At first, it’s hard to tell if BMO Financial Group’s $4.1 billion acquisition of Marshall & Ilsley is about a strategic expansion of business in the U.S. or an opportunistic buy of a bank beat up by bad real estate loans.
The answer is it is probably both. Marshall & Ilsley has lost money for nearly two years because its loan portfolio – heavily commercial – soured across the board. But it has a strong deposit footprint in Wisconsin, Minnesota, Florida and Arizona.
One of the interesting take aways from the Blackstone earnings report is that, at least in its real estate portfolio, there are signs of having hit or being near a bottom. The company said that it saw property values in the hotel and office segments begin to stabilize – the return for its real estate funds was a negative 0.5% in the most recent quarter versus a negative 29% in the year-ago quarter.
This could be a good sign for the overall commercial real estate market.
Associated Banc-Corp invites customers to learn how to put a safety net around their hard-earned money. The company is aggressively trying to do the same thing to its own financials.
The Green Bay bank reported a big loss today for hte fourth quarter ($161 million) and put all of the blame on its commercial loan portfolio. A huge chunk of the problems are in its construction loan portfolio – it charged off $124 million of those loans (which is more than half of its total charge offs). That $124 million was an 871% increase from just the third quarter of last year. Commercial real estate charge offs of $40 million were an 811% increase from the third quarter.
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