Marshall & Ilsley Corp.'s fourth-quarter loss narrowed significantly amid a big year-earlier charge, but the bank's results still missed analysts' forecasts.
Shares dropped 1.4% to $6.88 premarket.
"Despite the loss, there are some encouraging signs that credit quality has stabilized and core earnings trends have improved," said President and Chief Executive Mark Furlong.
In December, Moody's Investors Service downgraded the biggest Wisconsin-based bank on the expectation of "sizable credit losses throughout 2010" because of its concentration in real estate, a central focus of the financial crisis. Marshall & Ilsley received $1.7 billion under the government's Troubled Asset Relief Program.
Marshall & Ilsley reported a loss of $259.5 million, or 54 cents a share, narrower than its year-earlier loss of $1.89 billion, or $7.25 a share. The year-earlier quarter included a $1.49 billion write-down.
Analysts polled by Thomson Reuters had most recently forecast a loss of 48 cents.
Loan-loss provisions fell 25% to $639 million from a year earlier and rose 10% from the second quarter. Charge-offs, or loans thought not to be collectible, fell to 5.01% of average loans and leases from 5.38% a year earlier but rose from 4.48% a quarter earlier.
The company's tangible common equity ratio, which measures how much of a bank's hard assets its common shareholders actually own, was 8.2%, compared with 6.4% a year earlier and 7% in the prior quarter.
M&I's total average loans and leases were $45.3 billion for the fourth quarter, down 10% from a year earlier.