5. Marshall & Ilsley
Marshall & Ilsley
of Milwaukee closed at $7.00 Wednesday, returning 31% year-to-date. The company owes $1.7 billion in TARP money.
Marshall & Ilsley reported a second-quarter net loss to common shareholders of $173.8 million, or 33 cents a share, following a first-quarter loss of $140.5 million ,or 27 cents a share, when the company reported a one-time gain of $48.3 million from the sale of its merchant processing portfolio. For the second quarter of 2009, the net loss to common shareholders was $234 million or 83 cents a share.
While a high level of loan charge-offs kept the company in the red, Marshall & Ilsley's tax-adjusted net interest margin improved to 3.17% for the second quarter from 2.79% a year earlier, according to SNL Financial.
Total assets were 54 billion as of June 30 and the nonperforming assets ratio was 4.18%, declining from 4.27% the previous quarter and 4.67% a year earlier. The net charge-off ratio was 4.16% and with reserves covering 3.67% of total loans, it appeared the company would continue to make large provisions for loan loss reserves over coming quarters.
As of June 30, Marshall & Ilsley's Tier 1 leverage ratio was 9.12% and its total risk-based capital ratio was 14.35%. According to SNL Financial, the company's tangible common equity ratio was 8.19%, the highest among this group of ten banks holding companies.
Shares trade for 0.8 times tangible book value. The consensus estimate is for the company to earn 3 cents a share in 2011 and 71 cents in 2012. Based on the 2012 estimate, Marshall & Ilsley's forward P/E would be 9.9.
Out of 19 analysts covering Marshall & Ilsley, five recommend buying the shares, while 11 have hold ratings and three recommend investors sell.