Wisconsin Banking News

M&I revises quarterly loss to $1.9 billion; Milwaukee Biz Blog: M&I Insiders haven’t lost the faith; PNC slashes dividend to retain $1 billion in capital

M&I revises quarterly loss to $1.9 billion
On Monday, Marshall & Ilsley Corp. reported a revised 2008 fourth quarter net loss of $1.9 billion, or $7.25 per share.

The revision was driven entirely by a non-cash goodwill impairment charge, which is an adjustment to the Milwaukee-based company’s balance sheet that does not affect cash flow or liquidity.

The parent company of M&I Bank said the charge has a "negligible" impact on its regulatory and tangible capital ratios.

The corporation initially reported a 2008 fourth quarter net loss of $404 million, or $1.55 per share. M&I also reported a revised net loss of $2.1 billion, or $7.92 per share, for the full fiscal year of 2008. The company initially reported a net loss for the 12 months ended Dec. 31, 2008, of $568 million, or $2.19 per share.

"The goodwill impairment charge was driven by the decline in M&I’s stock price and the deteriorating economy," said Greg Smith, senior vice president and chief financial officer of M&I. "This non-cash charge had no impact on the company’s cash flow or liquidity and has a negligible impact on regulatory and tangible capital ratios."

The company said results showed that the estimated fair values of certain M&I reporting units were less than their book values, resulting in the charge.

Milwaukee Biz Blog: M&I Insiders haven’t lost the faith
Insiders at Marshall & Ilsley Corp. are continuing to buy the company’s stock, even though the Milwaukee-based parent firm of M&I Bank lost more than $2 billion in fiscal 2008. Read more in BizTimes Milwaukee executive editor Steve Jagler’s latest Milwaukee Biz Blog.

PNC slashes dividend to retain $1 billion in capital
Pittsburgh-based PNC Financial Services Inc., announced Monday that it was cutting its quarterly stock dividend to 10 cents per share from 66 cents per share. The move is expected to save PNC, which operates branches in 13 states, about $1 billion per year. PNC is expected to issue its next dividend in April.

“We are taking this proactive step to build capital, further strengthen our balance sheet and serve our customers in an unprecedented and uncertain economy,” said James E. Rohr, chairman and CEO. “While our overall capital and liquidity positions are strong, extreme market deterioration and the changing regulatory environment drove this difficult but prudent decision.”

Last October, PNC announced it had reached terms to acquire National City Corp., the corporate parent of National City Bank, for about $5.2 billion. National City entered the Milwaukee-area market in 2007 when it acquired MAF Bancorp Inc., which had previously acquired St. Francis Capital Corp. in 2003.

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