MILWAUKEE, Jan. 16 /PRNewswire-FirstCall/ -- Marshall & Ilsley
Corporation (NYSE:MI) today reported 2006 fourth quarter core
operating income of $218.4 million, or $0.84 per share, as compared
to $177.5 million, or $0.74 per share, in the fourth quarter of
2005, an increase of 23.1%, or 13.5% on a per share basis. The
Corporation reported 2006 fourth quarter net income of $205.4
million, or $0.79 per share. The $0.05 per share difference between
core operating income and net income as reported reflects the
charge for the termination of certain interest rate swaps due to a
change in the interpretation of certain accounting rules as
announced in October. Core operating income for the year ended
December 31, 2006, was $819.8 million, or $3.22 per share, as
compared to $706.2 million, or $2.99 per share in 2005, which
included a net increase of $.08 per share related to realized gains
on venture capital investments. Without these items, earnings per
share would have been $2.91 for the year ended December 31, 2005,
representing an increase in 2006 of 10.7%. Net income for the year
ended December 31, 2006, was $807.8 million, or $3.17 per share.
Return on average assets based on core operating income for the
fourth quarter and full year of 2006 was 1.56 percent,
respectively. By comparison, the return on average assets based on
net income for the fourth quarter and full year of 2005 was 1.56
and 1.63 percent, respectively. Return on equity based on core
operating income was 14.27 percent this quarter, as compared to
15.06 percent for the fourth quarter of 2005. The Corporation's
provision for loan losses was $18.3 million in the fourth quarter
of 2006, versus $13.0 million in the same period last year. Net
charge-offs for the period were $15.0 million, or 0.14 percent of
total average loans outstanding this quarter, and $11.5 million a
year ago, or 0.14 percent of total average loans. At December 31,
2006, the allowance for loan losses was 1.00 percent of total
loans, compared to 1.06 percent a year earlier. Nonperforming loans
were 0.64 percent of total loans at December 31, 2006, and 0.41
percent at December 31, 2005. Assets at year-end were $56.2
billion, compared to $46.2 billion at the end of 2005. Book value
per share was $24.24 at December 31, 2006, compared to $20.27 for
the same date a year ago. Total loans were $41.9 billion, compared
to $34.2 billion at December 31, 2005. All "per share" references
in this press release are references to diluted earnings per share.
Marshall & Ilsley Corporation (NYSE:MI) is a diversified
financial services corporation headquartered in Milwaukee, Wis.,
with $56.2 billion in assets. Founded in 1847, M&I Marshall
& Ilsley Bank is the largest Wisconsin- based bank with 195
offices throughout the state. In addition, M&I has 46 locations
throughout Arizona; 17 offices in Kansas City and nearby
communities; 17 offices on Florida's west coast; 17 offices in
metropolitan Minneapolis/St. Paul, and one in Duluth, Minn.; three
offices in Tulsa, Okla.; and one office in Las Vegas, Nev.
M&I's Southwest Bank subsidiary has 15 offices in the greater
St. Louis area. Metavante Corporation, a wholly owned subsidiary,
provides a full array of technology products and services for the
financial services industry. 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, 2005 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. This press release contains non-GAAP financial measures
for the three months and year ended December 31, 2006 and for the
year ended December 31, 2005, as a supplement to the Corporation's
GAAP financial results. The Corporation believes that these
non-GAAP financial measures are useful because they allow investors
to assess, on a consistent basis, the Corporation's core operating
performance, exclusive of items which management believes are not
indicative of the operations of the Corporation such as the change
in the accounting for derivatives. Management uses such non-GAAP
financial measures to evaluate financial results and to establish
operational goals. These non- GAAP financial measures should be
considered a supplement to, and not as a substitute for, financial
measures prepared in accordance with GAAP. For a reconciliation of
non-GAAP financial measures to the comparable financial measures
calculated in accordance with GAAP, please see the reconciliation
table included in the attachment to this press release. Note:
Marshall & Ilsley Corporation will hold a conference call at
11:00 a.m. Central Standard Time Tuesday, January 16, regarding
fourth quarter earnings. For those interested in listening, please
call 1-800-967-7185 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 will be available beginning at 2:30
p.m. on January 16 and will run through 5:00 p.m. January 23, by
calling 1-888-203-1112 and entering pass code 487 53 06.
Supplemental financial information referenced in the conference
call can be found at http://www.micorp.com/ , Investor Relations,
after 8:30 a.m. on January 16. Marshall & Ilsley Corporation
Financial Information (unaudited) Three Months Ended Twelve Months
Ended December December December December 31, 31, Percent 31, 31,
Percent 2006 2005 Change 2006 2005 Change PER SHARE DATA Diluted:
Core Operating Income $0.84 $0.74 13.5% $3.22 $2.99 7.7% Net Income
0.79 0.74 6.8 3.17 2.99 6.0 Basic: Core Operating Income 0.86 0.76
13.2 3.29 3.06 7.5 Net Income 0.81 0.76 6.6 3.24 3.06 5.9 Dividend
Declared 0.27 0.24 12.5 1.05 0.93 12.9 Book Value 24.24 20.27 19.6
24.24 20.27 19.6 Shares Outstanding (millions): Average - Diluted
260.5 239.6 8.7 254.6 236.0 7.9 End of Period 255.5 235.4 8.5 255.5
235.4 8.5 INCOME STATEMENT ($millions) Net Interest Income (FTE)
$402.3 $339.8 18.4% $1,520.4 $1,298.6 17.1% Provision for Loan and
Lease Losses 18.3 13.0 40.8 50.6 44.8 12.9 Data Processing Services
355.2 323.8 9.7 1,382.7 1,185.1 16.7 Wealth Management 57.9 48.2
20.1 221.6 191.7 15.6 Service Charge on Deposits 26.3 23.3 12.9
99.6 94.0 6.0 Mortgage Banking 12.1 14.6 -17.1 52.4 50.5 3.8 Net
Investment Securities Gains 3.1 2.9 6.9 9.7 45.5 -78.7 All Other
48.1 36.5 31.8 167.9 149.5 12.3 Total Non-Interest Revenues (Core
Operating 2006) 502.7 449.3 11.9 1,933.9 1,716.3 12.7 Salaries and
Employee Benefits 311.3 282.7 10.1 1,210.1 1,074.7 12.6 Occupancy
and Equipment 60.6 56.8 6.7 244.0 215.6 13.2 Intangible
Amortization 12.3 8.8 39.8 45.4 31.1 46.0 Other 179.3 157.3 14.0
660.0 557.7 18.3 Total Non-Interest Expenses 563.5 505.6 11.5
2,159.5 1,879.1 14.9 Tax Equivalent Adjustment 7.1 8.2 -13.4 30.1
33.3 -9.6 Pre-Tax Core Operating Earnings 316.1 262.3 20.5 1,214.1
1,057.7 14.8 Income Taxes (Core Operating Income 2006) 97.7 84.8
15.2 394.3 351.5 12.2 Core Operating Income $218.4 $177.5 23.1%
$819.8 $706.2 16.1% Derivative Loss - Discontinued Hedges, net of
tax (13.0) 0.0 n.m. (12.0) 0.0 n.m. Net Income $205.4 $177.5 15.7%
$807.8 $706.2 14.4% KEY RATIOS Net Interest Margin (FTE) / Avg.
Earning Assets 3.25% 3.38% 3.27% 3.40% Interest Spread (FTE) 2.61
2.82 2.66 2.93 Based on Core Operating Activities (2006) Efficiency
Ratio 62.2 64.1 62.6 62.6 Efficiency Ratio without Metavante 50.6
51.5 50.8 50.7 Return on Assets 1.56 1.56 1.56 1.63 Return on
Equity 14.27 15.06 14.58 16.21 Equity / Assets (End of Period)
10.94 10.25 10.94 10.25 Marshall & Ilsley Corporation Financial
Information (unaudited) As of December December 31, 31, Percent
2006 2005 Change ASSETS ($millions) Cash & Due From Banks
$1,248 $1,155 8.1% Trading Securities 36 30 20.0 Short - Term
Investments 256 300 -14.7 Investment Securities 7,473 6,320 18.2
Loans and Leases: Commercial Loans & Leases 12,587 10,066 25.0
Commercial Real Estate 14,351 10,421 37.7 Residential Real Estate
9,032 7,096 27.3 Home Equity Loans & Lines 4,342 4,834 -10.2
Personal Loans and Leases 1,623 1,750 -7.3 Total Loans and Leases
41,935 34,167 22.7 Reserve for Loan & Leases Losses (421) (364)
15.7 Premises and Equipment, net 572 491 16.5 Goodwill and
Intangibles 3,212 2,461 30.5 Other Assets 1,919 1,653 16.1 Total
Assets $56,230 $46,213 21.7% LIABILITIES & SHAREHOLDERS' EQUITY
($millions) Deposits: Noninterest Bearing $6,113 $5,525 10.6% Bank
Issued Interest Bearing Activity 12,924 10,530 22.7 Bank Issued
Time 8,108 5,279 53.6 Total Bank Issued Deposits 27,145 21,334 27.2
Wholesale Deposits 6,939 6,340 9.4 Total Deposits 34,084 27,674
23.2 Short - Term Borrowings 6,425 5,627 14.2 Long - Term
Borrowings 8,026 6,669 20.3 Other Liabilities 1,544 1,508 2.4
Shareholders' Equity 6,151 4,735 29.9 Total Liabilities &
Shareholders' Equity $56,230 $46,213 21.7% Three Months Ended
Twelve Months Ended December December December December 31, 31,
Percent 31, 31, Percent 2006 2005 Change 2006 2005 Change AVERAGE
ASSETS ($millions) Cash & Due From Banks $1,045 $1,012 3.3%
$1,024 $966 6.0% Trading Securities 44 33 33.3 46 27 70.4 Short -
Term Investments 223 216 3.2 303 237 27.8 Investment Securities
7,333 6,256 17.2 6,992 6,183 13.1 Loans and Leases: Commercial
Loans & Leases 12,338 9,761 26.4 11,691 9,394 24.5 Commercial
Real Estate 14,278 10,414 37.1 13,139 9,989 31.5 Residential Real
Estate 8,844 6,717 31.7 8,130 5,752 41.3 Home Equity Loans and
Lines 4,387 4,822 -9.0 4,540 4,988 -9.0 Personal Loans and Leases
1,591 1,688 -5.7 1,628 1,653 -1.5 Total Loans and Leases 41,438
33,402 24.1 39,128 31,776 23.1 Reserve for Loan & Leases Losses
(420) (365) 15.1 (406) (363) 11.8 Premises and Equipment, net 570
478 19.2 551 458 20.3 Goodwill and Intangibles 3,216 2,425 32.6
3,008 2,261 33.0 Other Assets 2,053 1,792 14.6 2,005 1,739 15.3
Total Assets $55,502 $45,249 22.7% $52,651 $43,284 21.6% Memo:
Average Earning Assets $49,038 $39,907 $46,469 $38,223 Average
Earning Assets Excluding Investment Securities Unrealized
Gains/Losses $49,094 $39,945 $46,555 $38,218 AVG LIABILITIES &
SHAREHOLDERS' EQUITY ($millions) Deposits: Noninterest Bearing
$5,526 $5,195 6.4% $5,336 $4,943 8.0% Bank Issued Interest Bearing
Activity 12,516 10,349 20.9 11,668 10,027 16.4 Bank Issued Time
8,111 5,057 60.4 7,329 4,410 66.2 Total Bank Issued Deposits 26,153
20,601 26.9 24,333 19,380 25.6 Wholesale Deposits 6,984 6,723 3.9
7,256 6,721 8.0 Total Deposits 33,137 27,324 21.3 31,589 26,101
21.0 Short - Term Borrowings 4,091 2,563 59.6 3,638 2,926 24.3 Long
- Term Borrowings 10,452 8,936 17.0 10,072 8,193 22.9 Other
Liabilities 1,772 1,751 1.2 1,751 1,707 2.6 Shareholders' Equity
6,050 4,675 29.4 5,601 4,357 28.6 Total Liabilities &
Shareholders' Equity $55,502 $45,249 22.7% $52,651 $43,284 21.6%
Memo: Average Interest Bearing Liabilities $42,154 $33,628 $39,963
$32,277 Marshall & Ilsley Corporation Financial Information
(unaudited) Three Months Ended Twelve Months Ended December
December December December 31, 31, Percent 31, 31, Percent 2006
2005 Change 2006 2005 Change CREDIT QUALITY (a) Net Charge-Offs
($millions) $15.0 $11.5 30.4% $39.0 $39.1 -0.3% Net Charge-Offs /
Average Loans & Leases 0.14% 0.14% 0.10% 0.12% Loan and Lease
Loss Reserve ($millions) $420.6 $363.8 15.6% $420.6 $363.8 15.6%
Loan and Lease Loss Reserve / Period-End Loans & Leases 1.00%
1.06% 1.00% 1.06% Non-Performing Loans & Leases (NPL)
($millions) $268.0 $140.6 90.6% $268.0 $140.6 90.6% NPL's /
Period-End Loans & Leases 0.64% 0.41% 0.64% 0.41% Loan and
Lease Loss Reserve / Non-Performing Loans & Leases 157% 259%
157% 259% MARGIN ANALYSIS (b) Loans and Leases: Commercial Loans
& Leases 7.58% 6.62% 7.38% 6.06% Commercial Real Estate 7.60
6.65 7.41 6.27 Residential Real Estate 7.19 6.47 7.05 6.13 Home
Equity Loans and Lines 7.47 6.64 7.28 6.28 Personal Loans and
Leases 7.57 6.44 7.22 6.05 Total Loans and Leases 7.49 6.59 7.30
6.17 Investment Securities 5.21 5.00 5.20 5.01 Short - Term
Investments 4.95 3.89 4.81 3.38 Interest Income (FTE) / Avg.
Interest Earning Assets 7.13% 6.33% 6.97% 5.97% Interest Bearing
Deposits: Bank Issued Interest Bearing Activity 3.55% 2.49% 3.31%
1.92% Bank Issued Time 4.72 3.65 4.40 3.21 Total Bank Issued
Deposits 4.01 2.87 3.73 2.31 Wholesale Deposits 5.07 3.64 4.82 3.14
Total Interest Bearing Deposits 4.28 3.10 4.03 2.58 Short - Term
Borrowings 5.30 4.34 5.14 3.63 Long - Term Borrowings 4.86 4.26
4.73 4.03 Interest Expense / Avg. Interest Bearing Liabilities
4.52% 3.51% 4.31% 3.04% Net Interest Margin (FTE) / Avg. Earning
Assets 3.25% 3.38% 3.27% 3.40% Interest Spread (FTE) 2.61% 2.82%
2.66% 2.93% Notes: (a) Includes Loans past due 90 days or more. (b)
Based on average balances excluding fair value adjustments for
available for sale securities. Reconciliation of Core Operating
Income to Net Income Three Months Ended Twelve Months Ended
December 31, 2006 December 31, 2006 Per Per Amount Diluted Amount
Diluted ($ in millions) Share ($ in millions) Share Total
Non-Interest Revenues (Core Operating) $502.7 $1,933.9 Derivative
Loss - Discontinued Hedges (20.2) (18.5) Total Non-Interest
Revenues (GAAP) $482.5 $1,915.4 Pre-Tax Core Operating Earnings
$316.1 $1,214.1 Derivative Loss - Discontinued Hedges (20.2) (18.5)
Pre-Tax Earnings (GAAP) $295.9 $1,195.6 Income Taxes - Core
Operating Income $97.7 $394.3 Tax Benefit on Derivative Loss -
Discontinued Hedges (7.2) (6.5) Income Taxes (GAAP) $90.5 $387.8
Core Operating Income $218.4 $0.84 $819.8 $3.22 Derivative Loss -
Discontinued Hedges, net of tax (13.0) (0.05) (12.0) (0.05) Net
Income (GAAP) $205.4 $0.79 $807.8 $3.17 Average Shareholders'
Equity Core Operating Activities $6,074 $5,624 Cumulative
Derivative Adjustments - Discontinued Hedges, net of tax (24) (23)
Average Shareholders' Equity (GAAP) $6,050 $5,601 Based on GAAP
Efficiency Ratio 63.6% 62.9% Efficiency Ratio without Metavante
52.5 51.3 Return on Assets 1.47 1.53 Return on Equity 13.47 14.42
Reconciliation of Net Income to Income as Adjusted Twelve Months
Ended December 31, 2005 Per Amount Diluted ($ in millions) Share
Net Income $706.2 $2.99 Adjustments (Net of Tax) Realized Gain
Venture Capital Investments 18.2 0.07 Cash Tender - Equity
Investment 3.9 0.02 Related Compensation Expense (1.7) (0.01) Total
Adjustments 20.4 0.08 Income as Adjusted $685.8 $2.91 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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