Marshall & Ilsley 2nd-qtr loss narrows, but misses Wall Street forecasts, sending stock down

Marshall & Ilsley stock slumps on big 2Q loss

MILWAUKEE — Marshall & Ilsley Corp. on Tuesday posted a narrower net loss for the second quarter, as it wrote off fewer bad loans and set aside less money to cover souring credit.

The results, however, missed Wall Street expectations, and the bank’s stock slumped by 8 percent.

After paying preferred dividends, the company posted a net loss of $173.8 million, or 33 cents per share, an improvement from a restated loss of $234 million, or 83 cents per share, in the year-ago quarter.

Yet analysts polled by Thomson Reuters expected, on average, a loss of only 26 cents per share.

Net interest income, or money earned from deposits and loans, rose 2 percent to $407.3 million, from $398.5 million in the 2009 second quarter.

Total deposits slipped 4 percent to $39.6 billion, from $41.2 billion last year, while total loans fell 14 percent to $41.3 billion, from $48.2 billion a year ago.

Non-interest income, or earnings from fees and service charges, slid 34 percent to $174 million, from $264.8 million last year, reflecting big drops in investment gains and mortgage banking fees.

Nonperforming assets, or loans that are considered past due, totaled $2.25 billion, down 19 percent from $2.77 billion in the 2009 second quarter.

Net charge-offs, or loans that were written off as uncollectable, fell 27 percent to $438.3 million, from $603.3 million last year.

Marshall & Ilsley reduced is provision for loan and lease losses by 29 percent to $439.9 million, from $619 million last year. The bank said early stage delinquencies fell 14 percent from the first quarter, the fifth consecutive quarterly decline, to reach their lowest level since 2009.

“This continues the progress we have made in addressing asset quality challenges through our early identification of problem credits,” said CEO Mark Furlong in a statement. “We will remain diligent in continuing to improve our credit profile, but our attention will increasingly shift toward a return to profitability and growth opportunities.”

Shares of Marshall & Ilsley fell 61 cents to close at $7.10.

(This version CORRECTS deposit and loan figures in 6th paragraph to billions, instead of millions)