Marshall & Ilsley Corp. (MI) swung to a third-quarter loss
amid charges and surging loan-loss provisions.
Separately, the largest Wisconsin-based bank said it would offer
at least $775 million of stock for sale, saying it would use the
proceeds for general corporate purposes and may contribute some of
the proceeds to the capital of its subsidiaries. The company's
market value is about $2.9 billion.
Following the news, shares dropped 6.69% to $6.70 in premarket
trading. The stock has lost about half its value this year.
The company reported a loss of $223.4 million, or 68 cents a
share, compared with a year-ago profit of $83.1 million, or 32
cents a share.
Loan-loss provisions fell 6.5% to $578.7 million from the second
quarter, but more than tripled from year-ago levels. Charge-offs,
or loans thought not to be collectible, surged to 4.48% of average
loans and leases from 3.71% and 1.21%, respectively. Non-performing
loans, or those near default, fell to 4.88% from 5.18% in the
second quarter but jumped from 2.5% a year ago.
The company's tangible common equity ratio, which measures how
much of a bank's hard assets its common shareholders actually owe,
was 7%, compared with 7.3% in the prior quarter.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com