MI Marshall & Ilsley Corp

Marshall & Ilsley Corporation Announces Fourth Quarter and Year-End Results MILWAUKEE, Jan. 13 /PRNewswire-FirstCall/ -- Marshall & Ilsley Corporation (NYSE:MI) today reported 2004 fourth quarter net income of $0.76 per diluted share, or $173.8 million, as compared to $0.62 per diluted share, or $141.1 million, in the fourth quarter of 2003. Fourth quarter net income per share increased 22.6 percent over the same period in 2003. Net income for the year ended December 31, 2004, was $2.77 per diluted share, or $627.1 million, as compared to $2.38 per diluted share, or $544.1 million, in 2003. Net income per share for 2004 increased 16.4 percent over 2003. Earnings for the quarter and year ended December 31, 2004 include the following items: -- A pre-tax unrealized gain of $34.1 million related to venture capital investments -- A pre-tax loss of $7.1 million on the sale of two small Metavante business units, and -- Foundation contributions and other accruals over and above normal levels of $6.8 million pre-tax. The net effect of these items was an increase of $0.06 per share. Without these items, earnings per share would have been $0.70 and $2.71 for the quarter and year ended December 31, 2004, respectively. Return on average assets based on net income for the fourth quarter and full year was 1.75 and 1.69 percent, respectively, as compared to 1.66 and 1.64 percent, respectively, for the same periods in 2003. Return on equity based on net income was 18.59 percent this quarter, as compared to 16.62 percent for the fourth quarter of 2003. The Corporation's provision for loan losses was $12.8 million in the fourth quarter of 2004, versus $9.8 million in the same period last year. Net charge-offs for the period were $12.8 million, or 0.18 percent of total average loans outstanding this quarter, and $8.3 million a year ago, or 0.13 percent of total average loans. At December 31, 2004, the allowance for loan losses was 1.21 percent of total loans, compared to 1.39 percent a year earlier. Nonperforming loans were 0.45 percent of total loans at December 31, 2004, and 0.69 percent at December 31, 2003. Assets at year-end were $40.4 billion, compared to $34.4 billion at the end of 2003. Book value per share was $17.24 at December 31, 2004, compared to $15.00 for the same date a year ago. Total loans were $29.5 billion, compared to $25.2 billion at December 31, 2003. Marshall & Ilsley Corporation (NYSE:MI) is a diversified financial services corporation headquartered in Milwaukee, Wis., with $40.4 billion in assets. Founded in 1847, M&I Marshall & Ilsley Bank has the largest banking presence in Wisconsin with 196 offices throughout the state. In addition, M&I has 34 locations throughout Arizona; 11 offices in metropolitan Minneapolis/St. Paul, Minn.; and, locations in Duluth, Minn.; Las Vegas, Nev.; and, Naples and Bonita Springs, Fla. M&I's Southwest Bank affiliate has six offices in the St. Louis area and one office in Belleville, Ill. Metavante Corporation, Marshall & Ilsley Corporation's wholly owned technology subsidiary, provides virtually all of the technology an organization needs to offer financial services. 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. This press release contains forward-looking statements concerning M&I's future operations and financial results. 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) the factors identified in M&I's Annual Report on Form 10-K for the year ended December 31, 2003 under the heading "Forward-Looking Statements" which factors are incorporated herein by reference, and (ii) such other factors as may be described from time to time in M&I's SEC filings. In addition, adjusted income results for the quarter and year ended December 31, 2004 exclude certain items which management believes should be excluded in order to have a clear understanding of the Corporation's financial results. These items, which are included in GAAP net income but which are excluded from the adjusted income results, are described in the reconciliation table at the end of this press release. Note: Marshall & Ilsley Corporation will hold a conference call at 11:00 a.m. central standard time Thursday, January 13, regarding fourth quarter earnings. For those interested in listening, please call 1-800-245-1683 and ask for M&I's quarterly earnings release conference call. If you are unable to join us at this time, a replay of the call will run through January 20, 5:00 p.m. central standard time by calling 1-800-839-6713 and entering passcode 683-56-62 to listen. Supplemental financial information referenced in the conference call can be found at http://www.micorp.com/ , Investor Relations, after 8:00 a.m. on January 13. M&I Corporation Financial Information (unaudited) Three Months Ended Twelve Months Ended December December December December 31, 31, Percent 31, 31, Percent 2004 2003 Change 2004 2003 Change PER SHARE DATA Diluted: Net Income $0.76 $0.62 22.6% $2.77 $2.38 16.4% Basic: Net Income 0.77 0.63 22.2 2.81 2.41 16.6 Dividend Declared 0.210 0.180 16.7 0.810 0.700 15.7 Book Value 17.24 15.00 14.9 17.24 15.00 14.9 Shares Outstanding (millions): Average - Diluted 228.5 228.5 0.0 226.6 228.3 -0.7 End of Period 227.3 223.2 1.8 227.3 223.2 1.8 INCOME STATEMENT ($millions) Net Interest Income (FTE) $296.4 $278.1 6.6% $1,164.2 $1,089.0 6.9% Provision for Loan and Lease Losses 12.8 9.8 30.6 38.0 63.0 -39.7 Data Processing Services 268.6 176.5 52.2 891.0 657.8 35.5 Item Processing 10.5 11.8 -11.0 43.1 42.8 0.7 Trust Services 39.2 33.5 17.0 150.9 126.8 19.0 Service Charge on Deposits 24.2 25.7 -5.8 99.8 102.5 -2.6 Mortgage Banking 7.6 6.7 13.4 35.1 70.3 -50.1 Net Investment Securities Gains (Losses) 35.3 5.9 n.m. 35.4 21.6 n.m. All Other 49.8 45.5 9.5 191.2 194.0 -1.4 Total Non-Interest Revenues 435.2 305.6 42.4 1,446.5 1,215.8 19.0 Salaries and Employee Benefits 240.0 207.4 15.7 887.3 797.5 11.3 Occupancy and Equipment 50.3 45.2 11.3 192.8 179.0 7.7 Intangible Amortization 8.7 6.0 45.0 27.9 23.8 17.2 Other 151.5 111.8 35.5 487.5 451.4 8.0 Total Non-Interest Expenses 450.5 370.4 21.6 1,595.5 1,451.7 9.9 Tax Equivalent Adjustment 8.2 7.9 3.8 32.2 31.7 1.6 Pre-Tax Earnings 260.1 195.6 33.0 945.0 758.4 24.6 Income Taxes 86.3 54.5 58.3 317.9 214.3 48.3 Net Income $173.8 $141.1 23.2% $627.1 $544.1 15.3% KEY RATIOS Net Interest Margin (FTE) / Avg. Earning Assets 3.39% 3.64% 3.52% 3.65% Interest Spread (FTE) 3.04 3.32 3.21 3.33 Efficiency Ratio 61.6 63.9 61.1 63.0 Efficiency Ratio without Metavante 47.0 52.1 48.4 52.4 Return on Assets 1.75 1.66 1.69 1.64 Return on Equity 18.59 16.62 17.89 16.79 Equity / Assets (End of Period) 9.62 9.68 9.62 9.68 M&I Corporation Financial Information (unaudited) As of December December 31, 31, Percent ASSETS ($millions) 2004 2003 Change Cash & Due From Banks $839 $810 3.6% Trading Securities 18 16 12.5 Short - Term Investments 173 147 17.7 Investment Securities 6,085 5,607 8.5 Loans and Leases: Commercial Loans & Leases 8,888 7,504 18.4 Commercial Real Estate 9,339 8,224 13.6 Residential Real Estate 4,489 3,133 43.3 Home Equity Loans & Lines 5,149 4,392 17.2 Personal Loans and Leases 1,672 1,932 -13.5 Total Loans and Leases 29,537 25,185 17.3 Reserve for Loan & Leases Losses (358) (350) 2.3 Premises and Equipment, net 467 439 6.4 Goodwill and Intangibles 2,126 1,105 92.4 Other Assets 1,550 1,414 9.6 Total Assets $40,437 $34,373 17.6% LIABILITIES & SHAREHOLDERS' EQUITY ($millions) Deposits: Noninterest Bearing $4,888 $4,715 3.7% Bank Issued Interest Bearing Activity 9,924 10,058 -1.3 Bank Issued Time 3,654 3,261 12.1 Total Bank Issued Deposits 18,466 18,034 2.4 Wholesale Deposits 7,989 4,236 88.6 Total Deposits 26,455 22,270 18.8 Short - Term Borrowings 3,530 4,933 -28.4 Long - Term Borrowings 5,027 2,735 83.8 Other Liabilities 1,535 1,106 38.8 Shareholders' Equity 3,890 3,329 16.9 Total Liabilities & Shareholders' Equity $40,437 $34,373 17.6% Three Months Ended Twelve Months Ended December December December December 31, 31, Percent 31, 31, Percent 2004 2003 Change 2004 2003 Change AVERAGE ASSETS ($millions) Cash & Due From Banks $914 $756 20.9% $835 $752 11.0% Trading Securities 20 22 -9.1 22 23 -4.3 Short - Term Investments 143 258 -44.6 171 264 -35.2 Investment Securities 6,028 5,390 11.8 5,872 5,212 12.7 Loans and Leases: Commercial Loans & Leases 8,478 7,223 17.4 8,018 7,295 9.9 Commercial Real Estate 9,185 8,147 12.7 8,756 7,901 10.8 Residential Real Estate 4,251 3,057 39.1 3,695 2,928 26.2 Home Equity Loans and Lines 5,035 4,215 19.5 4,765 4,110 15.9 Personal Loans and Leases 1,679 2,022 -17.0 1,787 2,159 -17.2 Total Loans and Leases 28,628 24,664 16.1 27,021 24,393 10.8 Reserve for Loan & Leases Losses (363) (349) 4.0 (360) (348) 3.4 Premises and Equipment, net 461 439 5.0 448 441 1.6 Goodwill and Intangibles 2,081 1,094 90.2 1,547 1,089 42.1 Other Assets 1,671 1,412 18.3 1,607 1,442 11.4 Total Assets $39,583 $33,686 17.5% $37,163 $33,268 11.7% Memo: Average Earning Assets $34,819 $30,334 $33,086 $29,892 Average Earning Assets Excluding Investment Securities Unrealized Gains /Losses $34,762 $30,273 $33,044 $29,823 AVG LIABILITIES & SHAREHOLDERS' EQUITY ($millions) Deposits: Noninterest Bearing $4,871 $4,469 9.0% $4,586 $4,190 9.5% Bank Issued Interest Bearing Activity 9,943 10,096 -1.5 9,960 10,085 -1.2 Bank Issued Time 3,591 3,292 9.1 3,384 3,400 -0.5 Total Bank Issued Deposits 18,405 17,857 3.1 17,930 17,675 1.4 Wholesale Deposits 6,867 4,626 48.4 6,058 4,311 40.5 Total Deposits 25,272 22,483 12.4 23,988 21,986 9.1 Short - Term Borrowings 2,461 2,649 -7.1 2,908 3,139 -7.4 Long - Term Borrowings 6,454 4,019 60.6 5,330 3,799 40.3 Other Liabilities 1,677 1,166 43.8 1,432 1,103 29.8 Shareholders' Equity 3,719 3,369 10.4 3,505 3,241 8.1 Total Liabilities & Shareholders' Equity $39,583 $33,686 17.5% $37,163 $33,268 11.7% Memo: Average Interest Bearing Liabilities $29,316 $24,682 $27,640 $24,734 M&I Corporation Financial Information (unaudited) Three Months Ended Twelve Months Ended December December December December 31, 31, Percent 31, 31, Percent 2004 2003 Change 2004 2003 Change CREDIT QUALITY (a) Net Charge-Offs ($millions) $12.8 $8.3 54.2% $29.5 $51.8 -43.1% Net Charge-Offs / Average Loans & Leases 0.18% 0.13% 0.11% 0.21% Loan and Lease Loss Reserve ($millions) $358.1 $349.6 2.4% $358.1 $349.6 2.4% Loan and Lease Loss Reserve / Period- End Loans & Leases 1.21% 1.39% 1.21% 1.39% Non-Performing Loans & Leases (NPL) ($millions) $132.4 $172.8 -23.4% $132.4 $172.8 -23.4% NPL's / Period-End Loans & Leases 0.45% 0.69% 0.45% 0.69% Loan and Lease Loss Reserve / Non- Performing Loans & Leases 271% 202% 271% 202% MARGIN ANALYSIS (b) Loans and Leases: Commercial Loans & Leases 5.19% 4.60% 4.83% 4.63% Commercial Real Estate 5.55 5.42 5.41 5.65 Residential Real Estate 5.42 5.56 5.47 5.92 Home Equity Loans and Lines 5.43 5.42 5.29 5.66 Personal Loans and Leases 5.28 4.92 5.12 5.37 Total Loans and Leases 5.39 5.16 5.21 5.36 Investment Securities 4.94 4.94 4.95 4.90 Short - Term Investments 2.07 0.95 1.39 0.98 Interest Income (FTE) / Avg. Interest Earning Assets 5.30% 5.08% 5.14% 5.24% Interest Bearing Deposits: Bank Issued Interest Bearing Activity 1.06% 0.63% 0.78% 0.75% Bank Issued Time 2.55 2.39 2.45 2.51 Total Bank Issued Deposits 1.46 1.06 1.20 1.19 Wholesale Deposits 2.26 1.46 1.91 1.57 Total Interest Bearing Deposits 1.73 1.16 1.42 1.28 Short - Term Borrowings 2.72 2.76 2.11 2.58 Long - Term Borrowings 3.75 3.77 3.69 4.30 Interest Expense / Avg. Interest Bearing Liabilities 2.26% 1.76% 1.93% 1.91% Net Interest Margin(FTE) / Avg. Earning Assets 3.39% 3.64% 3.52% 3.65% Interest Spread (FTE) 3.04% 3.32% 3.21% 3.33% Notes: (a) Includes Loans past due 90 days or more. (b) Based on average balances excluding fair value adjustments for available for sale securities. Reconciliation of Three Twelve Net Income to Months Months Income as Adjusted Ended Ended December Diluted December Diluted 31, EPS 31, EPS 2004 Impact 2004 Impact Net Income $173.8 $0.76 $627.1 $2.77 Adjustments (Net of Tax) Unrealized Gain Venture Capital Investments 22.2 0.10 22.2 0.10 Metavante Disposition of two Subsidiaries (4.2) (0.02) (4.2) (0.02) Foundation Contributions and Other (4.5) (0.02) (4.5) (0.02) Total Adjustments 13.5 0.06 13.5 0.06 Income as Adjusted $160.3 $0.70 $613.6 $2.71 DATASOURCE: Marshall & Ilsley Corporation CONTACT: John Presley, senior vice president and chief financial officer, +1-414-765-7833, or Don Wilson, senior vice president, corporate treasurer, +1-414-765-8043, both of Marshall & Ilsley Corporation Web site: http://www.micorp.com/ http://www.mibank.com/

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