--  Net loss of $0.50 per share for 2009 second quarter.   --  Aggressively addressed credit issues by writing down problem credits       and strengthening balance sheet.       --  Loan loss provision of $468 million, $15 million in excess of net           charge-offs.       --  Allowance to loans ratio boosted to 2.83 percent, up 8 basis           points from the prior quarter.       --  Common stock equity offering raised $552 million, increasing the           tangible common equity ratio to 7.3 percent.   --  Reduced construction and development exposure to 14.1 percent of total       loans.    --  Financial results included after-tax special FDIC insurance assessment       of $18 million or $0.07 per share, securities gains of $50 million or       $0.18 per share, favorable resolution of tax matter of $18 million or       $0.06 per share, and dividends paid to U.S. Treasury under Capital       Purchase Program of $25 million or $0.09 per share.   

Marshall & Ilsley Corporation (M&I) today reported a 2009 second quarter net loss of $139.3 million, or $0.50 per share, as compared to a net loss of $393.8 million, or $1.52 per share, in the second quarter of 2008.

"The second quarter of 2009 continued to be challenging for our nation's economy, the financial services industry, and Marshall & Ilsley Corporation," said Mark Furlong, president and CEO, Marshall & Ilsley Corporation. "We continue to work hard to address the challenges of this economic cycle, specifically focusing on the proactive resolution of problem credits. We remain committed to ensuring M&I emerges from this cycle in a position of strength and believe we are continuing to make progress toward our goal of returning to profitability."

Loan and Deposit Growth

M&I's average loans and leases totaled $48.9 billion for the second quarter of 2009, decreasing $1.1 billion or 2 percent compared to the second quarter of 2008. When adjusted for the targeted reduction in the Corporation's construction and development portfolio, loan growth was $1.7 billion or 4 percent versus the same period last year. The Corporation's average deposits totaled $39.9 billion for the second quarter of 2009, rising $0.8 billion or 2 percent versus the second quarter of 2008. M&I's average noninterest bearing deposits totaled $7.4 billion for the second quarter of 2009, increasing $1.5 billion or 26 percent compared to the second quarter of 2008.

Net Interest Income

The Corporation's net interest income (FTE) was $398.5 million for the second quarter of 2009, down $56.1 million or 12 percent compared to the second quarter of 2008. The net interest margin was 2.79 percent, down 35 basis points from the same period last year and 3 basis points from the previous quarter. The margin contraction was primarily caused by the late 2008 decline in short term interest rates.

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 residential developers. M&I's provision for loan and lease losses was $468.2 million in the second quarter of 2009 versus $477.9 million in the previous quarter. Net charge-offs for the period were $452.6 million. Included in this number was an acceleration in charge-offs related to consumer real estate nonperforming loans. This change led to a one-time increase in charge-offs of $47 million, which would otherwise have been taken in the following quarter. These charge-offs were fully reserved.

At June 30, 2009 and 2008, the allowance for loan and lease losses was 2.83 percent and 2.05 percent, respectively, of total loans and leases. Nonperforming loans and leases were 5.18 percent of total loans and leases at June 30, 2009, compared to 2.00 percent at June 30, 2008.

Non-Interest Income

The Corporation's non-interest income was $267.2 million for the second quarter of 2009 compared to $187.0 million for the second quarter of 2008. Total net investment securities gains were $82.7 million for the current quarter versus $0.5 million in the same period last year. Excluding net investment securities gains, non-interest income was relatively unchanged in the second quarter of 2009 compared to the second quarter of 2008. Wealth Management revenue was $65.8 million for the current quarter, falling $9.0 million or 12 percent over the same period last year. The decline was primarily driven by volatility in the equity markets in late 2008 and early 2009. Assets under Management and Assets under Administration were $31.7 billion and $109.3 billion, respectively, at June 30, 2009, compared to $25.4 billion and $106.4 billion, respectively, at June 30, 2008.

Non-Interest Expense

M&I's non-interest expense was $415.1 million for the second quarter of 2009 compared to $380.4 million for the second quarter of 2008. FDIC insurance expense was $49.2 million for the current quarter versus $2.2 million in the same period last year. Excluding FDIC insurance expense, non-interest expense fell $12.3 million or 3 percent in the second quarter of 2009 compared to the second quarter of 2008. The Corporation's salaries and employee benefits expense was $187.2 million for the second quarter of 2009, an increase of $0.6 million or 0.4 percent from the same period last year. Included in this number was severance expense of $6 million or $0.01 per share. After adjusting for certain net credit-related expenses and other one-time expenses, M&I's efficiency ratio was 55.9 percent in the current quarter.

Year-to-Date Results

M&I reported a net loss of $256.3 million, or $0.94 per share, as compared to a net loss of $247.6 million, or $0.95 per share, for the six months ended June 30, 2009 and 2008, respectively.

Balance Sheet and Capital Management

The Corporation's consolidated assets and total equity were $59.8 billion and $6.7 billion, respectively, at June 30, 2009, compared to $64.3 billion and $6.5 billion, respectively, at June 30, 2008. M&I issued 100 million common shares in conjunction with an equity offering on June 17, 2009. There were 368.1 million common shares outstanding at June 30, 2009, compared to 259.4 million outstanding at June 30, 2008. In the second quarter of 2009, M&I paid $25 million or $0.09 per share for dividends on the Corporation's Senior Preferred Stock, Series B, owned by the U.S. Treasury under the Capital Purchase Program.

   M&I's tangible common equity ratio was 7.3 percent at June 30, 2009.    Conference Call   

Marshall & Ilsley Corporation will hold a conference call at 11:00 a.m. (Central Daylight Time) Friday, July 17, regarding second quarter results. For those interested in listening, please call 1-888-711-1825 and ask for M&I's quarterly results conference call. If you are unable to join us at this time, a replay of the call will be available beginning at 3:00 p.m. on July 17 and will run through 5:00 p.m. August 7, by calling 1-800-642-1687 and entering pass code 166 19 867. 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 17.

About Marshall & Ilsley Corporation

Marshall & Ilsley Corporation is a diversified financial services corporation headquartered in Milwaukee, Wis., with $59.8 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 53 locations throughout Arizona; 32 offices in Indianapolis and nearby communities; 36 offices along Florida's west coast and in central Florida; 16 offices in Kansas City and nearby communities; 26 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.