savings and NOW 4,175 3,273 27.6 3,854 3,237 19.1 Money Market
10,207 11,199 -8.9 10,418 11,443 -9.0 Time 17,652 15,977 10.5
17,776 14,969 18.8 Foreign 469 2,776 -83.1 794 3,013 -73.6 --------
-------- -------- -------- Total Interest Bearing 32,503 33,225
-2.2 32,842 32,662 0.6 Total Deposits 39,858 39,053 2.1 39,763
38,390 3.6 Short - Term Borrowings 4,206 6,799 -38.1 4,961 6,607
-24.9 Long - Term Borrowings 9,440 9,639 -2.1 9,505 9,830 -3.3
Other Liabilities 1,041 1,023 1.7 1,081 1,087 -0.5 --------
-------- -------- -------- Total Liabilities 54,545 56,514 -3.5
55,310 55,914 -1.1 Equity: Marshall & Ilsley Corporation
Shareholders' Equity 6,389 6,966 -8.3 6,366 6,997 -9.0
Noncontrolling Interest in Subsidiaries 11 10 6.1 11 10 5.5
-------- -------- -------- -------- Total Equity 6,400 6,976 -8.3
6,377 7,007 -9.0 -------- -------- -------- -------- Total
Liabilities & Equity $60,945 $63,490 -4.0% $61,687 $62,921
-2.0% ======== ======== ======== ======== Memo: Average Interest
Bearing Liabilities $46,149 $49,663 $47,308 $49,099 Marshall &
Ilsley Corporation Financial Information (unaudited) Three Months
Ended Six Months Ended June 30, Percent June 30, Percent 2009 2008
Change 2009 2008 Change ------- ------- ------- ------- -------
------- CREDIT QUALITY (a) Net Charge- Offs ($millions) $452.6
$400.7 12.9% $780.5 $531.8 46.8% Net Charge- Offs / Average Loans
& Leases 3.71% 3.23% 3.19% 2.17% Loan and Lease Loss Reserve
($millions) $1,367.8 $1,028.8 32.9% $1,367.8 $1,028.8 32.9% Loan
and Lease Loss Reserve / Period-End Loans & Leases 2.83% 2.05%
2.83% 2.05% Nonperforming Loans & Leases ($millions) $2,502.2
$1,006.8 148.5% $2,502.2 $1,006.8 148.5% Nonperforming Loans &
Leases / Period-End Loans & Leases 5.18% 2.00% 5.18% 2.00% Loan
and Lease Loss Reserve / Nonperforming Loans & Leases* 56% 105%
56% 105% Nonperforming Assets (NPA) ($millions) $2,858.9 $1,213.9
135.5% $2,858.9 $1,213.9 135.5% NPA / Period- End Loans &
Leases and Other Real Estate Owned 5.87% 2.41% 5.87% 2.41%
Performing Impaired loans: Renegotiated ($millions) $832.8 $16.5
n.m.% $832.8 $16.5 n.m.% Contractually past due credits: Loans past
due 90 days or more ($millions) $15.1 $17.7 -14.8% $15.1 $17.7
-14.8% *Excludes nonperforming loans held for sale. MARGIN ANALYSIS
(b) Loans and Leases: Commercial Loans & Leases 4.01% 5.37%
3.96% 5.80% Commercial Real Estate 4.67 6.03 4.68 6.30 Residential
Real Estate 4.82 6.02 4.95 6.22 Home Equity Loans and Lines 5.06
6.27 5.12 6.58 Personal Loans and Leases 5.64 6.38 5.59 6.67
-------- -------- -------- -------- Total Loans and Leases 4.58
5.86 4.60 6.17 Investment Securities 4.11 4.77 4.19 4.90 Short -
Term Investments 1.13 1.96 1.01 2.38 -------- -------- --------
-------- Interest Income (FTE) / Avg. Interest Earning Assets 4.45%
5.68% 4.48% 5.96% ======== ======== ======== ======== Interest
Bearing Deposits: Savings and NOW 0.29% 0.52% 0.22% 0.74% Money
Market 0.72 1.80 0.67 2.39 Time 2.64 3.84 2.68 4.14 Foreign 0.36
1.76 0.34 2.41 -------- -------- -------- -------- Total Interest
Bearing Deposits 1.71 2.65 1.70 3.03 Short - Term Borrowings 0.27
2.25 0.28 2.79 Long - Term Borrowings 4.06 4.58 4.15 4.75 --------
-------- -------- -------- Interest Expense / Avg. Interest Bearing
Liabilities 2.06% 2.97% 2.04% 3.34% ======== ======== ========
======== Net Interest Margin(FTE) / Avg. Earning Assets 2.79% 3.14%
2.81% 3.11% ======== ======== ======== ======== Interest Spread
(FTE) 2.39% 2.71% 2.44% 2.62% ======== ======== ======== ========
Notes: (a) Nonperforming assets are comprised of nonperforming
loans & leases and other real estate owned. (b) Based on
average balances excluding fair value adjustments for available for
sale securities. DATASOURCE: Marshall & Ilsley Corporation
CONTACT: Greg Smith, senior vice president, chief financial
officer, +1-414-765-7727, or Dave Urban, vice president, director
of investor relations, +1-414-765-7853, both of Marshall &
Ilsley Corporation Web Site: http://www.micorp.com/
http://www.mibank.com/
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