Marshall & Ilsley (NYSE:MI)
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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/