EX-99.1 2 exhibit99-1.htm PRESS RELEASE DATED APRIL 17, 2007 EXHIBIT 99.1



 

Exhibit 99.1

[exhibit991002.gif]





 

News Release

 

Marshall & Ilsley Corporation

 

770 North Water Street

 

Milwaukee, WI 53202

 

414 765-7700 Main

 

414 298-2921 Fax

 

mibank.com


For Release:

Immediately

Contact:

Greg Smith, senior vice president, chief financial officer

414 765-7727

Dave Urban, vice president, director of investor relations

414 765-7853


MARSHALL & ILSLEY CORPORATION ANNOUNCES FIRST QUARTER RESULTS


Milwaukee, Wis. – April 17, 2007 – Marshall & Ilsley Corporation (NYSE: MI) today reported 2007 first quarter core operating income of $218.1 million, or $0.83 per share, as compared to $186.8 million, or $0.78 per share, in the first quarter of 2006, an increase of 16.8 percent. The Corporation reported 2007 first quarter net income of $216.8 million, or $0.83 per share, as compared to $173.1 million, or $0.72 per share, in the first quarter of 2006. The $1.3 million difference between core operating income and net income as reported for the first quarter of 2007 reflects the costs associated with the transaction to separate Metavante and M&I that was announced on April 3, 2007. The $13.7 million difference between core operating income and net income as reported for the first quarter of 2006 reflects the charge for certain interest rate swaps due to a change in the interpretation of certain accounting rules as announced in October 2006.


During the first quarter of 2007, the Corporation realized $9.6 million in pre-tax gains which includes $8.0 million related to Metavante’s investment in Firstsource. The impact of these gains was largely offset by a $9.5 million charge related to the Corporation’s 7.65 % Trust Preferred Securities that were called during the first quarter.


Return on average assets based on core operating income for the first quarter was 1.56 percent, as compared to 1.62 percent for the same period in 2006. Return on average equity based on core operating income was 14.13 percent this quarter as compared to 15.67 percent for the first quarter of 2006.


The Corporation’s provision for loan and lease losses was $17.1 million in the first quarter of 2007, versus $11.0 million in the same period last year. Net charge-offs for the period were $14.7 million, or 0.14 percent of total average loans and leases outstanding this quarter, and $6.0 million a year ago or 0.07 percent of total average loans and leases. At March 31, 2007, the allowance for loan and lease losses was 1.00 percent of total loans and leases, compared to 1.05 percent a year earlier. Nonperforming loans and leases were 0.83 percent of total loans and leases at March 31, 2007, compared to 0.42 percent at March 31, 2006.


Assets at March 31, 2007 were $56.5 billion, compared to $47.4 billion at March 31, 2006. Book value per share was $24.90 at March 31, 2007, compared to $20.75 for the same date a year ago. Total loans and leases were $42.3 billion, compared to $35.2 billion at March 31, 2006.


Marshall & Ilsley Corporation (NYSE: MI) is a diversified financial services corporation headquartered in Milwaukee, Wis., with $56.5 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 47 locations throughout Arizona; 30 offices along Florida’s west coast and central Florida; 17 offices in Kansas City and nearby communities; 17 offices in metropolitan Minneapolis/St. Paul, and one in Duluth, Minn.; three offices in Tulsa, Okla.; and one office in Las Vegas, Nev. M&I’s Southwest Bank subsidiary has 16 offices in the greater St. Louis area. Metavante Corporation, a wholly owned subsidiary, provides a full array of technology products and services for the financial services industry. On April 3, 2007, Marshall & Ilsley Corporation announced its plans to split Metavante Corporation and Marshall & Ilsley Corporation into independent publicly traded companies. 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 (www.mibank.com or 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, 2006 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.


This press release contains non-GAAP financial measures for the three months ended March 31, 2007 and 2006, as a supplement to the Corporation’s GAAP financial results. The Corporation believes that these non-GAAP financial measures are useful because they allow investors to assess, on a consistent basis, the Corporation’s core operating performance, exclusive of items which management believes are not indicative of the operations of the Corporation such as the change in the accounting for derivatives and the costs associated with the transaction to separate Metavante and M&I that was announced on April 3, 2007. Management uses such non-GAAP financial measures to evaluate financial results and to establish operational goals. These non-GAAP financial measures should be considered a supplement to, and not as a substitute for, financial measures prepared in accordance with GAAP. For a reconciliation of non-GAAP financial measures to the comparable financial measures calculated in accordance with GAAP, please see the reconciliation table included in the attachment to this press release.



Note:

Marshall & Ilsley Corporation will hold a conference call at 11:00 a.m. Central Daylight Time Tuesday, April 17, regarding first quarter earnings. For those interested in listening, please call 1-888-711-1825 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 be available beginning at 2:30 p.m. on April 17 and will run through 5:00 p.m. April 24, by calling 1-800-642-1687 and entering pass code 138 09 19 to listen.


Supplemental financial information referenced in the conference call can be found at www.micorp.com, Investor Relations, after 8:00 a.m. on April 17.



Marshall & Ilsley Corporation

 

 

 

 

 

 

 

 

Financial Information

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

Percent

 

 

 

 

 

2007

 

2006

 

Change

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

Diluted:  

 

 

 

 

 

 

 

 

 

   Core Operating Income

 

$0.83

 

$0.78

 

6.4

%

 

 

   Net  Income  

 

0.83

 

0.72

 

15.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:  

 

 

 

 

 

 

 

 

 

   Core Operating Income

 

0.85

 

0.79

 

7.6

 

 

 

   Net  Income  

 

0.85

 

0.74

 

14.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Declared  

 

0.27

 

0.24

 

12.5

 

 

 

Book Value  

 

24.90

 

20.75

 

20.0

 

 

 

Shares  Outstanding (millions):

 

 

 

 

 

 

 

 

 

     Average - Diluted  

 

261.3

 

240.3

 

8.7

 

 

 

     End of Period

 

256.8

 

236.1

 

8.8

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME STATEMENT ($millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income (FTE)  

 

$397.4

 

$333.0

 

19.3

%

 

 

Provision for Loan and Lease Losses  

 

17.1

 

11.0

 

56.0

 

 

 

 

 

 

 

 

 

 

 

 

 

     Data Processing Services  

 

356.4

 

343.0

 

3.9

 

 

 

     Wealth Management

 

60.7

 

52.8

 

15.0

 

 

 

     Service Charge on Deposits  

 

25.9

 

22.5

 

14.8

 

 

 

     Mortgage Banking  

 

10.1

 

12.9

 

-21.6

 

 

 

     Net Investment Securities Gains

 

1.6

 

1.1

 

40.2

 

 

 

     Net Gains Related to Firstsource

 

8.0

 

  -   

 

n.m.

 

 

 

     All Other  

 

44.4

 

39.9

 

11.6

 

 

 

Total Non-Interest Revenues

 

507.1

 

472.2

 

7.4

 

 

 

 

 

 

 

 

 

 

 

 

 

     Salaries and Employee Benefits  

 

297.1

 

277.4

 

7.1

 

 

 

     Occupancy and Equipment  

 

59.3

 

57.8

 

2.6

 

 

 

     Intangible Amortization   

 

11.3

 

8.9

 

27.1

 

 

 

     Other  

 

183.8

 

161.0

 

14.1

 

 

 

Total Non-Interest Expenses

 

551.5

 

505.1

 

9.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax Equivalent Adjustment  

 

7.1

 

7.9

 

-11.0

 

 

 

Pre-Tax Core Operating Earnings  

 

328.8

 

281.2

 

16.9

 

 

 

Income Taxes

 

110.7

 

94.4

 

17.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Operating Income

 

$218.1

 

$186.8

 

16.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Metavante Transaction Costs, net of tax

 

(1.3)

 

   -   

 

n.m.

 

 

 

Derivative Loss - Discontinued Hedges, net of tax

 

    -   

 

(13.7)

 

n.m.

 

 

 

 

 

 

 

 

 

 

 

 

 

Net  Income

 

$216.8

 

$173.1

 

25.2

%

 

 

 

 

 

 

 

 

 

 

 

 

KEY  RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin (FTE) / Avg. Earning Assets  

 

3.23

%

3.26

%

 

 

 

 

Interest Spread (FTE)  

 

2.60

 

2.68

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Based on Core Operating Activities

 

 

 

 

 

 

 

 

 

     Efficiency  Ratio   

 

61.0

 

62.8

 

 

 

 

 

     Efficiency  Ratio  without  Metavante   

 

50.5

 

48.8

 

 

 

 

 

     Return on Assets

 

1.56

 

1.62

 

 

 

 

 

     Return on Equity

 

14.13

 

15.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity / Assets (End of Period)  

 

11.24

 

10.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marshall & Ilsley Corporation

 

 

 

 

 

 

 

 

Financial Information

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

As of March 31,

 

Percent

 

 

 

 

 

2007

 

2006

 

Change

 

 

 

ASSETS ($millions)

 

 

 

 

 

 

 

 

 

Cash & Due  From  Banks  

 

$1,085

 

$1,017

 

6.7

%

 

 

Trading Securities  

 

117

 

40

 

190.5

 

 

 

Short - Term  Investments  

 

182

 

159

 

14.2

 

 

 

Investment  Securities   

 

7,530

 

6,627

 

13.6

 

 

 

Loans and Leases:  

 

 

 

 

 

 

 

 

 

     Commercial  Loans & Leases  

 

12,818

 

10,734

 

19.4

 

 

 

     Commercial  Real  Estate  

 

14,391

 

10,736

 

34.0

 

 

 

     Residential  Real  Estate   

 

9,308

 

7,508

 

24.0

 

 

 

     Home Equity Loans & Lines  

 

4,213

 

4,606

 

-8.5

 

 

 

     Personal  Loans and Leases  

 

1,525

 

1,652

 

-7.7

 

 

 

Total  Loans and Leases   

 

42,255

 

35,236

 

19.9

 

 

 

Reserve for Loan & Leases Losses  

 

(423)

 

(369)

 

14.7

 

 

 

Premises and Equipment, net  

 

576

 

500

 

15.1

 

 

 

Goodwill and Intangibles  

 

3,245

 

2,484

 

30.7

 

 

 

Other  Assets  

 

1,964

 

1,671

 

17.7

 

 

 

Total  Assets  

 

$56,531

 

$47,365

 

19.4

%

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES & SHAREHOLDERS' EQUITY ($millions)

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

     Noninterest Bearing  

 

$5,392

 

$5,000

 

7.8

%

 

 

     Bank Issued Interest Bearing Activity  

 

12,798

 

10,577

 

21.0

 

 

 

     Bank Issued Time  

 

8,223

 

5,774

 

42.4

 

 

 

     Total Bank Issued Deposits  

 

26,413

 

21,351

 

23.7

 

 

 

     Wholesale Deposits  

 

6,222

 

6,748

 

-7.8

 

 

 

Total  Deposits  

 

32,635

 

28,099

 

16.1

 

 

 

Short - Term  Borrowings  

 

8,661

 

5,553

 

56.0

 

 

 

Long - Term  Borrowings  

 

7,314

 

7,186

 

1.8

 

 

 

Other  Liabilities  

 

1,567

 

1,664

 

-5.8

 

 

 

Shareholders'  Equity  

 

6,354

 

4,863

 

30.7

 

 

 

Total  Liabilities  &  Shareholders'  Equity  

 

$56,531

 

$47,365

 

19.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

Percent

 

 

 

 

 

2007

 

2006

 

Change

 

 

 

AVERAGE  ASSETS ($millions)

 

 

 

 

 

 

 

 

 

Cash & Due  From  Banks  

 

$1,042

 

$980

 

6.3

%

 

 

Trading Securities  

 

41

 

34

 

20.8

 

 

 

Short - Term  Investments  

 

277

 

316

 

-12.2

 

 

 

Investment  Securities  

 

7,441

 

6,320

 

17.7

 

 

 

Loans and Leases:  

 

 

 

 

 

 

 

 

 

     Commercial  Loans & Leases  

 

12,677

 

10,370

 

22.2

 

 

 

     Commercial  Real  Estate  

 

14,416

 

10,581

 

36.3

 

 

 

     Residential  Real  Estate   

 

9,162

 

7,275

 

25.9

 

 

 

     Home Equity Loans and Lines  

 

4,295

 

4,706

 

-8.7

 

 

 

     Personal  Loans and Leases  

 

1,557

 

1,747

 

-10.9

 

 

 

Total  Loans and Leases   

 

42,107

 

34,679

 

21.4

 

 

 

Reserve  for  Loan  &  Leases  Losses  

 

(424)

 

(368)

 

15.0

 

 

 

Premises and Equipment, net  

 

575

 

496

 

15.8

 

 

 

Goodwill and Intangibles  

 

3,244

 

2,496

 

30.0

 

 

 

Other  Assets

 

2,209

 

1,827

 

20.8

 

 

 

Total  Assets  

 

$56,512

 

$46,780

 

20.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Memo:

 

 

 

 

 

 

 

 

 

Average Earning Assets  

 

$49,866

 

$41,349

 

 

 

 

 

Average Earning Assets Excluding Investment Securities  

 

 

 

 

 

 

 

 

 

             Unrealized Gains/Losses  

 

$49,915

 

$41,403

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVG  LIABILITIES & SHAREHOLDERS' EQUITY ($millions)

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

     Noninterest Bearing  

 

$5,319

 

$4,942

 

7.6

%

 

 

     Bank Issued Interest Bearing Activity  

 

12,635

 

10,464

 

20.7

 

 

 

     Bank Issued Time  

 

8,233

 

5,544

 

48.5

 

 

 

     Total Bank Issued Deposits  

 

26,187

 

20,950

 

25.0

 

 

 

     Wholesale Deposits  

 

6,371

 

6,529

 

-2.4

 

 

 

Total  Deposits  

 

32,558

 

27,479

 

18.5

 

 

 

Short - Term  Borrowings  

 

4,249

 

3,371

 

26.0

 

 

 

Long - Term  Borrowings  

 

11,624

 

9,404

 

23.6

 

 

 

Other  Liabilities  

 

1,823

 

1,712

 

6.5

 

 

 

Shareholders'  Equity  

 

6,258

 

4,814

 

30.0

 

 

 

Total  Liabilities  &  Shareholders'  Equity  

 

$56,512

 

$46,780

 

20.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Memo:

 

 

 

 

 

 

 

 

 

Average Interest Bearing Liabilities  

 

$43,112

 

$35,312

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marshall & Ilsley Corporation

 

 

 

 

 

 

 

 

Financial Information

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

Percent

 

 

 

 

 

2007

 

2006

 

Change

 

 

 

CREDIT  QUALITY (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Charge-Offs ($millions)  

 

$14.7

 

$6.0

 

144.4

%

 

 

Net Charge-Offs / Average Loans & Leases  

 

0.14

%

0.07

%

 

 

 

 

Loan and Lease Loss  Reserve ($millions)  

 

$423.1

 

$368.8

 

14.7

%

 

 

Loan and Lease Loss  Reserve / Period-End  Loans & Leases

 

1.00

%

1.05

%

 

 

 

 

Non-Performing Loans & Leases (NPL) ($millions)  

 

$351.7

 

$149.1

 

135.8

%

 

 

NPL's / Period-End Loans & Leases  

 

0.83

%

0.42

%

 

 

 

 

Loan and Lease Loss Reserve / Non-Performing Loans & Leases

120

%

247

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MARGIN  ANALYSIS (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and Leases:  

 

 

 

 

 

 

 

 

 

     Commercial  Loans & Leases  

 

7.62

%

6.91

%

 

 

 

 

     Commercial  Real  Estate  

 

7.60

 

6.94

 

 

 

 

 

     Residential  Real  Estate   

 

7.32

 

6.85

 

 

 

 

 

     Home Equity Loans and Lines  

 

7.55

 

6.98

 

 

 

 

 

     Personal  Loans and Leases  

 

7.83

 

6.77

 

 

 

 

 

Total  Loans and Leases   

 

7.55

 

6.91

 

 

 

 

 

Investment  Securities  

 

5.34

 

5.17

 

 

 

 

 

Short - Term  Investments  

 

                       5.03

 

4.22

 

 

 

 

 

Interest Income (FTE) / Avg. Interest Earning Assets  

 

7.20

%

6.62

%

 

 

 

 

Interest Bearing Deposits:  

 

 

 

 

 

 

 

 

 

     Bank Issued Interest Bearing Activity  

 

3.58

%

2.89

%

 

 

 

 

     Bank Issued Time  

 

4.84

 

3.90

 

 

 

 

 

     Total Bank Issued Deposits  

 

4.08

 

3.24

 

 

 

 

 

     Wholesale Deposits  

 

5.10

 

4.40

 

 

 

 

 

Total Interest Bearing Deposits  

 

4.32

 

3.58

 

 

 

 

 

Short - Term  Borrowings  

 

5.24

 

4.73

 

 

 

 

 

Long - Term  Borrowings  

 

5.02

 

4.51

 

 

 

 

 

Interest Expense / Avg. Interest Bearing Liabilities  

 

4.60

%

3.94

%

 

 

 

 

Net Interest Margin(FTE) / Avg. Earning Assets  

 

3.23

%

3.26

%

 

 

 

 

Interest Spread (FTE)  

 

2.60

%

2.68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Core Operating Income to Net Income

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 2007

 

March 31, 2006

 

 

 

Amount

 

Per

 

Amount

 

Per

 

 

 

($ in millions)

 

Diluted Share

 

($ in millions)

 

Diluted Share

 

Total Non-Interest Revenues (Core Operating)

 

 

 

 

 

$472.2

 

 

 

     Derivative Loss - Discontinued Hedges

 

 

 

 

 

(21.3)

 

 

 

Total Non-Interest Revenues (GAAP)

 

 

 

 

 

$450.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Non-Interest Expenses (Core Operating)

 

$551.5

 

 

 

 

 

 

 

     Metavante Transaction Costs

 

1.5

 

 

 

 

 

 

 

Total Non-Interest Expenses (GAAP)

 

$553.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Tax Core Operating Earnings  

 

$328.8

 

 

 

$281.2

 

 

 

     Metavante Transaction Costs

 

(1.5)

 

 

 

-   

 

 

 

     Derivative Loss - Discontinued Hedges

 

-   

 

 

 

(21.3)

 

 

 

Pre-Tax Earnings (GAAP)

 

$327.3

 

 

 

$259.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Taxes - Core Operating Income

 

$110.7

 

 

 

$94.4

 

 

 

     Tax Benefit on Metavante Transaction Costs

 

(0.2)

 

 

 

  -   

 

 

 

     Tax Benefit on Derivative Loss - Discontinued Hedges

-   

 

 

 

(7.6)

 

 

 

Income Taxes (GAAP)

 

$110.5

 

 

 

$86.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Operating Income

 

$218.1

 

$0.83

 

$186.8

 

$0.78

 

     Metavante Transaction Costs, net of tax

 

(1.3)

 

-   

 

-   

 

    -   

 

     Derivative Loss - Discontinued Hedges, net of tax

 

  -   

 

-   

 

(13.7)

 

(0.06)

 

Net  Income (GAAP)

 

$216.8

 

$0.83

 

$173.1

 

$0.72

 

 

 

 

 

 

 

 

 

 

 

Average Shareholders' Equity Core Operating Activities

 

 

 

 

 

$4,833

 

 

 

Cumulative Derivative Adjustments - Discontinued Hedges, net of tax

 

 

 

(19)

 

 

 

Average Shareholders' Equity (GAAP)

 

 

 

 

 

$4,814

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Based on GAAP

 

 

 

 

 

 

 

 

 

     Efficiency  Ratio   

 

                       61.1

%

 

 

                64.5

%

 

 

     Efficiency  Ratio  without  Metavante   

 

50.7

 

 

 

51.1

 

 

 

     Return on Assets

 

1.56

 

 

 

1.50

 

 

 

     Return on Equity

 

14.05

 

 

 

14.58