Oct. 6--Marshall and Ilsley Corp. said Tuesday morning it expects to post a loss of 68 cents to 70 cents per share in the third-quarter as it boosts reserves to cover shaky loans.

Milwaukee's MandI, the largest bank based in Wisconsin, said it would make a $185 million special provision to loan-loss reserves in the quarter because loans it made to other banks have run into problems. That amount is on top of $390 million to $400 million it is setting aside to cover potentially bad debt in its other portfolios.

MandI said, however, the deterioration of loans in general may be slowing.

The bank said nonperforming loans are expected to decrease by about $170 million from the previous quarter to slightly less than 4.9% of total loans -- the first decline in four years.

The bank also said early-stage delinquencies -- loans tardy by only 30 to 89 days -- are expected to fall about 20% from the previous quarter.

"While we see some continuation of improvement in credit quality, and read these as hopeful signs of what's ahead, we will continue to manage the business as though the recessionary effects in the economy will remain for several more months," Mark Furlong, president and chief executive of MandI, said in a press statement. "There simply are an inadequate number of consistent trends to reinforce the sentiments that the economy is stabilizing and better times are within sight."

MandI said it will report its third-quarter financial results on Oct. 22.

MandI has suffered a series of quarterly losses as the housing slump and recession have caused deterioration in its loans, especially in Arizona. The bank lost 83 cents per share in the second quarter of this year.

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