On Thursday, Marshall & Ilsley Corp. (MI), commonly known as M&I, announced a regular quarterly cash dividend of $21.4 million on its senior preferred stock, series B, which was purchased by the U.S. Treasury as a part of the Troubled Asset Relief Program (TARP). The dividend is expected to be paid on May 17, 2010 to the Treasury at the close of business on May 3, 2010.
The affirmation on dividend came in immediately after the pronouncement by the management, at the fourth quarter earnings conference call, that M&I does not expects to exit TARP in 2010, given the weak operational dynamics. The U.S. Treasury had infused $1.7 billion of capital in M&I in mid-Nov 2008.
Additionally, the Board of M&I also declared a regular quarterly cash dividend of 1 cent per share on its common stock. The dividend is payable on Mar 12, 2010 to common stock shareholders of record as on Mar 1, 2010.
M&I reported a 2009 fourth quarter net loss of 54 cents per share, which came in above the Zacks Consensus Estimate of a loss of 48 cents. However, it also raised money worth $775 million through common stock offering to increase its capital position and to provide a cushion to handle soured loans. This was the second initiative to raise capital since Jun, 2009.
The ongoing financial turmoil has marred core growth across sectors and financial services did not go unscarred. Non-performing loans, declining credit quality on a lean job market and constant fluctuations in the financial markets led to a substantial loss of earnings for M&I as well, as compared to its historical levels.
However, the company has been able to meet most of the challenges by drastic cost-cutting, bonus-freezing and dividend reduction measures. We believe that as the economy advances to a more favorable environment, M&I with a satisfactory net interest margin, a strong capital base and ample liquidity will be able to meet the fund requirements of its customers.