MI Marshall & Ilsley Corp

Marshall & Ilsley Corporation Announces Second Quarter Results MILWAUKEE, July 12 /PRNewswire-FirstCall/ -- Marshall & Ilsley Corporation (NYSE:MI) today reported 2005 second quarter net income of $0.81 per diluted share, or $188.5 million, as compared to $0.67 per diluted share, or $151.7 million, in the second quarter of 2004. Second quarter net income per share increased 20.9 percent over the same period in 2004. Net income for the six months ended June 30, 2005 was $358.1 million, or $1.54 per diluted share, compared to $297.8 million, or $1.32 per diluted share, in the first half of 2004. Earnings for the quarter and the six months ended June 30, 2005, include a $16.2 million after-tax gain, or $0.07 per diluted share, resulting from the sale of one of the Corporation's venture capital investments, net of related expenses. Return on average assets based on net income for the second quarter was 1.77 percent, as compared to 1.69 percent for the same period in 2004. Return on average equity based on net income was 18.25 percent this quarter as compared to 17.92 percent for the second quarter of 2004. The Corporation's provision for loan and lease losses was $13.7 million in the second quarter of 2005, versus $9.2 million in the same period last year. Net charge-offs for the period were $11.9 million, or 0.15 percent of total average loans and leases outstanding this quarter, and $5.0 million a year ago or 0.08 percent of total average loans and leases. At June 30, 2005, the allowance for loan and lease losses was 1.12 percent of total loans and leases, compared to 1.32 percent a year earlier. Nonperforming loans and leases were 0.41 percent of total loans and leases at June 30, 2005, and 0.53 percent at June 30, 2004. Assets at June 30, 2005 were $43.5 billion, compared to $37.1 billion at June 30, 2004. Book value per share was $18.48 at June 30, 2005, compared to $15.52 for the same date a year ago. Total loans and leases were $32.1 billion, compared to $27.2 billion at June 30, 2004. Marshall & Ilsley Corporation (NYSE:MI) is a diversified financial services corporation headquartered in Milwaukee, Wis., with $43.5 billion in assets. Founded in 1847, M&I Marshall & Ilsley Bank has the largest banking presence in Wisconsin with 197 offices throughout the state. In addition, M&I has 36 locations throughout Arizona; 12 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 seven 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, 2004 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. Note: Marshall & Ilsley Corporation will hold a conference call at 11:00 a.m. Central Daylight Time Tuesday, July 12, regarding second quarter earnings. For those interested in listening, please call 1-800-211-3767 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 July 19, 5:00 p.m. Central Daylight Time by calling 1-800-839-6713 and entering passcode 721 27 59 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 July 12. M&I Corporation Financial Information (unaudited) Three Months Ended Six Months Ended June 30, June 30, Percent June 30, June 30, Percent 2005 2004 Change 2005 2004 Change PER SHARE DATA Diluted: Net Income $0.81 $0.67 20.9% $1.54 $1.32 16.7% Basic: Net Income 0.82 0.68 20.6 1.57 1.34 17.2 Dividend Declared 0.240 0.210 14.3 0.450 0.390 15.4 Book Value 18.48 15.52 19.1 18.48 15.52 19.1 Shares Outstanding (millions): Average - Diluted 232.7 225.5 3.2 232.1 225.8 2.8 End of Period 229.7 222.8 3.1 229.7 222.8 3.1 INCOME STATEMENT ($millions) Net Interest Income (FTE) $313.2 $292.0 7.3% $613.2 $578.5 6.0% Provision for Loan and Lease Losses 13.7 9.2 48.9 21.9 18.3 19.7 Data Processing Services 271.7 197.3 37.7 544.0 383.5 41.9 Item Processing 10.7 10.9 -1.8 21.3 22.3 -4.5 Trust Services 41.1 37.9 8.4 81.5 74.2 9.8 Service Charge on Deposits 23.9 25.1 -4.8 47.5 50.6 -6.1 Mortgage Banking 10.5 11.7 -10.3 18.4 18.7 -1.6 Net Investment Securities Gains (Losses) 29.4 0.1 n.m. 35.3 (0.5) n.m. All Other 55.3 47.0 17.7 104.1 94.6 10.0 Total Non-Interest Revenues 442.6 330.0 34.1 852.1 643.4 32.4 Salaries and Employee Benefits 262.4 211.9 23.8 500.9 415.8 20.5 Occupancy and Equipment 50.9 44.5 14.4 104.2 91.8 13.5 Intangible Amortization 8.1 5.4 50.0 16.2 10.9 48.6 Other 131.2 112.9 16.2 267.7 218.5 22.5 Total Non-Interest Expenses 452.6 374.7 20.8 889.0 737.0 20.6 Tax Equivalent Adjustment 8.5 8.0 6.3 16.6 15.8 5.1 Pre-Tax Earnings 281.0 230.1 22.1 537.8 450.8 19.3 Income Taxes 92.5 78.4 18.0 179.7 153.0 17.5 Net Income $188.5 $151.7 24.3% $358.1 $297.8 20.2% KEY RATIOS Net Interest Margin (FTE) / Avg. Earning Assets 3.33% 3.61% 3.35% 3.65% Interest Spread (FTE) 2.89 3.32 2.93 3.35 Efficiency Ratio 59.9 60.2 60.9 60.3 Efficiency Ratio without Metavante 47.7 48.8 48.2 49.0 Return on Assets 1.77 1.69 1.73 1.69 Return on Equity 18.25 17.92 17.78 17.67 Equity / Assets (End of Period) 9.69 9.26 9.69 9.26 M&I Corporation Financial Information (unaudited) As of June 30, June 30, Percent 2005 2004 Change ASSETS ($millions) Cash & Due From Banks $976 $824 18.4% Trading Securities 22 28 -21.4 Short - Term Investments 271 336 -19.3 Investment Securities 6,241 5,915 5.5 Loans and Leases: Commercial Loans & Leases 9,612 8,158 17.8 Commercial Real Estate 10,029 8,775 14.3 Residential Real Estate 5,877 3,632 61.8 Home Equity Loans & Lines 4,978 4,885 1.9 Personal Loans and Leases 1,650 1,745 -5.4 Total Loans and Leases 32,146 27,195 18.2 Reserve for Loan & Leases Losses (360) (358) 0.6 Premises and Equipment, net 449 434 3.5 Goodwill and Intangibles 2,160 1,269 70.2 Other Assets 1,567 1,429 9.7 Total Assets $43,472 $37,072 17.3% LIABILITIES & SHAREHOLDERS' EQUITY ($millions) Deposits: Noninterest Bearing $5,089 $4,710 8.0% Bank Issued Interest Bearing Activity 9,881 9,928 -0.5 Bank Issued Time 4,306 3,352 28.5 Total Bank Issued Deposits 19,276 17,990 7.1 Wholesale Deposits 6,786 7,235 -6.2 Total Deposits 26,062 25,225 3.3 Short - Term Borrowings 5,162 3,562 44.9 Long - Term Borrowings 6,471 3,701 74.8 Other Liabilities 1,564 1,150 36.0 Shareholders' Equity 4,213 3,434 22.7 Total Liabilities & Shareholders' Equity $43,472 $37,072 17.3% Three Months Ended Six Months Ended June 30, June 30, Percent June 30, June 30, Percent 2005 2004 Change 2005 2004 Change AVERAGE ASSETS ($millions) Cash & Due From Banks $939 $802 17.1% $929 $787 18.0% Trading Securities 26 22 18.2 24 23 4.3 Short - Term Investments 271 165 64.2 230 188 22.3 Investment Securities 6,162 5,842 5.5 6,132 5,761 6.4 Loans and Leases: Commercial Loans & Leases 9,357 7,856 19.1 9,109 7,698 18.3 Commercial Real Estate 9,867 8,583 15.0 9,693 8,452 14.7 Residential Real Estate 5,368 3,502 53.3 5,050 3,364 50.1 Home Equity Loans and Lines 5,099 4,688 8.8 5,114 4,563 12.1 Personal Loans and Leases 1,603 1,879 -14.7 1,627 1,891 -14.0 Total Loans and Leases 31,294 26,508 18.1 30,593 25,968 17.8 Reserve for Loan & Leases Losses (361) (360) 0.3 (361) (358) 0.8 Premises and Equipment, net 445 435 2.3 448 437 2.5 Goodwill and Intangibles 2,154 1,167 84.6 2,148 1,138 88.8 Other Assets 1,723 1,591 8.3 1,709 1,564 9.3 Total Assets $42,653 $36,172 17.9% $41,852 $35,508 17.9% Memo: Average Earning Assets $37,753 $32,537 $36,979 $31,940 Average Earning Assets Excluding Investment Securities Unrealized Gains/ Losses $37,741 $32,510 $36,953 $31,885 AVG LIABILITIES & SHAREHOLDERS' EQUITY ($millions) Deposits: Noninterest Bearing $4,826 $4,514 6.9% $4,760 $4,415 7.8% Bank Issued Interest Bearing Activity 9,850 9,995 -1.5 9,863 9,994 -1.3 Bank Issued Time 4,194 3,242 29.4 4,028 3,242 24.2 Total Bank Issued Deposits 18,870 17,751 6.3 18,651 17,651 5.7 Wholesale Deposits 6,600 5,758 14.6 6,701 5,361 25.0 Total Deposits 25,470 23,509 8.3 25,352 23,012 10.2 Short - Term Borrowings 3,392 3,259 4.1 3,144 3,344 -6.0 Long - Term Borrowings 7,920 4,704 68.4 7,565 4,473 69.1 Other Liabilities 1,729 1,294 33.6 1,730 1,289 34.2 Shareholders' Equity 4,142 3,406 21.6 4,061 3,390 19.8 Total Liabilities & Shareholders' Equity $42,653 $36,172 17.9% $41,852 $35,508 17.9% Memo: Average Interest Bearing Liabilities $31,956 $26,958 $31,301 $26,414 M&I Corporation Financial Information (unaudited) Three Months Ended Six Months Ended June 30, June 30, Percent June 30, June 30, Percent 2005 2004 Change 2005 2004 Change CREDIT QUALITY (a) Net Charge-Offs ($millions) $11.9 $5.0 138.0% $19.8 $9.9 100.0% Net Charge-Offs / Average Loans & Leases 0.15% 0.08% 0.13% 0.08% Loan and Lease Loss Reserve ($millions) $360.1 $357.9 0.6% $360.1 $357.9 0.6% Loan and Lease Loss Reserve / Period-End Loans & Leases 1.12% 1.32% 1.12% 1.32% Non-Performing Loans & Leases (NPL) ($millions) $131.6 $145.0 -9.2% $131.6 $145.0 -9.2% NPL's / Period-End Loans & Leases 0.41% 0.53% 0.41% 0.53% Loan and Lease Loss Reserve / Non- Performing Loans & Leases 274% 247% 274% 247% MARGIN ANALYSIS (b) Loans and Leases: Commercial Loans & Leases 5.75% 4.59% 5.59% 4.63% Commercial Real Estate 6.07 5.34 5.96 5.35 Residential Real Estate 5.92 5.42 5.83 5.49 Home Equity Loans and Lines 5.99 5.24 5.86 5.29 Personal Loans and Leases 5.83 5.00 5.68 5.07 Total Loans and Leases 5.92 5.09 5.80 5.13 Investment Securities 5.03 4.87 5.02 4.93 Short - Term Investments 3.16 1.00 2.98 1.04 Interest Income (FTE) / Avg. Interest Earning Assets 5.76% 5.02% 5.65% 5.06% Interest Bearing Deposits: Bank Issued Interest Bearing Activity 1.70% 0.64% 1.54% 0.63% Bank Issued Time 3.02 2.38 2.89 2.38 Total Bank Issued Deposits 2.10 1.06 1.93 1.06 Wholesale Deposits 3.00 1.61 2.80 1.65 Total Interest Bearing Deposits 2.39 1.23 2.22 1.23 Short - Term Borrowings 3.36 1.76 3.23 1.81 Long - Term Borrowings 3.91 3.57 3.88 3.63 Interest Expense / Avg. Interest Bearing Liabilities 2.87% 1.70% 2.72% 1.71% Net Interest Margin (FTE) / Avg. Earning Assets 3.33% 3.61% 3.35% 3.65% Interest Spread (FTE) 2.89% 3.32% 2.93% 3.35% 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: John Presley, senior vice president, 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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