M&I reports loss of $858.8 million for 2009; Record revenues boost U.S. Bank; TCF continued earnings recovery in Q4 2009; Bank Mutual Corp.’s earnings fall; Income soars for parent company of National City Bank
M&I reports loss of $858.8 million for 2009
Marshall & Ilsley Corp. reported a fourth quarter net loss of $259.5 million, or 54 cents per share, which capped a fiscal year in which it lost $858.8 million, or $2.46 per share.
The company’s net loss for 2009 was actually an improvement over its 2008 performance, when the firm lost $2.0 billion, or $7.92 per share. The financial results for 2008 included a goodwill impairment charge of $1.5 billion after tax.
"Our aggressive approach to managing credit continued to impact M&I’s financial results during the fourth quarter of 2009," said Mark Furlong, president and chief executive officer of the Milwaukee-based parent company of M&I Bank. "Despite the loss, there are some encouraging signs that credit quality has stabilized and core earnings trends have improved. M&I remains committed to returning the company to profitability as soon as possible."
M&I’s average loans and leases totaled $45.3 billion for the fourth quarter of 2009, decreasing $4.9 billion or 10 percent compared with the fourth quarter of 2008. When adjusted for the targeted reduction in the corporation’s construction and development portfolio, loans fell $1.2 billion or 3 percent vs. the same period last year.
In a conference call with analysts, M&I executives expressed confidence that the company’s performance is improving.
The company’s nonperforming loans were down for the second consecutive quarter. The $205 million decrease of nonperforming loans in the last quarter was down 9 percent form the previous quarter.
“We continue to remain aggressive in dealing with tough credit issues,” Furlong said. “As we move into 2010, we intend to leave no struggling asset unaddressed. We are glad to put the last two years behind us.”
Greg Smith, chief financial officer for the company, said, “We are building confidence that a recovery is underway at M&I. Our non-performing loans continue to decline.”
Record revenues boost U.S. Bank
U.S. Bancorp reported fourth quarter net income of $602 million, or 30 cents per share, up from $330 million, or 15 cents per share, in the same period a year ago.
The Minneapolis-based parent company of U.S. Bank, which has a large Wisconsin presence, said its most recent quarter’s growth was driven by record total net revenue of $4.4 billion, the result of strong year-over-year growth in both net interest income and fee revenue.
The company’s results were impacted by two significant items: a $278 million provision for credit losses in excess of net charge-offs and $158 million of net securities losses.
For the full fiscal year, U.S. Bancorp reported 2009 net income of $2.2 billion, down from $2.9 billion in 2008.
U.S. Bancorp chairman, president and chief executive officer Richard Davis said, "U.S. Bancorp’s fourth quarter and full year 2009 earnings fully reflected the strength and quality of the company, as we achieved record total net revenue for both the quarter and the year. The strong growth in net revenue, the result of our expanding balance sheet and fee-based businesses, as well as recent investments in our branch network and various growth initiatives, was the primary driver behind the increase in fourth quarter earnings compared with the same period of 2008.”
Looking forward, Davis said, “Given the company’s diversified revenue mix, stable businesses, industry-leading performance, capital generation, and its dedicated employees, I am confident that we will continue to grow and prosper in the coming year, as we continue to serve our customers, support our communities, assist the government in their efforts to stimulate and strengthen the economy, and create long-term value for our shareholders, all of which will serve to further distinguish U.S. Bancorp as one of the strongest leaders in the financial services industry today."
TCF continued earnings recovery in Q4 2009
TCF Financial Corp., the Minnesota-based corporate parent of TCF Bank, which has several Wisconsin locations, posted $19.5 million in fourth quarter 2009 earnings, an 11.5 percent increase over its third quarter earnings of $17.5 million. However, the bank’s fourth quarter earnings were almost 30 percent below its same-quarter earnings from one before, when it had $27.7 million in earnings.
“While credit issues remain at elevated levels, TCF has remained profitable throughout this economic crisis and our credit metrics have outperformed most of our peers,” said William A. Cooper, TCF chairman and CEO. “An improving economy and stabilizing home values may signal improvements in the credit cycle in the coming quarters. TCF’s conservative business model has proven its sustainability throughout the recent economic recession. I remain optimistic about the future of TCF going into this new decade.”
Bank Mutual Corp.’s earnings fall
Brown Deer-based Bank Mutual Corp. reported net income for the year of $13.7 million, or 29 cents per share, compared with $17.2 million or 35 cents per share in 2008.
The company’s net income for the fourth quarter of 2009 was $1.5 million, or 3 cents per share, down from $6.2 million, or 13 cents per share, in the same period a year ago.
Michael Crowley Jr., chairman, president, and chief executive officer, said, "Our recent earnings performance has been impacted by difficult interest rate and economic environments that continue to erode the yields on our loans and investments and challenge some of our customers’ ability to repay their loans. However, we are committed to positioning our balance sheet for the future and maintaining conservative lending standards. Given our outlook for higher interest rates in the future, we believe this commitment will pay off in the long-run, but it may result in lower net interest income in the near term."
During 2009, Bank Mutual experienced increased levels of liquidity due to reduced portfolio loan demand and increased repayment activity in its loan and securities portfolios.
Income soars for parent company of National City Bank
The PNC Financial Services Group Inc., the parent company of National City Bank, posted 2009 net income of $2.4 billion, or $4.36 per diluted common share, up from with 2008 net income of $914 million, or $2.44 per diluted common share.
Fourth quarter 2009 net income was $1.1 billion, or $2.17 per diluted common share, compared with net income of $559 million, or $1.00 per diluted common share, for the third quarter of 2009.
"During the most challenging economic environment of our time, the execution of the PNC business model resulted in exceptional 2009 performance," said James Rohr, chairman and chief executive officer of Pittsburgh-based PNC Financial. "Our businesses performed well and customer growth and sales of products and services across the franchise were strong, giving us considerable momentum starting into 2010. We continue to focus on risk management and made significant progress in transitioning to a stronger balance sheet with strengthened loan loss reserves, liquidity and capital."
PNC acquired National City Corp. of Cleveland, Ohio, on Dec. 31, 2008. National City operates several branches in the Milwaukee market.
