Marshall & Ilsley Drops
Marshall & Ilsley Drops
By Linda Shen
Oct. 20 (Bloomberg) -- Marshall & Ilsley Corp. fell more than 12 percent, the worst decline in the KBW Bank Index today, after posting a fourth straight quarterly loss and disclosing plans for a $775 million stock sale.

Net loss attributable to the bank was $223.4 million, or 68 cents a share, compared with a profit of $83.1 million, or 32 cents, the same period a year earlier, the Milwaukee-based lender said today in a statement.

Marshall & Ilsley Chief Executive Officer Mark Furlong has struggled to contain losses on housing and construction loans in Florida and Arizona, which make up 13.7 percent of its total portfolio. The lender, Wisconsin’s biggest, got $1.72 billion in aid from the U.S. Treasury’s Troubled Asset Relief Program, and proceeds from the stock offering could be used to repay some of those funds, according to a separate statement.

“There are some encouraging early signs that credit quality is improving, but we realize it will take a few more quarters to fully address our problem loans,” Furlong said in the bank’s quarterly release.

Marshall and Ilsley dropped 81 cents to $6.37 at 9:47 a.m. in New York Stock Exchange composite trading and sold for as little as $6.29. Marshall & Ilsley had fallen 61 percent in the past 12 months.

The bank the common stock offering will fund “general corporate purposes” and said it might “contribute some portion of the net proceeds to the capital of its subsidiaries.”

Morgan Stanley and Bank of America Corp. are the joint book-runners for the offering, Marshall & Ilsley said.

Marshall & Ilsley set aside $578.7 million to cover bad debts, soaring from $155 million the same period a year earlier. The company said assets no longer collecting interest rose to $2.6 billion from $1.5 billion in the third quarter of 2008, and said nonperforming loans fell $166 million from the second quarter, the “first decline in four years.”

To contact the reporter on this story: Linda Shen in New York at