Milwaukee-headquartered Marshall & Ilsley Corp. (M&I), which recently extended its foreclosure moratorium, reports improving credit-quality trends for the third quarter, including an expected $170 million decrease in nonperforming loans from June 30 through Sept. 30.
As of late September, nonperforming loans made up slightly less than 4.9% of the bank's total loans – the first linked-quarter decline in four years.
In addition, early-stage loan delinquencies (i.e., loans that are 30-89 days delinquent) decreased by approximately $220 million, or 20%, during the third quarter.
‘While we see some continuation of improvement in credit quality and read these as hopeful signs of what's ahead, we will continue to manage the business as though the recessionary effects in the economy will remain for several more months,’ says Mark Furlong, president and CEO of M&I. ‘There simply are an inadequate number of consistent trends to reinforce the sentiments that the economy is stabilizing and better times are within sight."
M&I expects to record a special provision for loan and lease losses for the third quarter of approximately $185 million for certain bank holding company loans. This $185 million special provision is in addition to the approximately $390 million to $400 million provision for loan and lease losses previously anticipated for the third quarter.
With these additions, M&I expects the total provision for loan and lease losses for the third quarter of 2009 will be in the range of approximately $575 million to $585 million and expects net charge-offs in the range of approximately $530 million to $540 million. Estimated charge-offs for the quarter include approximately $160 million related to the bank holding company loans.
SOURCE: Marshall & Ilsley Corp.