"In the spring of 1847, Samuel Marshall arrived in Milwaukee in a two-horse stagecoach with several thousand dollars, a few years of business experience and a dream for the young city of Milwaukee. At the time, Wisconsin was still one year away from becoming a state. Marshall rented half of a cobbler shop and, on April 21, 1847, opened the doors of 'Samuel Marshall & Co., Exchange Brokers.' In 1849, he was joined by Charles Ilsley. Together, they set out to build one of Wisconsin's premier financial institutions â€“ Marshall & Ilsley Corporation."
So says the "history" page of the Web site of the Milwaukee-based parent company of M&I Bank.
Fast forward to April 2007, and Marshall & Ilsley was flying high. The company was reporting record quarterly earnings, and its stock was trading at more than $38 per share.
Little did we know then that the real estate bubble was about to burst, the Great Recession was about to slam the economy and M&I, holding hundreds of millions of dollars in doomed mortgages in Florida and Arizona, would soon crumble.
M&I could not stop the hemorrhaging, losing more than $2 billion in 2008, $758.6 million in 2009 and $515.9 million in 2010.
In its final full quarter as an independent company, the company recently reported a first quarter 2011 net loss of $142.0 million, or 27 cents per share. M&I entered into a definitive agreement on Dec. 17, 2010, in which all of its outstanding shares of common stock will be acquired by BMO Financial Group of Canada.
BMO will terminate the M&I brand, and Wisconsin's largest bank will be folded into BMO Harris Bank.
The death of the M&I brand and the loss of a corporate headquarters are nothing short of Milwaukee tragedies.
Shareholders are angry. Hundreds of employees are losing their jobs. For some, the pain is made worse with the knowledge that M&I chief executive officer Mark Furlong is skating away with a new gig as president and CEO of BMO Harris Bank in Chicago and an $18 million golden parachute, even though M&I still owes $1.3 billion in taxpayer bailout money through the Troubled Asset Relief Program (TARP). BMO also agreed to pay $65 million in severance to 15 other high-ranking M&I executives.
In addition to individual shareholders and employees, several institutional investors also are feeling the pain, including Northwestern Investment Management Company LLC, the asset management arm of The Northwestern Mutual Life Insurance Company in Milwaukee, which owned nearly 12.9 million shares of M&I's common stock. You can bet that most of those shares were purchased at a much higher price than the $8.14 range it is trading at per share these days.
Let the record show that the M&I story will end unceremoniously today, May 17, with a special shareholder meeting. Historically, the company's annual shareholder meetings have been in Milwaukee, but the final meeting will be held at noon Milwaukee time at the Marriott Marquis Hotel in New York City.
Wisconsin firefighters and public employees will be joined by service and construction workers, community supporters and members of Sheet Metal Workers' International Association, AFL-CIO in a demonstration in front of the hotel near Time Square.
The demonstrators will be protesting the donations by key M&I executives to Scott Walker's Wisconsin gubernatorial campaign at a time when the company still has not repaid its TARP debts to taxpayers.
Somehow, I have to believe the New York scene is not the kind of ending to the M&I story that Samuel Marshall and Charles Ilsley would have envisioned.
banche446 | May 17, 2011 at 2:35 p.m. (report)
What these guys did to our hometown bank is shameful. And they're slipping into the night with their own loots.
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