MILWAUKEE, April 17 /PRNewswire-FirstCall/ -- Marshall & Ilsley
Corporation (NYSE:MI) today reported 2007 first quarter core
operating income of $218.1 million, or $0.83 per share, as compared
to $186.8 million, or $0.78 per share, in the first quarter of
2006, an increase of 16.8 percent. The Corporation reported 2007
first quarter net income of $216.8 million, or $0.83 per share, as
compared to $173.1 million, or $0.72 per share, in the first
quarter of 2006. The $1.3 million difference between core operating
income and net income as reported for the first quarter of 2007
reflects the costs associated with the transaction to separate
Metavante and M&I that was announced on April 3, 2007. The
$13.7 million difference between core operating income and net
income as reported for the first quarter of 2006 reflects the
charge for certain interest rate swaps due to a change in the
interpretation of certain accounting rules as announced in October
2006. During the first quarter of 2007, the Corporation realized
$9.6 million in pre-tax gains which includes $8.0 million related
to Metavante's investment in Firstsource. The impact of these gains
was largely offset by a $9.5 million charge related to the
Corporation's 7.65% Trust Preferred Securities that were called
during the first quarter. Return on average assets based on core
operating income for the first quarter was 1.56 percent, as
compared to 1.62 percent for the same period in 2006. Return on
average equity based on core operating income was 14.13 percent
this quarter as compared to 15.67 percent for the first quarter of
2006. The Corporation's provision for loan and lease losses was
$17.1 million in the first quarter of 2007, versus $11.0 million in
the same period last year. Net charge-offs for the period were
$14.7 million, or 0.14 percent of total average loans and leases
outstanding this quarter, and $6.0 million a year ago or 0.07
percent of total average loans and leases. At March 31, 2007, the
allowance for loan and lease losses was 1.00 percent of total loans
and leases, compared to 1.05 percent a year earlier. Nonperforming
loans and leases were 0.83 percent of total loans and leases at
March 31, 2007, compared to 0.42 percent at March 31, 2006. Assets
at March 31, 2007 were $56.5 billion, compared to $47.4 billion at
March 31, 2006. Book value per share was $24.90 at March 31, 2007,
compared to $20.75 for the same date a year ago. Total loans and
leases were $42.3 billion, compared to $35.2 billion at March 31,
2006. Marshall & Ilsley Corporation (NYSE:MI) is a diversified
financial services corporation headquartered in Milwaukee, Wis.,
with $56.5 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 47 locations
throughout Arizona; 30 offices along Florida's west coast and
central Florida; 17 offices in Kansas City and nearby communities;
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 16 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. On April 3, 2007,
Marshall & Ilsley Corporation announced its plans to split
Metavante Corporation and Marshall & Ilsley Corporation into
independent publicly traded companies. 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, 2006 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 ended March 31, 2007 and 2006, 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
and the costs associated with the transaction to separate Metavante
and M&I that was announced on April 3, 2007. 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 Daylight Time Tuesday, April
17, regarding first quarter earnings. For those interested in
listening, please call 1-888-711-1825 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 be available
beginning at 2:30 p.m. on April 17 and will run through 5:00 p.m.
April 24, by calling 1-800-642-1687 and entering pass code 138 09
19 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 April 17. Marshall & Ilsley
Corporation Financial Information (unaudited) Three Months Ended
March 31, Percent 2007 2006 Change PER SHARE DATA Diluted: Core
Operating Income $0.83 $0.78 6.4 % Net Income 0.83 0.72 15.3 Basic:
Core Operating Income 0.85 0.79 7.6 Net Income 0.85 0.74 14.9
Dividend Declared 0.27 0.24 12.5 Book Value 24.90 20.75 20.0 Shares
Outstanding (millions): Average - Diluted 261.3 240.3 8.7 End of
Period 256.8 236.1 8.8 INCOME STATEMENT ($millions) Net Interest
Income (FTE) $397.4 $333.0 19.3 % Provision for Loan and Lease
Losses 17.1 11.0 56.0 Data Processing Services 356.4 343.0 3.9
Wealth Management 60.7 52.8 15.0 Service Charge on Deposits 25.9
22.5 14.8 Mortgage Banking 10.1 12.9 -21.6 Net Investment
Securities Gains 1.6 1.1 40.2 Net Gains Related to Firstsource 8.0
- n.m. All Other 44.4 39.9 11.6 Total Non-Interest Revenues 507.1
472.2 7.4 Salaries and Employee Benefits 297.1 277.4 7.1 Occupancy
and Equipment 59.3 57.8 2.6 Intangible Amortization 11.3 8.9 27.1
Other 183.8 161.0 14.1 Total Non-Interest Expenses 551.5 505.1 9.2
Tax Equivalent Adjustment 7.1 7.9 -11.0 Pre-Tax Core Operating
Earnings 328.8 281.2 16.9 Income Taxes 110.7 94.4 17.3 Core
Operating Income $218.1 $186.8 16.8 % Metavante Transaction Costs,
net of tax (1.3) - n.m. Derivative Loss - Discontinued Hedges, net
of tax - (13.7) n.m. Net Income $216.8 $173.1 25.2 % KEY RATIOS Net
Interest Margin (FTE) / Avg. Earning Assets 3.23 % 3.26 % Interest
Spread (FTE) 2.60 2.68 Based on Core Operating Activities
Efficiency Ratio 61.0 62.8 Efficiency Ratio without Metavante 50.5
48.8 Return on Assets 1.56 1.62 Return on Equity 14.13 15.67 Equity
/ Assets (End of Period) 11.24 10.27 Marshall & Ilsley
Corporation Financial Information (unaudited) As of March 31,
Percent 2007 2006 Change ASSETS ($millions) Cash & Due From
Banks $1,085 $1,017 6.7 % Trading Securities 117 40 190.5 Short -
Term Investments 182 159 14.2 Investment Securities 7,530 6,627
13.6 Loans and Leases: Commercial Loans & Leases 12,818 10,734
19.4 Commercial Real Estate 14,391 10,736 34.0 Residential Real
Estate 9,308 7,508 24.0 Home Equity Loans & Lines 4,213 4,606
-8.5 Personal Loans and Leases 1,525 1,652 -7.7 Total Loans and
Leases 42,255 35,236 19.9 Reserve for Loan & Leases Losses
(423) (369) 14.7 Premises and Equipment, net 576 500 15.1 Goodwill
and Intangibles 3,245 2,484 30.7 Other Assets 1,964 1,671 17.7
Total Assets $56,531 $47,365 19.4 % LIABILITIES & SHAREHOLDERS'
EQUITY ($millions) Deposits: Noninterest Bearing $5,392 $5,000 7.8
% Bank Issued Interest Bearing Activity 12,798 10,577 21.0 Bank
Issued Time 8,223 5,774 42.4 Total Bank Issued Deposits 26,413
21,351 23.7 Wholesale Deposits 6,222 6,748 -7.8 Total Deposits
32,635 28,099 16.1 Short - Term Borrowings 8,661 5,553 56.0 Long -
Term Borrowings 7,314 7,186 1.8 Other Liabilities 1,567 1,664 -5.8
Shareholders' Equity 6,354 4,863 30.7 Total Liabilities &
Shareholders' Equity $56,531 $47,365 19.4 % Three Months Ended
March 31, Percent 2007 2006 Change AVERAGE ASSETS ($millions) Cash
& Due From Banks $1,042 $980 6.3 % Trading Securities 41 34
20.8 Short - Term Investments 277 316 -12.2 Investment Securities
7,441 6,320 17.7 Loans and Leases: Commercial Loans & Leases
12,677 10,370 22.2 Commercial Real Estate 14,416 10,581 36.3
Residential Real Estate 9,162 7,275 25.9 Home Equity Loans and
Lines 4,295 4,706 -8.7 Personal Loans and Leases 1,557 1,747 -10.9
Total Loans and Leases 42,107 34,679 21.4 Reserve for Loan &
Leases Losses (424) (368) 15.0 Premises and Equipment, net 575 496
15.8 Goodwill and Intangibles 3,244 2,496 30.0 Other Assets 2,209
1,827 20.8 Total Assets $56,512 $46,780 20.8 % Memo: Average
Earning Assets $49,866 $41,349 Average Earning Assets Excluding
Investment Securities Unrealized Gains/Losses $49,915 $41,403 AVG
LIABILITIES & SHAREHOLDERS' EQUITY ($millions) Deposits:
Noninterest Bearing $5,319 $4,942 7.6 % Bank Issued Interest
Bearing Activity 12,635 10,464 20.7 Bank Issued Time 8,233 5,544
48.5 Total Bank Issued Deposits 26,187 20,950 25.0 Wholesale
Deposits 6,371 6,529 -2.4 Total Deposits 32,558 27,479 18.5 Short -
Term Borrowings 4,249 3,371 26.0 Long - Term Borrowings 11,624
9,404 23.6 Other Liabilities 1,823 1,712 6.5 Shareholders' Equity
6,258 4,814 30.0 Total Liabilities & Shareholders' Equity
$56,512 $46,780 20.8 % Memo: Average Interest Bearing Liabilities
$43,112 $35,312 Marshall & Ilsley Corporation Financial
Information (unaudited) Three Months Ended March 31, Percent 2007
2006 Change CREDIT QUALITY (a) Net Charge-Offs ($millions) $14.7
$6.0 144.4 % Net Charge-Offs / Average Loans & Leases 0.14 %
0.07 % Loan and Lease Loss Reserve ($millions) $423.1 $368.8 14.7 %
Loan and Lease Loss Reserve / Period-End Loans & Leases 1.00 %
1.05 % Non-Performing Loans & Leases (NPL) ($millions) $351.7
$149.1 135.8 % NPL's / Period-End Loans & Leases 0.83 % 0.42 %
Loan and Lease Loss Reserve / Non- Performing Loans & Leases
120 % 247 % MARGIN ANALYSIS (b) Loans and Leases: Commercial Loans
& Leases 7.62 % 6.91 % Commercial Real Estate 7.60 6.94
Residential Real Estate 7.32 6.85 Home Equity Loans and Lines 7.55
6.98 Personal Loans and Leases 7.83 6.77 Total Loans and Leases
7.55 6.91 Investment Securities 5.34 5.17 Short - Term Investments
5.03 4.22 Interest Income (FTE) / Avg. Interest Earning Assets 7.20
% 6.62 % Interest Bearing Deposits: Bank Issued Interest Bearing
Activity 3.58 % 2.89 % Bank Issued Time 4.84 3.90 Total Bank Issued
Deposits 4.08 3.24 Wholesale Deposits 5.10 4.40 Total Interest
Bearing Deposits 4.32 3.58 Short - Term Borrowings 5.24 4.73 Long -
Term Borrowings 5.02 4.51 Interest Expense / Avg. Interest Bearing
Liabilities 4.60 % 3.94 % Net Interest Margin(FTE) / Avg. Earning
Assets 3.23 % 3.26 % Interest Spread (FTE) 2.60 % 2.68 % Notes: (a)
Includes Loans past due 90 days or more. (b) Based on average
balances excluding fair value adjustments for available for sale
securities. Reconciliation of Core Operating Income to Net Income
Three Months Ended March 31, 2007 March 31, 2006 Amount Per Amount
Per ($ in Diluted ($ in Diluted millions) Share millions) Share
Total Non-Interest Revenues (Core Operating) $472.2 Derivative Loss
- Discontinued Hedges (21.3) Total Non-Interest Revenues (GAAP)
$450.9 Total Non-Interest Expenses (Core Operating) $551.5
Metavante Transaction Costs 1.5 Total Non-Interest Expenses (GAAP)
$553.0 Pre-Tax Core Operating Earnings $328.8 $281.2 Metavante
Transaction Costs (1.5) - Derivative Loss - Discontinued Hedges -
(21.3) Pre-Tax Earnings (GAAP) $327.3 $259.9 Income Taxes - Core
Operating Income $110.7 $94.4 Tax Benefit on Metavante Transaction
Costs (0.2) - Tax Benefit on Derivative Loss - Discontinued Hedges
- (7.6) Income Taxes (GAAP) $110.5 $86.8 Core Operating Income
$218.1 $0.83 $186.8 $0.78 Metavante Transaction Costs, net of tax
(1.3) - - - Derivative Loss - Discontinued Hedges, net of tax - -
(13.7) (0.06) Net Income (GAAP) $216.8 $0.83 $173.1 $0.72 Average
Shareholders' Equity Core Operating Activities $4,833 Cumulative
Derivative Adjustments - Discontinued Hedges, net of tax (19)
Average Shareholders' Equity (GAAP) $4,814 Based on GAAP Efficiency
Ratio 61.1 % 64.5 % Efficiency Ratio without Metavante 50.7 51.1
Return on Assets 1.56 1.50 Return on Equity 14.05 14.58 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.mibank.com/ http://www.micorp.com/
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