(By Mayur Pahilajani - iStockAnalyst Writer)

New York, NY - Shares of Marshall & Ilsley Corp. (NYSE: MI) plummeted more than 22 percent on Thursday on reports that the regional bank has swung to a fourth-quarter loss on worsening credit market condition and bad loans.

The  Wisconsin's largest bank also slashed its dividend and has plans to hand out pink slips to 8 percent of its of its nearly 10,000 employees in a bid to save $100 million in costs. Marshall & Ilsley, established in 1847, manages over 370 branches in different U.S. states, including 193 offices in Wisconsin.

The company, which received $1.7 billion in Troubled Asset Relief Program funds from a stock sale to the U.S. Treasury in November, reported net loss of $403.9 million, or $1.55 a share, compared to the profit $493.9 million, or $1.83, the same period a year earlier. The bank has used about $1.3 billion of the government funds for lending.

The market analysts on Wall Street had expected the firm to post a profit of seven cents per share on average basis. Revenue in the fourth quarter was higher by 0.9 percent to $635.1 million.

"Our fourth quarter and year-end results reflect the extent to which the current recession has had an impact on our economy," Mark Furlong, president and CEO, Marshall & Ilsley Corp. said. "Although these are disappointing results, our excess capital and strong levels of reserves will keep us ahead of the industry's challenges."

The Milwaukee-based lender sharply lowered its quarterly dividend to 1 cent per share from its previous payout of 32 cents.

By the end of 2008, the bank's consolidated assets was at $63.8 billion, while total shareholders’ equity at $7.7 billion. The consolidated assets and total shareholders’ equity were $59.8 billion and $7 billion, respectively, by the end of 2007.

It added that it will reduce workforce by 830, stating that 80 percent of the job cuts had already been made, including positions eliminated earlier in 2008 through attrition and staff reductions. The bank said that the remaining 20 percent are related to operational efficiencies and are expected to be achieved by the end of 2009 year.

In the fourth quarter, the provision for loan and lease losses more than tripled to $850.4 million, up from $235.1 million in the same period of 2007.

Net charge-offs in the fourth quarter, loans thought not to be collectible, jumped to 5.38 percent of average loans and leases from 1.67 percent in 2007. Charge-offs for the period was $680 million. Nonperforming loans (period end loans), or those near default, increased to 3.62 percent from 2 percent a year earlier.

Shares of the company were steeply moving down by $2.34 or 21.83 percent to 52-week low of $8.38 at 11:38 a.m. on the New York Stock Exchange composite trading, from the previous low of $10.50. The stock of the company, which has tumbled by more than 60 percent in one year through yesterday, has traded as high as $29.97 in the last 52-week period.