MI Marshall & Ilsley Corp

Marshall & Ilsley Corporation Announces Second Quarter Results MILWAUKEE, July 13 /PRNewswire-FirstCall/ -- Marshall & Ilsley Corporation (NYSE:MI) today reported 2004 second quarter net income of $0.67 per diluted share, or $151.7 million, as compared to $0.59 per diluted share, or $134.7 million, in the second quarter of 2003. Second quarter net income per share increased 13.6 percent over the same period in 2003. Net income for the six months ended June 30, 2004 was $297.8 million, or $1.32 per diluted share, compared to $262.7 million, or $1.15 per diluted share, in the first half of 2003. Earnings for the first half of 2003 include $1.5 million (after tax), or $0.01 per diluted share, of Metavante's acquisition-related transition expenses. Return on average assets based on net income for the second quarter was 1.69 percent, as compared to 1.62 percent for the same period in 2003. Return on average equity based on net income was 17.92 percent this quarter as compared to 16.88 percent for the second quarter of 2003. The Corporation's provision for loan and lease losses was $9.2 million in the second quarter of 2004, versus $19.6 million in the same period last year. Net charge-offs for the period were $5.0 million, or 0.08 percent of total average loans and leases outstanding this quarter, and $9.8 million a year ago or 0.16 percent of total average loans and leases. At June 30, 2004, the allowance for loan and lease losses was 1.32 percent of total loans and leases, compared to 1.40 percent a year earlier. Nonperforming loans and leases were 0.53 percent of total loans and leases at June 30, 2004, and 0.82 percent at June 30, 2003. Assets at June 30, 2004 were $37.1 billion, compared to $34.1 billion at June 30, 2003. Book value per share was $15.52 at June 30, 2004, compared to $14.36 for the same date a year ago. Total loans and leases were $27.2 billion, compared to $24.9 billion at June 20, 2003. Proposed Offerings On May 17, 2004, the Corporation announced that its Metavante subsidiary had entered into a definitive agreement to acquire NYCE Corporation for approximately $610 million in cash. The Corporation expects to fund the acquisition or portions thereof through the issuance of senior debt and an issuance of approximately $400 million of a hybrid security. It is expected that the hybrid security will consist of a trust preferred bundled with a forward contract to purchase a variable number of shares of M&I common stock. The funding and the acquisition are both expected to be completed in the third quarter, subject to regulatory approval of the acquisition. The debt and hybrid security offerings are subject to market conditions and changes in the expected timing, amount and terms. This press release does not constitute an offer of any security for sale. Marshall & Ilsley Corporation (NYSE:MI) is a diversified financial services corporation headquartered in Milwaukee, Wis., with $37.1 billion in assets. Founded in 1847, M&I Marshall & Ilsley Bank has the largest banking presence in Wisconsin with 199 offices throughout the state. In addition, M&I has 31 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. Note: Marshall & Ilsley Corporation will hold a conference call at 11:00 a.m. central daylight time Tuesday, July 13, 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 20, 5:00 p.m. central daylight time by calling 1-800-839-6713 and entering passcode 644 26 81 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 13. M&I Corporation Financial Information (unaudited) Three Months Ended June 30, June 30, Percent 2004 2003 Change PER SHARE DATA Diluted: Net Income $0.67 $0.59 13.6% Income as Adjusted (a) 0.67 0.59 13.6 Basic: Net Income 0.68 0.59 15.3 Income as Adjusted (a) 0.68 0.59 15.3 Dividend Declared 0.210 0.180 16.7 Book Value 15.52 14.36 8.1 Shares Outstanding (millions): Average - Diluted 225.5 228.4 -1.3 End of Period 222.8 227.1 -1.9 INCOME STATEMENT ($millions) Net Interest Income (FTE) $292.0 $271.8 7.4% Provision for Loan and Lease Losses 9.2 19.6 -53.1 Data Processing Services 197.3 158.0 24.9 Item Processing 10.9 9.6 13.5 Trust Services 37.9 31.2 21.5 Service Charge on Deposits 25.1 25.2 -0.4 Mortgage Banking 11.7 21.8 -46.3 Net Investment Securities Gains (Losses) 0.1 (2.6) n.m. All Other 47.0 51.5 -8.7 Total Non-Interest Revenues 330.0 294.7 12.0 Salaries and Employee Benefits 211.9 193.5 9.5 Occupancy and Equipment 44.5 46.2 -3.7 Intangible Amortization 5.4 7.5 -28.0 Other 112.9 88.5 27.6 Total Non-Interest Expenses 374.7 335.7 11.6 Tax Equivalent Adjustment 8.0 7.9 1.3 Pre-Tax Earnings 230.1 203.3 13.2 Income Taxes 78.4 68.6 14.3 Income as Adjusted (a) 151.7 134.7 12.6 Adjustments (a) 0.0 0.0 n.m. Net Income $151.7 $134.7 12.6% KEY RATIOS Net Interest Margin(FTE) / Avg. Earning Assets 3.61% 3.65% Interest Spread (FTE) 3.32 3.33 Efficiency Ratio 60.2 59.0 Efficiency Ratio without Metavante 48.8 48.2 Return on Assets 1.69 1.62 Return on Equity 17.92 16.88 Return on Assets - Income as Adjusted (a) 1.69 1.62 Return on Equity - Income as Adjusted (a) 17.92 16.88 Equity / Assets (End of Period) 9.26 9.52 Notes: (a) See reconciliation of Income as Adjusted to Net Income. M&I Corporation Financial Information (unaudited) Six Months Ended June 30, June 30, Percent 2004 2003 Change PER SHARE DATA Diluted: Net Income $1.32 $1.15 14.8% Income as Adjusted (a) 1.32 1.16 13.8 Basic: Net Income 1.34 1.16 15.5 Income as Adjusted (a) 1.34 1.17 14.5 Dividend Declared 0.390 0.340 14.7 Book Value 15.52 14.36 8.1 Shares Outstanding (millions): Average - Diluted 225.8 228.0 -1.0 End of Period 222.8 227.1 -1.9 INCOME STATEMENT ($millions) Net Interest Income (FTE) $578.5 $544.3 6.3% Provision for Loan and Lease Losses 18.3 45.3 -59.6 Data Processing Services 383.5 315.1 21.7 Item Processing 22.3 19.8 12.6 Trust Services 74.2 61.2 21.2 Service Charge on Deposits 50.6 51.4 -1.6 Mortgage Banking 18.7 39.3 -52.4 Net Investment Securities Gains (Losses) (0.5) (1.0) n.m. All Other 94.6 99.4 -4.8 Total Non-Interest Revenues 643.4 585.2 9.9 Salaries and Employee Benefits 415.8 388.0 7.2 Occupancy and Equipment 91.8 92.7 -1.0 Intangible Amortization 10.9 14.4 -24.3 Other 218.5 173.6 25.9 Total Non-Interest Expenses 737.0 668.7 10.2 Tax Equivalent Adjustment 15.8 15.9 -0.6 Pre-Tax Earnings 450.8 399.6 12.8 Income Taxes 153.0 135.4 13.0 Income as Adjusted (a) $297.8 $264.2 12.7 Adjustments (a) 0.0 (1.5) n.m. Net Income $297.8 $262.7 13.4% KEY RATIOS Net Interest Margin(FTE) / Avg. Earning Assets 3.65% 3.72% Interest Spread (FTE) 3.36 3.39 Efficiency Ratio 60.3 59.3 Efficiency Ratio without Metavante 49.0 48.4 Return on Assets 1.69 1.61 Return on Equity 17.67 16.81 Return on Assets - Income as Adjusted (a) 1.69 1.62 Return on Equity - Income as Adjusted (a) 17.67 16.91 Equity / Assets (End of Period) 9.26 9.52 Notes: (a) See reconciliation of Income as Adjusted to Net Income. M&I Corporation Financial Information (unaudited) As of June 30, June 30, Percent ASSETS ($millions) 2004 2003 Change Cash & Due From Banks $824 $988 -16.6% Trading Securities 28 30 -6.7 Short - Term Investments 336 263 27.8 Investment Securities 5,915 5,363 10.3 Loans and Leases: Commercial Loans & Leases 8,158 7,540 8.2 Commercial Real Estate 8,775 7,932 10.6 Residential Real Estate 3,632 3,012 20.6 Home Equity Loans & Lines 4,885 4,109 18.9 Personal Loans and Leases 1,745 2,306 -24.3 Total Loans and Leases 27,195 24,899 9.2 Reserve for Loan & Leases Losses (358) (348) 2.9 Premises and Equipment, net 434 438 -0.9 Goodwill and Intangibles 1,269 1,085 17.0 Other Assets 1,429 1,348 6.0 Total Assets $37,072 $34,066 8.8% LIABILITIES & SHAREHOLDERS' EQUITY ($millions) Deposits: Noninterest Bearing $4,710 $4,653 1.2% Bank Issued Interest Bearing Activity 9,928 10,127 -2.0 Bank Issued Time 3,352 3,361 -0.3 Total Bank Issued Deposits 17,990 18,141 -0.8 Wholesale Deposits 7,235 4,129 75.2 Total Deposits 25,225 22,270 13.3 Short - Term Borrowings 3,562 5,297 -32.8 Long - Term Borrowings 3,701 2,272 62.9 Other Liabilities 1,150 984 16.9 Shareholders' Equity 3,434 3,243 5.9 Total Liabilities & Shareholders' Equity $37,072 $34,066 8.8% Three Months Ended Six Months Ended June 30, June 30, Percent June 30, June 30, Percent 2004 2003 Change 2004 2003 Change AVERAGE ASSETS ($millions) Cash & Due From Banks $802 $747 7.4% $787 $755 4.2% Trading Securities 22 25 -12.0 23 22 4.5 Short - Term Investments 165 282 -41.5 188 270 -30.4 Investment Securities 5,842 5,218 12.0 5,761 5,150 11.9 Loans and Leases: Commercial Loans & Leases 7,856 7,433 5.7 7,698 7,327 5.1 Commercial Real Estate 8,583 7,836 9.5 8,452 7,724 9.4 Residential Real Estate 3,502 2,894 21.0 3,364 2,846 18.2 Home Equity Loans and Lines 4,688 4,075 15.0 4,563 4,062 12.3 Personal Loans and Leases 1,879 2,161 -13.0 1,891 2,192 -13.7 Total Loans and Leases 26,508 24,399 8.6 25,968 24,151 7.5 Reserve for Loan & Leases Losses (360) (345) 4.3 (358) (345) 3.8 Premises and Equipment, net 435 442 -1.6 437 443 -1.4 Goodwill and Intangibles 1,167 1,090 7.1 1,138 1,089 4.5 Other Assets 1,591 1,441 10.4 1,564 1,433 9.1 Total Assets $36,172 $33,299 8.6% $35,508 $32,968 7.7% Memo: Average Earning Assets $32,537 $29,924 $31,940 $29,593 Average Earning Assets Excluding Investment Securities Unrealized Gains/Losses $32,510 $29,843 $31,885 $29,509 AVG LIABILITIES & SHAREHOLDERS' EQUITY ($millions) Deposits: Noninterest Bearing $4,514 $4,073 10.8% $4,415 $3,967 11.3% Bank Issued Interest Bearing Activity 9,995 10,135 -1.4 9,994 10,086 -0.9 Bank Issued Time 3,242 3,419 -5.2 3,242 3,493 -7.2 Total Bank Issued Deposits 17,751 17,627 0.7 17,651 17,546 0.6 Wholesale Deposits 5,758 4,515 27.5 5,361 4,101 30.7 Total Deposits 23,509 22,142 6.2 23,012 21,647 6.3 Short - Term Borrowings 3,259 3,204 1.7 3,344 3,406 -1.8 Long - Term Borrowings 4,704 3,700 27.1 4,473 3,699 20.9 Other Liabilities 1,294 1,053 22.9 1,289 1,066 20.9 Shareholders' Equity 3,406 3,200 6.4 3,390 3,150 7.6 Total Liabilities & Shareholders' Equity $36,172 $33,299 8.6% $35,508 $32,968 7.7% Memo: Average Interest Bearing Liabilities $26,958 $24,973 $26,414 $24,785 M&I Corporation Financial Information (unaudited) Three Months Ended Six Months Ended June 30, June 30, Percent June 30, June 30, Percent 2004 2003 Change 2004 2003 Change CREDIT QUALITY(a) Net Charge-Offs ($millions) $5.0 $9.8 -49.0% $9.9 $35.6 -72.2% Net Charge-Offs / Average Loans & Leases 0.08% 0.16% 0.08% 0.30% Loan and Lease Loss Reserve ($millions) $357.9 $348.1 2.8% $357.9 $348.1 2.8% Loan and Lease Loss Reserve / Period-End Loans & Leases 1.32% 1.40% 1.32% 1.40% Non-Performing Loans & Leases (NPL)($millions) $145.0 $203.3 -28.7% $145.0 $203.3 -28.7% NPL's / Period-End Loans & Leases 0.53% 0.82% 0.53% 0.82% Loan and Lease Loss Reserve / Non-Performing Loans & Leases 247% 171% 247% 171% MARGIN ANALYSIS(b) Loans and Leases: Commercial Loans & Leases 4.62% 4.68% 4.64% 4.69% Commercial Real Estate 5.34 5.75 5.35 5.86 Residential Real Estate 5.42 6.07 5.49 6.23 Home Equity Loans and Lines 5.24 5.81 5.29 5.88 Personal Loans and Leases 5.00 5.53 5.07 5.64 Total Loans and Leases 5.09 5.45 5.13 5.53 Investment Securities 4.87 4.92 4.93 5.21 Short - Term Investments 0.99 1.00 1.04 1.08 Interest Income(FTE) / Avg. Interest Earning Assets 5.03% 5.31% 5.07% 5.43% Interest Bearing Deposits: Bank Issued Interest Bearing Activity 0.64% 0.82% 0.63% 0.86% Bank Issued Time 2.38 2.54 2.38 2.62 Total Bank Issued Deposits 1.06 1.25 1.06 1.31 Wholesale Deposits 1.61 1.60 1.64 1.71 Total Interest Bearing Deposits 1.23 1.34 1.23 1.40 Short - Term Borrowings 1.76 2.63 1.81 2.55 Long - Term Borrowings 3.62 4.58 3.66 4.61 Interest Expense / Avg. Interest Bearing Liabilities 1.71% 1.98% 1.71% 2.04% Net Interest Margin(FTE) / Avg. Earning Assets 3.61% 3.65% 3.65% 3.72% Interest Spread (FTE) 3.32% 3.33% 3.36% 3.39% 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 Income as Adjusted to Net Income Income as Adjusted $151.7 $134.7 $297.8 $264.2 Acquisition and Transition Related Charges - Metavante 0.0 0.0 0.0 (1.5) Net Income $151.7 $134.7 $297.8 $262.7 DATASOURCE: Marshall & Ilsley Corporation CONTACT: Mark Furlong, executive vice president and chief financial officer, +1-414-765-8052, or Don Wilson, senior vice president, corporate treasurer, +1-414-765-8043, both of Marshall & Ilsley Corporation Web site: http://www.micorp.com/

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