Marshall & Ilsley Corporation Reports Net Income of $0.32 Per Diluted Share for 2008 Third Quarter

- Net interest income increased 9 percent compared to the third quarter of 2007.






MILWAUKEE, Oct. 15  /PRNewswire-FirstCall/ -- Marshall & Ilsley Corporation (NYSE:MI) (M&I) today reported 2008 third quarter net income of $83.1 million, or $0.32 per share, as compared to income from continuing operations of $173.7 million, or $0.65 per share, in the third quarter of 2007.

During the third quarter of 2008, the Corporation experienced continued stress on its construction and development portfolio due to the ongoing deterioration in the housing market.

  --  Provision for loan and lease losses totaled $155 million, exceeding
      net charge-offs of $152 million.

  --  Allowance to loan ratio was maintained at 2.05 percent -- up 104 basis
      points versus the third quarter of 2007.


  2008 Third Quarter Key Performance Highlights

  --  On an acquisition-adjusted basis, average loans and leases increased
      10 percent over the third quarter of 2007.
  --  Net interest margin fell 8 basis points on a linked quarter basis and
      was down 1 basis point from the third quarter of 2007.
  --  Net interest income increased 9 percent compared to the same period
      last year.
  --  Wealth Management total revenue increased 7 percent over the third
      quarter of 2007.
  --  Adjusted efficiency ratio was 52.0 percent, up 0.7 percentage points
      on a linked quarter basis.
  --  Tangible common equity ratio was 7.0 percent at September 30,
      2008 -- up 60 basis points from September 30, 2007.


  Loan and Core Deposit Growth


On an acquisition-adjusted basis, M&I's average loans and leases totaled $50.0 billion for the third quarter of 2008, reflecting an increase of $4.4 billion or 10 percent compared to the third quarter of 2007. The Corporation's average bank-issued deposits totaled $29.1 billion for the third quarter of 2008, decreasing $0.6 billion or 2 percent on an acquisition-adjusted basis, versus the same period last year. M&I's demand deposits totaled $5.9 billion for the third quarter of 2008, increasing $173 million or 3 percent compared to the third quarter of 2007.

Net Interest Income

The Corporation's net interest income (FTE) rose $37.3 million to $447.5 million in the third quarter of 2008 -- up 9 percent compared to the third quarter of 2007. The net interest margin was 3.06 percent, down 8 basis points on a linked quarter basis, and 1 basis point from the same period last year.

Asset Quality

M&I's construction and development portfolio continued to experience deterioration in the estimated collateral values and repayment abilities of some of the Corporation's customers, particularly among small and mid-sized local developers. M&I's provision for loan and lease losses was $155.0 million in the third quarter of 2008. Net charge-offs for the period were $152.3 million, or 1.21 percent of total average loans and leases. At September 30, 2008 and 2007, the allowance for loan and lease losses was 2.05 percent and 1.01 percent, respectively, of total loans and leases. Non-performing loans and leases were 2.70 percent of total loans and leases at September 30, 2008, compared to 1.01 percent at September 30, 2007.

Wealth Management Revenue

Wealth Management total revenue was $71.3 million for the current quarter, an increase of $4.8 million or 7 percent over the third quarter of 2007. Assets Under Management finished the quarter at $24.4 billion and Assets Under Administration ended at $101 billion.

Other Non-Interest Income

M&I's service charges on deposits were $36.7 million for the third quarter of 2008, an increase of $5.8 million or 19 percent from the same period last year.

Non-Interest Expense

The Corporation's non-interest expense was $360.0 million for the third quarter of 2008, a decrease of $20.4 million on a linked quarter basis. After adjusting for approximately $15 million of losses related to financial market disruption, M&I's efficiency ratio was 54.6 percent. Further adjusting for credit-related expenses that include other real estate owned, the Corporation's efficiency ratio was 52.0 percent -- up 0.7 percentage points on a linked quarter basis.

Year-to-Date Results

M&I reported a net loss of $164.4 million, or $0.63 per share, as compared to income from continuing operations of $521.4 million, or $1.97 per share, for the nine months ended September 30, 2008 and 2007, respectively.

Balance Sheet and Capital Management

The Corporation's consolidated assets and common shareholders' equity were $63.5 billion and $6.5 billion, respectively, at September 30, 2008, compared to $60.8 billion and $7.0 billion, respectively, at September 30, 2007. Tangible book value per share was $16.71 at September 30, 2008. There were 260.0 million common shares outstanding at September 30, 2008, compared to 267.1 million outstanding at September 30, 2007. The Corporation has a Stock Repurchase Program authorization under which up to 12 million shares of the Corporation's common stock can be repurchased annually. In the third quarter of 2008, the Corporation did not repurchase any shares. M&I's tangible common equity ratio was 7.0 percent at September 30, 2008 -- up 60 basis points from September 30, 2007.

Conference Call

Marshall & Ilsley Corporation will hold a conference call at 11:00 a.m. Central Daylight Time Wednesday, October 15, regarding third quarter results. For those interested in listening, please call 1-888-711-1825 and ask for M&I's quarterly results release conference call. If you are unable to join us at this time, a replay of the call will be available beginning at 2:30 p.m. on October 15 and will run through 5:00 p.m. October 22, by calling 1-800-642-1687 and entering pass code 636 89 134.

Supplemental financial information referenced in the conference call can be found at http://www.micorp.com/, Investor Relations, after 8:00 a.m. on October 15.

About Marshall & Ilsley Corporation

Marshall & Ilsley Corporation (NYSE:MI) is a diversified financial services corporation headquartered in Milwaukee, Wis., with $63.5 billion in assets. Founded in 1847, M&I Marshall & Ilsley Bank is the largest Wisconsin-based bank, with 193 offices throughout the state. In addition, M&I has 52 locations throughout Arizona; 32 offices in Indianapolis and nearby communities; 31 offices along Florida's west coast and in central Florida; 15 offices in Kansas City and nearby communities; 24 offices in metropolitan Minneapolis/St. Paul, and one in Duluth, Minn.; and one office in Las Vegas, Nev. M&I's Southwest Bank subsidiary has 17 offices in the greater St. Louis area. 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.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements include, without limitation, statements regarding expected financial and operating activities and results that are preceded by, followed by, or that include words such as "may," "expects," "anticipates," "estimates" or "believes."  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) M&I's exposure to the volatile commercial and residential real estate markets, which could result in increased charge-offs and increases in M&I's allowance for loan and lease losses to compensate for potential losses in its real estate loan portfolio, (ii) adverse changes in the financial performance and/or condition of M&I's borrowers, which could impact repayment of such borrowers' outstanding loans, (iii) M&I's ability to maintain required levels of capital, (iv) fluctuation of M&I's stock price, and (v) those factors referenced in Item 1A. Risk Factors in M&I's annual report on Form 10-K for the year ended December 31, 2007 and in M&I's quarterly report on Form 10-Q for the quarter ended June 30, 2008, and as may be described from time to time in M&I's subsequent SEC filings, which factors are incorporated herein by reference.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect only M&I's belief as of the date of this press release.  Except as required by federal securities law, M&I undertakes no obligation to update these forward-looking statements or reflect events or circumstances after the date of this report.

  Marshall & Ilsley Corporation
  Financial Information
  (unaudited)

                      Three Months                Nine Months
                          Ended                      Ended
                      September 30,    Percent    September 30,    Percent
                      2008      2007    Change    2008       2007   Change

    PER SHARE DATA

  Diluted:
    Income (Loss)
     from Continuing
     Operations      $0.32     $0.65   -50.8%   ($0.63)    $1.97     n.m.%
    Net Income (Loss) 0.32      0.83   -61.4     (0.63)     2.49     n.m.

  Basic:
    Income (Loss) from
     Continuing
     Operations       0.32      0.66   -51.5     (0.63)     2.02     n.m.
    Net Income (Loss) 0.32      0.84   -61.9     (0.63)     2.54     n.m.

  Dividend Declared   0.32      0.31     3.2      0.95      0.89     6.7
  Book Value         25.12     26.45    -5.0     25.12     26.45    -5.0
  Shares Outstanding
   (millions):
    Average -
     Diluted         259.2     266.3    -2.7     259.1     264.2    -1.9
    End of Period    260.0     267.1    -2.6     260.0     267.1    -2.6

  INCOME STATEMENT ($millions)

  Net Interest
   Income (FTE)     $447.5    $410.2     9.1% $1,339.6  $1,218.5     9.9%
  Provision for Loan
   and Lease Losses  155.0      41.5   273.2   1,187.3      84.7  1301.7

    Wealth Management 71.3      66.5     7.3     218.0     192.8    13.1
    Service Charge on
     Deposits         36.7      30.9    18.8     110.3      88.6    24.4
    Mortgage Banking   5.5       6.5   -15.3      21.5      28.6   -24.9
    Net Investment
     Securities Gains  1.0       8.9   -88.9      27.2      29.9    -9.3
    Other             69.3      70.5    -1.7     205.1     185.5    10.6
  Total Non-Interest
   Revenues          183.8     183.3     0.3     582.1     525.4    10.8

    Salaries and
     Employee
     Benefits        184.0     166.8    10.3     545.3     485.9    12.2
    Occupancy and
     Equipment        31.7      27.7    14.4      94.1      83.2    13.1
    Intangible
     Amortization      6.0       5.4    10.6      17.9      15.1    18.6
    Other            138.3      93.6    47.8     398.9     284.6    40.1
  Total Non-Interest
   Expenses          360.0     293.5    22.7   1,056.2     868.8    21.6

  Tax Equivalent
   Adjustment          6.8       7.0    -3.6      20.9      21.1    -1.1
  Pre-Tax Income
   (Loss)            109.5     251.5   -56.5    (342.7)    769.3     n.m.
  Provision (Benefit)
   for Income Taxes   26.4      77.8   -66.1    (178.3)    247.9     n.m.
  Income (Loss)
   from Continuing
   Operations         83.1     173.7   -52.1    (164.4)    521.4     n.m.
  Discontinued
   Operations,
   net of tax:
    Separation
     Transaction Costs   -      (4.0)                -      (6.7)
    Metavante Net
     Income              -      50.2                 -     142.3
  Discontinued
   Operations,
   net of tax            -      46.2                 -     135.6
  Net Income (Loss)  $83.1    $219.9  -62.2%   ($164.4)   $657.0     n.m.%


    KEY RATIOS

  Net Interest Margin
   (FTE) / Avg.
   Earning Assets     3.06%     3.07%             3.10%     3.14%
  Interest
   Spread (FTE)       2.65      2.43              2.63      2.49

  Based on Income
   from Continuing
   Operations

    Efficiency Ratio  57.0%     49.9%            55.7%     50.5%
    Return on Assets  0.52      1.19              n.m.     1.24
    Return on Equity  5.07     10.19              n.m.    10.70

  Based on Net Income
    Return on Assets  0.52%     1.47              n.m.%    1.52%
    Return on Equity  5.07     12.91              n.m.    13.48


  Equity / Assets
   (End of Period)    10.2%     11.6%            10.2%     11.6%



  Marshall & Ilsley Corporation
  Financial Information
  (unaudited)
                           As of
                        September 30,   Percent
                       2008      2007   Change
    ASSETS ($millions)
  Cash & Due
   From Banks         $982     $1,034   -5.0%
  Trading Securities   163         48  237.7
  Short - Term
   Investments         137        717  -80.8
  Investment
   Securities        7,383      7,179    2.9
  Loan to Metavante      -        982    n.m.
  Loans and Leases:
    Commercial
     Loans & Leases 15,711     13,569   15.8
    Commercial Real
     Estate         17,519      5,689   11.7
    Residential
     Real Estate    10,029      9,700    3.4
    Home Equity
     Loans & Lines   5,053      4,304   17.4
    Personal Loans
     and Leases      2,105      1,707   23.3
  Total Loans
   and Leases       50,417     44,969   12.1
  Reserve for
   Loan & Lease
   Losses           (1,031)      (453) 127.9
  Premises and
   Equipment, net      542        470   15.4
  Goodwill and
   Intangibles       2,237      1,824   22.6
  Other Assets       2,671      2,638    1.3
  Total Assets
   of Continuing
   Operations       63,501     59,408    6.9
  Assets of
   Discontinued
   Operations            -      1,360    n.m.
  Total Assets     $63,501    $60,768    4.5%



    LIABILITIES & SHAREHOLDERS' EQUITY ($millions)
  Deposits:
    Noninterest
     Bearing        $6,359     $5,559   14.4%
    Bank Issued
     Interest
     Bearing
     Activity       13,444     13,816   -2.7
    Bank Issued
     Time            9,146      8,566    6.8
    Total Bank
     Issued
     Deposits       28,949     27,941    3.6
    Wholesale
     Deposits       11,091      6,467   71.5
  Total Deposits    40,040     34,408   16.4
  Short - Term
   Borrowings        7,820      9,835  -20.5
  Long - Term
   Borrowings        8,161      8,142    0.2
  Other
   Liabilities         988      1,410  -29.9
  Liabilities
   of Discontinued
   Operations            -        (49)   n.m.
  Shareholders'
   Equity            6,492      7,022   -7.5
  Total Liabilities
   & Shareholders'
   Equity          $63,501    $60,768    4.5%



                     Three Months Ended         Nine Months Ended
                       September 30,   Percent    September 30,   Percent
                       2008     2007   Change     2008     2007   Change

    AVERAGE  ASSETS ($millions)

  Cash & Due From
   Banks              $892     $1,022  -12.7%      $908    $1,007    -9.8%
  Trading Securities   144         49  196.0        162        50   226.3
  Short - Term
   Investments         387        393   -1.8        363       313    16.0
  Investment
   Securities        7,509      7,388    1.6      7,718     7,436     3.8
  Loan to Metavante      -        982    n.m.        -        982     n.m.
  Loans and Leases:
    Commercial
     Loans & Leases 15,513     13,265   17.0     15,342    12,983    18.2
    Commercial
     Real Estate    17,361     15,408   12.7     17,144    14,873    15.3
    Residential
     Real Estate    10,169      9,577    6.2     10,313     9,377    10.0
    Home Equity
     Loans and
     Lines           5,027      4,248   18.3      4,845     4,255    13.9
    Personal Loans
     and Leases      1,962      1,612   21.8      1,882     1,558    20.7
  Total Loans and
   Leases           50,032     44,110   13.4     49,526    43,046    15.1
  Reserve for Loan &
   Lease Losses     (1,083)      (444) 143.9       (775)     (434)   78.9
  Premises and
   Equipment, net      533        467   14.0        521       455    14.6
  Goodwill and
   Intangibles       2,239      1,823   22.8      2,242     1,712    30.9
  Other Assets       2,411      1,892   27.4      2,304     1,739    32.6
  Total Assets of
   Continuing
   Operations       63,064     57,682    9.3     62,969    56,306    11.8
  Assets of
   Discontinued
   Operations            -      1,542    n.m.         -     1,517     n.m.
  Total Assets     $63,064    $59,224    6.5%   $62,969   $57,823     8.9%

  Memo:
  Average Earning
   Assets          $58,072    $52,922           $57,769   $51,827
  Average Earning
   Assets Excluding
   Investment
   Securities
   Unrealized
   Gains/Losses    $58,137    $53,010           $57,779   $51,888



    AVG LIABILITIES & SHAREHOLDERS' EQUITY ($millions)

  Deposits:
    Noninterest
     Bearing        $5,909     $5,513    7.2%    $5,789    $5,438    6.4%
    Bank Issued
     Interest
     Bearing
     Activity       14,178     13,819    2.6     14,635    13,359    9.6
    Bank Issued
     Time            9,033      8,788    2.8      8,926     8,626    3.5
    Total Bank
     Issued
     Deposits       29,120     28,120    3.6     29,350    27,423    7.0
    Wholesale
     Deposits       10,568      6,724   57.2      9,476     6,453   46.9
  Total Deposits    39,688     34,844   13.9     38,826    33,876   14.6
  Short - Term
   Borrowings        6,415      4,491   42.8      6,543     4,346   50.5
  Long - Term
   Borrowings        9,653     11,902  -18.9      9,770    11,823  -17.4
  Other Liabilities    784      1,048  -25.3        992     1,062   -6.5
  Liabilities of
   Discontinued
   Operations            -        178    n.m.         -      200     n.m.
  Shareholders'
   Equity            6,524      6,761   -3.5      6,838    6,516     4.9
  Total Liabilities
   & Shareholders'
   Equity          $63,064    $59,224    6.5%   $62,969  $57,823     8.9%

  Memo:
  Average Interest
   Bearing
   Liabilities     $49,847    $45,724           $49,350  $44,607



  Marshall & Ilsley Corporation
  Financial Information
  (unaudited)
                 Three Months Ended            Nine Months Ended
                     September 30,     Percent    September 30,    Percent
                   2008         2007   Change     2008      2007    Change
    CREDIT QUALITY

  Net Charge-Offs
   ($millions)      $152.3      $26.0  484.8%    $684.1     $64.3  963.4%
  Net Charge-
   Offs / Average
   Loans & Leases     1.21%      0.23%             1.85%     0.20%
  Loan and Lease Loss
   Reserve
   ($millions)    $1,031.5     $452.7  127.9%  $1,031.5    $452.7  127.9%
  Loan and Lease
   Loss Reserve /
   Period-End
   Loans & Leases     2.05%      1.01%             2.05%     1.01%
  Nonaccrual
   Loans & Leases
   ($millions)    $1,260.6     $445.8  182.8%  $1,260.6    $445.8  182.8%
  Nonaccrual
   Loans & Leases /
   Period-End
   Loans & Leases     2.50%      0.99%             2.50%     0.99%
  Loan and
   Lease Loss
   Reserve /
   Nonaccrual
   Loans & Leases       82%       102%               82%      102%
  Non-Performing
   Loans & Leases (NPL)
   ($millions)(a)  1,362.2     $453.6  200.3%  $1,362.2    $453.6  200.3%
  NPL's /
   Period-End
   Loans & Leases(a)  2.70%      1.01%             2.70%     1.01%
  Loan and
   Lease Loss
   Reserve / Non-
   Performing
   Loans & Leases(a)    76%       100%               76%      100%



    MARGIN ANALYSIS(b)

  Loans and Leases:
    Commercial
     Loans &
     Leases           5.29%      7.61%             5.63%     7.60%
    Commercial
     Real Estate      5.82       7.51              6.13      7.56
    Residential
     Real Estate      5.72       7.14              6.06      7.25
    Home Equity
     Loans and
     Lines            6.16       7.51              6.43      7.53
    Personal Loans
     and Leases       6.16       7.71              6.49      7.79
  Total Loans
   and Leases         5.68       7.47              6.00      7.51
  Loan to
   Metavante             -       4.36               -        4.41
  Investment
   Securities         4.62       5.27              4.81      5.32
  Short - Term
   Investments        1.99       4.94              2.25      4.78
  Interest Income
   (FTE) / Avg.
   Interest Earning
   Assets             5.51%      7.08%             5.81%     7.12%
  Interest Bearing
   Deposits:
    Bank Issued
     Interest
     Bearing
     Activity         1.33%      3.64%             1.74%     3.62%
    Bank Issued
     Time             3.76       4.98              4.12      4.93
    Total Bank
     Issued
     Deposits         2.28       4.16              2.64      4.14
    Wholesale
     Deposits         3.05       5.16              3.38      5.12
  Total Interest
   Bearing Deposits   2.52       4.39              2.85      4.36
  Short - Term
   Borrowings         2.15       5.17              2.58      5.21
  Long - Term
   Borrowings         4.51       5.09              4.67      5.05
  Interest
   Expense / Avg.
   Interest Bearing
   Liabilities        2.86%      4.65%             3.18%     4.63%
  Net Interest
   Margin(FTE) / Avg.
   Earning Assets     3.06%      3.07%             3.10%     3.14%
  Interest
   Spread (FTE)       2.65%      2.43%             2.63%     2.49%

  Notes:
  (a)  Includes Loans past due 90 days or more.
  (b)  Based on average balances excluding fair value adjustments for
       available for sale securities.


DATASOURCE: Marshall & Ilsley Corporation



CONTACT:  Greg Smith, senior vice president, chief financial officer,

[phone], or Dave Urban, vice president, director of investor

relations, [phone], both of Marshall & Ilsley Corporation



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

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