* Loss per share $0.68, matching analysts' estimates
* Net charge-offs $532.7 million
* M&I announces public offering of $775 mln of stock
* Shares fall to lowest level since early September (Updates with analysts comments, stock price)
By Juan Lagorio
NEW YORK, Oct 20 (Reuters) - Marshall & Ilsley Corp MI.N announced plans on Tuesday to raise $775 million to boost the capital of subsidiaries, after Wisconsin's largest bank posted its fourth straight quarterly loss.
The bank's stock fell as much as 12.4 percent to $6.29, its lowest price since early September, as the public stock offering is expected to dilute the investments of current shareholders by 28 percent, according to analysts.
"We believe (the capital) raise helps management deal with remaining credit issues, weak pretax pre-provision earnings power, and expected higher industrywide capital requirements," Fox-Pitt analysts said in a research note.
M&I's third-quarter net loss was $248.4 million, or 68 cents per share, compared with net income of $83.1 million, or 32 cents per share, a year earlier, as the bank was hurt by charges related to loans made to other banks and mortgage defaults.
The company had forecast a loss of 68 to 70 cents per share, and analysts' average forecast was a loss of 68 cents, according to Thomson Reuters I/B/E/S.
The regional bank previously said it would record a charge of $185 million related to loans made to smaller banks, which have been hit hard by the recession.
The charge increased M&I's third-quarter provision for loan and lease losses by 273 percent from a year ago to $578.7 million, and boosted its net charge-offs by 250 percent to $532.7 million.
However, nonperforming loans fell $166 million from the prior quarter in the first decline in four years.
In addition, early stage delinquencies declined $218 million, or 21 percent, from the second quarter 2009 at the lowest level since the first quarter of 2008.
"Our financial results during the third quarter of 2009 were negatively impacted by bank holding company loans and housing-related credits," President and Chief Executive Mark Furlong said in a statement.
M&I shares fell 63 cents, or 8.77 percent, to $6.55, off the earlier low of $6.29, on the New York Stock Exchange at mid-afternoon.
(Reporting by Juan Lagorio; Editing by John Wallace, Matthew Lewis and Richard Chang)