In the news release, Marshall & Ilsley Corporation (NYSE: MI)
Reports Net Income of $0.32 Per Diluted Share for 2008 Third
Quarter, issued earlier today by Marshall & Ilsley Corporation
over PR Newswire, in the "Financial Information" table as of
September 30, 2007, the line item "Commercial Real Estate" should
read "15,689" rather than "5,689" as incorrectly transmitted by PR
Newswire. PR Newswire apologizes for this error. Complete,
corrected release follows: MILWAUKEE, Oct. 15
/PRNewswire-FirstCall/ -- Marshall & Ilsley Corporation
(NYSE:MI) (M&I) today reported 2008 third quarter net income of
$83.1 million, or $0.32 per share, as compared to income from
continuing operations of $173.7 million, or $0.65 per share, in the
third quarter of 2007. During the third quarter of 2008, the
Corporation experienced continued stress on its construction and
development portfolio due to the ongoing deterioration in the
housing market. -- Provision for loan and lease losses totaled $155
million, exceeding net charge-offs of $152 million. -- Allowance to
loan ratio was maintained at 2.05 percent -- up 104 basis points
versus the third quarter of 2007. 2008 Third Quarter Key
Performance Highlights -- On an acquisition-adjusted basis, average
loans and leases increased 10 percent over the third quarter of
2007. -- Net interest margin fell 8 basis points on a linked
quarter basis and was down 1 basis point from the third quarter of
2007. -- Net interest income increased 9 percent compared to the
same period last year. -- Wealth Management total revenue increased
7 percent over the third quarter of 2007. -- Adjusted efficiency
ratio was 52.0 percent, up 0.7 percentage points on a linked
quarter basis. -- Tangible common equity ratio was 7.0 percent at
September 30, 2008 -- up 60 basis points from September 30, 2007.
Loan and Core Deposit Growth On an acquisition-adjusted basis,
M&I's average loans and leases totaled $50.0 billion for the
third quarter of 2008, reflecting an increase of $4.4 billion or 10
percent compared to the third quarter of 2007. The Corporation's
average bank-issued deposits totaled $29.1 billion for the third
quarter of 2008, decreasing $0.6 billion or 2 percent on an
acquisition-adjusted basis, versus the same period last year.
M&I's demand deposits totaled $5.9 billion for the third
quarter of 2008, increasing $173 million or 3 percent compared to
the third quarter of 2007. Net Interest Income The Corporation's
net interest income (FTE) rose $37.3 million to $447.5 million in
the third quarter of 2008 -- up 9 percent compared to the third
quarter of 2007. The net interest margin was 3.06 percent, down 8
basis points on a linked quarter basis, and 1 basis point from the
same period last year. 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 developers. M&I's provision for loan and lease losses was
$155.0 million in the third quarter of 2008. Net charge-offs for
the period were $152.3 million, or 1.21 percent of total average
loans and leases. At September 30, 2008 and 2007, the allowance for
loan and lease losses was 2.05 percent and 1.01 percent,
respectively, of total loans and leases. Non-performing loans and
leases were 2.70 percent of total loans and leases at September 30,
2008, compared to 1.01 percent at September 30, 2007. Wealth
Management Revenue Wealth Management total revenue was $71.3
million for the current quarter, an increase of $4.8 million or 7
percent over the third quarter of 2007. Assets Under Management
finished the quarter at $24.4 billion and Assets Under
Administration ended at $101 billion. Other Non-Interest Income
M&I's service charges on deposits were $36.7 million for the
third quarter of 2008, an increase of $5.8 million or 19 percent
from the same period last year. Non-Interest Expense The
Corporation's non-interest expense was $360.0 million for the third
quarter of 2008, a decrease of $20.4 million on a linked quarter
basis. After adjusting for approximately $15 million of losses
related to financial market disruption, M&I's efficiency ratio
was 54.6 percent. Further adjusting for credit-related expenses
that include other real estate owned, the Corporation's efficiency
ratio was 52.0 percent -- up 0.7 percentage points on a linked
quarter basis. Year-to-Date Results M&I reported a net loss of
$164.4 million, or $0.63 per share, as compared to income from
continuing operations of $521.4 million, or $1.97 per share, for
the nine months ended September 30, 2008 and 2007, respectively.
Balance Sheet and Capital Management The Corporation's consolidated
assets and common shareholders' equity were $63.5 billion and $6.5
billion, respectively, at September 30, 2008, compared to $60.8
billion and $7.0 billion, respectively, at September 30, 2007.
Tangible book value per share was $16.71 at September 30, 2008.
There were 260.0 million common shares outstanding at September 30,
2008, compared to 267.1 million outstanding at September 30, 2007.
The Corporation has a Stock Repurchase Program authorization under
which up to 12 million shares of the Corporation's common stock can
be repurchased annually. In the third quarter of 2008, the
Corporation did not repurchase any shares. M&I's tangible
common equity ratio was 7.0 percent at September 30, 2008 -- up 60
basis points from September 30, 2007. Conference Call Marshall
& Ilsley Corporation will hold a conference call at 11:00 a.m.
Central Daylight Time Wednesday, October 15, regarding third
quarter results. For those interested in listening, please call
1-888-711-1825 and ask for M&I's quarterly results release
conference call. If you are unable to join us at this time, a
replay of the call will be available beginning at 2:30 p.m. on
October 15 and will run through 5:00 p.m. October 22, by calling
1-800-642-1687 and entering pass code 636 89 134. Supplemental
financial information referenced in the conference call can be
found at http://www.micorp.com/, Investor Relations, after 8:00
a.m. on October 15. About Marshall & Ilsley Corporation
Marshall & Ilsley Corporation (NYSE:MI) is a diversified
financial services corporation headquartered in Milwaukee, Wis.,
with $63.5 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 52 locations
throughout Arizona; 32 offices in Indianapolis and nearby
communities; 31 offices along Florida's west coast and in central
Florida; 15 offices in Kansas City and nearby communities; 24
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 volatile commercial and
residential real estate markets, which could result in increased
charge-offs and increases in M&I's allowance for loan and lease
losses to compensate for potential losses in its real estate loan
portfolio, (ii) adverse changes in the financial performance and/or
condition of M&I's borrowers, which could impact repayment of
such borrowers' outstanding loans, (iii) M&I's ability to
maintain required levels of capital, (iv) fluctuation of M&I's
stock price, and (v) those factors referenced in Item 1A. Risk
Factors in M&I's annual report on Form 10-K for the year ended
December 31, 2007 and in M&I's quarterly report on Form 10-Q
for the quarter ended June 30, 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 report. Marshall
& Ilsley Corporation Financial Information (unaudited) Three
Months Nine Months Ended Ended September 30, Percent September 30,
Percent 2008 2007 Change 2008 2007 Change PER SHARE DATA Diluted:
Income (Loss) from Continuing Operations $0.32 $0.65 -50.8% ($0.63)
$1.97 n.m.% Net Income (Loss) 0.32 0.83 -61.4 (0.63) 2.49 n.m.
Basic: Income (Loss) from Continuing Operations 0.32 0.66 -51.5
(0.63) 2.02 n.m. Net Income (Loss) 0.32 0.84 -61.9 (0.63) 2.54 n.m.
Dividend Declared 0.32 0.31 3.2 0.95 0.89 6.7 Book Value 25.12
26.45 -5.0 25.12 26.45 -5.0 Shares Outstanding (millions): Average
- Diluted 259.2 266.3 -2.7 259.1 264.2 -1.9 End of Period 260.0
267.1 -2.6 260.0 267.1 -2.6 INCOME STATEMENT ($millions) Net
Interest Income (FTE) $447.5 $410.2 9.1% $1,339.6 $1,218.5 9.9%
Provision for Loan and Lease Losses 155.0 41.5 273.2 1,187.3 84.7
1301.7 Wealth Management 71.3 66.5 7.3 218.0 192.8 13.1 Service
Charge on Deposits 36.7 30.9 18.8 110.3 88.6 24.4 Mortgage Banking
5.5 6.5 -15.3 21.5 28.6 -24.9 Net Investment Securities Gains 1.0
8.9 -88.9 27.2 29.9 -9.3 Other 69.3 70.5 -1.7 205.1 185.5 10.6
Total Non-Interest Revenues 183.8 183.3 0.3 582.1 525.4 10.8
Salaries and Employee Benefits 184.0 166.8 10.3 545.3 485.9 12.2
Occupancy and Equipment 31.7 27.7 14.4 94.1 83.2 13.1 Intangible
Amortization 6.0 5.4 10.6 17.9 15.1 18.6 Other 138.3 93.6 47.8
398.9 284.6 40.1 Total Non-Interest Expenses 360.0 293.5 22.7
1,056.2 868.8 21.6 Tax Equivalent Adjustment 6.8 7.0 -3.6 20.9 21.1
-1.1 Pre-Tax Income (Loss) 109.5 251.5 -56.5 (342.7) 769.3 n.m.
Provision (Benefit) for Income Taxes 26.4 77.8 -66.1 (178.3) 247.9
n.m. Income (Loss) from Continuing Operations 83.1 173.7 -52.1
(164.4) 521.4 n.m. Discontinued Operations, net of tax: Separation
Transaction Costs - (4.0) - (6.7) Metavante Net Income - 50.2 -
142.3 Discontinued Operations, net of tax - 46.2 - 135.6 Net Income
(Loss) $83.1 $219.9 -62.2% ($164.4) $657.0 n.m.% KEY RATIOS Net
Interest Margin (FTE) / Avg. Earning Assets 3.06% 3.07% 3.10% 3.14%
Interest Spread (FTE) 2.65 2.43 2.63 2.49 Based on Income from
Continuing Operations Efficiency Ratio 57.0% 49.9% 55.7% 50.5%
Return on Assets 0.52 1.19 n.m. 1.24 Return on Equity 5.07 10.19
n.m. 10.70 Based on Net Income Return on Assets 0.52% 1.47 n.m.%
1.52% Return on Equity 5.07 12.91 n.m. 13.48 Equity / Assets (End
of Period) 10.2% 11.6% 10.2% 11.6% Marshall & Ilsley
Corporation Financial Information (unaudited) As of September 30,
Percent 2008 2007 Change ASSETS ($millions) Cash & Due From
Banks $982 $1,034 -5.0% Trading Securities 163 48 237.7 Short -
Term Investments 137 717 -80.8 Investment Securities 7,383 7,179
2.9 Loan to Metavante - 982 n.m. Loans and Leases: Commercial Loans
& Leases 15,711 13,569 15.8 Commercial Real Estate 17,519
15,689 11.7 Residential Real Estate 10,029 9,700 3.4 Home Equity
Loans & Lines 5,053 4,304 17.4 Personal Loans and Leases 2,105
1,707 23.3 Total Loans and Leases 50,417 44,969 12.1 Reserve for
Loan & Lease Losses (1,031) (453) 127.9 Premises and Equipment,
net 542 470 15.4 Goodwill and Intangibles 2,237 1,824 22.6 Other
Assets 2,671 2,638 1.3 Total Assets of Continuing Operations 63,501
59,408 6.9 Assets of Discontinued Operations - 1,360 n.m. Total
Assets $63,501 $60,768 4.5% LIABILITIES & SHAREHOLDERS' EQUITY
($millions) Deposits: Noninterest Bearing $6,359 $5,559 14.4% Bank
Issued Interest Bearing Activity 13,444 13,816 -2.7 Bank Issued
Time 9,146 8,566 6.8 Total Bank Issued Deposits 28,949 27,941 3.6
Wholesale Deposits 11,091 6,467 71.5 Total Deposits 40,040 34,408
16.4 Short - Term Borrowings 7,820 9,835 -20.5 Long - Term
Borrowings 8,161 8,142 0.2 Other Liabilities 988 1,410 -29.9
Liabilities of Discontinued Operations - (49) n.m. Shareholders'
Equity 6,492 7,022 -7.5 Total Liabilities & Shareholders'
Equity $63,501 $60,768 4.5% Three Months Ended Nine Months Ended
September 30, Percent September 30, Percent 2008 2007 Change 2008
2007 Change AVERAGE ASSETS ($millions) Cash & Due From Banks
$892 $1,022 -12.7% $908 $1,007 -9.8% Trading Securities 144 49
196.0 162 50 226.3 Short - Term Investments 387 393 -1.8 363 313
16.0 Investment Securities 7,509 7,388 1.6 7,718 7,436 3.8 Loan to
Metavante - 982 n.m. - 982 n.m. Loans and Leases: Commercial Loans
& Leases 15,513 13,265 17.0 15,342 12,983 18.2 Commercial Real
Estate 17,361 15,408 12.7 17,144 14,873 15.3 Residential Real
Estate 10,169 9,577 6.2 10,313 9,377 10.0 Home Equity Loans and
Lines 5,027 4,248 18.3 4,845 4,255 13.9 Personal Loans and Leases
1,962 1,612 21.8 1,882 1,558 20.7 Total Loans and Leases 50,032
44,110 13.4 49,526 43,046 15.1 Reserve for Loan & Lease Losses
(1,083) (444) 143.9 (775) (434) 78.9 Premises and Equipment, net
533 467 14.0 521 455 14.6 Goodwill and Intangibles 2,239 1,823 22.8
2,242 1,712 30.9 Other Assets 2,411 1,892 27.4 2,304 1,739 32.6
Total Assets of Continuing Operations 63,064 57,682 9.3 62,969
56,306 11.8 Assets of Discontinued Operations - 1,542 n.m. - 1,517
n.m. Total Assets $63,064 $59,224 6.5% $62,969 $57,823 8.9% Memo:
Average Earning Assets $58,072 $52,922 $57,769 $51,827 Average
Earning Assets Excluding Investment Securities Unrealized
Gains/Losses $58,137 $53,010 $57,779 $51,888 AVG LIABILITIES &
SHAREHOLDERS' EQUITY ($millions) Deposits: Noninterest Bearing
$5,909 $5,513 7.2% $5,789 $5,438 6.4% Bank Issued Interest Bearing
Activity 14,178 13,819 2.6 14,635 13,359 9.6 Bank Issued Time 9,033
8,788 2.8 8,926 8,626 3.5 Total Bank Issued Deposits 29,120 28,120
3.6 29,350 27,423 7.0 Wholesale Deposits 10,568 6,724 57.2 9,476
6,453 46.9 Total Deposits 39,688 34,844 13.9 38,826 33,876 14.6
Short - Term Borrowings 6,415 4,491 42.8 6,543 4,346 50.5 Long -
Term Borrowings 9,653 11,902 -18.9 9,770 11,823 -17.4 Other
Liabilities 784 1,048 -25.3 992 1,062 -6.5 Liabilities of
Discontinued Operations - 178 n.m. - 200 n.m. Shareholders' Equity
6,524 6,761 -3.5 6,838 6,516 4.9 Total Liabilities &
Shareholders' Equity $63,064 $59,224 6.5% $62,969 $57,823 8.9%
Memo: Average Interest Bearing Liabilities $49,847 $45,724 $49,350
$44,607 Marshall & Ilsley Corporation Financial Information
(unaudited) Three Months Ended Nine Months Ended September 30,
Percent September 30, Percent 2008 2007 Change 2008 2007 Change
CREDIT QUALITY Net Charge-Offs ($millions) $152.3 $26.0 484.8%
$684.1 $64.3 963.4% Net Charge- Offs / Average Loans & Leases
1.21% 0.23% 1.85% 0.20% Loan and Lease Loss Reserve ($millions)
$1,031.5 $452.7 127.9% $1,031.5 $452.7 127.9% Loan and Lease Loss
Reserve / Period-End Loans & Leases 2.05% 1.01% 2.05% 1.01%
Nonaccrual Loans & Leases ($millions) $1,260.6 $445.8 182.8%
$1,260.6 $445.8 182.8% Nonaccrual Loans & Leases / Period-End
Loans & Leases 2.50% 0.99% 2.50% 0.99% Loan and Lease Loss
Reserve / Nonaccrual Loans & Leases 82% 102% 82% 102%
Non-Performing Loans & Leases (NPL) ($millions)(a) 1,362.2
$453.6 200.3% $1,362.2 $453.6 200.3% NPL's / Period-End Loans &
Leases(a) 2.70% 1.01% 2.70% 1.01% Loan and Lease Loss Reserve /
Non- Performing Loans & Leases(a) 76% 100% 76% 100% MARGIN
ANALYSIS(b) Loans and Leases: Commercial Loans & Leases 5.29%
7.61% 5.63% 7.60% Commercial Real Estate 5.82 7.51 6.13 7.56
Residential Real Estate 5.72 7.14 6.06 7.25 Home Equity Loans and
Lines 6.16 7.51 6.43 7.53 Personal Loans and Leases 6.16 7.71 6.49
7.79 Total Loans and Leases 5.68 7.47 6.00 7.51 Loan to Metavante -
4.36 - 4.41 Investment Securities 4.62 5.27 4.81 5.32 Short - Term
Investments 1.99 4.94 2.25 4.78 Interest Income (FTE) / Avg.
Interest Earning Assets 5.51% 7.08% 5.81% 7.12% Interest Bearing
Deposits: Bank Issued Interest Bearing Activity 1.33% 3.64% 1.74%
3.62% Bank Issued Time 3.76 4.98 4.12 4.93 Total Bank Issued
Deposits 2.28 4.16 2.64 4.14 Wholesale Deposits 3.05 5.16 3.38 5.12
Total Interest Bearing Deposits 2.52 4.39 2.85 4.36 Short - Term
Borrowings 2.15 5.17 2.58 5.21 Long - Term Borrowings 4.51 5.09
4.67 5.05 Interest Expense / Avg. Interest Bearing Liabilities
2.86% 4.65% 3.18% 4.63% Net Interest Margin(FTE) / Avg. Earning
Assets 3.06% 3.07% 3.10% 3.14% Interest Spread (FTE) 2.65% 2.43%
2.63% 2.49% Notes: (a) Includes Loans past due 90 days or more. (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/
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