Marshall & Ilsley Swings To 1Q Loss On Credit Woes

   DOW JONES NEWSWIRES 
 

Marshall & Ilsley Corp. (MI) swung to a first-quarter loss on another increase in its loan-loss provisions amid credit woes.

Wisconsin's largest bank has been cutting costs by eliminating jobs and slashing its dividend as it looks to preserve cash. Its problems stem not only from its struggles with heavy exposure to some of the most troubled housing markets, but also from its especially large exposures to commercial construction loans.

The company's shares were up 5.6% at $7.59 in premarket trading.

Marshall & Ilsley posted a net loss of $116.9 million, or 44 cents a share, compared with year-earlier net income of $46.2 million, or 56 cents a share.

The latest results included a net gain of 10 cents a share from a tax benefit, which offset dividends paid to the Treasury Department under the Troubled Asset Relief Program.

Analysts polled by Thomson Reuters expected a loss 33 cents a share.

The company didn't provide revenue figures.

Loan-loss provisions rose 56% from the prior quarter to $1.33 billion. Charge-offs, or loans thought not to be collectible, rose to 2.67% of average loans and leases from 1.08% in the prior quarter. Nonperforming loans, or those near default, rose to 5.15% of total loans and leases from 3.62% in the prior quarter.

In a contrast to many major banks, Marshall & Ilsley said last month it would extend its moratorium on foreclosures as it looks to keep homeowners in their homes and keep those loans from going bad.

The company's tangible common equity ratio, which measures how much of a bank's hard assets its common shareholders actually own, was 6.4%. It didn't give prior figures.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; [e-mail]