October 20, 2009 / 11:47 AM / 10 years ago

UPDATE 3-M&I posts Q3 loss, to sell $775 mln of stock

 * 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)


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