M&I Bank will receive $1.7 billion from the federal bailout program
M&I to receive $1.7 billion in federal bailout funds
Milwaukee-based Marshall & Ilsley Corp. announced last week that the U.S. Treasury Department will purchase $1.7 billion in M&I stock as part of the $700 billion federal bailout package for the banking industry.
The Treasury Department’s Capital Purchase Program is designed to infuse capital into the nation’s healthiest and strongest banks. The $1.7 billion in capital would raise M&I’s Tier 1 and Total Capital ratio levels at September 30, 2008 from 7.9 percent to 10.9 percent, and from 11.8 percent to 14.8 percent, respectively. The preferred stock will carry a 5 percent coupon for 5 years, and 9 percent thereafter.
"Being chosen by the Treasury Department underscores M&I’s strength as a financial institution," said Mark Furlong, president and CEO of M&I. "Although M&I is already one of the best-capitalized and most stable banks in the nation, the additional $1.7 billion in capital will enable us to further increase our already substantial lending activity to invest in the needs of our current and future customers across all of our markets. It also enables us to more quickly return to our strategic growth plan for the benefit of our customers, employees, shareholders, and our communities."
Two Chicago-based banks with Milwaukee-area branches have also announced that they will receive funds from the U.S. Treasury. Northern Trust has agreed to sell $1.5 billion worth of its preferred stock to the treasury, and Midwest Bank Holdings Inc., will receive about $85.5 million from the treasury.