Marshall & Ilsley Corp.'s first-quarter loss widened despite lower loan-loss provisions as the company reported a sharply reduced tax benefit, as well as increased noninterest and credit-related expenses.
It marks the sixth consecutive quarterly loss for the Wisconsin regional bank despite an increase in revenue. President and Chief Executive Mark Furlong said, "Our first quarter results reinforce our confidence that a credit quality recovery is under way at M&I."
Many banks, including the Wisconsin lender, began to show some signs of improved credit quality late last year. Still, Marshall & Ilsley is expected to continue to struggle this year because of its exposure to some of the most-troubled U.S. housing markets and especially large exposure to commercial construction loans. Marshall & Ilsley last month extended its moratorium, begun in December 2008, on foreclosures by an additional 90 days through the end of June.
The company reported a loss of $115.4 million, or 27 cents a share, compared with a prior-year loss of $92 million, or 44 cents. The tax benefit Revenue increased 8.7% to $636.7 million.
Analysts polled by Thomson Reuters most recently forecast a loss of 40 cents on revenue of $575 million.
Loan-loss provisions fell to $458.1 million from $477.9 million a year earlier and $639 million in the fourth quarter. Charge-offs, or loans thought not to be collectible, grew to 3.94% of average loans and leases from 2.67% a year earlier but fell from 5.01% sequentially. Nonperforming loans, or those near default, were 4.58% of total loans, compared with 4.21% and 4.62%, respectively.
Moody's Investors Service in December predicted Marshall & Ilsley would see "sizable credit losses throughout 2010" because of its real-estate focus, as the credit agency downgraded its ratings.
Shares closed Monday at $8.41 and were inactive premarket. The stock is up 54% this year.