Marshall & Ilsley Corporation Announces Fourth Quarter and Year-End Results

MILWAUKEE, Jan. 12  /PRNewswire-FirstCall/ -- Marshall & Ilsley Corporation (NYSE:MI) today reported 2005 fourth quarter net income of $0.78 per diluted share, or $185.3 million, as compared to $0.76 per diluted share, or $173.8 million, in the fourth quarter of 2004. Fourth quarter net income per share increased 2.6 percent over the same period in 2004.

Net income for the year ended December 31, 2005, was $3.10 per diluted share, or $727.5 million, as compared to $2.77 per diluted share, or $627.1 million, in 2004. Net income per share for 2005 increased 11.9 percent over 2004.

Earnings for the year ended December 31, 2005, include the following items:

   -- A pre-tax realized gain of $29.4 million related to venture capital
      investments

   -- A pre-tax realized gain of $6.6 million from the cash tender of an
      equity investment, and

   -- Pre-tax compensation expense of $2.7 million related to the gains.



The net effect of these items was an increase of $0.09 per share.  Without these items, diluted earnings per share would have been $3.01 for the year ended December 31, 2005.

Earnings for the quarter and year ended December 31, 2004, include the following items:

   -- A pre-tax unrealized gain of $34.1 million related to venture capital
      investments

   -- A pre-tax loss of $7.1 million on the sale of two small Metavante
      business units, and

   -- Foundation contributions and other accruals over and above normal
      levels of $6.8 million pre-tax.



The net effect of these items was an increase of $0.06 per share.  Without these items, diluted earnings per share would have been $0.70 and $2.71 for the quarter and year ended December 31, 2004, respectively.

Return on average assets based on net income for the fourth quarter and full year was 1.62 and 1.68 percent, respectively, as compared to 1.75 and 1.69 percent, respectively, for the same periods in 2004.  Return on equity based on net income was 15.96 percent this quarter, as compared to 18.59 percent for the fourth quarter of 2004.

The Corporation's provision for loan losses was $13.0 million in the fourth quarter of 2005, versus $12.8 million in the same period last year. Net charge-offs for the period were $11.5 million, or 0.14 percent of total average loans outstanding this quarter, and $12.8 million a year ago, or 0.18 percent of total average loans.  At December 31, 2005, the allowance for loan losses was 1.06 percent of total loans, compared to 1.21 percent a year earlier.  Nonperforming loans were 0.41 percent of total loans at December 31, 2005, and 0.45 percent at December 31, 2004.

Assets at year-end were $46.2 billion, compared to $40.4 billion at the end of 2004.  Book value per share was $19.98 at December 31, 2005, compared to $17.24 for the same date a year ago.  Total loans were $34.2 billion, compared to $29.5 billion at December 31, 2004.

Marshall & Ilsley Corporation (NYSE:MI) is a diversified financial services corporation headquartered in Milwaukee, Wis., with $46.2 billion in assets. Founded in 1847, M&I Marshall & Ilsley Bank is the largest Wisconsin- based bank. M&I Bank has 195 offices throughout the state, in addition to 42 locations throughout Arizona; 13 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 seven 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, 2004 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.  In addition, adjusted income results for the year ended December 31, 2005 and quarter and year ended December 31, 2004 exclude certain items which management believes should be excluded in order to have a clear understanding of the Corporation's financial results.  These items, which are included in GAAP net income but which are excluded from the adjusted income results, are described in the reconciliation table at the end of this press release.

Note:

Marshall & Ilsley Corporation will hold a conference call at 4:00 p.m. Central Standard Time Thursday, January 12, regarding fourth quarter earnings. For those interested in listening, please call 1-800-500-3170 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 January 19, 5:00 p.m. Central Standard Time by calling 1-888-203-1112 and entering pass code 432 31 95 to listen. Supplemental financial information referenced in the conference call can be found at http://www.micorp.com/ , Investor Relations, after 3:30 p.m. on January 12.

  M&I Corporation
  Financial Information
  (unaudited)


                  Three Months Ended           Twelve Months Ended
                 Dec. 31,   Dec. 31,  Percent  Dec. 31,  Dec. 31,  Percent
                   2005      2004     Change     2005     2004     Change
  PER SHARE DATA
  Diluted:
    Net Income    $0.78     $0.76      2.6%     $3.10     $2.77     11.9%
  Basic:
    Net Income     0.79      0.77      2.6       3.15      2.81     12.1
  Dividend
   Declared       0.240     0.210     14.3      0.930     0.810     14.8
  Book Value      19.98     17.24     15.9      19.98     17.24     15.9
  Shares
   Outstanding
   (millions):
      Average
       - Diluted  238.3     228.5      4.3      234.9     226.6     3.7
      End of
       Period     235.4     227.3      3.6      235.4     227.3     3.6


  INCOME STATEMENT
   ($millions)

  Net Interest
   Income (FTE)  $331.0    $296.4     11.7%  $1,265.9  $1,164.2     8.7%
  Provision for
   Loan and Lease
   Losses          13.0      12.8      1.6       44.8      38.0    17.9

     Data
      Processing
      Services    312.4     268.6     16.3    1,141.4     891.0    28.1
     Item
      Processing   11.4      10.5      8.6       43.7      43.1     1.4
     Trust
      Services     42.3      39.2      7.9      165.7     150.9     9.8
     Service Charge
      on Deposits  23.5      24.2     -2.9       94.8      99.8    -5.0
     Mortgage
      Banking      12.9       7.6     69.7       46.0      35.1    31.1
     Net Investment
      Securities
      Gains
      (Losses)      2.8      35.3     n.m.       45.4      35.4    28.2
     All Other     52.9      49.8      6.2      211.9     191.2    10.8
  Total
   Non-Interest
   Revenues       458.2     435.2      5.3    1,748.9   1,446.5    20.9

     Salaries and
      Employee
      Benefits    270.6     240.0     12.8    1,042.7     887.3    17.5
     Occupancy and
      Equipment    56.8      50.3     12.9      215.6     192.8    11.8
      Intangible
       Amortization 8.8       8.7      1.1       31.1      27.9    11.5
      Other       157.3     151.5      3.8      556.9     487.5    14.2
  Total
   Non-Interest
   Expenses       493.5     450.5      9.5    1,846.3   1,595.5    15.7

  Tax Equivalent
   Adjustment       8.2       8.2      0.0       33.3      32.2     3.4
  Pre-Tax
   Earnings       274.5     260.1      5.5    1,090.4     945.0    15.4
  Income Taxes     89.2      86.3      3.4      362.9     317.9    14.2


  Net Income     $185.3    $173.8      6.6%    $727.5    $627.1    16.0%

  KEY RATIOS

  Net Interest
   Margin (FTE) /
   Avg. Earning
   Assets          3.29%     3.39%               3.31%     3.52%
  Interest Spread
   (FTE)           2.73      3.04                2.84      3.21

  Efficiency Ratio 62.6      61.6                61.5      61.1
  Efficiency Ratio
   without
   Metavante       48.6      47.0                48.4      48.4

  Return on Assets 1.62      1.75                1.68      1.69
  Return on
   Equity         15.96     18.59               16.95     17.89

  Equity / Assets
   (End of
   Period)        10.10      9.62               10.10      9.62


  M&I Corporation
  Financial Information
  (unaudited)
                               As of
                         December December
                            31,      31,   Percent
   ASSETS ($millions)      2005     2004   Change
   Cash & Due From
    Banks                $1,155     $839   37.7%
   Trading Securities        30       18   66.7
   Short - Term
    Investments             300      173   73.4
   Investment
    Securities            6,320    6,085    3.9
   Loans and Leases:
     Commercial
      Loans & Leases     10,066    8,888   13.3
     Commercial
      Real Estate        10,421    9,339   11.6
     Residential
      Real Estate         7,096    4,489   58.1
     Home Equity
      Loans & Lines       4,834    5,149   -6.1
     Personal Loans
      and Leases          1,750    1,672    4.7
   Total Loans and
    Leases               34,167   29,537   15.7
   Reserve for Loan &
    Leases Losses          (364)    (358)   1.7
   Premises and
    Equipment, net          491      467    5.1
   Goodwill and
    Intangibles           2,461    2,126   15.8
   Other Assets           1,653    1,550    6.6
   Total Assets         $46,213  $40,437   14.3%

   LIABILITIES &
    SHAREHOLDERS'
    EQUITY ($millions)
   Deposits:
     Noninterest
      Bearing            $5,525   $4,888   13.0%
     Bank Issued
      Interest
      Bearing
      Activity           10,530    9,924    6.1
     Bank Issued
      Time                5,279    3,654   44.5
     Total Bank
      Issued
      Deposits           21,334   18,466   15.5
     Wholesale
      Deposits            6,340    7,989  -20.6
   Total Deposits        27,674   26,455    4.6
   Short - Term
    Borrowings            5,627    3,530   59.4
   Long - Term
    Borrowings            6,669    5,027   32.7
   Other Liabilities      1,575    1,535    2.6
   Shareholders'
    Equity                4,668    3,890   20.0
   Total Liabilities
    & Shareholders'
    Equity              $46,213  $40,437   14.3%

                        Three Months Ended        Twelve Months Ended
                        December December         December December
                           31,      31,   Percent     31,      31,   Percent
   AVERAGE ASSETS         2005     2004   Change     2005     2004   Change
    ($millions)
   Cash & Due From
    Banks                $1,012     $914   10.7%      $966     $835  15.7%
   Trading Securities        33       20   65.0         27       22  22.7
   Short - Term
    Investments             216      143   51.0        237      171  38.6
   Investment
    Securities            6,256    6,028    3.8      6,183    5,872   5.3
   Loans and Leases:
     Commercial
      Loans & Leases      9,761    8,478   15.1      9,394    8,018  17.2
     Commercial
      Real Estate        10,414    9,185   13.4      9,989    8,756  14.1
     Residential
      Real Estate         6,717    4,251   58.0      5,752    3,695  55.7
     Home Equity
      Loans and
      Lines               4,822    5,035   -4.2      4,988    4,765   4.7
     Personal Loans
      and Leases          1,688    1,679    0.5      1,653    1,787  -7.5
   Total Loans and
    Leases               33,402   28,628   16.7     31,776   27,021  17.6
   Reserve for Loan
    & Leases Losses        (365)    (363)   0.6       (363)    (360)  0.8
   Premises and
    Equipment, net          478      461    3.7        458      448   2.2
   Goodwill and
    Intangibles           2,425    2,081   16.5      2,261    1,547  46.2
   Other Assets           1,792    1,671    7.2      1,739    1,607   8.2
   Total Assets         $45,249  $39,583   14.3%   $43,284  $37,163  16.5%

   Memo:
   Average Earning
    Assets              $39,907  $34,819           $38,223  $33,086
   Average Earning
    Assets Excluding
    Investment
    Securities
    Unrealized
    Gains/Losses        $39,945  $34,762           $38,218  $33,044

   AVG LIABILITIES &
    SHAREHOLDERS'
    EQUITY ($millions)
   Deposits:
     Noninterest
      Bearing            $5,195   $4,871    6.7%    $4,943   $4,586   7.8%
     Bank Issued
      Interest
      Bearing
      Activity           10,349    9,943    4.1     10,027    9,960   0.7
     Bank Issued
      Time                5,057    3,591   40.8      4,410    3,384  30.3
     Total Bank
      Issued
      Deposits           20,601   18,405   11.9     19,380   17,930   8.1
     Wholesale
      Deposits            6,723    6,867   -2.1      6,721    6,058  10.9
   Total Deposits        27,324   25,272    8.1     26,101   23,988   8.8
   Short - Term
    Borrowings            2,563    2,461    4.1      2,926    2,908   0.6
   Long - Term
    Borrowings            8,936    6,454   38.5      8,193    5,330  53.7
   Other Liabilities      1,821    1,677    8.6      1,773    1,432  23.8
   Shareholders'
    Equity                4,605    3,719   23.8      4,291    3,505  22.4
   Total Liabilities
    & Shareholders'
    Equity              $45,249  $39,583   14.3%   $43,284  $37,163  16.5%

   Memo:
   Average Interest
    Bearing Liabilities $33,628  $29,316           $32,277  $27,640


  M&I Corporation
  Financial Information
  (unaudited)
                      Three Months Ended           Twelve Months Ended
                      December   December          December  December
                          31,        31,  Percent     31,       31,  Percent
                         2005       2004  Change     2005      2004  Change
   CREDIT QUALITY (a)

   Net Charge-Offs
    ($millions)         $11.5      $12.8   -10.2%    $39.1     $29.5  32.5%
   Net Charge-Offs /
    Average Loans &
    Leases               0.14%      0.18%             0.12%     0.11%
   Loan and Lease
    Loss  Reserve
    ($millions)        $363.8     $358.1     1.6%   $363.8    $358.1   1.6%
   Loan and Lease
    Loss  Reserve /
    Period-End  Loans
    & Leases             1.06%      1.21%             1.06%     1.21%
   Non-Performing
    Loans & Leases
    (NPL) ($millions)  $140.6     $132.4     6.2%   $140.6    $132.4   6.2%
   NPL's / Period-End
    Loans & Leases       0.41%      0.45%             0.41%     0.45%
   Loan and Lease
    Loss Reserve /
    Non-Performing
    Loans & Leases        259%       271%              259%      271%

   MARGIN ANALYSIS (b)

   Loans and Leases:
     Commercial
      Loans &
      Leases             6.51%      5.19%             5.96%     4.83%
     Commercial
      Real Estate        6.57       5.55              6.20      5.41
     Residential
      Real Estate        6.43       5.42              6.09      5.47
     Home Equity
      Loans and
      Lines              6.39       5.43              6.04      5.29
     Personal
      Loans and
      Leases             6.38       5.28              5.97      5.12
   Total Loans and
    Leases               6.49       5.39              6.07      5.21
   Investment
    Securities           5.00       4.94              5.01      4.95
   Short - Term
    Investments          3.89       2.07              3.38      1.39
   Interest Income
    (FTE) / Avg.
    Interest Earning
    Assets               6.24%      5.30%             5.88%     5.14%
   Interest Bearing
    Deposits:
      Bank Issued
       Interest
       Bearing
       Activity          2.49%      1.06%             1.92%     0.78%
      Bank Issued
       Time              3.65       2.55              3.21      2.45
      Total Bank
       Issued
       Deposits          2.87       1.46              2.31      1.20
      Wholesale
       Deposits          3.64       2.26              3.14      1.91
   Total Interest
    Bearing Deposits     3.10       1.73              2.58      1.42
   Short - Term
    Borrowings           4.34       2.72              3.63      2.11
   Long - Term
    Borrowings           4.26       3.75              4.03      3.69
   Interest Expense /
    Avg. Interest
    Bearing
    Liabilities          3.51%      2.26%             3.04%     1.93%
   Net Interest
    Margin(FTE) /
    Avg. Earning
    Assets               3.29%      3.39%             3.31%     3.52%
   Interest Spread
    (FTE)                2.73%      3.04%             2.84%     3.21%


   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 Net
    Income to Income as Adjusted                          Twelve
                                                          Months
                                                           Ended
                                                         December  Diluted
                                                             31,     EPS
                                                            2005    Impact
   Net Income                                             $727.5   $3.10
   Adjustments (Net of Tax)
     Realized Gain Venture Capital
      Investments                                           18.2    0.08
     Cash Tender - Equity Investment                         3.9    0.02
     Related Compensation Expense                           (1.7)  (0.01)
   Total Adjustments                                        20.4    0.09

   Income as Adjusted                                     $707.1   $3.01

                                        Three            Twelve
                                       Months            Months
                                        Ended             Ended
                                      December  Diluted  December  Diluted
                                         31,     EPS       31,      EPS
                                        2004    Impact    2004     Impact
   Net Income                          $173.8    $0.76    $627.1   $2.77
   Adjustments (Net of Tax)
     Unrealized Gain Venture Capital
      Investments                        22.2     0.10      22.2    0.10
     Metavante Disposition of two
      Subsidiaries                       (4.2)   (0.02)     (4.2)  (0.02)
     Foundation Contributions and Other  (4.5)   (0.02)     (4.5)  (0.02)
   Total Adjustments                     13.5     0.06      13.5    0.06

   Income as Adjusted                  $160.3    $0.70    $613.6   $2.71


DATASOURCE: Marshall & Ilsley Corporation



CONTACT:  John Presley, senior vice president and chief financial

officer, [phone], or Don Wilson, senior vice president,

corporate treasurer, [phone], both of Marshall & Ilsley Corporation



Web site:  http://www.micorp.com/

http://www.mibank.com/ 

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