MARSHALL & ILSLEY CORP/WI/, 10-K405, 1996-03-08

MARSHALL & ILSLEY CORP/WI/
10-K405, 1996-03-08
NATIONAL COMMERCIAL BANKS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM 10-K
------------------------

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended December 31, 1995

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission File No. 0-1220

MARSHALL & ILSLEY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

WISCONSIN 39-0968604
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

770 NORTH WATER STREET
MILWAUKEE, WISCONSIN 53202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

Registrant's telephone number, including area code: (414) 765-7801

Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:

Common Stock - $1.00 par value
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/

The aggregate market value of the voting stock held by nonaffiliates of the
registrant is approximately $2,305,562,000 as of February 29, 1996. The number
of shares of common stock outstanding as of February 29, 1996 is 92,685,907.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates information by reference from the Proxy Statement for
the registrant's Annual Meeting of Shareholders to be held on April 23, 1996.
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PART I

ITEM 1. BUSINESS

GENERAL

Marshall & Ilsley Corporation ("M&I" or the "Corporation"), incorporated in
Wisconsin in 1959, is a registered bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHCA"), and a registered savings and loan
holding company under the Home Owners' Loan Act of 1933, as amended ("HOLA"). As
of December 31, 1995, M&I had consolidated total assets of approximately $13.3
billion and consolidated total deposits of approximately $10.3 billion, making
M&I the second largest bank holding company headquartered in Wisconsin. The
executive offices of M&I are located at 770 North Water Street, Milwaukee,
Wisconsin 53202 (telephone number (414) 765-7801).

M&I's principal assets are the stock of its bank and nonbank subsidiaries
and the assets of its Data Services Division ("M&I Data Services"). M&I's
subsidiaries include 29 commercial banks, one savings association and a number
of companies engaged in businesses that the Federal Reserve Board (the "FRB")
has determined to be closely-related or incidental to the business of banking.
M&I provides its subsidiaries with financial and managerial assistance in such
areas as budgeting, tax planning, compliance assistance, asset and liability
management, investment administration and portfolio planning, business
development, advertising and human resources management.

M&I's bank and savings association subsidiaries provide a full range of
banking services to individuals, businesses and governments throughout Wisconsin
and the Phoenix, Arizona metropolitan area. These subsidiaries offer retail,
institutional, international, business and correspondent banking, investment and
trust services through the operation of 236 banking offices in Wisconsin and 12
offices in Arizona. M&I Marshall & Ilsley Bank ("M&I Bank"), M&I's largest bank
subsidiary with consolidated assets as of December 31, 1995 of approximately
$4.0 billion, is the third largest bank in Wisconsin.

M&I Data Services is a major supplier of financial and data processing
services and software to banking, financial and related organizations. M&I Data
Services provides services and software to over 500 financial institution
customers in the United States, as well as institutions in numerous foreign
countries. M&I's nonbank subsidiaries operate a variety of bank-related
businesses, including those providing investment management services, insurance
services, trust services, equipment lease financing, commercial and residential
mortgage banking, venture capital, brokerage services and financial advisory
services. M&I Investment Management Corp. offers a full range of asset
management services to M&I's trust company subsidiaries, the Marshall Funds and
other individual, business and institutional customers. M&I's trust company
subsidiaries provide trust and employee benefit plan services to customers in
Wisconsin, Arizona and Florida. M&I First National Leasing Corp. leases a
variety of equipment and machinery to large and small businesses. M&I Mortgage
Corp. originates, purchases, sells and services residential mortgages. The
Richter-Schroeder Company originates and services long-term commercial real
estate loans for institutional investors. M&I Capital Markets Group, Inc.
provides venture capital, financial advisory and strategic planning services to
customers, including assistance in connection with the private placement of
securities, raising funds for expansion, leveraged buy-outs, divestitures,
mergers and acquisitions and small business investment company transactions. M&I
Brokerage Services, Inc., a broker-dealer registered with the National
Association of Securities Dealers and the Securities and Exchange Commission,
provides brokerage and other investment related services to a variety of retail
and commercial customers.

On February 1, 1995, M&I acquired the Bank of Burlington, Burlington,
Wisconsin, which had total assets of approximately $180 million at the
acquisition date. On July 1, 1995, M&I acquired Citizens Bancorp of Delavan,
Inc., Delavan, Wisconsin, and on July 2, 1995, M&I acquired Sharon State Bank,
Sharon, Wisconsin, which were merged and became the M&I Bank of Delavan with
combined assets of $123 million at the merger date.

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PRINCIPAL SOURCES OF REVENUE

The table below shows the amount and percentages of M&I's total
consolidated operating income resulting from interest and fees on loans,
interest on investment securities and fees for data processing services for each
of the last three years:

<TABLE>
<CAPTION>
INTEREST ON
INTEREST AND INVESTMENT FEES FOR DATA
FEES ON LOANS SECURITIES PROCESSING SERVICES
-------------------- -------------------- --------------------
PERCENT PERCENT PERCENT
OF TOTAL OF TOTAL OF TOTAL TOTAL
YEAR ENDED OPERATING OPERATING OPERATING OPERATING
DECEMBER 31 AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME INCOME
- ----------- -------- --------- -------- --------- -------- --------- ----------
($000'S) ($000'S) ($000'S) ($000'S)
<S> <C> <C> <C> <C> <C> <C> <C>
1995................... $774,256 57.4% $136,980 10.2% $213,914 15.9% $1,348,842
1994................... 681,085 57.8 127,587 10.8 159,418 13.5 1,178,787
1993................... 643,679 55.2 143,899 12.3 135,041 11.6 1,165,403
</TABLE>

M&I business segment information is contained in Note 19 of the Notes to
the Consolidated Financial Statements contained in Item 8 hereof.

COMPETITION

M&I and its subsidiaries face substantial competition from hundreds of
competitors in the markets they serve, some of which are larger and have greater
resources than M&I. M&I's bank subsidiaries compete for deposits and other
sources of funds and for credit relationships with other banks, savings
associations, credit unions, finance companies, mutual funds, life insurance
companies (and other long-term lenders) and other financial and non-financial
companies located both within and outside M&I's primary market area, many of
which offer products functionally equivalent to bank products. M&I's non-bank
operations compete with numerous banks, finance companies, data servicing
companies, leasing companies, mortgage bankers, brokerage firms, financial
advisors, trust companies, mutual funds and investment bankers in Wisconsin and
throughout the United States.

The market for the banking technology services offered by M&I Data Services
is national in scope. In any given geographic area, M&I Data Services'
competitors vary in size and include national, regional and local operations.
While historically the bank data processing industry has been highly
decentralized, there is an accelerating trend toward consolidation in the
industry, resulting in fewer companies competing over larger geographic regions.
As consolidation continues, successful companies in this business are likely to
increase substantially in size as the scale of activity necessary to compete
increases.

EMPLOYEES

As of December 31, 1995, M&I and its subsidiaries employed in the aggregate
approximately 9,079 full and part-time employees. M&I considers employee
relations to be excellent. None of the employees of M&I and its subsidiaries are
represented by a collective bargaining group.

SUPERVISION AND REGULATION

As a registered bank holding company and savings and loan holding company,
M&I is subject to regulation and examination by the FRB under the BHCA and the
Office of Thrift Supervision ("OTS") under HOLA. M&I's state bank subsidiaries
are subject to regulation and examination by the Wisconsin Office of the
Commissioner of Banking, or in the case of M&I Thunderbird Bank, the Arizona
State Banking Department, and the FRB (for state banks which are members of the
Federal Reserve System) or the Federal Deposit Insurance Corporation ("FDIC")
(for state banks which are not members of the Federal Reserve System). M&I's
national bank subsidiary is subject to regulation and examination by the Office
of the Comptroller of the Currency. M&I's savings association subsidiary is
subject to regulation and examination by

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the Wisconsin Office of the Commissioner of Savings and Loans and the OTS. In
addition, all of M&I's bank subsidiaries are subject to examination by the FDIC
and other federal agencies.

Under FRB policy, M&I is expected to act as a source of financial strength
to each of its bank subsidiaries and to commit resources to support each bank
subsidiary in circumstances when it might not do so absent such requirements. In
addition, there are numerous federal and state laws and regulations which
regulate the activities of M&I and its bank subsidiaries, including requirements
and limitations relating to capital and reserve requirements, permissible
investments and lines of business, transactions with affiliates, loan limits,
mergers and acquisitions, issuances of securities, dividend payments, extensions
of credit and branch banking. The federal regulatory agencies have implemented
provisions of the Federal Deposit Insurance Corporation Improvement Act of 1991
by creating standards for when they will take prompt corrective action if a
depository institution fails to maintain a certain capital level within
specified categories ranging from "critically undercapitalized" to "well
capitalized." Information regarding capital requirements for bank holding
companies and tables reflecting M&I's regulatory capital position at December
31, 1995 can be found in Note 13 of the Notes to the Consolidated Financial
Statements contained in Item 8 hereof.

Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994, the restrictions on interstate acquisitions have been abolished effective
September 29, 1995. Now, adequately capitalized and managed bank holding
companies from any state may acquire banks and bank holding companies located in
any other state, subject to certain conditions. In addition, banks may create
interstate branching networks on or after June 1, 1997 in states that do not opt
out of the legislation, or prior to such date in states that opt into the
legislation early. The Financial Reform, Recovery and Enforcement Act of 1989
provides that a bank holding company's controlled insured depository
institutions are liable for any loss incurred by the FDIC in connection with the
default of or any FDIC-assisted transaction involving an affiliated insured bank
or savings association.

The laws and regulations to which M&I are subject are constantly under
review by Congress, regulatory agencies and state legislatures. These laws and
regulations may be changed dramatically in the future, which could affect the
ability of bank holding companies to engage in certain activities such as
nationwide banking, securities underwriting and insurance, as well as the amount
of capital that banks and bank holding companies must maintain, premiums paid
for deposit insurance and other matters directly affecting earnings. It is not
certain which changes will occur, if any, or the effect such changes will have
on the profitability of M&I, its ability to compete effectively, or the
composition of the financial services industry.

The earnings and business of M&I and the M&I bank subsidiaries are affected
by the general economic and political conditions in the United States and abroad
and by the monetary and fiscal policies of various federal agencies. The FRB
impacts the competitive conditions under which M&I operates by determining the
cost of funds obtained from money market sources for lending and investing and
by exerting influence on interest rates and credit conditions. In addition,
legislative and economic factors can be expected to have an ongoing impact on
the competitive environment within the financial services industry. The impact
of fluctuating economic conditions and federal regulatory policies on the future
profitability of M&I and its subsidiaries cannot be predicted with certainty.

The foregoing references to applicable laws, statutes, regulations and
legislation are brief summaries thereof which do not purport to be complete and
are qualified in their entirety by reference to such statutes, regulations and
legislation.

SELECTED STATISTICAL INFORMATION

Statistical information relating to M&I and its subsidiaries on a
consolidated basis is set forth as follows:

(1) Average Balance Sheets and Analysis of Net Interest Income for each of
the last three years is included in Item 7, Management's Discussion and
Analysis of Financial Position and Results of Operations.

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(2) Analysis of Changes in Interest Income and Interest Expense for each of
the last two years is included in Item 7, Management's Discussion and
Analysis of Financial Position and Results of Operations.

(3) Nonaccrual, Past Due and Restructured Loans for each of the last five
years is included in Item 7, Management's Discussion and Analysis of
Financial Position and Results of Operations.

(4) Summary of Loan Loss Experience for each of the last five years is
included in Item 7, Management's Discussion and Analysis of Financial
Position and Results of Operations.

(5) Return on Average Shareholders' Equity, Return on Average Assets and
other statistical ratios for each of the last five years can be found
in Item 6, Selected Financial Data.

The following tables set forth certain statistical information relating to
M&I and its subsidiaries on a consolidated basis.

INVESTMENT SECURITIES

The amortized cost of M&I's consolidated investment securities at December
31 of each year are:

<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
U.S. Treasury and government agencies.................. $2,330,577 $1,970,556 $2,139,866
States and political subdivisions...................... 446,998 290,483 326,154
Other.................................................. 98,380 86,533 106,538
---------- ---------- ----------
$2,875,955 $2,347,572 $2,572,558
========== ========== ==========
</TABLE>

The maturities, at amortized cost, and weighted average yields (for
tax-exempt obligations on a fully taxable basis assuming a 35% tax rate) of
investment securities at December 31, 1995 are (in thousands):

AFTER ONE BUT AFTER FIVE BUT
WITHIN ONE YEAR WITHIN FIVE YEARS WITHIN TEN YEARS AFTER TEN YEARS TOTAL
---------------- ------------------ ---------------- --------------- ------------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
-------- ----- ---------- ----- -------- ----- ------- ----- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and government
agencies.................. $662,408 5.53% $1,662,707 6.15% $ 3,754 6.84% $1,708 8.06% $2,330,577 5.98%
States and other political
subdivisions.............. 95,930 6.94 158,504 7.16 183,533 7.41 9,031 9.21 446,998 7.26
Other....................... 7,630 8.60 14,063 10.87 7,483 10.59 69,204 3.80 98,380 5.70
-------- ---- ---------- ----- -------- ----- ------- ---- ---------- ----
$765,968 5.74% $1,835,274 6.27% $194,770 7.52% $79,943 4.50% $2,875,955 6.17%
======== ==== ========== ===== ======== ===== ======= ==== ========== ====
</TABLE>

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TYPES OF LOANS

M&I's consolidated loans, classified by type, at December 31 of each year
are:

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Commercial, financial and
agricultural................... $2,903,920 $2,644,928 $2,538,830 $2,471,150 $2,620,594
Industrial development revenue
bonds.......................... 29,358 31,796 45,889 58,388 52,288
Real estate:
Construction................... 303,345 378,316 333,609 273,556 260,353
Mortgage:
Residential................. 2,002,023 2,240,287 2,223,857 2,160,116 1,977,673
Commercial.................. 2,189,449 2,062,022 2,000,052 1,718,452 1,320,346
---------- ---------- ---------- ---------- ----------
Total mortgage......... 4,191,472 4,302,309 4,223,909 3,878,568 3,298,019
Personal......................... 1,163,127 1,178,453 1,217,513 1,056,901 1,010,682
Lease financing.................. 277,680 256,690 257,622 242,282 219,164
---------- ---------- ---------- ---------- ----------
8,868,902 8,792,492 8,617,372 7,980,845 7,461,100
Less: Allowance for loan
losses......................... 161,430 153,961 133,600 123,805 105,156
---------- ---------- ---------- ---------- ----------
Net loans........................ $8,707,472 $8,638,531 $8,483,772 $7,857,040 $7,355,944
========== ========== ========== ========== ==========
</TABLE>

LOAN BALANCES AND MATURITIES
DECEMBER 31, 1995
DOLLAR AMOUNTS IN THOUSANDS

The analysis of loan maturities at December 31, 1995, and the rate
structure for the categories indicated are:

<TABLE>
<CAPTION>
RATE STRUCTURE OF LOANS
MATURITY DUE AFTER ONE YEAR
------------------------------------------------- ----------------------------------
OVER ONE OVER WITH PRE- WITH
ONE YEAR YEAR THROUGH FIVE DETERMINED FLOATING
OR LESS FIVE YEARS YEARS TOTAL RATE RATE TOTAL
---------- ------------ -------- ---------- ---------- -------- ----------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Commercial, financial and
agricultural............. $2,117,379 $679,506 $107,035 $2,903,920 $ 635,405 $151,136 $ 786,541
Industrial development
revenue bonds............ 10,306 9,772 9,280 29,358 9,511 9,541 19,052
Real estate --
construction............. 207,483 95,862 -- 303,345 64,243 31,619 95,862
Lease financing............ 79,692 197,584 404 277,680 197,988 -- 197,988
---------- -------- -------- ---------- --------- -------- ----------
$2,414,860 $982,724 $116,719 $3,514,303 $ 907,147 $192,296 $1,099,443
========== ======== ======== ========== ========= ======== ==========
</TABLE>

Notes:
(1) Scheduled repayments are reported in the maturity category in which the
payments are due based on the terms of the loan agreements. Demand loans,
loans having no stated schedule of repayments and no stated maturity, and
overdrafts are reported as due in one year or less.

NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS

Generally, a loan is placed on nonaccrual if payment of interest is more
than 60 days delinquent and the loan has been determined by management to be a
"problem" loan. In addition, loans which are past due 90 days or more as to
interest or principal are also placed on non-accrual. Exceptions to these rules
are generally only for loans fully collateralized by readily marketable
securities or other relatively risk free collateral.

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POTENTIAL PROBLEM LOANS

At December 31, 1995, the Corporation had $23,623 of loans for which
payments are presently current, but the borrowers are experiencing serious
financial problems. These loans are subject to constant management attention and
their classification is reviewed on a quarterly basis.

OTHER INTEREST BEARING ASSETS

At December 31, 1995, the Corporation's commercial finance subsidiary had
$4,093 of corporate debt investment securities on nonaccrual status. The gross
interest that would have been recorded in 1995 under the original terms amounted
to $413. There was no interest income recorded during 1995 with respect to such
debt securities.

DEPOSITS

The average amount of and the average rate paid on selected deposit
categories for each of the years ended December 31 is as follows:

<TABLE>
<CAPTION>
1995 1994 1993
------------------ ------------------ ------------------
AMOUNT RATE AMOUNT RATE AMOUNT RATE
---------- ----- ---------- ----- ---------- -----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Noninterest bearing demand
deposits.......................... $1,980,035 $2,051,864 $1,997,781
Interest bearing demand deposits.... 959,234 1.85% 1,084,552 1.65% 1,081,702 1.88%
Savings deposits.................... 3,006,002 3.61% 2,869,618 2.54% 2,792,851 2.57%
Time deposits....................... 3,664,144 5.61% 3,664,063 4.51% 3,902,398 4.61%
---------- ---------- ----------
Total deposits............ $9,609,415 $9,670,097 $9,774,732
========== ========== ==========
</TABLE>

The maturity distribution of time deposits issued in amounts of $100,000
and over and outstanding at December 31, 1995 (in thousands) is:

<TABLE>
<S> <C>
Three months or less...................................................... $281,827
Over three and through six months......................................... 126,556
Over six and through twelve months........................................ 136,600
Over twelve months........................................................ 115,294
--------
$660,277
========
</TABLE>

At December 31, 1995, time deposits issued by foreign offices totalled
$44,847.

SHORT-TERM BORROWINGS

Information related to M&I's funds purchased and security repurchase
agreements for the last three years is as follows (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Amount outstanding at year end.................. $ 517,576 $ 944,843 $515,028
Average amount outstanding during the year...... 739,191 835,472 556,812
Maximum amount outstanding at any month's end... 1,094,314 1,011,509 907,247
Weighted average interest rate at year end...... 4.99% 5.17% 2.78%
Weighted average interest rate during the
year.......................................... 5.70% 4.09% 2.87%
</TABLE>

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SUMMARY OF LOAN LOSS EXPERIENCE

The following should be read in conjunction with Item 7, Management's
Discussion and Analysis of Financial Position and Results of Operations.

The Corporation's evaluation of the adequacy of the allowance for loan
losses broadly consists of two levels of analysis. The first level focuses
primarily on assessments of specific credits, as described more fully below. The
second more general level of analysis focuses on categories of similar type
loans and portfolio segments (e.g., commercial/individual; real estate/non-real
estate; geographical regions related to the locations of affiliate banks). These
methodologies include multiple analytical approaches which are viewed together
to assess overall reserve and provision levels. The analyses consider, among
other factors, historical loss experience, current and anticipated economic
conditions, loan portfolio trends, portfolio composition by segment, assigned
credit grades, and estimates of potential loss exposures.

The loan portfolios of the Corporation's affiliate banks and leasing
subsidiary are subject to continual management oversight and quarterly analyses.
Management's analyses are based on the Corporation's credit grading system which
classifies loans in a manner similar to that of bank regulatory examiners, with
estimates of probable and potential losses derived. Management's assigned credit
grades and quarterly portfolio analyses are subject to independent monitoring by
the Corporation's credit review group, which also performs periodic portfolio
reviews at each affiliate. The credit review group prepares reports on the
results of its evaluations of affiliate loan portfolios, which together with
quarterly analyses of credit exposure provided by affiliate management, serve as
the basis for determining the adequacy of the allowance for loan losses.

Management utilizes the above-described reserve analysis approaches to
determine the overall adequacy of the allowance for loan losses. Management's
overall assessment is based on its view of the loan portfolio as consisting of
commercial business loans, real estate loans, personal loans, and direct
financing leases. Industrial development revenue bonds are viewed as commercial
real estate loans.

During 1995, consolidated net charge-offs increased to $9.3 million,
representing $14.6 million of charge-offs, offset by $5.3 million of recoveries.
The 1995 net charge-off level closely parallels the levels of 1992 and 1993,
which were above the unusually low 1994 level of $4.6 million, but below the
higher than historic net charge-off level experienced in 1991. Gross charge-off
levels declined from 1991 through 1994 and although 1995 levels increased, they
remained at the second lowest level during the five-year period. Recovery levels
in 1991, 1993 and 1994 were relatively consistent, and contrast to a higher
level of recoveries in 1992 and a lower level of recoveries in 1995. Recoveries
in 1992 were unusually high due to the collection of a large commercial loan
charge-off recorded in 1990. The generally positive net charge-off levels
experienced during the post-1991 period reflect the relative strength of the
Wisconsin economy and stabilization in the Arizona economy and real estate
levels. The Corporation's Arizona-based loan portfolio represents approximately
3% of the total portfolio.

The Corporation's 1995 provision level of $16.2 million is consistent with
the 1994 general provision level of $16.0 million, not including the $8.9
million special provision taken in 1994. The special provision, which was
charged to expense, was utilized to conform Valley's loan valuation policies
with those of the Corporation, after consummation of the merger. The 1994 and
1995 general provision levels are lower than the previous three years. The
resulting 1995 year-end reserve level is $161 million, or 1.82% of total loans,
which compares to the year-end 1994 reserve level of 1.75%. The increasing
reserve levels in 1991 through 1995 reflect the Corporation's favorable net
charge-off experience and the inherent cyclical nature of economic conditions
and related credit impacts. In addition, the 1995 reserve level of 1.82%
reflects a reduction in loan volume due to the securitization of mortgage loans
and related transfer of a portion of the loan loss reserve to a recourse
reserve. The year-end 1995 reserve level is considered adequate given
uncertainties regarding the economic conditions in the country and the
Corporation's primary service areas.

The Corporation's 1995 charge-off and recovery levels across portfolio
sectors generally reflect the current stability of the Wisconsin and Arizona
economies. These conditions contrast with 1990 and 1991 when conditions were
generally less favorable and weaknesses in economic conditions and real estate
values significantly impacted the Corporation's Arizona-based portfolio,
resulting in higher than historic levels of

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<PAGE> 9

losses. The 1995 charge-off level for commercial loans was above the abnormally
low 1994 level, but below 1991-1993 levels. During the 1991-1995 period,
commercial loan recoveries generally declined, with the exception of 1992 when a
large recovery occurred relating to a 1990 charge-off. The higher 1992 recovery
and the abnormally low 1994 gross charge-offs, resulted in small net commercial
loan recoveries in 1992 and 1994. The 1995 charge-off for construction real
estate loans, decreased from the 1994 peak. The losses were offset by negligible
recoveries and continue to be relatively immaterial. The 1995 charge-offs for
real estate mortgages, which decreased to the lowest level in five years, were
offset by lower than normal recoveries. Resulting net charge-offs increased from
1993 and 1994 levels, but remained below 1991 and 1992 levels. The 1995 charge-
off and recovery levels for personal loans increased above 1993 and 1994 levels,
but remained below 1991 and 1992 levels. The 1995 charge-offs for the
Corporation's lease financing portfolio approximated 1993 and 1994 levels,
remaining below 1991 and 1992 levels. Offsetting recoveries continued to
decrease from their 1993 peak, resulting in 1995 net charge-offs which were
slightly below the five-year average.

The Corporation's charge-off and provision levels for 1996 are expected to
continue to be largely dependent on economic conditions in the Corporation's
primary service areas. While general economic conditions continue to be
relatively stable, should national or regional conditions deteriorate, the
Corporation's Wisconsin and Arizona markets may be adversely affected. Absent
deterioration in these conditions, total charge-offs for 1996 are not currently
expected to vary significantly from 1995 levels. Offsetting recoveries are
currently expected to decrease slightly from 1995 levels as a result of the
general decline in gross charge-offs in recent years. At the present time, there
are no material loans which are known or believed to be in imminent danger of
deteriorating or defaulting which are currently expected to give rise to
material charge-offs; however, loss levels can be significantly impacted by a
few large loans which could deteriorate unexpectedly or be adversely impacted by
economic conditions. Based on current conditions, commercial loan losses for
1996 are expected to approximate normal historic levels, remaining below peak
1990 and 1991 levels. Commercial real estate loans continue to be highly
vulnerable to regional economic conditions and real estate values; however,
based on current conditions, real estate and construction loan losses for 1996
are not currently expected to vary significantly from 1995 levels. Based on the
current portfolio size, composition and experience, personal loan losses for
1996 are expected to approximate normal historic levels, remaining below the
peak level experienced in 1991. However, the Corporation is not immune to the
potential impacts of national trends in retail credit delinquencies and
collections. At the present time, direct lease financing losses for 1996 are
expected to approximate historic levels; however, actual losses could be
impacted by portfolio growth, fraud, or unanticipated weaknesses in industry
segments within the portfolio.

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<PAGE> 10

ITEM 2. PROPERTIES

M&I and M&I Bank occupy offices on all or portions of 16 floors of a
21-story building located at 770 North Water Street, Milwaukee, Wisconsin. A
subsidiary of M&I Bank owns the building and its adjacent 10-story parking lot
and leases the remaining floors to a professional tenant. In addition, various
subsidiaries of M&I lease commercial office space in downtown Milwaukee office
buildings near the 770 North Water Street facility. M&I Bank also owns or leases
various branch offices located in Milwaukee and in surrounding suburban
communities. M&I has 28 subsidiary banks and one savings association located in
cities throughout Wisconsin. M&I Thunderbird Bank, a wholly-owned bank
subsidiary of M&I, is located in Phoenix, Arizona and has 12 offices in Phoenix
and the surrounding Maricopa County communities. The subsidiary banks and
savings association occupy modern facilities which are owned or leased. M&I owns
a data processing facility located in Brown Deer, a suburb of Milwaukee, from
which M&I Data Services conducts data processing activities. Properties leased
by M&I for M&I Data Services also include commercial office space in Brown Deer,
a data processing site in Oak Creek, Wisconsin, and processing centers and sales
offices in various cities throughout the United States.

ITEM 3. LEGAL PROCEEDINGS

M&I is not currently involved in any material pending legal proceedings
other than litigation of a routine nature and various legal matters which are
being defended and handled in the ordinary course of business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
NAME OF OFFICER OFFICE
- ------------------------- ------------------------------------------------------------------
<S> <C>
J.B. Wigdale Chairman of the Board since December, 1992, Chief Executive
Age 59 Officer since October, 1992, Director since December, 1988, Vice
Chairman of the Board, December, 1988 to December, 1992, Marshall
& Ilsley Corporation; Chairman of the Board since January, 1989,
Chief Executive Officer since 1987, Director since 1981, M&I
Marshall & Ilsley Bank; President and Director -- M&I Financial
Corp., M&I Building Corp. and Loujo Company; Director -- M&I First
National Leasing Corp., M&I Mortgage Corp., Richter-Schroeder
Company, Inc., M&I Data Services, M&I Capital Markets Group, Inc.
and Marshall & Ilsley Trust Company.
D.J. Kuester Director since February, 1994, President since 1987, Marshall &
Age 54 Ilsley Corporation; President and Director since January, 1989,
M&I Marshall & Ilsley Bank; Chairman of the Board, Chief Executive
Officer and Director, M&I Data Services; Director -- M&I Financial
Corp. and M&I Building Corp; President and Director, M&I Insurance
Company of Arizona, Inc.
P.M. Platten, III Vice Chairman of the Board and Director since May, 1994, Marshall
Age 56 & Ilsley Corporation; Chairman of the Board, January, 1993 to May,
1994, President and Chief Executive Officer, January, 1989 to May,
1994, Valley Bancorporation.
</TABLE>

10
<PAGE> 11

<TABLE>
<CAPTION>
NAME OF OFFICER OFFICE
- ------------------------- ------------------------------------------------------------------
<S> <C>
G.H. Gunnlaugsson Director since February, 1994, Executive Vice President and Chief
Age 51 Financial Officer since 1987, Marshall & Ilsley Corporation; Vice
President of M&I Marshall & Ilsley Bank since 1976; Vice President
and Director -- M&I Insurance Company of Arizona, Inc. and Loujo
Company; Director -- M&I Mortgage Corp., M&I Data Services and M&I
Insurance Services, Inc.
G.D. Strelow Senior Vice President and Human Resources Director of Marshall &
Age 61 Ilsley Corporation since 1993; Vice President and Human Resources
Director of M&I Marshall & Ilsley Bank since 1980.
M.A. Hatfield Senior Vice President since 1993, Secretary since 1981 and
Age 50 Treasurer from 1986 to May 1995, Marshall & Ilsley Corporation;
Vice President and Secretary, M&I Marshall & Ilsley Bank;
Secretary -- M&I First National Leasing Corp., M&I Capital Markets
Group, Inc., Marshall & Ilsley Trust Company, M&I Investment
Management Corp., Marshall & Ilsley Trust Company of Florida, M&I
Ventures Corporation and M&I Brokerage Services, Inc.; Secretary,
Treasurer and Director -- M&I Financial Corp. and M&I Building
Corp.; Secretary and Director -- M&I Insurance Company of Arizona,
Inc., M&I Data Services and Loujo Company; Secretary, M&I
Insurance Services, Inc.; Secretary and Treasurer, M&I Mortgage
Corp.; Director, Richter-Schroeder Company, Inc.
P.R. Justiliano Senior Vice President since 1994 and Corporate Controller since
Age 45 April, 1989, Vice President, 1986 to 1994, Marshall & Ilsley
Corporation; Director, M&I Insurance Company of Arizona, Inc.
J.L. Delgadillo Senior Vice President of Marshall & Ilsley Corporation since 1993;
Age 43 Director of M&I Data Services since 1994; President and Chief
Operating Officer of M&I Data Services since 1993; Senior Vice
President of M&I Data Services since 1989.
D.W. Layden, Jr. Senior Vice President since October, 1994, Marshall & Ilsley
Age 38 Corporation; Director -- Marshall & Ilsley Trust Company and M&I
Investment Management Corp. since February, 1995; Executive Vice
President and Chief Financial Officer from January, 1994 to
October, 1994, Senior Vice President and Legal Counsel from March,
1992 to October, 1994, M&I Data Services.
D.R. Jones Senior Vice President since December, 1993, Vice President and
Age 50 North and South Regional Manager since May, 1993, Vice President
and South Regional Manager from March, 1989 to May, 1993, Marshall
& Ilsley Corporation.
D.P. O'Connor Senior Vice President since December, 1993, Vice President and
Age 54 North Regional Manager from March, 1989 to May, 1993, Marshall &
Ilsley Corporation; Executive Vice President since May, 1993, M&I
Marshall & Ilsley Bank; Chairman from January, 1992 to May, 1993,
M&I First American National Bank.
</TABLE>

11
<PAGE> 12

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS

STOCK LISTING

M&I's common stock is traded under the symbol "MRIS" in the NASDAQ National
Market System, and quotations are supplied by the National Association of
Securities Dealers.

Common dividends declared and the price range for M&I's common stock for
each of the last five years can be found in Item 8, Consolidated Financial
Statements, Quarterly Financial Information.

A discussion of the regulatory restrictions on the payment of dividends can
be found under Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations, and in Note 13 to Item 8, Consolidated
Financial Statements.

HOLDERS OF COMMON EQUITY

At December 31, 1995, M&I had approximately 18,659 record holders of its
Common Stock.

12
<PAGE> 13

ITEM 6. SELECTED FINANCIAL DATA

CONSOLIDATED SUMMARY OF EARNINGS
YEARS ENDED DECEMBER 31 ($000'S EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Interest Income:
Loans............................. $774,256 $681,085 $643,679 $665,634 $730,696
Investment Securities:
Taxable........................ 118,868 110,894 123,207 139,302 140,261
Tax Exempt..................... 18,112 16,693 20,692 31,946 42,438
Short-term Investments............ 13,424 8,634 5,899 14,157 24,695
-------- -------- -------- -------- --------
Total Interest Income..... 924,660 817,306 793,477 851,039 938,090
Interest Expense:
Deposits.......................... 331,734 255,861 272,100 334,443 448,757
Short-term Borrowings............. 47,740 39,681 18,010 17,606 32,065
Long-term Borrowings.............. 53,709 30,537 23,088 26,439 27,770
-------- -------- -------- -------- --------
Total Interest Expense.... 433,183 326,079 313,198 378,488 508,592
-------- -------- -------- -------- --------
Net Interest Income................. 491,477 491,227 480,279 472,551 429,498
Provision for Loan Losses........... 16,158 24,907 18,034 23,546 28,924
-------- -------- -------- -------- --------
Net Interest Income After Provision
for Loan Losses................... 475,319 466,320 462,245 449,005 400,574
Other Income:
Data Processing Services.......... 213,914 159,418 135,041 112,056 90,582
Trust Services.................... 64,176 59,720 61,226 58,050 54,060
Other............................. 146,092 142,343 175,659 158,305 132,106
-------- -------- -------- -------- --------
Total Other Income........ 424,182 361,481 371,926 328,411 276,748
Other Expense:
Salaries and Benefits............. 343,650 323,904 320,717 299,540 260,289
Other............................. 255,972 260,866 248,870 246,084 230,295
Merger/Restructuring.............. -- 75,228 -- -- --
-------- -------- -------- -------- --------
Total Other Expense....... 599,622 659,998 569,587 545,624 490,584
-------- -------- -------- -------- --------
Income Before Taxes................. 299,879 167,803 264,584 231,792 186,738
Provision for Income Taxes.......... 106,580 73,405 93,190 75,391 56,725
-------- -------- -------- -------- --------
Income Before Extraordinary Items
and Accounting Changes............ 193,299 94,398 171,394 156,401 130,013
Extraordinary Items and Accounting
Changes........................... -- 11,542 -- (9,134) --
-------- -------- -------- -------- --------
Net Income................ $193,299 $105,940 $171,394 $147,267 $130,013
======== ======== ======== ======== ========
</TABLE>

13
<PAGE> 14

CONSOLIDATED SUMMARY OF EARNINGS -- CONTINUED
YEARS ENDED DECEMBER 31 ($000'S EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per Share:
Primary Net Income
Before Extraordinary Items and Accounting
Changes.................................. $ 1.96 $ 0.95 $ 1.67 $ 1.55 $ 1.33
Primary Net Income
After Extraordinary Items and Accounting
Changes.................................. 1.96 1.07 1.67 1.46 1.33
Fully Diluted Net Income
Before Extraordinary Items and Accounting
Changes.................................. 1.90 0.93 1.60 1.48 1.27
Fully Diluted Net Income
After Extraordinary Items and Accounting
Changes.................................. 1.90 1.04 1.60 1.40 1.27
Fully Diluted Net Income (Historical)*...... 1.90 1.04 1.76 1.52 1.40
Common Dividend Declared.................... 0.645 0.59 0.54 0.48 0.43
Other Significant Data:
Year-End Common Stock Price................. $26.00 $19.00 $23.63 $21.17 $18.33
Return on Average Shareholders' Equity
Before Extraordinary Items and Accounting
Changes.................................. 16.41% 8.60% 15.29% 15.48% 14.44%
Return on Average Shareholders' Equity After
Extraordinary Items and Accounting
Changes.................................. 16.41 9.65 15.29 14.57 14.44
Return on Average Assets Before
Extraordinary Items and Accounting
Changes.................................. 1.52 0.76 1.42 1.36 1.18
Return on Average Assets After Extraordinary
Items and Accounting Changes............. 1.52 0.85 1.42 1.28 1.18
Dividend Payout Ratio....................... 33.95 56.73 33.75 34.20 33.86
Average Equity to Average Assets Ratio...... 9.26 8.83 9.31 8.77 8.18
Ratio of Earnings to Fixed Charges**
Excluding Interest on Deposits........... 3.76x 3.18x 6.52x 5.57x 3.80x
Including Interest on Deposits........... 1.68x 1.50x 1.83x 1.60x 1.36x
Stock Splits................................ 3 FOR 1
</TABLE>

- ---------------
* Not restated for acquisitions accounted for as a pooling of interests.

** See Exhibit 12 for detailed computation of these ratios.

14
<PAGE> 15

CONSOLIDATED AVERAGE BALANCE SHEETS
YEARS ENDED DECEMBER 31 ($000'S EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Cash and Due from Banks................. $ 576,943 $ 613,053 $ 616,761 $ 572,132 $ 538,068
Short-term Investments.................. 222,779 196,653 180,143 366,132 428,543
Trading Securities...................... 10,346 4,528 4,860 6,049 6,185
Investment Securities:
Taxable............................... 2,026,859 2,116,856 2,236,805 1,950,155 1,692,476
Tax Exempt............................ 374,014 351,026 400,135 523,551 604,753
Loans:
Commercial............................ 2,832,228 2,680,735 2,572,967 2,643,726 2,813,243
Real Estate........................... 4,773,214 4,572,496 4,248,970 3,798,180 3,314,452
Personal.............................. 1,159,957 1,201,131 1,109,701 1,017,625 991,600
Lease Financing....................... 262,566 256,344 248,654 234,566 199,246
----------- ----------- ----------- ----------- -----------
Total Loans and Leases.................. 9,027,965 8,710,706 8,180,292 7,694,097 7,318,541
Allowance for Loan Losses............. 160,797 144,917 129,972 114,046 100,726
----------- ----------- ----------- ----------- -----------
Net Loans and Leases.................... 8,867,168 8,565,789 8,050,320 7,580,051 7,217,815
Other Assets............................ 647,402 584,556 550,444 527,339 527,485
----------- ----------- ----------- ----------- -----------
Total Assets..................... $12,725,511 $12,432,461 $12,039,468 $11,525,409 $11,015,325
=========== =========== =========== =========== ===========
Liabilities and Shareholders' Equity:
Noninterest Bearing Deposits............ $ 1,980,035 $ 2,051,864 $ 1,997,781 $ 1,799,072 $ 1,576,525
Interest Bearing Deposits:
Savings and NOW Accounts.............. 1,981,804 2,426,502 2,339,754 2,086,065 1,769,710
Money Market Savings.................. 1,983,432 1,527,668 1,534,799 1,560,913 1,441,169
CDs of $100 or more................... 567,373 436,268 440,573 416,555 565,614
Other................................. 3,096,771 3,227,795 3,461,825 3,589,990 3,668,741
----------- ----------- ----------- ----------- -----------
Total Deposits.......................... 9,609,415 9,670,097 9,774,732 9,452,595 9,021,759
Short-term Borrowings................... 835,230 964,850 641,836 529,528 591,602
Long-term Borrowings.................... 801,176 447,254 272,041 284,333 290,724
Accrued Expenses and Other
Liabilities........................... 301,865 252,297 229,545 248,286 210,575
Shareholders' Equity.................... 1,177,825 1,097,963 1,121,314 1,010,667 900,665
----------- ----------- ----------- ----------- -----------
Total Liabilities and
Shareholders' Equity........... $12,725,511 $12,432,461 $12,039,468 $11,525,409 $11,015,325
=========== =========== =========== =========== ===========
Other Significant Data:
Book Value Per Share at Year End***..... $ 12.92 $ 11.01 $ 11.35 $ 10.76 $ 9.74
Average Common Shares Outstanding***.... 93,697,513 94,850,595 98,497,435 96,958,290 94,601,491
Shareholders of Record at Year End*..... 18,659 18,919 10,374 9,381 9,462
Employees at Year End*.................. 9,079 8,634 6,611 6,315 6,137
Historically Reported Credit Quality
Ratios:*
Net Loan Charge-offs to Average Loans... 0.10% 0.05% 0.03% 0.07% 0.32%
Total Nonperforming Loans** & OREO to
End of Period Loans & OREO............ 0.79 0.80 0.86 1.14 1.49
Allowance for Loan Losses to End of
Period Loans.......................... 1.82 1.75 1.74 1.76 1.55
Allowance for Loan Losses to Total
Nonperforming Loans**................. 261 265 261 213 128
</TABLE>

- ---------------
* Not restated for acquisitions accounted for as pooling of interests.

** Nonaccrual loans, restructured loans, and loans past due 90 days or more.

*** Restated for 3 for 1 stock split.

15
<PAGE> 16

YIELD & COST ANALYSIS
(TAX EQUIVALENT BASIS) YEARS ENDED DECEMBER 31

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ----- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Average Rates Earned:
Loans............................................... 8.60% 7.84% 7.89% 8.68% 10.02%
Investment Securities -- Taxable.................... 5.86 5.24 5.51 7.14 8.29
Investment Securities -- Tax Exempt................. 6.85 6.86 7.91 9.02 10.27
Trading Securities.................................. 4.98 5.39 4.26 4.69 6.42
Short-term Investments.............................. 5.81 4.28 3.17 3.80 5.68
Average Rates Paid:
Interest Bearing Deposits........................... 4.35% 3.36% 3.50% 4.37% 6.03%
Short-term Borrowings............................... 5.72 4.11 2.81 3.32 5.42
Long-term Borrowings................................ 6.70 6.83 8.49 9.30 9.55
M&I Marshall & Ilsley Bank Average Prime Rate....... 8.83 7.15 6.00 6.25 8.46
Summary Yield and Cost Analysis:
(As a % of Average Assets)
Average Yield....................................... 7.34% 6.65% 6.70% 7.53% 8.72%
Average Cost........................................ 3.40 2.62 2.60 3.28 4.62
---- ---- ---- ---- -----
Net Interest Income................................. 3.94 4.03 4.10 4.25 4.10
Provision for Loan Losses........................... 0.13 0.20 0.15 0.20 0.26
---- ---- ---- ---- -----
Net Interest Income After Provision for Loan
Losses........................................... 3.81 3.83 3.95 4.05 3.84
Net Securities Gains (Losses)....................... 0.04 (0.05) 0.07 0.08 0.05
Other Income........................................ 3.30 2.95 3.02 2.77 2.47
Other Expense....................................... 4.72 5.30 4.74 4.74 4.46
---- ---- ---- ---- -----
Income Before Income Taxes.......................... 2.43 1.43 2.30 2.16 1.90
Provision for Income Taxes.......................... 0.91 0.67 0.88 0.80 0.72
---- ---- ---- ---- -----
Income Before Extraordinary Items and Accounting
Changes.......................................... 1.52% 0.76% 1.42% 1.36% 1.18%
==== ==== ==== ==== =====
Net Income.................................. 1.52% 0.85% 1.42% 1.28% 1.18%
==== ==== ==== ==== =====
</TABLE>

- ---------------
* Not restated for acquisitions accounted for as pooling of interests.

** Nonaccrual loans, restructured loans, and loans past due 90 days or more.

16
<PAGE> 17

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
OF OPERATIONS

For 1995, the Corporation reported net income of $193.3 million compared to
$105.9 million in 1994. Fully diluted net income per share in 1995 was $1.90
compared to $1.04 in the prior year. The return on average assets and average
equity in 1995 was 1.52% and 16.41%, respectively, and 0.85% and 9.65%,
respectively, for the year ended December 31, 1994.

Net income for 1994 included $64.0 million of charges and extraordinary
items related to the Corporation's merger with Valley Bancorporation (Valley),
which occurred during the second quarter of 1994.

Excluding the above noted merger related charges, net operating income and
fully diluted earnings per share for 1994 would have been $169.9 million and
$1.65, respectively.

The following table summarizes the unusual items reported in the second
quarter of 1994 adjusted for merger related gains realized in the third and
fourth quarter of 1994 and its impact on net income.

<TABLE>
<CAPTION>
AFTER-TAX
GAIN FULLY DILUTED
(CHARGE) PER SHARE INCREASE
($ MILLIONS) (DECREASE)
------------ ------------------
<S> <C> <C>
Income from Operations.................................. $169.9 $ 1.65
Recognition of $75.2 million merger/restructuring
charge............................................. (58.9) (.56)
Additional loan loss provisions of $8.9 million....... (5.8) (.06)
Other miscellaneous charges of $8.5 million........... (6.2) (.06)
Securities losses of $7.3 million..................... (4.6) (.04)
Net extraordinary gain of $20.6 million............... 11.5 .11
------ ------
Reported Net Income..................................... $105.9 $ 1.04
====== ======
</TABLE>

INCOME STATEMENT COMPONENTS AS A PERCENT OF AVERAGE TOTAL ASSETS

The table below presents a summary of the major elements of the income
statement for 1995, 1994, and 1993. Each of the elements is stated as a percent
of average total assets outstanding for the respective year and, where
appropriate, is converted to a fully taxable equivalent basis (FTE). The results
exclude the after-tax merger related charges reported in 1994.

<TABLE>
<CAPTION>
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Interest Income............................................. 7.34% 6.65% 6.70%
Interest Expense............................................ (3.40) (2.62) (2.60)
----- ----- -----
Net Interest Income......................................... 3.94 4.03 4.10
Provision for Loan Losses................................... (.13) (.13) (.15)
Net Securities Gains........................................ .04 .01 .07
Other Income................................................ 3.30 2.95 3.02
Other Expense............................................... (4.72) (4.64) (4.74)
----- ----- -----
Income Before Income Taxes.................................. 2.43 2.22 2.30
Income Taxes................................................ (.91) (.85) (.88)
----- ----- -----
Return on Average Assets.................................... 1.52% 1.37% 1.42%
===== ===== =====
</TABLE>

17
<PAGE> 18

NET INTEREST INCOME

Net interest income for 1995 was $491.5 million compared to $491.2 million
in 1994, an increase of $0.3 million. The benefit from the increase in rates
earned and the slight increase in the volume of average earning assets,
primarily loans, was offset by the increase in rates paid on interest bearing
liabilities and the negative impact of the change in liability mix.

Average earning assets increased $282.2 million or 2.5% in 1995 compared to
the same period last year. Average loan growth of $317.3 million or 3.6% was
somewhat offset by the decline in average other earning assets, primarily
investment securities, of $35.1 million.

Average interest bearing liabilities increased $235.4 million or 2.6% in
1995 compared to 1994. Average interest bearing deposits increased $11.1 million
while average short-term borrowings decreased $129.6 million or 13.4% since last
year. The decrease in average short-term borrowings together with the decrease
in noninterest bearing deposits of $71.8 million or 3.5%, resulted in an
increase in average long-term borrowings from $447.3 million in 1994 to $801.2
million in 1995, an increase of $353.9 million or 79.1%.

In conjunction with the Valley merger in 1994, the Corporation completed
certain required and voluntary branch divestitures. During the third and fourth
quarters of 1994, approximately $300 million of deposits and $200 million of
loans were sold. The effect of these divestitures was somewhat mitigated by 1995
acquisitions which were accounted for as purchases. The Bank of Burlington, with
deposits of $149 million and loans of $113 million, was acquired on February 1,
1995. In July 1995, Citizens Bancorp of Delavan, Inc. and Sharon State Bank were
acquired, which had combined deposits of $82.6 million and combined loans of
$72.5 million.

The growth and composition of the Corporation's average loan portfolio for
the current year and prior two years are reflected below:

<TABLE>
<CAPTION>
GROWTH
PERCENT
-------------
1995 1994
VS. VS.
1995 1994 1993 1994 1993
-------- -------- -------- ---- ----
$ IN MILLIONS
<S> <C> <C> <C> <C> <C>
Commercial Loans.............................. $2,832.2 $2,680.7 $2,573.0 5.7% 4.2%
Real Estate Loans
Construction................................ 341.8 262.7 277.9 30.1 (5.5)
Commercial Mortgages........................ 2,129.8 2,098.6 1,825.5 1.5 15.0
Residential Mortgages....................... 2,301.6 2,211.2 2,145.6 4.1 3.1
-------- -------- -------- ---- ----
Total Real Estate Loans....................... 4,773.2 4,572.5 4,249.0 4.4 7.6
Personal Loans
Personal Loans.............................. 872.0 936.7 901.0 (6.9) 4.0
Student Loans............................... 288.0 264.4 208.7 8.9 26.7
-------- -------- -------- ---- ----
Total Personal Loans.......................... 1,160.0 1,201.1 1,109.7 (3.4) 8.2
Leasing Financing
Receivables................................. 262.6 256.4 248.6 2.4 3.1
-------- -------- -------- ---- ----
Total Consolidated Average Loans.... $9,028.0 $8,710.7 $8,180.3 3.6% 6.5%
======== ======== ======== ==== ====
</TABLE>

During the third quarter of 1995, the Corporation began converting
adjustable rate mortgage loans (ARMs) into Federal National Mortgage Association
(FNMA) ARM pool securities to enhance liquidity. Approximately $455 million of
ARM loans were securitized and transferred to investment securities available
for sale in 1995. A fee of 7.5 basis points is required to guarantee the
securities which had and will have a negative impact on net interest income. The
Corporation estimates that approximately $100 million of ARM loans may be
securitized in 1996. Average residential real estate loan growth and average
total consolidated loan growth for 1995 versus 1994 would have been 7.6% and
4.5% before the securitizations.

18
<PAGE> 19

The growth and composition of the Corporation's average deposits for the
current year and prior two years are reflected below:

<TABLE>
<CAPTION>
GROWTH PERCENT
--------------
1995 1994
VS. VS.
1995 1994 1993 1994 1993
-------- -------- -------- ----- ----
$ IN MILLIONS
<S> <C> <C> <C> <C> <C>
Noninterest Bearing
Commercial................................. $1,289.7 $1,302.7 $1,252.1 (1.0)% 4.0%
Personal................................... 409.2 428.7 404.8 (4.5) 5.9
Other...................................... 281.1 320.5 340.9 (12.3) (6.0)
-------- -------- -------- ----- ----
Total Noninterest Bearing
Deposits......................... 1,980.0 2,051.9 1,997.8 (3.5) 2.7
Interest Bearing
Savings & NOW.............................. 1,981.8 2,426.4 2,339.7 (18.3) 3.7
Money Market............................... 1,983.4 1,527.7 1,534.8 29.8 (0.5)
Other CDs & Time Deposits.................. 3,096.8 3,227.8 3,461.8 (4.1) (6.8)
CDs Greater than $100,000.................. 567.4 436.3 440.6 30.1 (1.0)
-------- -------- -------- ----- ----
Total Interest Bearing Deposits.... 7,629.4 7,618.2 7,776.9 0.1 (2.0)
-------- -------- -------- ----- ----
Total Consolidated Average
Deposits......................... $9,609.4 $9,670.1 $9,774.7 (0.6)% (1.1)%
======== ======== ======== ===== ====
</TABLE>

During the third quarter of 1994, the Corporation began offering a money
market index account to attract new deposits. The average balance of the money
market index account was approximately $956 million in 1995. Since inception,
this product has generated approximately $668 million of new deposits. The
remaining balances were the result of disintermediation from the Corporation's
other deposit accounts. The average rate paid on the index account was
approximately 200 basis points higher than the tier equivalent nonindexed money
market account in 1995.

The net interest margin as a percent of average earning assets declined 10
basis points from 4.40% in 1994 to 4.30% in 1995. The yield on interest earning
assets increased 74 basis points while the cost of interest bearing liabilities
increased 107 basis points.

Loan growth and the increase in loan yields of 76 basis points account for
87% of the increase in interest on earning assets in 1995 compared to 1994. The
remainder of the increase was primarily attributable to higher yields in other
earning assets, particularly taxable investment securities.

The increase in average cost of deposits and short-term borrowings
represent 83% of the 1995 versus 1994 increase in interest paid on interest
bearing liabilities. The average cost of savings and interest bearing demand
deposits increased 88 basis points and the average cost of other time deposits
increased 110 basis points in 1995 compared to the prior year. The average cost
of short-term borrowings increased 161 basis points. The increase in the volume
of long-term borrowings, offset by a 13 basis point decline in the average cost
of this category, contributed approximately $23.2 million of the increase in
interest paid on interest bearing liabilities.

During the second quarter of 1994, the Corporation's banking subsidiaries
began offering Bank Notes. The Bank Notes, issued for a two-year term at
floating interest rates indexed to LIBOR, provide an additional funding source
along with those traditionally available to our banking affiliates. In 1995, the
average amount and average cost of these notes were $415 million and 6.20%
compared to $138.4 million and 5.21% in 1994.

Throughout 1995 and 1994, the Corporation was not involved in derivative
activity that would impact net interest margins or interest rate sensitivity or
risk. Financial derivative instruments which are straightforward and involve
little complexity may be used on a limited basis in the future.

The possible continuing lack of deposit and earning asset growth, and shift
of deposit mix into higher cost categories, may continue to put pressure on the
interest margin.

19
<PAGE> 20

Net interest income was $491.2 million in 1994, an increase of $10.9
million or 2.3% from $480.3 million earned in 1993. The benefit of the increase
in average earning assets was partially offset by the slight decline in the
yield on average earning assets and increased volume of higher cost short-term
and long-term borrowings fueled in part by the decline in average deposits.

Average earning assets increased $377.5 million or 3.4% in 1994 compared to
the prior year. Average loans increased $530.4 million or 6.5% and was the
primary contributor to average earning asset growth. The decline in other
earning assets, primarily investment securities, was due to the funding of loan
growth.

During 1994, the Corporation experienced a shift in its deposit mix.
Noninterest bearing deposits increased $54.1 million or 2.7%, however, this
increase did not offset the decline in interest bearing deposits, which declined
$158.7 million in 1994. Core interest bearing deposits increased $79.6 million
while certificates of deposit and other time deposits declined $238.3 million.

During the third quarter of 1994, the Corporation prepaid $53 million of
Valley's long-term Series A 9.86% and Series B 9.97% senior unsecured notes and
refinanced the notes with the Corporation's medium-term notes which had an
average cost of 7.46% in 1994.

The net interest margin as a percentage of average earning assets declined
from 4.48% in 1993 to 4.40% in 1994. The average yield on interest earning
assets was 7.27% in 1994, a decrease of 6 basis points compared to 1993. The
total investment yield declined 40 basis points due to the maturity of higher
yielding securities. The total cost of interest bearing liabilities remained
relatively unchanged. While the decline in the cost of deposits had a favorable
impact on the net interest margin, the lack of deposit growth resulted in the
use of higher cost short-term and long-term borrowings to meet funding needs.
Average short-term borrowings increased $323.0 million and the average cost of
such borrowings increased 130 basis points in 1994 compared to the prior year.
The increase in the average volume of long-term borrowings, primarily Bank
Notes, negatively impacted the net interest margin despite the 166 basis point
decline in the cost of such borrowings.

20
<PAGE> 21

AVERAGE BALANCE SHEETS AND ANALYSIS OF NET INTEREST INCOME

The Corporation's consolidated average balance sheets, interest earned and
interest paid, and the average interest rates earned and paid for each of the
last three years are presented below (dollars in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
---------------------------------- ---------------------------------- ----------------------------------
AVERAGE INTEREST AVERAGE AVERAGE INTEREST AVERAGE AVERAGE INTEREST AVERAGE
BALANCE EARNED YIELD BALANCE EARNED YIELD BALANCE EARNED YIELD
----------- -------- ------- ----------- -------- ------- ----------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans(1,2)....... $ 9,027,965 $776,280 8.60% $ 8,710,706 $683,265 7.84% $ 8,180,292 $645,434 7.89%
Investment
securities:
Taxable........ 2,026,859 118,868 5.86 2,116,856 110,894 5.24 2,236,805 123,207 5.51
Tax
exempt(1).... 374,014 25,621 6.85 351,026 24,065 6.86 400,135 31,650 7.91
Interest bearing
deposits in
other banks.... 144,135 7,956 5.52 93,504 3,752 4.01 98,220 2,915 2.97
Funds sold and
security resale
agreements..... 65,820 4,195 6.37 91,090 4,147 4.55 40,401 1,224 3.03
Trading
securities(1)... 10,346 515 4.98 4,528 244 5.39 4,860 207 4.26
Other short-term
investments.... 12,824 790 6.16 12,059 517 4.29 41,522 1,574 3.79
----------- -------- ---- ----------- -------- ---- ----------- -------- ----
Total
interest
earning
assets... 11,661,963 934,225 8.01 11,379,769 826,884 7.27 11,002,235 806,211 7.33
Cash and demand
deposits due
from banks..... 576,943 613,053 616,761
Premises and
equipment,
net............ 295,970 289,300 281,952
Other assets..... 351,432 295,256 268,492
Allowance for
loan losses.... (160,797) (144,917) (129,972)
----------- ----------- -----------
Total
Assets... $12,725,511 $12,432,461 $12,039,468
=========== =========== ===========
Savings and
interest
bearing demand
deposits....... $ 3,965,236 $126,196 3.18% $ 3,954,170 $ 90,788 2.30% $ 3,874,553 $ 92,074 2.38%
Other time
deposits....... 3,664,144 205,538 5.61 3,664,063 165,073 4.51 3,902,398 180,026 4.61
Short-term
borrowings..... 835,230 47,740 5.72 964,850 39,681 4.11 641,836 18,010 2.81
Long-term
borrowings..... 801,176 53,709 6.70 447,254 30,537 6.83 272,041 23,088 8.49
----------- -------- ---- ----------- -------- ---- ----------- -------- ----
Total
interest
bearing
liabi-
lities... 9,265,786 433,183 4.68 9,030,337 326,079 3.61 8,690,828 313,198 3.60
Noninterest
bearing
deposits....... 1,980,035 2,051,864 1,997,781
Other
liabilities.... 301,865 252,297 229,545
Shareholders'
equity......... 1,177,825 1,097,963 1,121,314
----------- ----------- -----------
Total
liabilities
and
shareholders'
equity..... $12,725,511 $12,432,461 $12,039,468
=========== =========== ===========
Net
interest
income... $501,042 $500,805 $493,013
======== ======== ========
Net yield
on
interest
earning
assets... 4.30% 4.40% 4.48%
==== ==== ====
</TABLE>

- ---------------
Notes:

(1) Fully taxable equivalent basis, assuming a Federal income tax rate of 35%,
and excluding disallowed interest expense.

(2) Loans on a nonaccrual status have been included in the computation of
average balances.

21
<PAGE> 22

ANALYSIS OF CHANGES IN INTEREST INCOME AND INTEREST EXPENSE

The effect on interest income and interest expense due to volume and rate
changes in 1995 and 1994 are outlined below. Changes not due solely to either
volume or rate are allocated to rate (dollars in thousands):

1995 VS. 1994 1994 VS. 1993
------------------------------ --------------------------------
INCREASE (DECREASE) INCREASE (DECREASE)
DUE TO CHANGE IN DUE TO CHANGE IN
------------------- TOTAL ------------------- TOTAL
AVERAGE AVERAGE INCREASE AVERAGE AVERAGE INCREASE
VOLUME RATE (DECREASE) VOLUME RATE (DECREASE)
------- ------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Interest on earning assets:
Loans(1)........................ $24,886 $68,129 $ 93,015 $ 41,850 $ (4,019) $ 37,831
Investment securities:
Taxable......................... (4,715) 12,689 7,974 (6,607) (5,706) (12,313)
Tax-exempt(1)................... 1,576 (20) 1,556 (3,884) (3,701) (7,585)
Interest bearing deposits in
other banks.................. 2,032 2,172 4,204 (140) 977 837
Funds sold and security resale
agreements................... (1,150) 1,198 48 1,536 1,387 2,923
Trading securities(1)........... 314 (43) 271 (14) 51 37
Other short-term investments.... 33 240 273 (1,117) 60 (1,057)
------- ------- -------- -------- -------- --------
Total interest income
change................ $22,976 $84,365 $107,341 $ 31,624 $(10,951) $ 20,673
======= ======= ======== ======== ======== ========
Expense on interest bearing
liabilities:
Savings and interest bearing
demand deposits.............. $ 254 $35,154 $ 35,408 $ 1,892 $ (3,178) $ (1,286)
Other time deposits............. 4 40,461 40,465 (10,995) (3,958) (14,953)
Short-term borrowings........... (5,331) 13,390 8,059 9,064 12,607 21,671
Long-term borrowings............ 24,165 (993) 23,172 14,870 (7,421) 7,449
------- ------- -------- -------- -------- --------
Total interest expense
change................ $19,092 $88,012 $107,104 $ 14,831 $ (1,950) $ 12,881
======= ======= ======== ======== ======== ========
</TABLE>

- ---------------
Notes:

(1) Fully taxable equivalent basis, assuming a Federal income tax rate of 35%,
and excluding disallowed interest expense.

22
<PAGE> 23

PROVISION FOR LOAN LOSSES AND CREDIT QUALITY

The provision for loan losses in 1995 amounted to $16.2 million compared to
$24.9 million in 1994. The 1994 provision included an additional loan loss
provision of $8.9 million which was recorded at the time of the Valley merger to
conform Valley's loan valuation policies with those of the Corporation.

Nonperforming assets at December 31, 1995 were $70.5 million compared to
$70.1 million reported at December 31, 1994. Nonaccrual loans, the largest
component of nonperforming assets, increased $5.8 million when compared to
December 31, 1994 while loans past due 90 days or more and renegotiated loans
decreased $1.1 million and $0.9 million, respectively. Nonaccrual commercial
loans and leases increased $4.8 million or 48.1% while nonaccrual commercial
real estate loans declined $3.1 million or 15.5% at December 31, 1995 when
compared to last year. Nonaccrual residential real estate continued its upward
trend and amounted to $15.7 million, an increase of $4.2 million since December
31, 1994. At December 31, 1995, other real estate owned, which is down $3.5
million from the prior year, includes approximately $2.4 million of closed
branch facilities.

Net charge-offs in 1995 amounted to $9.3 million or .10% of average loans
compared to $4.5 million or .05% for the prior year.

The allowance for loan losses amounted to $161.4 million or 1.82% of total
loans at December 31, 1995 compared to $154.0 million or 1.75% of total loans at
December 31, 1994. The coverage of the allowance for loan losses to
nonperforming loans decreased slightly from 265% at December 31, 1994 to 261% at
the end of the current year.

As part of the ARM loan securitization previously discussed, approximately
$2.3 million of loan loss reserve balances were transferred to a specific
investment reserve to cover estimated losses based on the Corporation's
experience with these types of loans. The Corporation has agreed to guarantee
the first 4% of the loan pools securitized through FNMA against loss.

Since the third quarter of 1995, nonperforming assets increased $0.9
million which was primarily due to an increase of $1.1 million in loans past due
90 days or more. Also affecting total nonperforming assets were net charge-offs
in the fourth quarter which amounted to $5.3 million and was $4.6 million higher
than the third quarter of 1995. The increased net charge-offs were primarily
related to commercial loans.

23
<PAGE> 24

CONSOLIDATED CREDIT QUALITY INFORMATION

DECEMBER 31 ($000'S)

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NONPERFORMING ASSETS BY TYPE
Loans:
Nonaccrual........................ $ 50,598 $ 44,766 $ 44,186 $ 52,811 $ 78,887
Renegotiated...................... 3,087 4,172 4,263 6,325 8,026
Past Due 90 Days or More.......... 8,184 9,093 7,906 7,097 9,330
-------- -------- -------- -------- --------
Total Nonperforming
Loans................... 61,869 58,031 56,355 66,233 96,243
Other Real Estate Owned............. 8,648 12,114 12,928 19,286 18,510
-------- -------- -------- -------- --------
Total Nonperforming
Assets.................. $ 70,517 $ 70,145 $ 69,283 $ 85,519 $114,753
======== ======== ======== ======== ========
Allowance for Loan Losses........... $161,430 $153,961 $133,600 $123,805 $105,156
======== ======== ======== ======== ========
CONSOLIDATED STATISTICS
Net Charge-offs to Average Loans.... .10% .05% .11% .12% .30%
Total Nonperforming Loans to Total
Loans............................. .70 .66 .65 .83 1.29
Total Nonperforming Assets to Total
Loans and Other Real Estate
Owned............................. .79 .80 .80 1.07 1.53
Allowance for Loan Losses to Total
Loans............................. 1.82 1.75 1.55 1.55 1.41
Allowance for Loan Losses to
Nonperforming Loans............... 261 265 237 187 109
</TABLE>

MAJOR CATEGORIES OF NONACCRUAL LOANS ($000'S)

<TABLE>
<CAPTION>
1995 1994
---------------------------------- ----------------------------------
% OF % OF
LOAN % OF LOAN % OF
NONACCRUAL TYPE NONACCRUAL NONACCRUAL TYPE NONACCRUAL
---------- ---- ---------- ---------- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
COMMERCIAL
Commercial...................... $ 13,527 .5% 26.7% $ 8,372 .3 % 18.7%
Lease Financing Receivables..... 1,244 .4 2.5 1,601 .6 3.6
------- -- ----- ------- -- -----
Total Commercial......... 14,771 .5 29.2 9,973 .3 22.3
REAL ESTATE
Construction and Land
Development................... 618 .2 1.2 902 .2 2.0
Commercial Real Estate.......... 16,653 .8 32.9 19,706 1.0 44.0
Residential Real Estate......... 15,701 .7 31.0 11,453 .5 25.6
------- -- ----- ------- -- -----
Total Real Estate........ 32,972 .7 65.1 32,061 .7 71.6
Personal........................ 2,855 .2 5.7 2,732 .2 6.1
------- -- ----- ------- -- -----
Total.................... $ 50,598 .6% 100.0% $ 44,766 .5 % 100.0%
======= == ===== ======= == =====
</TABLE>

24
<PAGE> 25

RECONCILIATION OF CONSOLIDATED ALLOWANCE FOR LOAN LOSSES ($000'S)

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Allowance for Loan Losses at
Beginning of Year................. $153,961 $133,600 $123,805 $105,156 $ 94,145
Provision for Loan Losses(1)........ 16,158 24,907 18,034 23,546 28,924
Allowance of Bank Acquired.......... 2,843 -- 1,167 4,284 4,344
Allowance Transfer for Loan
Securitizations................... (2,275) -- -- -- --
Loans Charged-off
Commercial........................ 5,130 3,301 8,810 8,863 12,614
Real Estate-Construction.......... 407 737 79 513 352
Real Estate-Mortgage.............. 2,444 3,241 2,729 4,655 7,440
Personal.......................... 5,759 4,375 5,033 6,887 8,220
Leases............................ 875 907 815 1,426 1,430
-------- -------- -------- -------- --------
Total Charge-offs................... 14,615 12,561 17,466 22,344 30,056
Recoveries on Loans
Commercial........................ 2,117 3,675 3,431 9,149 4,285
Real Estate-Construction.......... 39 6 49 92 175
Real Estate-Mortgage.............. 1,021 2,468 2,208 1,493 790
Personal.......................... 2,158 1,789 2,156 2,306 2,503
Leases............................ 23 77 216 123 46
-------- -------- -------- -------- --------
Total Recoveries.................... 5,358 8,015 8,060 13,163 7,799
-------- -------- -------- -------- --------
Net Loans Charged-off............... 9,257 4,546 9,406 9,181 22,257
-------- -------- -------- -------- --------
Allowance for Loan Losses at End of
Year.............................. $161,430 $153,961 $133,600 $123,805 $105,156
======== ======== ======== ======== ========
</TABLE>

- ---------------
(1) The amount of the provision for loan losses charged to operating expense for
the year ended December 31, 1995, is the amount necessary to bring the
allowance for loan losses at December 31, 1995, to a level believed adequate
by management to absorb current estimated potential losses in the loan
portfolio. Management's determination of the adequacy of the allowance is
based on a continual review of the loan portfolio, loan loss experience,
economic conditions, growth and composition of the portfolio, and other
relevant factors. As a result of management's continual review, the
allowance is adjusted through provisions for loan losses charged against
income.

25
<PAGE> 26

OTHER INCOME

Total other income was $424.2 million for the year ended December 31, 1995
compared to $361.5 million earned in the prior year. Our financial services
affiliates were the major contributors to the increase.

M&I Data Services (Data Services), the Corporation's data processing
division, reported data processing revenue of $213.9 million compared to $159.4
million for the year ended December 31, 1994, an increase of $54.5 million or
34.2%. Processing and conversion revenue increased $30.0 million or 23.4% while
buy out fees related to terminated contracts (which can vary from year to year)
increased $4.3 million and amounted to $6.3 million for the year ended December
31, 1995. Software related revenue increased $18.5 million. Approximately 60% of
the increase is attributable to the December, 1994 acquisition of Software
Alliance.

Trust fees amounted to $64.2 million, an increase of $4.5 million or 7.5%
compared to $59.7 million earned in 1994. An increase in the overall market
value of trust assets along with increased revenue from outsourcing services
more than offset the revenue decline due to pricing compressions.

Other customer services declined $6.3 million in 1995 compared to the prior
year. Fees on loans declined $1.3 million or 6.5% while other commission and
fees declined $2.2 million or 4.9% in the current year when compared to 1994.
Service charges on deposit accounts declined $2.9 million and amounted to $51.0
million for the year ended December 31, 1995.

Net securities gains amounted to $4.6 million for the year ended December
31, 1995 compared to net securities losses of $5.8 million for the year ended
December 31, 1994. During 1995, Capital Markets Group realized securities gains
of $7.2 million offset in part by $4.0 million of realized and unrealized
securities losses as compared to securities gains of $2.3 million in 1994 and
securities losses of $0.3 million. The Corporation also sold certain equity
securities carried in the available for sale category and realized a net gain of
$1.3 million in 1995 and $0.9 million in 1994. Excluding the $7.3 million of
securities losses taken at the time of the Valley merger, 1994 net securities
gains amounted to $1.5 million.

Other miscellaneous income amounted to $30.8 million for the year ended
December 31, 1995, slightly lower than that reported in the prior year. The
Corporation adopted the new accounting standard on mortgage servicing rights in
the third quarter of 1995 which resulted in a $2.4 million increase in other
income. This increase was offset by lower gains on the sale of other real estate
owned and lower insurance commissions revenue. Revenue from property and
casualty insurance commissions declined $2.8 million due to the sale of that
line of business in the later part of 1994.

Total other income amounted to $361.5 million in 1994, a decline of $10.4
million when compared to $371.9 million reported in 1993. Excluding the $7.3
million of securities losses taken as part of the Valley acquisition, other
income declined $3.1 million in 1994 compared to the prior year. Data processing
revenue increased $24.4 million or 18.1% in 1994 while trust revenues declined
$1.5 million for the same period. Other customer service revenue declined $7.4
million in 1994 compared to 1993 primarily due to lower service charges on
deposit accounts. The higher interest rate environment in 1994 caused higher
earnings credits to be given to commercial deposit accounts. The decline in
revenue from the origination and sale of mortgage loans in 1994 accounted for a
majority of the decrease in fees on loans and other miscellaneous income.

Securities losses in 1994 amounted to $5.8 million compared to a net gain
of $8.3 million in 1993. Excluding the securities losses taken at the time of
the Valley acquisition, net securities gains amounted to $1.5 million in 1994.
Capital Markets Group realized net gains of $2.0 million in 1994 compared to
$3.3 million in 1993. The Corporation also sold certain equity securities and
realized a gain of $0.9 million in 1994 and $4.2 million in 1993.

OTHER EXPENSE

Total other expense amounted to $599.6 million in 1995 compared to $660.0
million in 1994. As noted earlier, several one time charges were recorded in
1994. A merger/restructuring charge of $75.2 million reflected the costs
associated with executive contracts, a reduction in work force, and other items
related to the merger. Also taken at that time were other miscellaneous charges
of $8.5 million which represented goodwill

26
<PAGE> 27

and other real estate write downs and other accrual related adjustments. Total
other expense for 1994, excluding the above noted items, would have been $576.3
million.

Salaries and benefits expense amounted to $343.7 million, an increase of
$19.7 million or 6.1%, in 1995 compared to the prior year. The increase was due
primarily to Data Services.

At December 31, 1995, Data Services had approximately 2,600 employees
compared to 2,200 employees at December 31, 1994. A portion of the increase was
due to Data Service's acquisition of Software Alliance and a New England data
center. Our banking affiliates experienced a decline in salaries and benefits
expense.

Upon consummation of the merger in 1994, the Valley pension plan was
curtailed and in 1995, the plan was fully terminated through cash distributions
and/or purchases of annuities. The 1994 curtailment expense of $2.3 million is
classified as a merger/restructuring cost while the pension termination expense
of $1.8 million is included in salaries and benefits expense for 1995.

Net occupancy expense in 1995 declined $0.9 million due primarily to the
branch divestitures which occurred during 1994. This benefit was somewhat offset
by increased occupancy costs incurred by Data Services through its New England
data center acquisition and a full year of operating a secondary processing
site.

Equipment expense amounted to $65.5 million in 1995 compared to $59.6
million for 1994. The 1995 acquisition of the New England data center, a
secondary processing site which became operational late in the fourth quarter of
1994, and CPU and other equipment upgrades by Data Services were the primary
reasons for the increase.

The decline in payments to regulatory agencies of $10.6 million in 1995
when compared to 1994 is due to the reduction in FDIC insurance premium rates
which declined from $.23 per $1,000 of insured deposits to $.04 on June 1, 1995.

Supplies and printing expense which amounted to $15.7 million in 1995
increased $1.3 million when compared to the prior year. This increase is the
result of higher data processing revenue experienced in 1995.

Professional services expense amounted to $18.7 million for the year ended
December 31, 1995 compared to $12.5 million in the prior year. Approximately
$4.7 million of the increase was due to costs incurred for technological
assistance in software development, such as Data Service's data warehouse
project. Approximately $1.1 million of the remaining increase represents costs
incurred in connection with the ARM loan securitization program previously
discussed.

Other miscellaneous expense amounted to $89.1 million in 1995 compared to
$96.1 million in 1994. Excluding $7.4 million of charges taken in conjunction
with the Valley merger, other miscellaneous expense for 1994 amounted to $88.7
million. Travel and software costs for Data Services increased $4.8 million over
the prior year. In addition, the acquisitions of Software Alliance and the New
England data center resulted in an increase in intangibles amortization expense
of $3.7 million in 1995 compared to 1994. This category of expense is also
affected by the capitalization of costs, net of amortization, associated with
software development and data processing conversions. Including the professional
services expense increase of $4.7 million, the amount of software development
costs, net of amortization, in 1995 was $8.0 million higher than the amount
reported in 1994. The impact of conversion activity, net of amortization, was to
increase miscellaneous expense by $1.0 million in 1995 compared to the prior
year.

Total other expense amounted to $660.0 million in 1994 compared to $569.6
million in 1993. Excluding the one-time merger related items of $83.7 million,
1994 total other expenses amounted to $576.3 million, an increase of $6.7
million or 1.2% when compared to 1993. The minimal expense growth is
attributable to the cost savings achieved by the Corporation in 1994 due to the
merger. Salaries and Benefits expense increased only 1.0% due primarily to the
elimination of duplicate job functions at the time of the Valley merger.
Occupancy expense increased $0.2 million in 1994 compared to 1993 due to the
sale of branch facilities in the second half of 1994. Equipment expense, which
increased 2.9% in 1994 when compared to the prior year, was associated with Data
Services need for more computer capacity, data storage devices, and other
processing

27
<PAGE> 28

equipment. This increased cost did not totally offset the cost savings
associated with the merger. The other miscellaneous category of expense was
affected by the $7.4 million of merger related charges in 1994.

INCOME TAX PROVISION

The provision for income taxes was $106.6 million in 1995 compared to $73.4
million in 1994 and $93.2 million in 1993. The increase in the 1995 provision
levels is due to higher taxable income offset in part by a $2.3 million research
and experimental tax credit related to software development. The 1994 provision
for taxes was impacted by certain nondeductible expenses associated with the
Valley combination. The effective tax rate was 35.54% in 1995, 43.74% in 1994,
and 35.22% in 1993.

ASSET/LIABILITY MANAGEMENT

Asset/Liability management involves the funding and investment strategies
necessary to maintain an appropriate balance between interest sensitive assets
and liabilities as well as to assure adequate liquidity. These strategies
determine the characteristics and mix of the balance sheet. They affect net
interest margins, maturity patterns, interest rate sensitivity and risk, as well
as resource allocations.

The Corporation combines the active management of the balance sheet
position over interest rate cycles to confine interest rate risk within prudent
parameters. Financial derivative instruments may be used on a limited basis and
are generally straightforward and involve little complexity. We position the
balance sheet in a manner which will match asset and liability repricing
schedules to insulate our net interest margin from cyclical swings in interest
rates, while consciously matching or mismatching discretionary asset and
liability repricing schedules to take advantage of interest rate swings over
short periods of time.

Adequate funding sources are maintained through a full line of deposit and
short-term borrowing products, competitively priced to a diversified customer
base. Asset diversification provides a proper mix of variable and fixed rate
loans, while investment decisions are primarily designed to balance the overall
interest rate risk in the balance sheet. Liquidity is provided through
marketability and an appropriate schedule of maturing investments.

A portion of demand deposits are considered rate sensitive under the
following assumptions. A core amount of demand deposits is calculated at the
beginning of each year. This core number is the average of the previous six
months actual and upcoming twelve months forecasted balances. The core balance
is considered nonrate sensitive and classified as a nonrate sensitive liability
in the "1 year +" time frame. Actual demand deposit balances are compared to the
core balance monthly. The difference, positive or negative, is considered rate
sensitive and classified as a rate sensitive liability. At December 31, 1995,
$261 million of demand deposits were classified as rate sensitive in the "1-30
Days" time frame. In addition, a percentage of various interest-bearing accounts
are classified (rate sensitive or nonrate sensitive) according to assumptions
which approximate the extent to which the rates on these accounts are expected
to increase (decrease) relative to a change in the general level of interest
rates.

28
<PAGE> 29

ASSET/LIABILITY MANAGEMENT
($ IN MILLIONS)

<TABLE>
<CAPTION>
1-30 31-90 91-180 181-364 1
DAYS DAYS DAYS DAYS SUBTOTAL YEAR + TOTAL
------ ----- ------ ------- -------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Loans....................... $3,138 $ 678 $ 744 $ 917 $5,477 $3,230 $ 8,707
Securities.................. 97 56 180 434 767 2,142 2,909
Other Interest Bearing
Assets.................... 286 -- -- -- 286 -- 286
Other Assets................ -- -- -- -- -- 1,441 1,441
------ ----- ----- ------ ------ ------ -------
Total Assets.............. $3,521 $ 734 $ 924 $ 1,351 $6,530 $6,813 $13,343
Rate Sensitive
Liabilities............... $4,403 $ 492 $ 727 $ 1,091 $6,713 $3,044 $ 9,757
Nonrate Sensitive
Liabilities............... -- -- -- -- -- 3,586 3,586
------ ----- ----- ------ ------ ------ -------
Total Liabilities &
Equity................. $4,403 $ 492 $ 727 $ 1,091 $6,713 $6,630 $13,343
====== ===== ===== ====== ====== ====== =======
Gap......................... $ (882) $ 242 $ 197 $ 260 $ 183
Cumulative Gap.............. (882) (640) (443 ) (183)
Cumulative Gap as a % of
Total Assets.............. (6.61)% (4.80)% (3.32 )% (1.37)%
</TABLE>

CAPITAL RESOURCES

Shareholders' equity was $1.26 billion at December 31, 1995 compared to
$1.06 billion at December 31, 1994. This increase was primarily due to retained
net income, the issuance of 2.8 million common shares for the acquisition of
three banking affiliates and a $55.3 million increase in the net unrealized gain
on investment securities available for sale.

The Corporation and its affiliates continue to have a strong capital base
and the Corporation's regulatory capital ratios are significantly above the
defined minimum regulatory ratios. At December 31, 1995, the Corporation had a
total risk-based capital ratio of 14.04% and an 11.71% core capital to
risk-based asset ratio. Selected leverage capital ratios must also be
maintained. The Corporation's leverage ratio at December 31, 1995 of 9.07% was
substantially in excess of the minimum guidelines.

The Corporation's subsidiaries, primarily its banking subsidiaries, are
restricted by regulations from making dividend distributions above prescribed
amounts. In addition, banking subsidiaries are limited in making loans and
advances to the Corporation. At December 31, 1995, approximately $87 million and
$45 million were available for distribution without regulatory approval from the
Corporation's banking and nonbanking subsidiaries, respectively.

Under Federal Reserve Board policy, the Corporation is expected to act as a
source of financial strength to each subsidiary bank and to commit resources to
support each subsidiary bank in circumstances when it might not do so absent
such policy.

In May of 1994, $16.4 million of 8.5% convertible subordinated notes were
converted into 1,870,057 shares of common stock. As provided for in the note
agreement, the noteholder, subsequent to conversion, exchanged the common shares
acquired by conversion of the debt for 163,630 shares of Series A preferred
stock.

The Corporation has a Stock Repurchase Program which was approved by the
Corporation's Board of Directors in April 1993 and reaffirmed in October 1994.
In October 1994, the Board of Directors also authorized an increase in the
number of shares to be repurchased from 9.0 million shares to 15.1 million
shares. The shares are being acquired in anticipation of the remaining
conversion of the Corporation's 8.5% convertible subordinated notes, to fund the
on-going program to deliver or have available shares of common stock for stock
option and other employee benefit plans and other corporate needs. During 1995,
the Corporation purchased 2.7 million shares and has cumulatively purchased 12.5
million shares since inception of the program.

29
<PAGE> 30

The Corporation has filed registration statements with the Securities &
Exchange Commission to issue medium term unsecured and subordinated series
notes. These issues may have maturities which range from nine (9) months to 30
years from the date of issue at a fixed or floating rate. As of December 31,
1995, approximately $177 million of medium term notes and approximately $560
million of bank notes can be issued. This allows the Corporation to maintain
ready access to funding sources for general corporate purposes which include,
but are not limited to, refinancing existing corporate and bank debt as it
matures, and other corporate needs.

30
<PAGE> 31

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA FOR YEARS ENDED
DECEMBER 31, 1995, 1994, AND 1993

CONSOLIDATED BALANCE SHEETS
DECEMBER 31 ($000'S EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Cash and Cash Equivalents:
Cash and Due from Banks......................................... $ 745,911 $ 685,919
Funds Sold and Security Resale Agreements....................... 66,618 205,248
Money Market Funds.............................................. 84,960 76,724
----------- -----------
Total Cash and Cash Equivalents................................... 897,489 967,891
Trading Securities, at Market Value............................... 38,601 20,361
Other Short-term Investments, at Cost which Approximates
Market Value.................................................... 95,635 43,519
Investment Securities Available for Sale, at Market Value......... 2,458,600 1,865,147
Investment Securities Held to Maturity, Market Value $453,240
($419,521 in 1994).............................................. 450,457 429,456
Loans, Net of Unearned Income of $46,571 ($39,569 in 1994)........ 8,868,902 8,792,492
Less: Allowance for Loan Losses................................... 161,430 153,961
----------- -----------
Net Loans......................................................... 8,707,472 8,638,531
Premises and Equipment............................................ 306,988 286,435
Accrued Interest and Other Assets................................. 387,855 361,609
----------- -----------
Total Assets............................................ $13,343,097 $12,612,949
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest Bearing............................................. $ 2,363,194 $ 2,199,016
Interest Bearing................................................ 7,917,583 7,300,064
----------- -----------
Total Deposits.................................................... 10,280,777 9,499,080
Short-term Borrowings............................................. 1,015,022 1,111,142
Accrued Expenses and Other Liabilities............................ 367,131 287,654
Long-term Borrowings.............................................. 422,550 653,777
----------- -----------
Total Liabilities....................................... 12,085,480 11,551,653
Shareholders' Equity:
Series A Convertible Preferred Stock, $1.00 par value, 3,000,000
Shares Authorized; 348,944 Shares Issued; Liquidation
Preference $34,894........................................... 349 349
Common Stock, $1.00 par value, 160,000,000 Shares Authorized;
99,494,335 Shares Issued..................................... 99,494 99,494
Additional Paid-in Capital...................................... 190,287 194,697
Retained Earnings............................................... 1,075,789 945,469
Less: Treasury Stock, at Cost, 5,968,631 Shares (6,964,920 in
1994)........................................................ 128,459 143,438
Deferred Compensation........................................ 1,090 1,203
Net Unrealized Securities Gains (Losses) Net of Taxes........... 21,247 (34,072)
----------- -----------
Total Shareholders' Equity.............................. 1,257,617 1,061,296
----------- -----------
Total Liabilities and Shareholders' Equity.............. $13,343,097 $12,612,949
=========== ===========
</TABLE>

The accompanying notes are an integral part of the Consolidated Financial
Statements.

31
<PAGE> 32

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31 ($000'S EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
INTEREST INCOME
Loans................................................................ $774,256 $681,085 $643,679
Investment Securities:
Taxable............................................................ 118,868 110,894 123,207
Exempt from Federal Income Taxes................................... 18,112 16,693 20,692
Trading Securities................................................... 483 218 186
Other Short-term Investments......................................... 12,941 8,416 5,713
-------- -------- --------
Total Interest Income....................................... 924,660 817,306 793,477
INTEREST EXPENSE
Deposits............................................................. 331,734 255,861 272,100
Short-term Borrowings................................................ 47,740 39,681 18,010
Long-term Borrowings................................................. 53,709 30,537 23,088
-------- -------- --------
Total Interest Expense...................................... 433,183 326,079 313,198
-------- -------- --------
Net Interest Income.................................................. 491,477 491,227 480,279
Provision for Loan Losses............................................ 16,158 24,907 18,034
-------- -------- --------
Net Interest Income After Provision for Loan Losses.................. 475,319 466,320 462,245
OTHER INCOME
Data Processing Services............................................. 213,914 159,418 135,041
Trust Services....................................................... 64,176 59,720 61,226
Other Customer Services.............................................. 110,779 117,089 124,505
Net Securities Gains (Losses)........................................ 4,555 (5,752) 8,334
Other................................................................ 30,758 31,006 42,820
-------- -------- --------
Total Other Income.......................................... 424,182 361,481 371,926
OTHER EXPENSE
Salaries and Employee Benefits....................................... 343,650 323,904 320,717
Net Occupancy........................................................ 35,717 36,579 36,389
Equipment............................................................ 65,534 59,569 57,863
Payments to Regulatory Agencies...................................... 12,715 23,359 23,142
Processing Charges................................................... 18,480 18,293 17,379
Supplies and Printing................................................ 15,711 14,416 13,169
Professional Services................................................ 18,675 12,504 12,036
Merger/Restructuring................................................. -- 75,228 --
Other................................................................ 89,140 96,146 88,892
-------- -------- --------
Total Other Expense......................................... 599,622 659,998 569,587
-------- -------- --------
Income Before Income Taxes and Extraordinary Items................... 299,879 167,803 264,584
Provision for Income Taxes........................................... 106,580 73,405 93,190
-------- -------- --------
Income Before Extraordinary Items.................................... 193,299 94,398 171,394
Extraordinary Items, Net of Income Taxes............................. -- 11,542 --
-------- -------- --------
Net Income.................................................. $193,299 $105,940 $171,394
======== ======== ========
NET INCOME PER COMMON SHARE
Primary:
Income Before Extraordinary Items.................................. $ 1.96 $ 0.95 $ 1.67
Extraordinary Items................................................ -- 0.12 --
-------- -------- --------
Net Income.................................................. $ 1.96 $ 1.07 $ 1.67
======== ======== ========
Fully Diluted:
Income Before Extraordinary Items.................................. $ 1.90 $ 0.93 $ 1.60
Extraordinary Items................................................ -- 0.11 --
-------- -------- --------
Net Income.................................................. $ 1.90 $ 1.04 $ 1.60
======== ======== ========
</TABLE>

The accompanying notes are an integral part of the Consolidated Financial
Statements.

32
<PAGE> 33

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31 ($000'S)

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income.................................................... $ 193,299 $ 105,940 $ 171,394
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization............................. 47,167 71,957 57,058
Provision for Loan Losses................................. 16,158 24,907 18,034
Gains on Sales of Assets.................................. (20,448) (2,434) (21,487)
Proceeds from Sales of Trading Securities and Loans Held
for Resale.............................................. 3,506,767 3,657,575 3,192,622
Purchases of Trading Securities and Loans Held for
Resale.................................................. (3,514,512) (3,547,732) (3,220,184)
Other..................................................... (727) (2,765) (6,743)
----------- ----------- -----------
Total Adjustments......................................... 34,405 201,508 19,300
----------- ----------- -----------
Net Cash Provided by Operating Activities..................... 227,704 307,448 190,694
CASH FLOWS FROM INVESTING ACTIVITIES
Net (Increase) Decrease in Shorter Term Securities............ (49,980) 7,676 53,244
Proceeds from Maturities of Longer Term Securities............ 668,708 861,428 1,742,984
Proceeds from Sales of Securities Available for Sale.......... 133,340 595,476 29,892
Purchases of Longer Term Securities........................... (791,172) (1,254,651) (1,419,314)
Decrease in Loans Due to Divestitures......................... -- 199,455 --
Net Increase in Loans......................................... (332,649) (497,075) (543,812)
Purchases of Assets to be Leased.............................. (132,299) (88,826) (94,187)
Principal Payments on Lease Receivables....................... 139,155 113,976 105,352
Purchases of Premises and Equipment, Net...................... (39,881) (28,995) (65,731)
Other......................................................... 26,603 (29,829) (10,431)
----------- ----------- -----------
Net Cash Used in Investing Activities......................... (378,175) (121,365) (202,003)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in Deposits Due to Divestitures...................... -- (300,736) --
Net Increase (Decrease) in Deposits........................... 550,261 (371,993) 33,124
Proceeds from Issuance of Commercial Paper.................... 1,406,388 1,578,618 1,348,661
Principal Payments on Commercial Paper........................ (1,439,343) (1,604,384) (1,325,634)
Net Increase (Decrease) in Other Short-term Borrowings........ (434,429) 440,501 53,320
Proceeds from Issuance of Long-term Debt...................... 216,872 497,560 116,959
Payment of Long-term Debt..................................... (104,676) (96,299) (63,718)
Dividends Paid................................................ (62,985) (57,575) (54,435)
Purchase of Common Stock...................................... (61,104) (101,887) (114,686)
Proceeds from the Issuance of Common Stock.................... 9,079 11,682 19,887
Other......................................................... 6 1,687 (630)
----------- ----------- -----------
Net Cash Provided by (Used in) Financing Activities........... 80,069 (2,826) 12,848
----------- ----------- -----------
Net Increase (Decrease) in Cash and Cash Equivalents.......... (70,402) 183,257 1,539
Cash and Cash Equivalents, Beginning of Year.................. 967,891 784,634 783,095
----------- ----------- -----------
Cash and Cash Equivalents, End of Year........................ $ 897,489 $ 967,891 $ 784,634
=========== =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash Paid During the Year for:
Interest.................................................... $ 406,383 $ 319,398 $ 313,073
Income Taxes................................................ 107,672 91,797 88,398
</TABLE>

The accompanying notes are an integral part of the Consolidated Financial
Statements.

33
<PAGE> 34

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
($000'S EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
ADDITIONAL TREASURY DEFERRED
PREFERRED COMMON PAID-IN RETAINED COMMON COMPEN-
STOCK STOCK CAPITAL EARNINGS STOCK SATION
--------- -------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1992.......... $ 185 $ 29,788 $297,452 $780,177 $ 18,798 $ 3,135
Net Income.......................... -- -- -- 171,394 -- --
3 for 1 Stock Split Effected in the
Form of a 200% Stock Dividend..... -- 59,576 (59,576) -- -- --
Transactions by Affiliates Prior to
Combination....................... -- 11,513 (11,513) (19,014) -- --
Issuance of 134,150 Common Shares on
Conversion of Convertible Notes... -- 134 383 -- -- --
Issuance of 2,228,186 Common Shares
Under Stock Option and Restricted
Stock Plans....................... -- 1,062 3,230 -- (15,582) --
Acquisition of 5,053,317 Common
Shares............................ -- -- -- -- 117,890 --
Dividends Declared on Preferred
Stock -- $5.76 Per Share.......... -- -- -- (1,067) -- --
Dividends Declared on Common
Stock -- $0.54 Per Share.......... -- -- -- (34,354) -- --
Net Change in Deferred
Compensation...................... -- -- -- -- -- (1,243)
Other............................... -- -- 8,154 (13) -- --
---- -------- -------- -------- -------- -------
Balance, December 31, 1993.......... $ 185 $102,073 $238,130 $897,123 $121,106 $ 1,892
==== ======== ======== ======== ======== =======
</TABLE>

The accompanying notes are an integral part of the Consolidated Financial
Statements.

34
<PAGE> 35

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
($000'S EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
NET UNREALIZED
ADDITIONAL TREASURY DEFERRED SECURITIES
PREFERRED COMMON PAID-IN RETAINED COMMON COMPEN- GAINS (LOSSES)
STOCK STOCK CAPITAL EARNINGS STOCK SATION NET OF TAXES
--------- -------- ---------- -------- -------- ------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993........... $ 185 $102,073 $238,130 $897,123 $121,106 $1,892 $ --
Net Income........................... -- -- -- 105,940 -- -- --
Adoption of Statement of Financial
Accounting Standards No. 115,
"Accounting for Certain Investments
in Debt and Equity Securities"..... -- -- -- -- -- -- 13,858
Issuance of 2,653,689 Treasury Shares
in the 1994 Business Combination... -- (2,654) (52,569) -- (55,223) -- --
Transactions by Affiliates Prior to
Combination........................ -- -- -- (9,963) -- -- --
Issuance of 1,870,057 Treasury Common
Shares on Conversion of Convertible
Notes.............................. -- -- (22,365) -- (38,916) -- --
Issuance of 163,630 Preferred Shares
on Conversion of 1,870,057 Common
Shares............................. 164 -- 38,752 -- 38,916 -- --
Issuance of 1,154,218 Common Shares
Under Stock Option and Restricted
Stock Plans........................ -- 78 (10,628) -- (22,294) -- --
Acquisition of 4,827,637 Common
Shares............................. -- -- -- -- 99,271 -- --
Dividends Declared on Preferred
Stock -- $6.43 Per Share........... -- -- -- (2,000) -- -- --
Dividends Declared on Common Stock --
$0.59 Per Share.................... -- -- -- (45,612) -- -- --
Net Change in Deferred
Compensation....................... -- -- -- -- -- (689 ) --
Net Change in Unrealized Securities
Gains (Losses) Net of Taxes........ -- -- -- -- -- -- (47,930)
Other................................ -- (3) 3,377 (19) 578 -- --
---- -------- -------- -------- -------- ------ --------
Balance, December 31, 1994........... $ 349 $ 99,494 $194,697 $945,469 $143,438 $1,203 $(34,072)
==== ======== ======== ======== ======== ====== ========
</TABLE>

The accompanying notes are an integral part of the Consolidated Financial
Statements.

35
<PAGE> 36

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
($000'S EXCEPT SHARE DATA)

The accompanying notes are an integral part of the Consolidated Financial
Statements.

36
<PAGE> 37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

Marshall & Ilsley Corporation ("M&I" or the "Corporation") is a bank and
savings and loan holding company that provides financial services to a wide
variety of corporate, institutional, government and individual customers through
28 banks and one savings association located in Wisconsin and one bank in
Arizona. Based on total revenues, banking is M&I's largest business and includes
personal property lease financing; investment management and advisory services;
commercial and residential mortgage banking; venture capital and financial
advisory services; trust services to residents of Wisconsin, Arizona and
Florida; and brokerage services. M&I also provides financial and data processing
services and software sales through the Data Services Division of the
Corporation. M&I's largest affiliates and principal operations are in Wisconsin;
however, it has activities in other markets, particularly in certain neighboring
midwestern states, and in Arizona and Florida.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
periods. Actual results could differ from those estimates.

Consolidation principles -- The Consolidated Financial Statements include
the accounts of Marshall & Ilsley Corporation and all subsidiaries. All
significant intercompany balances and transactions are eliminated in
consolidation. Certain amounts in the 1994 and 1993 Consolidated Financial
Statements have been reclassified to conform with the 1995 presentation.

Cash and cash equivalents -- For purposes of the Consolidated Financial
Statements, the Corporation defines cash equivalents as short-term investments
which have an original maturity of three months or less and are readily
convertible into cash.

Securities -- Securities, when purchased, are designated as Trading,
Investment Securities Held to Maturity, or Investment Securities Available for
Sale and remain in that category until they are sold or mature. The specific
identification method is used in determining the cost of securities sold.

Investment Securities Held to Maturity are carried at cost, adjusted for
amortization of premiums and accretion of discounts. Investment Securities
Available for Sale are carried at fair value with fair value adjustments and the
related income tax effects reported as a separate component of shareholders'
equity as prescribed by Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." Short-term
Investments, other than Trading Securities, are carried at cost, which
approximates market value. Trading Securities are carried at market value, with
adjustments to the carrying value reflected in the Consolidated Statements of
Income.

Loans -- Interest on loans, other than direct financing leases, is
recognized as income based on the loan principal outstanding during the period.
Unearned income on direct financing leases is recognized over the lease term on
a basis that results in an approximate level rate of return on the lease
investment. Loans are generally placed on nonaccrual status when they are past
due 90 days as to either interest or principal. When a loan is placed on
nonaccrual status, previously accrued and uncollected interest is charged to
interest income on loans. A nonaccrual loan may be restored to an accrual basis
when interest and principal payments are brought current and collectibility of
future payments is not in doubt.

The Corporation defers and amortizes fees and certain incremental direct
costs, primarily salary and employee benefit expenses, over the contractual term
of the loan or lease as an adjustment to the yield. The unamortized net fees and
costs are reported as part of the loan balance outstanding.

Allowance for loan losses -- The allowance for loan losses is maintained at
a level believed adequate by management to absorb estimated potential losses in
the loan portfolio. Management's determination of the

37
<PAGE> 38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

adequacy of the allowance is based on a continual review of the loan portfolio,
loan loss experience, economic conditions, growth and composition of the
portfolio, and other relevant factors. As a result of management's continual
review, the allowance is adjusted through provisions for loan losses charged
against income.

Premises and equipment -- Premises and equipment are recorded at cost and
depreciated principally on the straight-line method with annual rates varying
from 2% to 10% for buildings and 10% to 35% for equipment. Maintenance and
repairs are charged to expense and betterments are capitalized.

Other real estate owned -- Other real estate owned includes assets that
have been acquired in satisfaction of debts or bank branch premises held for
sale. Other real estate is recorded at the lower of cost or fair value, less
estimated selling costs, at the date of transfer. Valuation adjustments required
at the date of transfer for assets acquired in satisfaction of debts are charged
to the allowance for loan losses, whereas any valuation adjustments on premises
are reported in other expense. Subsequent to transfer, other real estate owned
is carried at the lower of cost or fair market value, less estimated selling
costs, based upon periodic evaluations. Rental income from properties and gains
on sales are included in other income, and property expenses, which include
carrying costs, required valuation adjustments and losses on sales, are recorded
in other expense.

Mortgage servicing -- Normal fees related to the servicing of mortgage
loans are recorded as income when payments are received from mortgagors.
Mortgage loans held for sale to investors are carried at the lower of cost or
market, determined on an aggregate basis, based on outstanding firm commitments
received for such loans or on current market prices.

Data processing services -- Direct costs associated with the production of
computer software which will be marketed or used in data processing operations
are capitalized and amortized on the straight-line method over the estimated
economic life of the product, generally four years. Direct costs associated with
customer system conversions to the data services operations are capitalized and
amortized on the straight-line method over the terms, generally five to seven
years, of the related servicing contract. Routine maintenance of software
products, design costs and development costs incurred prior to establishment of
a product's technological feasibility are expensed as incurred. Net unamortized
capitalized costs were $34,984 at December 31, 1995, and $21,696 at December 31,
1994. Amortization expense was $7,122, $6,960, and $4,668, for 1995, 1994, and
1993, respectively.

Intangibles -- Unamortized intangibles resulting from acquisitions,
primarily goodwill, core deposit premiums, purchased data processing contract
rights and mortgage servicing rights were $77,376 at December 31, 1995 and
$64,171 at December 31, 1994. The Corporation recognizes as separate assets
rights to service mortgage loans when purchased or originated and sold with
servicing retained in accordance with Statement of Financial Accounting
Standards No. 122, "Accounting for Mortgage Servicing Rights" (SFAS 122) which
was adopted by the Corporation in 1995. The Corporation allocates the cost of
mortgage loans to the mortgage servicing rights and the loans based on their
estimated relative fair values. Mortgage servicing rights are amortized over the
periods during which the corresponding mortgage servicing revenues are
anticipated to be generated. The Corporation periodically evaluates and measures
impairment of capitalized mortgage servicing rights and recognizes impairment,
if required, through a valuation allowance. For purposes of evaluating and
measuring impairment, the Corporation stratifies the mortgage servicing rights
based on loan term which the Corporation considers the predominant risk
characteristic of the underlying loans. The impact of adopting SFAS 122 was not
material and no valuation allowance was required for any individual stratum at
December 31, 1995. Purchased data processing contract rights represent the costs
to acquire the rights to data processing and software distribution. Such costs
are generally amortized over the average contract lives, which range from 5 to 8
years. The other intangibles are amortized principally on the straight-line
method over periods ranging from 6 to 25 years. Total amortization expense was
$10,708, $9,176 and $7,204 for 1995, 1994 and 1993, respectively. The
Corporation continually evaluates whether later events and circumstances have
occurred to indicate that intangibles should be evaluated for possible
impairment and utilizes estimates of undiscounted net income over the remaining
life to measure recoverability.

38
<PAGE> 39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

The Corporation also has negative goodwill included in other liabilities,
the majority of which, arose from an acquisition in 1992. Negative goodwill
amounted to $10,811 and $12,387 at December 31, 1995 and 1994, respectively. The
negative goodwill is being accreted on a straight-line basis over a period of 10
years and amounted to $1,576 in 1995, 1994 and 1993.

Foreign exchange contracts -- Foreign exchange contracts include such
commitments as foreign currency spot, forward, future and, to a much lessor
extent, option contracts. Foreign exchange contracts and the premiums on options
written or sold are carried at market value, with realized and unrealized gains
and losses included in other income.

Net income per share -- Primary net income per share is computed using the
weighted average number of common shares outstanding plus common equivalent
shares issuable upon the assumed conversion of the preferred stock outstanding
and shares issuable under outstanding stock option plans. The average number of
common and common equivalent shares used in computing primary net income per
share was 98,757,047 in 1995, 99,420,070 in 1994, and 102,672,361 in 1993.

Fully diluted net income per share also includes dilution resulting from
the assumed conversion of the convertible notes. The average number of shares
used in the computation of fully diluted net income per share was 102,954,823 in
1995, 104,051,365 in 1994, and 108,874,600 in 1993.

2. BUSINESS COMBINATIONS

On May 31, 1994, Valley Bancorporation ("Valley") merged with and into the
Corporation in a tax-free reorganization accounted for as a pooling of
interests. Accordingly, prior year financial statements have been restated to
give effect to this transaction. In accordance with the terms of the merger,
each share of Valley Common Stock was converted into the right to receive 1.72
shares of the Corporation's Common Stock (approximately 35.7 million shares).

A reconciliation of net interest income and net income of the Corporation
as previously reported to the amounts for that period in the accompanying
Consolidated Financial Statements as restated for the 1994 pooling of interests
is as follows:

<TABLE>
<CAPTION>
1993
--------
<S> <C>
Net Interest Income:
Corporation, as previously reported..................................... $309,178
Valley Bancorporation................................................... 171,101
--------
Combined.................................................................. $480,279
========
Net Income:
Corporation, as previously reported..................................... $125,491
Valley Bancorporation................................................... 45,903
--------
Combined.................................................................. $171,394
========
</TABLE>

39
<PAGE> 40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

The Corporation has also consummated the following business combinations:

<TABLE>
<CAPTION>
CONSIDERATION
DATE ------------------------ METHOD OF
ORGANIZATION CONSUMMATED CASH COMMON STOCK ACCOUNTING
- ------------------------------------ ------------------ ------- ------------ ----------
<S> <C> <C> <C> <C>
Pierce County Bank and Trust Co. ... November 6, 1993 $14,678 -- Purchase
Software Alliance Corp. ............ December 30, 1994 15,700 -- Purchase
Bank of Burlington.................. February 1, 1995 -- 1,491,600 Purchase
Mutual Services, Inc. .............. June 27, 1995 5,333 -- Purchase
Citizens Bancorp of Delavan,
Inc. ............................. July 1, 1995 -- 1,132,544 Purchase
Sharon State Bank................... July 2, 1995 -- 220,000 Purchase
</TABLE>

The results of operations for the acquired companies accounted for as
purchases are included in the Consolidated Financial Statements from the dates
of acquisition. The pro forma impact on net income from acquisitions is not
material.

3. MERGER/RESTRUCTURING

Certain one-time expenses associated with the 1994 merger with Valley are
shown in the Consolidated Statements of Income as Merger/Restructuring and
consist of the following:

<TABLE>
<S> <C>
Executive contracts........................................................ $26,371
Employee severance costs................................................... 14,775
Duplicative computer and software write-offs............................... 12,741
System conversion and standardization costs................................ 2,888
Investment advisor fees.................................................... 3,420
Legal, accounting and other professional fees.............................. 3,826
Lease terminations and equipment disposals................................. 4,232
Net gain on sale of duplicative facilities and voluntary divestitures...... (1,334)
Other...................................................................... 8,309
-------
Total merger/restructuring....................................... $75,228
=======
</TABLE>

The executive contracts accrual was the present value of the amounts
contractually due to certain Valley executives under their former employment
contracts. During 1995 and 1994, payments of $0.2 million and $10.2 million
respectively, were made.

Employee severance costs represented the planned general reduction in work
force resulting from the merger and restructuring activities which affected all
employee groups. Approximately $8.6 million of severance costs were paid in 1994
and the remainder was substantially paid in 1995.

Duplicative computer and software write-offs were the capitalized costs of
Valley's own internal data processing center which was closed. System conversion
and standardization costs represent the costs associated with the one-time
conversion and standardization of Valley's records to the Corporation's data
processing systems.

Investment advisors and legal, accounting and other professional fees
represent fees paid to consummate the merger.

Lease terminations and equipment disposals represent the costs to terminate
branch office and other corporate facilities leases, equipment leases and the
disposal of equipment.

Net gain on sale of duplicative facilities and voluntary divestitures
represents the gain or loss from the sale of duplicative branch offices and
other corporate facilities which were owned. The Corporation voluntarily

40
<PAGE> 41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

divested four bank branches with deposits of approximately $34 million and
certain portions of its insurance agencies.

Other charges include the one-time expenses associated with the curtailment
of certain Valley defined benefit plans, approximately $3.3 million, costs to
eliminate duplicate customer accounts, unusable capitalized inventory, and other
costs not deemed to be realizable due to the merger.

There have not been any material adjustments to the liabilities subsequent
to the initial recognition which occurred during the second quarter of 1994.

4. EXTRAORDINARY ITEMS

During the third and fourth quarters of 1994, the Corporation realized
extraordinary gains from the sale of certain bank branches with deposits of $267
million which were required to be divested in conjunction with the regulatory
approvals obtained for the merger with Valley.

During the third quarter of 1994, the Corporation prepaid $53 million of
Valley's long-term debt consisting of the senior unsecured notes, Series A 9.86%
due in 1994 and Series B 9.97% due in 1995. In accordance with the note
agreements, a prepayment premium was paid in connection with the early
retirement of the debt. The debt was refinanced with the Corporation's
medium-term notes.

The following table summarizes these 1994 transactions:

<TABLE>
<CAPTION>
EARNINGS PER SHARE
INCOME INCREASE (DECREASE)
GROSS TAX NET -------------------
GAIN EXPENSE GAIN FULLY
(LOSS) (BENEFIT) (LOSS) PRIMARY DILUTED
------- --------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Required Divestitures.............. $22,034 $ 9,527 $12,507 $ 0.13 $ 0.12
Debt Prepayment.................... (1,484) (519) (965) (0.01) (0.01)
------- ------ ------- ------ ------
$20,550 $ 9,008 $11,542 $ 0.12 $ 0.11
======= ====== ======= ====== ======
</TABLE>

5. CASH AND DUE FROM BANKS

At December 31, 1995, $133,652 of cash and due from banks was restricted,
primarily due to requirements of the Federal Reserve System to maintain certain
reserve balances.

6. OTHER SHORT-TERM INVESTMENTS

Other short-term investments at December 31 were:

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Commercial paper................................................. $65,250 $15,270
Interest bearing deposits in other banks......................... 28,812 28,249
U.S. Treasury Bills.............................................. 1,573 --
------- -------
Total other short-term investments..................... $95,635 $43,519
======= =======
</TABLE>

41
<PAGE> 42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

7. SECURITIES

The book and market values of securities at December 31 were:

<TABLE>
<CAPTION>
1995 1994
------------------------- -------------------------
AMORTIZED MARKET AMORTIZED MARKET
COST VALUE COST VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Investment Securities Held to Maturity:
U.S. Treasury and government
agencies............................ $ -- $ -- $ 134,080 $ 129,737
States and political subdivisions...... 446,113 448,896 290,483 284,885
Other.................................. 4,344 4,344 4,893 4,899
---------- ---------- ---------- ----------
Total.......................... $ 450,457 $ 453,240 $ 429,456 $ 419,521
========== ========== ========== ==========
Investment Securities Available for Sale:
U.S. Treasury and government
agencies............................ $2,330,577 $2,346,866 $1,836,476 $1,772,883
States and political subdivisions...... 885 894 -- --
Mortgage backed securities............. 5,210 5,220 12,099 11,759
Other.................................. 88,826 105,620 69,541 80,505
---------- ---------- ---------- ----------
Total.......................... $2,425,498 $2,458,600 $1,918,116 $1,865,147
========== ========== ========== ==========
</TABLE>

The unrealized gains and losses of securities at December 31 were:

<TABLE>
<CAPTION>
1995 1994
------------------------- -------------------------
UNREALIZED UNREALIZED UNREALIZED UNREALIZED
GAINS LOSSES GAINS LOSSES
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Investment Securities Held to Maturity:
U.S. Treasury and government agencies........ $ -- $ -- $ -- $ 4,343
States and political subdivisions............ 4,473 1,690 1,501 7,099
Other........................................ -- -- 8 2
------- ------ ------- -------
Total................................ $ 4,473 $1,690 $ 1,509 $ 11,444
======== ====== ======== ========
Investment Securities Available for Sale:
U.S. Treasury and government agencies........ $ 23,964 $7,675 $ 120 $ 63,713
States and political subdivisions............ 9 -- -- --
Mortgage backed securities................... 33 23 14 354
Other........................................ 17,237 443 11,003 39
------- ------ ------- -------
Total................................ $ 41,243 $8,141 $ 11,137 $ 64,106
======== ====== ======== ========
</TABLE>

42
<PAGE> 43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

The book value and market value of securities by contractual maturity at
December 31, 1995 were:

<TABLE>
<CAPTION>
INVESTMENT SECURITIES INVESTMENT SECURITIES
HELD TO MATURITY AVAILABLE FOR SALE
---------------------- -------------------------
AMORTIZED MARKET AMORTIZED MARKET
COST VALUE COST VALUE
--------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Within one year............................. $ 96,883 $ 97,053 $ 669,085 $ 669,797
From one through five years................. 158,962 159,980 1,676,312 1,691,060
From five through ten years................. 185,273 186,563 9,497 9,858
After ten years............................. 9,339 9,644 70,604 87,885
-------- -------- ---------- ----------
Total............................. $ 450,457 $453,240 $2,425,498 $2,458,600
========= ======== ========== ==========
</TABLE>

The gross realized gains and losses amounted to $8,821 and $4,266 in 1995,
$3,499 and $9,251 in 1994, and $8,552 and $218 in 1993, respectively.

At December 31, 1995, securities with a value of approximately $364,340
were pledged to secure public deposits, short-term borrowings, and for other
purposes required by law.

During 1995, approximately $455 million of adjustable rate mortgage loans
were securitized and transferred to investment securities available for sale.
Approximately $2,275 of the allowance for loan losses was transferred to a
specific investment reserve to cover estimated losses based on the Corporation's
experience with these types of financial instruments. The Corporation has agreed
to guarantee the first 4% of the loan pools securitized through a government
agency against potential loss. These are noncash transactions for purposes of
the Consolidated Statements of Cash Flows.

On December 1, 1995, the Corporation transferred and reclassified
approximately $182.8 million of investment securities previously classified as
held to maturity to available for sale after reassessing the appropriateness of
the classification of all investment securities held at that time in accordance
with SFAS 115 and the Financial Accounting Standards Board's, "A Guide to
Implementation of Statement 115 on Accounting for Certain Investments in Debt
and Equity Securities."

8. LOANS

Loans at December 31 were:

<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Commercial, financial, and agricultural..................... $2,903,920 $2,644,928
Industrial development revenue bonds........................ 29,358 31,796
Real estate:
Construction.............................................. 303,345 378,316
Residential mortgage...................................... 2,002,023 2,240,287
Commercial mortgage....................................... 2,189,449 2,062,022
Personal.................................................... 1,163,127 1,178,453
Lease financing............................................. 277,680 256,690
---------- ----------
Total loans....................................... $8,868,902 $8,792,492
========== ==========
</TABLE>

The Corporation's lending activities are concentrated primarily in the
Midwest. Approximately 3% of its portfolio consists of loans granted to
customers located in Arizona. The Corporation had $3,103 in foreign credits at
December 31, 1995. The Corporation's loan portfolio consists of business loans
extending across many industry types, as well as loans to individuals. As of
December 31, 1995, total loans to any group of

43
<PAGE> 44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

customers engaged in similar activities and having similar economic
characteristics, as defined by standard industrial classifications, did not
exceed 10% of total loans.

The Corporation evaluates the credit risk of each customer on an individual
basis and, where deemed appropriate, collateral is obtained. Collateral varies
by individual loan customer but may include accounts receivable, inventory, real
estate, equipment, deposits, personal and government guaranties, and general
security agreements. Access to collateral is dependent upon the type of
collateral obtained. On an on-going basis, the Corporation monitors its
collateral and the collateral value related to the loan balance outstanding.

An analysis of loans outstanding to directors and officers, including their
related interests, of the Corporation and its significant subsidiaries for 1995
is presented below. All of these loans were made in the ordinary course of
business with normal credit terms, including interest rates and collateral. The
beginning balance has been adjusted to reflect the activity of newly-appointed
directors and executive officers and directors and executive officers of
subsidiaries previously not considered significant.

Loans to Directors & Executive Officers:

<TABLE>
<S> <C>
Balance, beginning of year............................................... $ 146,102
New loans................................................................ 104,675
Repayments............................................................... (106,742)
---------
Balance, end of year..................................................... $ 144,035
=========
</TABLE>

9. ALLOWANCE FOR LOAN LOSSES

An analysis of the allowance for loan losses follows:

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Balance, beginning of year......................... $153,961 $133,600 $123,805
Allowance of banks acquired........................ 2,843 -- 1,167
Provision charged to expense....................... 16,158 24,907 18,034
Loan securitization transfer....................... (2,275) -- --
Charge-offs........................................ (14,615) (12,561) (17,466)
Recoveries......................................... 5,358 8,015 8,060
-------- -------- --------
Balance, end of year............................... $161,430 $153,961 $133,600
======== ======== ========
</TABLE>

As of December 31, 1995, and 1994, nonaccrual loans totalled $50,598 and
$44,766, respectively.

During the second quarter of 1994, a loan loss provision of $8,950 was
charged to expense, after consummation of the merger with Valley, to conform
Valley's loan valuation policies with those of the Corporation.

In May 1993 and October 1994, the Financial Accounting Standards Board
issued Statements of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan" and SFAS No. 118, an amendment to SFAS No.
114 (collectively "SFAS 114"). These new standards require that a loan's value
be measured, and if appropriate, a valuation reserve established, when it has
been determined that

44
<PAGE> 45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

the loan is impaired and loss is probable. At December 31, 1995 the
Corporation's recorded investment in impaired loans and the related valuation
allowance are as follows:

<TABLE>
<CAPTION>
RECORDED VALUATION
INVESTMENT ALLOWANCE
---------- ---------
<S> <C> <C>
Total impaired loans and leases (Nonaccrual and
renegotiated)................................................ $ 53,685
Loans and leases excluded from evaluation under SFAS 114....... (22,887)
---------
$ 30,798
=========
Valuation allowance required................................... $ 8,643 $ 2,336
No valuation allowance required................................ 22,155 --
--------- -------
Impaired loans evaluated....................................... $ 30,798 $ 2,336
========= =======
</TABLE>

The recorded investment in impaired loans for which no allowance is
required is net of applications of cash interest payments and net of previous
direct writedowns of $4,325 against the loan balance outstanding. The required
valuation allowance is included in the allowance for loan losses in the
consolidated balance sheet at December 31, 1995.

The average recorded investment in total impaired loans and leases for the
year ended December 31, 1995 amounted to $52,827.

Interest payments received on impaired loans and leases are recorded as
interest income, unless collection of the remaining recorded investment is
doubtful, at which time payments received are recorded as reductions of
principal. During 1995, interest income recognized on total impaired loans
amounted to $3,594. The gross income that would have been recognized had such
loans and leases been performing in accordance with their original terms would
have been $8,430 for the same period.

10. PREMISES AND EQUIPMENT

The composition of premises and equipment at December 31 was:

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Land........................................................... $ 37,006 $ 37,894
Buildings and leasehold improvements........................... 250,607 246,679
Furniture and equipment........................................ 315,961 288,507
-------- --------
603,574 573,080
Less accumulated depreciation.................................. 296,586 286,645
-------- --------
Total premises and equipment......................... $306,988 $286,435
======== ========
</TABLE>

Depreciation expense was $45,153 in 1995, $43,006 in 1994, and $42,417 in
1993.

The Corporation leases certain of its facilities and equipment. Rent
expense under such operating leases was $21,702 in 1995, $20,567 in 1994, and
$20,420 in 1993, respectively.

The future minimum lease payments under operating leases that have initial
or remaining noncancellable lease terms in excess of one year for 1996 through
2000 are $9,124, $8,770, $8,146 $7,132 and $4,884, respectively.

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121 (SFAS 121), "Accounting for the
impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
This standard, which must be adopted in 1996, requires long-lived impaired
assets

45
<PAGE> 46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

to be carried at fair value and all long-lived assets to be disposed of to be
reported at the lower of carrying amount or fair value less cost to sell.

SFAS 121 prescribes a cash flow test for recoverability whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. For purposes of SFAS 121, assets include certain identifiable
intangibles and goodwill if the asset tested for recoverability was acquired in
a business combination accounted for using the purchase method.

The Corporation does not anticipate that SFAS 121 will have a material
impact on the consolidated financial statements.

11. SHORT-TERM BORROWINGS

Short-term borrowings at December 31 were:

<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Funds purchased and security repurchase agreements.......... $ 517,576 $ 944,843
U.S. Treasury demand notes.................................. 17,585 29,976
Commercial paper............................................ 41,571 74,526
Current maturities of long-term borrowings.................. 398,688 37,286
Other....................................................... 39,602 24,511
---------- ----------
Total short-term borrowings....................... $1,015,022 $1,111,142
========== ==========
</TABLE>

Unused lines of credit primarily to support commercial paper borrowings
were $40,000 at December 31, 1995 and 1994.

12. LONG-TERM BORROWINGS

Long-term borrowings at December 31 were:

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
CORPORATION:
8.5% convertible subordinated notes due in 1997................ $ 33,637 $ 33,637
6.375% subordinated notes due in 2003.......................... 99,475 99,422
Medium-term Series B and C notes............................... 170,200 183,700
Mortgage....................................................... 35 65
Other.......................................................... 20,923 7,747
SUBSIDIARIES:
Bank notes..................................................... 438,823 308,638
Nonrecourse notes.............................................. 32,533 33,043
Mortgages...................................................... 1,812 3,021
9.75% obligation under capital lease due through 2006.......... 4,699 4,939
Other.......................................................... 19,101 16,851
-------- --------
821,238 691,063
Less current maturities........................................ 398,688 37,286
-------- --------
Total long-term borrowings........................... $422,550 $653,777
======== ========
</TABLE>

46
<PAGE> 47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

The 8.5% convertible subordinated notes (the "Notes") require semi-annual
interest payments and are convertible at the option of the holder into common
stock at a conversion price of $8.75. The holder has the right to exchange
common stock, acquired by conversion of the Notes or otherwise, for Series A
convertible preferred stock ("Series A"). The holder may own up to 24.9%
(computed as the percentage of common shares owned directly or indirectly
through conversion privileges) of the Corporation's outstanding common stock and
convertible securities, but may not own directly more than 5% of the
Corporation's outstanding common stock. Except under limited circumstances, the
holder may not sell, transfer or otherwise dispose of the Notes or common stock
acquired by conversion, and then, only under prescribed conditions and subject
to the Corporation's right of first refusal.

A portion of the Notes qualify as equity contract notes as defined by the
applicable guidelines of the Board of Governors of the Federal Reserve System.
The Notes require the holder to take common stock (or other equity securities)
in lieu of cash in satisfaction of the claim for principal repayment, unless the
Corporation sells new common stock (or certain other equity securities) and
dedicates the proceeds thereof to the redemption or retirement of the Notes.

During 1994, $16,363 of the Notes were converted by the holder into
1,870,057 shares of the Corporation's common stock. The common stock acquired by
conversion of the Notes was exchanged for 163,630 shares of the Corporation's
Series A convertible preferred stock. These are noncash transactions for
purposes of the Consolidated Statements of Cash Flows.

The 6.375% subordinated notes are not redeemable prior to maturity and
qualify as "Tier 2" or supplementary capital for regulatory capital purposes.
Interest is payable semiannually.

The Corporation has filed registration statements with the Securities and
Exchange Commission to issue medium-term unsecured and unsubordinated series
notes. These issues may have maturities which range from 9 months to 30 years
from the date of issue, at a fixed or floating rate.

At December 31, 1995, medium-term Series B notes outstanding amounted to
$47,330. Such notes mature in 1996 through 1998 and have fixed interest rates of
6.05% to 8.65%. No additional borrowings may occur under the Series B notes.
There were $122,870 of medium-term Series C notes outstanding at December 31,
1995. The medium-term Series C notes have fixed interest rates of 6.74% to 7.84%
and mature in 1996 and 1997. Approximately $27,130 of unissued Series C notes
are remaining and available to be issued in the future. There have been no
issuances of the $150 million Series D notes.

The bank notes represent unsecured general obligations of the Corporation's
banking subsidiaries ("Issuing Banks"). Each of the Corporation's banking
subsidiaries is a potential Issuing Bank which may issue bank notes with
maturities ranging from 30 days to 15 years at a fixed or floating rate up to a
maximum of $1.0 billion aggregate principal amount outstanding at any time. The
bank notes are offered through certain designated agents and are offered and
sold only to institutional investors. The bank notes are sole obligations of the
respective Issuing Banks and are not obligations of or guaranteed by the
Corporation. The amount outstanding at December 31, 1995 represents the
aggregate borrowings of 14 banking subsidiaries and mature at various times in
1996 and 1997. Each bank note outstanding has a floating rate which is based on
LIBOR plus 1/16 which ranged from 5.81% to 6.00% at December 31, 1995. Interest
is payable and the interest rate is reset monthly.

The nonrecourse notes are reported net of prepaid interest and represent
borrowings by the leasing subsidiary from banks and other financial
institutions. These notes have a weighted average interest rate of 8.65% at
December 31, 1995 and are due in installments over varying periods through 2001.
Lease financing receivables at least equal to the amount of the notes are
pledged as collateral.

The mortgages are secured by land and buildings with a net book value of
$8,650 at December 31, 1995.

47
<PAGE> 48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

Scheduled maturities of long-term borrowings are: $296,756, $14,116, $6,273
and $975 for 1997 through 2000, respectively.

13. SHAREHOLDERS' EQUITY

The Corporation has 5,000,000 shares of preferred stock authorized, of
which the Board of Directors has designated 3,000,000 shares as Series A
convertible, with a $100 value per share for conversion purposes. Series A is
nonvoting preferred stock. The same cash dividends will be paid on Series A as
would have been paid on the common stock exchanged for Series A. Series A has
the same restrictions on sale as are applicable to the 8.5% convertible
subordinated notes.

The holder of the 8.5% convertible subordinated notes has the option
through 1997 to exchange common stock of the Corporation for Series A. If the
common stock is acquired by the holder in conversion of the notes, the exchange
ratio is one share of Series A for 11.43 shares of common stock. If acquired
otherwise, the exchange ratio is one share of Series A, valued at $100, to the
holder's weighted average purchase price per common share. Also, the holder has
the option to convert Series A into common stock at the same ratio that the
common stock was exchanged for Series A. The Corporation has issued 348,944
shares of its Series A convertible preferred stock in exchange for 3,832,957
shares of common stock.

The preferred stock is treated as a common stock equivalent in all per
share calculations.

The Corporation has a Stock Repurchase Program which was approved by the
Corporation's Board of Directors in April, 1993 and reaffirmed in October, 1994.
In October 1994, the Board of Directors also authorized an increase in the
number of shares to be repurchased from 9.0 million shares to 15.1 million
shares. The shares are being acquired in anticipation of the conversion of the
Corporation's 8.5% convertible subordinated notes, to fund the on-going program
to deliver or have available shares of common stock for stock option and other
employee benefit plans and other corporate needs. During 1995, the Corporation
purchased 2.7 million shares and has cumulatively purchased 12.5 million shares
since inception of the program.

Federal banking regulatory agencies have established capital adequacy rules
which take into account risk attributable to balance sheet assets and
off-balance sheet activities. All banks and bank holding companies must meet a
minimum total risk-based capital ratio of 8%. Of the 8% required, half must be
comprised of core capital elements defined as Tier 1 capital. The federal
banking agencies also have adopted leverage capital guidelines which banking
organizations must meet. Under these guidelines, the most highly rated banking
organizations must meet a minimum leverage ratio of at least 3% Tier 1 capital
to total assets, while lower rated banking organizations must maintain a ratio
of at least 4% to 5%.

48
<PAGE> 49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

The Corporation's risk-based capital and leverage ratios are as follows:

<TABLE>
<CAPTION>
RISK-BASED CAPITAL RATIOS
AS OF DECEMBER 31, 1995
-------------------------
AMOUNT RATIO
-------- ------
($ IN MILLIONS)
<S> <C> <C>
Tier 1 capital............................................. $1,167.5 11.71%
Tier 1 capital minimum requirement......................... 398.7 4.00
-------- -----
Excess..................................................... $ 768.8 7.71%
======== =====
Total capital.................................... $1,399.3 14.04%
Total capital minimum requirement.......................... 797.3 8.00
-------- -----
Excess..................................................... $ 602.0 6.04%
======== =====
Risk-adjusted assets............................. $9,965.8
</TABLE>

<TABLE>
<CAPTION>
LEVERAGE RATIO
AS OF DECEMBER 31, 1995
---------------------------
AMOUNT RATIO
------------ ----------
($ IN MILLIONS)
<S> <C> <C>
Tier 1 capital to adjusted total assets................... $ 1,167.5 9.07%
Minimum leverage requirement.............................. 386.3-643.8 3.00-5.00
------------ ---------
Excess.................................................... $781.2-523.7 6.07-4.07%
============ =========
Adjusted average total assets................... $ 12,875.3
</TABLE>

All of the Corporation's banking subsidiaries' risk-based capital and
leverage ratios meet or exceed the defined minimum requirements.

Banking subsidiaries are restricted by banking regulations from making
dividend distributions above prescribed amounts and are limited in making loans
and advances to the Corporation. At December 31, 1995, the retained earnings of
subsidiaries available for distribution as dividends without regulatory approval
was approximately $131,998.

14. INCOME TAXES

Total income tax expense for the years ended December 31, 1995, 1994 and
1993 was allocated as follows:

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- -------
<S> <C> <C> <C>
Income before extraordinary items................... $106,580 $ 73,405 $93,190
Extraordinary items................................. -- 9,008 --
Shareholders' Equity:
Compensation expense for tax purposes in excess of
amounts recognized for financial reporting
purposes....................................... (3,415) (3,442) (8,154)
Unrealized gains (losses) on investment securities
available for sale............................. 30,752 (18,897) --
-------- -------- -------
$133,917 $ 60,074 $85,036
======== ======== =======
</TABLE>

49
<PAGE> 50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

The current and deferred portions of the provision for income taxes were:

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- -------
<S> <C> <C> <C>
Current:
Federal........................................... $ 91,233 $ 80,758 $81,561
State............................................. 13,900 12,686 14,746
-------- -------- -------
105,133 93,444 96,307
Deferred:
Federal........................................... 1,826 (21,075) (3,412)
State............................................. (379) 1,036 295
-------- -------- -------
1,447 (20,039) (3,117)
-------- -------- -------
Total provision for income taxes.......... $106,580 $ 73,405 $93,190
======== ======== =======
</TABLE>

The following is a reconciliation between the amount of the provision for
income taxes and the amount of tax computed by applying the statutory Federal
income tax rate (35%):

<TABLE>
<CAPTION>
1995 1994 1993
-------- ------- -------
<S> <C> <C> <C>
Tax computed at statutory rates...................... $104,958 $58,731 $92,604
Increase (decrease) in taxes resulting from:
Federal tax-exempt income.......................... (5,972) (5,972) (7,714)
State income taxes, net of Federal tax benefit..... 9,891 10,605 9,832
Adjustment to deferred tax assets/liabilities for
an enacted change in tax rate................... -- -- (469)
Merger/Restructuring............................... -- 7,191 --
Other.............................................. (2,297) 2,850 (1,063)
-------- ------- -------
Total provision for income taxes........... $106,580 $73,405 $93,190
======== ======= =======
</TABLE>

50
<PAGE> 51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

The tax effects of temporary differences that give rise to significant
elements of the deferred tax assets and deferred tax liabilities at December 31,
are as follows:

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Deferred tax assets:
Deferred compensation.......................................... $ 9,396 $ 8,170
Allowance for loan losses...................................... 48,523 43,537
Accrued postretirement benefits................................ 16,384 14,275
Unrealized gains and losses.................................... -- 18,897
Other.......................................................... 25,512 26,504
------- -------
Total deferred tax assets.............................. 99,815 111,383
Deferred tax liabilities:
Lease revenue reporting........................................ 19,988 20,683
Deferred expense, net of unearned income....................... 9,724 5,563
Premises and equipment, principally due to depreciation........ 18,720 17,683
Pension funding versus expense................................. 1,067 1,833
Purchase accounting adjustments................................ 3,303 336
Unrealized gains and losses.................................... 11,855 --
Other.......................................................... 8,209 6,122
------- -------
Total deferred tax liabilities......................... 72,866 52,220
------- -------
Net deferred tax assets................................ $26,949 $59,163
======= =======
</TABLE>

The amount of income tax expense (benefit) related to net securities gains
or losses amounted to $1,762, ($2,171) and $3,103, in 1995, 1994, and 1993,
respectively.

15. STOCK OPTION AND RESTRICTED STOCK PLANS

The Corporation has Executive Stock Option and Restricted Stock Plans which
provide for the grant of nonqualified and incentive stock options, stock
appreciation rights and rights to purchase restricted shares to key employees at
prices ranging from not less than the par value of the common shares to the fair
market value of the shares at the date of grant.

51
<PAGE> 52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

Activity relating to common stock options was:

<TABLE>
<CAPTION>
NUMBER OPTION PRICE
OF SHARES PER SHARE
---------- --------------
<S> <C> <C>
Shares under option at December 31, 1993................. 6,395,435 $ 4.02-23.25
Options granted.......................................... 1,091,800 19.25-21.75
Options lapsed or surrendered............................ (29,889) 5.39-22.75
Options exercised........................................ (1,151,218) 4.02-19.50
---------- --------------
Shares under option at December 31, 1994................. 6,306,128 $ 4.02-23.25
Options granted.......................................... 741,700 20.25-26.19
Options lapsed or surrendered............................ (34,275) 8.54-22.75
Options exercised........................................ (858,087) 4.02-22.75
---------- --------------
Shares under option at December 31, 1995................. 6,155,466 $ 4.47-26.19
========== ==============
</TABLE>

Options exercisable at December 31, 1995 and 1994, were 4,949,541 and
4,825,426, respectively. Shares reserved for the granting of additional options
at December 31, 1995 were 1,735,961.

There were 5,000 restricted stock purchase rights outstanding at December
31, 1995 and 13,000 restricted stock purchase rights outstanding at December 31,
1994. During 1995, 26,000 stock purchase rights were exercised and 3,000
purchase rights were exercised in 1994.

Restrictions on stock issued pursuant to the exercise of stock purchase
rights lapse within a seven-year period. Accordingly, the compensation related
to issuance of the rights is deferred and amortized over the vesting period.
Unamortized deferred compensation is reflected as a reduction of shareholders'
equity.

Aggregate compensation expense related to stock purchase rights was $611,
$747, and $1,008 in 1995, 1994, and 1993, respectively.

The Corporation also has a Long-term Incentive Plan (the "Plan"). Under the
Plan, performance units may be awarded from time to time. Once awarded,
additional performance units will be credited to each participant based on
dividends paid by the Corporation on its common stock. At the end of a
designated vesting period, participants will receive an amount, either in cash,
common stock or some combination thereof, equal to some percent (0%-275%) of the
initial performance units credited plus those additional units credited as
dividends based on the established performance criteria. During 1995, 91,700
units and in 1994, 156,500 units were awarded to certain executives of the
Corporation. The vesting period is three years from the date the performance
units were awarded. Based on the performance criteria, without regard to the
vesting, no amount would be due to the participants at December 31, 1995.

In October, 1995 the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123 (SFAS 123), "Accounting for
Stock-Based Compensation." This standard, which must be adopted in 1996,
establishes financial accounting and reporting standards for stock-based
employee compensation plans such as stock options, restricted stock plans and
stock appreciation rights.

SFAS 123 defines a fair value based method of accounting for employee stock
option or similar equity instruments. Under the fair value based method,
compensation cost is measured at the grant date based on the fair value of the
award using an option-pricing model that takes into account the stock price at
the grant date, the exercise price, the expected life of the option, the
volatility of the underlying stock, expected dividends and the risk-free
interest rate over the expected life of the option. The resulting compensation
cost is recognized over the service period, which is usually the vesting period.

52
<PAGE> 53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

Currently compensation cost is measured and accounted for using the
intrinsic value based method of accounting prescribed in Accounting Principles
Board Opinion No. 25 (APBO 25), "Accounting for Stock Issued to Employees."
Under the intrinsic value based method, compensation cost is the excess, if any,
of the quoted market price of the stock at grant date or other measurement date
over the amount paid to acquire the stock.

The largest difference between SFAS 123 and APBO 25 as it relates to the
Corporation is the amount of compensation cost attributable to the Corporation's
fixed stock option plans. Under APBO 25, no compensation cost is recognized for
fixed stock option plans because the exercise price is equal to the quoted
market price at the date of grant and therefore, there is no intrinsic value.
SFAS 123 compensation cost would equal the fair value of the options granted.

This standard permits entities to continue to measure compensation cost for
such plans using the accounting method prescribed by APBO 25 as long as pro
forma disclosures of net income and earnings per share are presented as if the
fair value based method of accounting as defined in SFAS 123 had been applied.

The Corporation has not yet determined whether it will adopt the SFAS 123
method of accounting or continue APBO 25 accounting with the required
disclosures. However, based on the fixed stock option grants in 1995, the impact
of adopting the SFAS 123 accounting would be immaterial to the consolidated
financial statements.

16. EMPLOYEE RETIREMENT AND HEALTH PLANS

The Corporation has a defined contribution retirement plan and an incentive
savings plan for substantially all employees. The retirement plan provides for a
guaranteed contribution to eligible participants equal to 2% of compensation. At
the Corporation's option, a profit sharing amount may also be contributed and
may vary from year to year up to a maximum of 6% of eligible compensation. Under
the incentive savings plan, employee contributions, up to 6% of eligible
compensation, are matched up to 50% by the Corporation based on the
Corporation's return on equity as defined by the plan. Total expense relating to
these plans was $23,883, $21,631 and $17,771 in 1995, 1994 and 1993,
respectively.

The Corporation also has supplemental retirement plans to provide
retirement benefits to certain of its key executives. Total expense relating to
these plans amounted to $1,023 in 1995, $910 in 1994, and $2,703 in 1993.

Valley maintained a trusteed defined benefit retirement plan which covered
substantially all its employees. Upon consummation of the merger in 1994, the
plan was curtailed and in 1995, was fully terminated through cash distributions
and/or purchases of annuities. The following table reflects the plan's funded
status and amounts recognized in the financial statements at December 31:

<TABLE>
<CAPTION>
1994
-------
<S> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation................................................ $34,680
Nonvested benefit obligation............................................. 520
-------
Accumulated/Projected benefit obligation................................... 35,200
Plan assets at fair value.................................................. 43,913
-------
Plan assets greater than projected benefit obligations..................... 8,713
Unrecognized net gain...................................................... (2,855)
Unrecognized net asset..................................................... (1,534)
-------
Prepaid pension cost....................................................... $ 4,324
=======
</TABLE>

53
<PAGE> 54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

The net pension cost for 1994 and 1993, included the following components:

<TABLE>
<CAPTION>
1994 1993
------- -------
<S> <C> <C>
Service cost..................................................... $ 2,011 $ 3,361
Interest cost.................................................... 3,393 3,283
Actual return on plan assets..................................... (777) (2,885)
Net amortization and deferral.................................... (2,279) (416)
------- -------
Net periodic pension cost before curtailment and termination..... 2,348 3,343
Curtailment...................................................... 2,301 --
------- -------
Total expense.......................................... $ 4,649 $ 3,343
======= =======
</TABLE>

During 1995, expense of $1,789 was recorded in conjunction with the
termination of the Valley plan.

The expense associated with the curtailment is classified as
Merger/Restructuring and the termination expense is included in salaries and
employee benefits in the Consolidated Statements of Income.

The following assumptions were used in determining the projected benefit
obligation:

<TABLE>
<CAPTION>
1994
----
<S> <C>
Discount rate................................................................. 8.25%
Expected long-term rate of return on assets................................... 7.00%
</TABLE>

The Corporation sponsors a defined benefit health plan that provides health
care benefits to all eligible current and retired employees. The plan is
contributory, with contributions adjusted periodically such that participants
contribute approximately 40% of the cost of health care benefits. The plan also
contains other cost-sharing features such as deductibles and coinsurance.
Retiree eligibility is dependent upon age, years of service, and participation
in the health plan during active service. The plan is not funded.

Valley provided postretirement health care benefits to retired employees.
These benefits were subject to deductibles, copayment provisions and other
limitations. Only those employees retiring on or before December 31, 1994 were
eligible for such benefits. As part of the merger, all former Valley employees
became eligible to participate in the Corporation's postretirement health plan.
The Corporation did not recognize years of service with Valley prior to the
merger.

The components of the accumulated postretirement benefit obligation (APBO)
reconciled with the amount recognized in the Corporation's Consolidated Balance
Sheets at December 31, were:

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees....................................................... $16,022 $17,541
Fully eligible active plan participants........................ 9,424 8,187
Active plan participants....................................... 19,434 13,890
------- -------
44,880 39,618
Unrecognized loss................................................ (6,152) (5,836)
------- -------
Accrued postretirement benefit cost.............................. $38,728 $33,782
======= =======
Weighted average discount rate used in determining APBO.......... 7.50% 8.25%
======= =======
</TABLE>

54
<PAGE> 55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

Net periodic postretirement benefit cost for the years ended December 31,
1995, 1994 and 1993 includes the following components:

<TABLE>
<CAPTION>
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Service cost............................................. $2,130 $2,510 $1,385
Interest on APBO......................................... 3,236 2,950 2,279
Net amortization and deferral............................ 127 617 --
------ ------ ------
$5,493 $6,077 $3,664
====== ====== ======
</TABLE>

For measurement purposes, the assumed health care cost trend rate was 11%
and 12% in 1995 and 1994, respectively, and gradually declines to 5.5% in the
year 2022.

The health care cost trend rate assumption has a significant effect on the
amounts reported. An increase in the assumed health care cost trend rate of one
percentage point would increase the APBO at December 31, 1995 by $7,569 and
increase 1995 postretirement benefit expense by $564.

17. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

Financial instruments with off-balance sheet risk at December 31 were:

<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Financial instruments whose amounts represent credit risk:
Commitments to extend credit:
To commercial customers................................ $3,912,442 $2,585,065
To individuals......................................... 818,888 634,350
Standby letters of credit, net of participations.......... 280,750 332,142
Commercial letters of credit.............................. 17,342 26,278
Mortgage loans sold with recourse......................... 4,926 6,145
Financial instruments whose amounts exceed the amount of
credit risk:
Foreign exchange contracts:
Commitments to purchase foreign exchange............... 133,236 148,832
Commitments to deliver foreign exchange................ 136,373 151,135
Options written/purchased.............................. 1,504 6,714
</TABLE>

Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates and may require payment of a
fee. The majority of the Corporation's commitments to extend credit generally
provide for the interest rate to be determined at the time the commitment is
utilized. Since many of the commitments are expected to expire without being
drawn upon, the total commitment amounts do not necessarily represent future
cash requirements.

The Corporation evaluates each customer's credit worthiness on an
individual basis. Collateral obtained, if any, upon extension of credit, is
based upon management's credit evaluation of the customer. Collateral
requirements and the ability to access collateral is generally similar to that
required on loans outstanding as discussed in Note 8.

Standby and commercial letters of credit are contingent commitments issued
by the Corporation to support the financial obligations of a customer to a third
party. Standby letters of credit are issued to support

55
<PAGE> 56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

public and private financing, and other financial or performance obligations of
customers. Commercial letters of credit are issued to support payment
obligations of a customer as buyer in a commercial contract for the purchase of
goods. Letters of credit have maturities which generally reflect the maturities
of the underlying obligations. The credit risk involved in issuing letters of
credit is the same as that involved in extending loans to customers. If deemed
necessary, the Corporation holds various forms of collateral to support letters
of credit.

Mortgage loans sold with recourse are pools of residential mortgage loans
sold to government agencies subject to certain underwriting requirements. If the
loans do not meet the underwriting requirements of the government agencies, the
Corporation may be required to reacquire the loans.

Foreign exchange contracts are commitments to purchase or deliver foreign
currency at a specified exchange rate. The Corporation enters into foreign
exchange contracts primarily in connection with trading activities to enable
customers involved in international trade to hedge their exposure to foreign
currency fluctuations and to minimize the Corporation's own exposure to foreign
currency fluctuations resulting from the above. Foreign exchange contracts
include such commitments as foreign currency spot, forward, future and, to a
much lesser extent, option contracts. The risks in these transactions arise from
the ability of the counterparties to perform under the terms of the contracts
and the risk of trading in a volatile commodity. The Corporation actively
monitors all transactions and positions against predetermined limits established
on traders and types of currency to ensure reasonable risk taking.

The Corporation's market risk from unfavorable movements in currency
exchange rates is minimized by essentially matching commitments to deliver
foreign currencies with commitments to purchase foreign currencies.

At December 31, 1995, the Corporation's foreign currency positions
resulting from foreign exchange contracts by major currency was as follows
($000's US):

<TABLE>
<CAPTION>
COMMITMENTS COMMITMENTS
TO DELIVER TO PURCHASE
FOREIGN FOREIGN
EXCHANGE EXCHANGE
----------- -----------
<S> <C> <C>
CURRENCY
Deutsche Mark.............................................. $ 42,232 $ 42,113
French Franc............................................... 32,311 32,242
English Pound Sterling..................................... 20,414 20,278
Japanese Yen............................................... 18,205 16,714
Canadian Dollars........................................... 14,450 13,764
Spanish Peseta............................................. 2,830 2,788
All Other.................................................. 5,931 5,337
--------- ---------
Total............................................ $ 136,373 $ 133,236
========= =========
Average Amount of Contracts To Deliver/Purchase Foreign
Exchange................................................. $ 242,030 $ 238,839
========= =========
</TABLE>

These amounts do not represent the actual credit or market exposure.

56
<PAGE> 57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

18. FAIR VALUE OF FINANCIAL INSTRUMENTS

The book values and estimated fair values for on and off-balance sheet
financial instruments as of December 31, 1995 and 1994 are reflected below:

BALANCE SHEET FINANCIAL INSTRUMENTS
($ IN MILLIONS)

<TABLE>
<CAPTION>
1995 1994
--------------------- -------------------
BOOK FAIR BOOK FAIR
VALUE VALUE VALUE VALUE
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Financial Assets:
Cash and short-term investments............. $ 993.1 $ 993.1 $1,011.4 $1,011.4
Trading securities.......................... 38.6 38.6 20.4 20.4
Investment securities held to maturity...... 450.5 453.2 429.5 419.5
Investment securities available for sale.... 2,458.6 2,458.6 1,865.1 1,865.1
Net loans................................... 8,707.5 8,930.0 8,638.5 8,668.6
Interest receivable......................... 96.8 96.8 85.9 85.9
Financial Liabilities:
Deposits.................................... 10,280.8 10,355.3 9,499.1 9,494.3
Short-term borrowings....................... 616.3 616.3 1,073.9 1,073.9
Long-term borrowings:
Convertible debt......................... 33.6 100.0 33.6 73.0
Other long-term borrowings............... 787.6 796.9 657.4 639.6
Interest payable............................ 72.1 72.1 44.7 44.7
</TABLE>

Where readily available, quoted market prices were utilized by the
Corporation. If quoted market prices were not available, fair values were based
on estimates using present value or other valuation techniques. These techniques
were significantly affected by the assumptions used, including the discount rate
and estimates of future cash flows. The calculated fair value estimates,
therefore, cannot be substantiated by comparison to independent markets and, in
many cases, could not be realized in immediate settlement of the instrument.
SFAS 107 excludes certain financial instruments and all nonfinancial assets and
liabilities from its disclosure requirements. Accordingly, the aggregate fair
value amounts presented do not represent the underlying value of the
Corporation.

The following methods and assumptions were used in estimating the fair
value for financial instruments.

CASH AND SHORT-TERM INVESTMENTS

The carrying amounts reported for cash and short-term investments
approximates the fair values for those assets.

TRADING AND INVESTMENT SECURITIES

Fair value is based on quoted market prices or dealer quotes. See Note 7,
Securities, for additional information.

LOANS

Loans that reprice or mature within three months of December 31 were
assigned fair values based on their book value. Market values were used on
performing loans where available. Most remaining loan balances

57
<PAGE> 58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

were assigned fair values based on a discounted cash flow analysis. The discount
rate was based on the treasury yield curve, with rate adjustments for credit
quality, cost and profit factors.

DEPOSITS

The fair value for demand deposits or any interest bearing deposits with no
fixed maturity date was considered to be equal to the carrying value. Time
deposits with defined maturity dates were considered to have a fair value equal
to the book value if the maturity date was within three months of December 31.
The remaining time deposits were assigned fair values based on a discounted cash
flow analysis using discount rates which approximate interest rates currently
being offered on time deposits with comparable maturities.

BORROWINGS

Short-term borrowings are carried at cost which approximates fair value.
The Corporation has convertible debt (see Note 12) for which fair value was
considered to be the current market value of the shares that would be issued in
a full conversion. Other long-term debt was generally valued using a discounted
cash flow analysis with a discount rate based on current incremental borrowing
rates for similar types of arrangements or, if not readily available, based on a
build up approach similar to that used for loans and deposits. Long-term
borrowings include their related current maturities.

OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
($ IN MILLIONS)

Fair values of loan commitments and letters of credit have been estimated
based on the equivalent fees, net of expenses, that would be charged for similar
contracts and customers at December 31.

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Loan commitments...................................................... $1.5 $1.2
Letters of credit..................................................... 2.2 2.7
</TABLE>

Foreign exchange contracts are carried at market value (U.S. dollar
equivalent of the underlying contract). The fair value of options
written/purchased are based on the market value of the premium paid as of the
reporting date.

<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Commitments to purchase foreign exchange........................... $133.2 $148.8
Commitments to deliver foreign exchange............................ 136.4 151.1
Options written/purchased.......................................... .0 .8
</TABLE>

See Note 17 for additional information on off-balance sheet financial
instruments.

58
<PAGE> 59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

19. BUSINESS SEGMENTS

The following table reflects certain information regarding our banking and
data processing businesses:

<TABLE>
<CAPTION>
ADJUSTMENTS
DATA AND
BANKING PROCESSING ELIMINATIONS CONSOLIDATION
----------- -------- ------------ -----------
<S> <C> <C> <C> <C>
1995
Revenue from:
Unaffiliated customers................. $ 1,134,928 $213,914 $ -- $ 1,348,842
Affiliated customers................... 8,388 70,946 (79,334) --
----------- -------- -------- -----------
Total revenue............................ $ 1,143,316 $284,860 $(79,334) $ 1,348,842
=========== ======== ======== ===========
Operating profit......................... $ 264,996 $ 34,883 $ -- $ 299,879
=========== ======== ======== ===========
Identifiable assets...................... $13,166,362 $242,695 $(65,960) $13,343,097
=========== ======== ======== ===========
Net capital expenditures................. $ 6,859 $ 33,022 $ -- $ 39,881
=========== ======== ======== ===========
1994
Revenue from:
Unaffiliated customers................. $ 1,019,369 $159,418 $ -- $ 1,178,787
Affiliated customers................... 6,815 72,068 (78,883) --
----------- -------- -------- -----------
Total revenue............................ $ 1,026,184 $231,486 $(78,883) $ 1,178,787
=========== ======== ======== ===========
Operating profit before
Merger/Restructuring................... $ 211,897 $ 31,134 $ -- $ 243,031
=========== ======== ======== ===========
Operating profit......................... $ 150,352 $ 17,451 $ -- $ 167,803
=========== ======== ======== ===========
Identifiable assets...................... $12,463,178 $208,216 $(58,445) $12,612,949
=========== ======== ======== ===========
Net capital expenditures................. $ (3,184) $ 32,179 $ -- $ 28,995
=========== ======== ======== ===========
1993
Revenue from:
Unaffiliated customers................. $ 1,030,362 $135,041 $ -- $ 1,165,403
Affiliated customers................... 7,920 71,775 (79,695) --
----------- -------- -------- -----------
Total revenue............................ $ 1,038,282 $206,816 $(79,695) $ 1,165,403
=========== ======== ======== ===========
Operating profit......................... $ 243,285 $ 21,299 $ -- $ 264,584
=========== ======== ======== ===========
Identifiable assets...................... $12,372,154 $162,748 $(48,965) $12,485,937
=========== ======== ======== ===========
Net capital expenditures................. $ 20,004 $ 45,727 $ -- $ 65,731
=========== ======== ======== ===========
</TABLE>

Our banking operations provide traditional banking products along with
trust, mortgage banking, leasing, and venture capital services. M&I Data
Services, a division of the Corporation, provides data processing, software, and
other related services to both affiliated and unaffiliated customers. In
addition, a Valley affiliate provided similar services and other operational
support to affiliated customers and merged with M&I Data Services upon
consummation of the merger.

Revenues from affiliated customers are charged at rates available to and
transacted with unaffiliated customers.

Operating profit is pretax net income. Depreciation and amortization
expense for the banking services business amounted to $8,189, $40,733, and
$30,378 in 1995, 1994, and 1993, respectively, and for M&I Data Services
amounted to $38,978 in 1995, $31,224 in 1994, and $26,680 in 1993.

59
<PAGE> 60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

20. CONDENSED FINANCIAL INFORMATION -- PARENT CORPORATION ONLY

CONDENSED BALANCE SHEETS
DECEMBER 31

<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
ASSETS
Cash and cash equivalents................................... $ 36,689 $ 47,157
Data processing services receivables........................ 60,034 47,678
Indebtedness of affiliates:
Banks..................................................... 5,000 5,000
Nonbanks.................................................. 173,690 145,721
Investments in affiliates:
Banks..................................................... 1,075,011 957,731
Nonbanks.................................................. 164,860 155,536
Premises and equipment, net................................. 115,627 97,086
Other assets................................................ 116,136 120,977
---------- ----------
Total assets...................................... $1,747,047 $1,576,886
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Commercial paper issued..................................... $ 41,571 $ 74,526
Other liabilities........................................... 123,589 116,493
Long-term borrowings........................................ 324,270 324,571
---------- ----------
Total liabilities................................. 489,430 515,590
Shareholders' equity........................................ 1,257,617 1,061,296
---------- ----------
Total liabilities and shareholders' equity........ $1,747,047 $1,576,886
========== ==========
</TABLE>

Scheduled maturities of long-term borrowings are $69,981 in 1996, $143,980
in 1997, $7,895 in 1998, $2,863 in 1999 and $75 in 2000.

60
<PAGE> 61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

CONDENSED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
INCOME
Cash dividends:
Bank affiliates.......................................... $141,928 $ 94,812 $105,738
Nonbank affiliates....................................... 11,624 14,690 13,259
Interest from affiliates................................... 10,491 12,172 11,582
Data processing income..................................... 284,141 230,518 205,937
Service fees and other..................................... 37,322 33,068 33,543
-------- -------- --------
Total income..................................... 485,506 385,260 370,059
EXPENSE
Interest................................................... 26,851 23,214 19,978
Salaries and employee benefits............................. 151,519 126,171 122,416
Administrative and general................................. 122,276 155,297 95,211
-------- -------- --------
Total expense.................................... 300,646 304,682 237,605
Income before income taxes, extraordinary items and equity
in undistributed net income of affiliates................ 184,860 80,578 132,454
Provision for income taxes................................. 9,549 475 6,821
-------- -------- --------
Income before extraordinary items and equity in
undistributed net income of affiliates................... 175,311 80,103 125,633
Extraordinary items, net of income taxes................... -- (610) --
-------- -------- --------
Income before equity in undistributed net income of
affiliates............................................... 175,311 79,493 125,633
Equity in undistributed net income of affiliates:
Banks.................................................... 5,755 29,430 36,527
Nonbanks................................................. 12,233 (2,983) 9,234
-------- -------- --------
Net income....................................... $193,299 $105,940 $171,394
======== ======== ========
</TABLE>

61
<PAGE> 62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1995, 1994, AND 1993 ($000'S EXCEPT SHARE DATA)

CONDENSED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income.......................................... $ 193,299 $ 105,940 $ 171,394
Noncash items included in income:
Equity in undistributed net income of
affiliates..................................... (17,988) (26,447) (45,761)
Depreciation and amortization..................... 42,264 40,596 32,772
Other............................................. 10,372 (20,661) (6,283)
---------- ---------- ----------
Net cash provided by operating activities......... 227,947 99,428 152,122
Cash Flows From Investing Activities:
Increases in indebtedness of affiliates........... (256,220) (28,136) (351,056)
Decreases in indebtedness of affiliates........... 228,251 155,658 247,435
Increases in investments in affiliates............ (215) (20,300) (15,040)
Net capital expenditures.......................... (33,755) (33,069) (46,700)
Other............................................. (11,298) 3,279 (7,436)
---------- ---------- ----------
Net cash provided by (used in) investing
activities..................................... (73,237) 77,432 (172,797)
Cash Flows From Financing Activities:
Dividends paid.................................... (62,985) (57,575) (54,435)
Proceeds from issuance of commercial paper........ 1,406,388 1,578,618 1,348,661
Principal payments on commercial paper............ (1,439,343) (1,604,384) (1,325,634)
Proceeds from issuance of long-term debt.......... -- 158,563 99,351
Payments on long-term debt........................ (17,619) (67,229) (37,491)
Increase (decrease) in other short-term
borrowings..................................... -- (50,000) 50,000
Purchase of common stock.......................... (61,104) (101,887) (114,686)
Proceeds from exercise of stock options........... 9,079 11,682 19,887
Other............................................. 406 (1,043) 431
---------- ---------- ----------
Net cash used in financing activities............. (165,178) (133,255) (13,916)
---------- ---------- ----------
Net increase (decrease) in cash and cash
equivalents....................................... (10,468) 43,605 (34,591)
Cash and cash equivalents, beginning of year........ 47,157 3,552 38,143
---------- ---------- ----------
Cash and cash equivalents, end of year.............. $ 36,689 $ 47,157 $ 3,552
========== ========== ==========
</TABLE>

62
<PAGE> 63

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
($000'S EXCEPT SHARE DATA)

Following is unaudited financial information for each of the calendar
quarters during the years ended December 31, 1995 and 1994.
<TABLE>
<CAPTION>
QUARTER ENDED
-----------------------------------------------
DEC. 31 SEPT. 30 JUNE 30 MARCH 31
-------- -------- -------- --------
<S> <C> <C> <C> <C>
1995
Total Interest Income............... $236,598 $235,587 $230,792 $221,683
Net Interest Income................. 125,366 122,884 122,283 120,944
Provision for Loan Losses........... 4,100 4,070 4,005 3,983
Income before Income Taxes.......... 80,003 76,863 71,034 71,979
Net Income.......................... 50,372 47,742 46,268 46,124
Net Income Per Share:
Primary:
Net Income..................... 0.53 0.49 0.47 0.47
Fully Diluted:
Net Income..................... 0.51 0.48 0.46 0.46
1994
Total Interest Income............... $216,323 $210,480 $198,539 $191,964
Net Interest Income................. 126,816 126,165 120,711 117,535
Provision for Loan Losses........... 4,299 3,655 13,001 3,952
Income (Loss) before Income Taxes
and Extraordinary Items........... 76,090 71,338 (39,636) 60,011
Income (Loss) before Extraordinary
Items............................. 48,054 44,892 (37,061) 38,513
Net Income (Loss)................... 58,473 46,015 (37,061) 38,513
Net Income (Loss) Per Share:
Primary:
Income (Loss) before
Extraordinary Items.......... 0.49 0.45 (0.39) 0.39
Net Income (Loss).............. 0.60 0.46 (0.39) 0.39
Fully Diluted:
Income (Loss) before
Extraordinary Items.......... 0.48 0.44 (0.39) 0.37
Net Income (Loss).............. 0.58 0.45 (0.39) 0.37

<CAPTION>
1995 1994 1993 1992 1991
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
COMMON DIVIDENDS DECLARED
First Quarter....................... $0.150 $0.14 $0.12 $0.11 $0.10
Second Quarter...................... 0.165 0.15 0.14 0.12 0.11
Third Quarter....................... 0.165 0.15 0.14 0.12 0.11
Fourth Quarter...................... 0.165 0.15 0.14 0.12 0.11
------ ----- ----- ----- -----
$0.645 $0.59 $0.54 $0.47 $0.43
====== ===== ===== ===== =====
</TABLE>

63
<PAGE> 64

QUARTERLY FINANCIAL INFORMATION (UNAUDITED) -- CONTINUED
($000'S EXCEPT SHARE DATA)

PRICE RANGE OF STOCK
(LOW AND HIGH BID)

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
First Quarter
Low.............................................. $18 1/8 $20 $21 1/6 $17 1/4 $ 8 15/16
High............................................. 21 3/4 23 3/4 23 5/16 18 1/4 11 3/16
Second Quarter
Low.............................................. 19 7/8 19 1/4 22 15/16 16 15/16 10 9/16
High............................................. 22 3/4 22 1/4 25 3/4 20 9/16 13 11/16
Third Quarter
Low.............................................. 22 1/8 19 5/8 21 1/4 19 3/16 12 3/4
High............................................. 26 1/4 21 3/4 25 21 13/16 15 1/16
Fourth Quarter
Low.............................................. 24 18 21 3/4 20 1/16 14 3/16
High............................................. 26 3/8 20 9/16 24 1/4 22 1/16 18 9/16
</TABLE>

64
<PAGE> 65

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and the Board of Directors of Marshall & Ilsley Corporation:

We have audited the accompanying consolidated balance sheets of Marshall &
Ilsley Corporation (a Wisconsin corporation) and subsidiaries as of December 31,
1995 and 1994, and the related consolidated statements of income, shareholders'
equity and cash flows for the years ended December 31, 1995, 1994 and 1993.
These consolidated financial statements are the responsibility of the
Corporation's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Marshall &
Ilsley Corporation and subsidiaries as of December 31, 1995 and 1994, and the
results of their operations and cash flows for the years ended December 31,
1995, 1994 and 1993, in conformity with generally accepted accounting
principles.

As discussed in note one to the consolidated financial statements,
effective January 1, 1994, the Corporation changed its method of accounting for
certain investments in debt and equity securities.

/s/ Arthur Andersen LLP

Milwaukee, Wisconsin,
January 26, 1996

65
<PAGE> 66

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Incorporated herein by reference to M&I's definitive proxy statement for
the Annual Meeting of Shareholders to be held on April 23, 1996, except for
information as to executive officers which is set forth in Part I of this
report.

ITEM 11. EXECUTIVE COMPENSATION

Incorporated herein by reference to M&I's definitive proxy statement for
the Annual Meeting of Shareholders to be held on April 23, 1996.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated herein by reference to M&I's definitive proxy statement for
the Annual Meeting of Shareholders to be held on April 23, 1996.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated herein by reference to M&I's definitive proxy statement for
the Annual Meeting of Shareholders to be held on April 23, 1996.

66
<PAGE> 67

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

<TABLE>
<C> <S>
(a) 1. Financial Statements

Consolidated Financial Statements:

Balance Sheets -- December 31, 1995 and 1994
Statements of Income -- years ended December 31, 1995, 1994, and 1993
Statements of Cash Flows -- years ended December 31, 1995, 1994, and 1993
Statements of Shareholders' Equity -- years ended December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
Report of Independent Public Accountants

2. Financial Statement Schedules

All schedules are omitted because they are not required, not applicable or the
required information is contained elsewhere.

3. Exhibits

See Index to Exhibits of this Form 10-K.

(b) Reports on Form 8-K

During the last quarter of 1995, M&I filed one Current Report on Form 8-K dated December
27, 1995. The Form 8-K reported items 5 and 7 and included exhibits related to the
offering by M&I of debt securities.
</TABLE>

67
<PAGE> 68

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

MARSHALL & ILSLEY CORPORATION

By: /s/ J.B. Wigdale
--------------------------------------
J.B. Wigdale
Chairman of the Board

Date: February 26, 1996

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
NAME
----
<S> <C>
/s/ J.B. WIGDALE
- ---------------------------------------------
J.B. Wigdale
Chairman of the Board and a Director
(Chief Executive Officer) Date: February 26, 1996

/s/ G.H. GUNNLAUGSSON
- ---------------------------------------------
G.H. Gunnlaugsson
Executive Vice President and a Director
(Chief Financial Officer) Date: February 26, 1996

/s/ P.R. JUSTILIANO
- ---------------------------------------------
P.R. Justiliano
Senior Vice President and Corporate
Controller
(Principal Accounting Officer) Date: February 26, 1996
</TABLE>

Directors: Richard A. Abdoo, Oscar C. Boldt, J.P. Bolduc, Wendell F. Bueche,
G.H. Gunnlaugsson, Burleigh E. Jacobs, Jack F. Kellner, D.J.
Kuester, Edward L. Meyer, Jr., Don R. O'Hare, San W. Orr, Jr., Peter
M. Platten III, Stuart W. Tisdale, J.B. Wigdale, James O. Wright and
Gus A. Zuehlke.

<TABLE>
<S> <C>
By /s/ M.A. HATFIELD
------------------------------------------
M.A. Hatfield
As Attorney-In-Fact* Date: February 26, 1996
</TABLE>

- ---------------
* Pursuant to authority granted by powers of attorney, copies of which are filed
herewith.

68
<PAGE> 69

MARSHALL & ILSLEY CORPORATION

INDEX TO EXHIBITS
(ITEM 14(a)3)

ITEM

(2) Agreement and Plan of Merger dated as of September 19, 1993,
between M&I and Valley Bancorporation, incorporated by
reference to M&I's Current Report on Form 8-K dated September
19, 1993 (as amended by M&I's Current Report on Form 8-K/A
dated September 19, 1993), SEC File No. 0-1220

(3) (a) Restated Articles of Incorporation, incorporated by reference
to M&I's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994, SEC File No. 0-1220

(b) By-laws, as amended

(4) (a) Indenture between M&I and Chemical Bank (as successor to
Manufacturers Hanover Trust Company) dated as of November 15,
1985 ("Senior Indenture"), incorporated by reference to M&I's
Registration Statement on Form S-3 (Registration No.
33-21377), as supplemented by the First Supplemental Indenture
to the Senior Indenture dated as of May 31, 1990, incorporated
by reference to M&I's Current Report on Form 8-K dated May 31,
1990, and as supplemented by the Second Supplemental Indenture
to the Senior Indenture dated as of July 15, 1993,
incorporated by reference to M&I's Quarterly Report on Form
10-Q for the quarter ended June 30, 1993, SEC File No. 0-1220

(b) Form of Medium Term Notes, Series B, issued pursuant to the
Senior Indenture, incorporated by reference to M&I's Current
Report on Form 8-K dated May 31, 1990, SEC File No. 0-1220

(d) Indenture between M&I and Chemical Bank dated as of July 15,
1993 ("Subordinated Indenture"), incorporated by reference to
M&I's Quarterly Report on Form 10-Q for the quarter ended June
30, 1993, SEC File No. 0-1220

(e) Form of Subordinated Note issued pursuant to the Subordinated
Indenture, included in Exhibit 4(d)

(f) Investment Agreement between M&I and The Northwestern Mutual
Life Insurance Company dated August 30, 1985, incorporated by
reference to M&I's Current Report on Form 8-K dated May 20,
1985, SEC File No. 0-1220

(g) Subordinated Convertible Note Agreement between The
Northwestern Mutual Life Insurance Company dated December 31,
1985, incorporated by reference to M&I's Current Report on
Form 8-K dated May 20, 1985, SEC File No. 0-1220

(h) Form of Convertible Subordinated Note, incorporated by
reference to M&I's Current Report on Form 8-K dated May 20,
1985, SEC File No. 0-1220

(i) Designation of Rights and Preferences of holders of Series A
Preferred Stock, incorporated by reference to M&I's Current
Report on Form 8-K dated May 20, 1985, SEC File No. 0-1220

73
<PAGE> 70
(10) (a) 1983 Executive Stock Option and Restricted Stock Plan, as
amended, incorporated by reference to M&I's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987, SEC
File No. 0-1220*

(b) 1985 Executive Stock Option and Restricted Stock Plan, as
amended, incorporated by reference to M&I's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987, SEC
File No. 0-1220*

(c) M&I Marshall & Ilsley Bank Supplementary Retirement Benefits
Plan, incorporated by reference to M&I's Annual Report on Form
10-K for the fiscal year ended December 31, 1983, SEC File No.
0-1220*

(d) Directors Deferred Compensation Plan, adopted on February 14,
1985, incorporated by reference to M&I's Annual Report on Form
10-K for the fiscal year ended December 31, 1984, SEC File No.
0-1220*

(e) Consulting Agreement and Supplemental Retirement Plan dated as
of October 1, 1986 between M&I and Mr. J.A. Puelicher,
incorporated by reference to M&I's Annual Report on Form 10-K
for the fiscal year ended December 31, 1986, SEC File No.
0-1220*

(f) Amendment to Consulting Agreement and Supplemental Retirement
Plan dated as of August 13, 1992, between M&I and Mr. J.A.
Puelicher, incorporated by reference to M&I's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993, SEC
File No. 0-1220*

(g) Deferred Compensation Trust between Marshall & Ilsley
Corporation and Bessemer Trust Company dated April 28, 1987,
as amended, incorporated by reference to M&I's Annual Report
on Form 10-K for the fiscal year ended December 31, 1988, SEC
File No. 0-1220*

(h) 1986 Non-Qualified Stock Option Plan of M&I and related Stock
Option Agreement between M&I and Mr. J.A. Puelicher,
incorporated by reference to M&I's Annual Report on Form 10-K
for the fiscal year ended December 31, 1986, SEC File No.
0-1220*

(i) Form of employment agreements, dated November 5, 1990, between
M&I and Messrs. Gunnlaugsson, Kuester, Strelow and Wigdale
incorporated by reference to M&I's Annual Report on Form 10-K
for the fiscal year ended December 31, 1990, SEC File No.
0-1220*

(j) Employment agreement, dated November 5, 1990, between M&I and
Mr. Michael A. Hatfield incorporated by reference to M&I's
Annual Report on Form 10-K for the fiscal year ended December
31, 1990, SEC File No. 0-1220*

(k) Employment agreement, dated as of November 5, 1990, between
M&I and Mr. Delgadillo, incorporated by reference to M&I's
Annual Report on Form 10-K for the fiscal year ended December
31, 1993, SEC File No. 0-1220*

(l) Restricted Stock Plan of Marshall & Ilsley Corporation,
incorporated by reference to M&I's Annual Report on Form 10-K
for the fiscal year ended December 31, 1988, SEC File No.
0-1220*

(m) 1989 Executive Stock Option and Restricted Stock Plan,
incorporated by reference to M&I's Annual Report on Form 10-K
for the fiscal year ended December 31, 1988, as amended by
M&I's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, SEC File No. 0-1220*

74
<PAGE> 71
(n) Marshall & Ilsley Corporation Nonqualified Retirement Benefit
Plan, incorporated by reference to M&I's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, SEC File No.
0-1220*

(o) Marshall & Ilsley Corporation Supplemental Retirement Benefits
Plan, incorporated by reference to M&I's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, SEC File No.
0-1220*

(p) Marshall & Ilsley Trust Company Supplemental Retirement
Benefits Plan, incorporated by reference to M&I's Annual
Report on Form 10-K for the fiscal year ended December 31,
1991, SEC File No. 0-1220*

(q) Supplemental Retirement Agreement dated December 10, 1992,
between M&I and Mr. J.A. Puelicher, incorporated by reference
to M&I's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, SEC File No. 0-1220*

(r) Amendment to Supplemental Retirement Agreement dated December
16, 1993, between M&I and Mr. J.A. Puelicher, incorporated by
reference to M&I's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, SEC File No. 0-1220*

(s) Marshall & Ilsley Corporation 1993 Executive Stock Option Plan,
as amended*

(t) Marshall & Ilsley Corporation 1994 Long-Term Incentive Plan
for Executives, incorporated by reference to M&I's Proxy
Statement for the 1994 Annual Meeting of Shareholders, SEC
File No. 0-1220*

(u) Marshall & Ilsley Corporation 1995 Directors Stock Option
Plan, incorporated by reference to M&I's Proxy Statement for
the 1995 Annual Meeting of Shareholders, SEC File No. 0-1220*

(v) Marshall & Ilsley Corporation Assumption Agreement dated May
31, 1994 assuming rights, obligations and interests of Valley
Bancorporation under various stock option plans, incorporated
by reference to M&I's Registration Statement on Form S-8 (Reg.
No. 33-53897)*

(w) Valley Bancorporation 1992 Incentive Stock Plan, incorporated
by reference to Valley Bancorporation's Proxy Statement for
the 1992 Annual Meeting of Shareholders (the "Valley 1992
Proxy Statement")*

(x) Valley Bancorporation 1992 Outside Directors' Stock Option
Plan, incorporated by reference to the Valley 1992 Proxy
Statement*

(y) Valley Bancorporation 1988 Nonqualified Stock Option Plan,
incorporated by reference to Valley Bancorporation's Proxy
Statement for the 1988 Annual Meeting of Shareholders*

(z) Valley Bancorporation 1986 Amended and Restated Stock Option
Plan, incorporated by reference to Valley Bancorporation's
Proxy Statement for the 1987 Annual Meeting of Shareholders*

(aa) Employment agreement between M&I and Mr. Peter M. Platten,
III, incorporated by reference to M&I's Registration Statement
on Form S-4 (Reg. No. 33-51753)*

(bb) Letter agreement dated January 25, 1994 between Valley
Bancorporation and Mr. Peter M. Platten, III incorporated by
reference to M&I's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994, SEC File No. 0-1220*

75
<PAGE> 72
(cc) Employment agreement, dated as of December 14, 1995, between
M&I and Ms. Patricia R. Justiliano*

(11) Computation of Net Income Per Common Share

(12) Computation of Ratio of Earnings to Fixed Charges

(21) Subsidiaries

(23) Consent of Arthur Andersen LLP

(24) Powers of Attorney

(27) Financial Data Schedule

M&I will provide a copy of any instrument defining the rights of holders of
long-term debt to the Commission upon request.

_____________________

*Management contract or compensatory plan or arrangement.

<PAGE> 1
Exhibit 3(b)

Updated through
12/14/95

BY-LAWS
MARSHALL & ILSLEY CORPORATION

1. OFFICES

1.1. Principal and Other Offices. The principal office of
the Corporation shall be located at any place either within or outside the
State of Wisconsin as shall be designated in the Corporation's most recent
annual report filed with the Wisconsin Secretary of State. The executive
offices of the Corporation shall be located at its principal office. The
Corporation may have such other offices, either within or without the State of
Wisconsin, as the Board of Directors may designate or as the business of the
Corporation may require from time to time.

1.2. Registered Office. The registered office of the
Corporation required by the Wisconsin Business Corporation Law (the "WBCL") to
be maintained in the State of Wisconsin may be, but need not be, the same as
any of its places of business within the State of Wisconsin. The registered
office may be changed from time to time as provided in Section 180.0502 of the
WBCL or any successor thereto.

2. SHAREHOLDERS

2.1. Annual Meeting. The annual meeting of shareholders
shall be held on the fourth Tuesday in the month of April in each year at 10
A.M., or at such other time and/or date as shall be fixed by the Secretary of
the Corporation or the Board of Directors, for the purposes of electing
directors and for the transaction of such other business as may have been
properly brought before the meeting in compliance with the provisions of
Section 2.5 of the By-laws. If the day fixed for the annual meeting shall be a
legal holiday in the State of Wisconsin, such meeting shall be held on the next
succeeding business day.

2.2. Special Meetings. Except as otherwise provided by the
WBCL and subject to the rights of the holders of any class of series of capital
stock having a preference over the common stock as to dividends or upon
liquidation, special meetings of shareholders of the Corporation may be called
only by the Chief Executive Officer or the President of the Corporation
pursuant to a resolution approved by not less than three-quarters of the Board
of Directors.
<PAGE> 2
2.3. Place of Meeting. The Board of Directors, Chief
Executive Officer or President may designate any place, within or without the
State of Wisconsin, as the place of meeting for the annual meeting or for any
special meeting. If no designation is made, the place of meeting shall be the
principal office of the Corporation. Any meeting may be adjourned to reconvene
at any place designated by vote of a majority of the shares represented at the
meeting.

2.4. Notice of Meeting. The Corporation shall notify
shareholders of the date, time and place of each annual and special
shareholders' meeting not less than ten nor more than sixty days before the
date of the meeting. Notice of a special meeting shall include a description
of each purpose for which the meeting is called. Notice of the meeting shall
be given only to those shareholders entitled to vote at the meeting, unless
otherwise required by the law. Notice may be communicated in person, by
telephone, telegraph, teletype, facsimile or other forms of wire or wireless
communication, or by mail or private carrier. Written notice to a shareholder
shall be deemed to be effective on the earlier of: (a) the date received; (b)
the date it is deposited in the United States mail when addressed to the
shareholder's address shown in the Corporation's current record of
shareholders, with postage prepaid; (c) on the date shown on the return
receipt, if sent by registered or certified mail, return receipt requested, and
the receipt is signed by or on behalf of the addressee; (d) the date sent, if
transmitted by telegraph, teletype, facsimile or other form of wire or wireless
communication; or (e) the date delivered to a courier or deposited in a
designated receptacle, if sent by private carrier, when addressed to the
shareholder's address shown in the Corporation's current record of
shareholders.

2.5. Advance Notice of Shareholder-Proposed Business at
Annual Meetings. At an annual meeting of shareholders, only such business
shall be conducted as shall have been properly brought before the meeting. To
be properly brought before an annual meeting, business must be either (a)
specified in the notice of meeting (or any supplement thereto) given in
accordance with Section 2.4 of these By-laws, (b) otherwise properly brought
before the meeting by or at the direction of the Board of Directors, the Chief
Executive Officer or the President, or (c) otherwise properly brought before
the meeting by a shareholder. In addition to any other applicable requirements
for business to be properly brought before an annual meeting by a shareholder,
the shareholder must have given timely notice of such business in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation, not less

2
<PAGE> 3
than 90 days prior to the anniversary date of the annual meeting of
shareholders in the immediately preceding year. A shareholder's notice to the
Secretary of the Corporation shall set forth as to each matter the shareholder
proposes to bring before the annual meeting (i) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and record
address of the shareholder proposing such business, and the beneficial owner or
owners, if any, on whose behalf the proposal is made, (iii) a representation
that the shareholder is a shareholder of record and will remain such through
the record date for the meeting and that the shareholder intends to appear in
person or by proxy at such meeting to move the consideration of the business
set forth in the notice, (iv) the class and number of shares of the Corporation
which are beneficially owned by the shareholder and the beneficial owner or
owners on whose behalf the proposal is made, and (v) any material interest of
the shareholder in such business. In addition, any such shareholders shall be
required to provide such further information as may be requested by the
Corporation in order to comply with federal securities laws, rules and
regulations.

Notwithstanding anything contained in these By-laws to the
contrary, no business shall be conducted at the annual meeting except in
accordance with the procedures set forth in this Section 2.5; provided,
however, that nothing in this Section 2.5 shall be deemed to preclude
discussion by any shareholder of any business properly brought before the
annual meeting in accordance with said procedure.

The chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 2.5, and
if he should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.

2.6. Procedure for Nomination of Directors. Only persons
nominated in accordance with the following procedures shall be eligible for
election as directors, except as may otherwise be provided by the terms of the
Corporation's Amended and Restated Articles of Incorporation (the "Articles")
with respect to the rights of holders of any class or series of preferred stock
to elect directors under specified circumstances. Nominations of persons for
election to the Board of Directors of the Corporation may be made at a meeting
of shareholders by or at the direction of the Board of Directors, by any
nominating committee or persons appointed by the Board, or by any shareholder
of the Corporation entitled to vote for election of

3
<PAGE> 4
directors at the meeting who complies with the notice procedures set forth in
this Section 2.6.

Nominations other than those made by or at the direction of
the Board of Directors or any nominating committee or person appointed by the
Board shall be made pursuant to timely notice in proper written form to the
Secretary of the Corporation. To be timely, a shareholder's request to
nominate a person for election to the Board of Directors, together with the
written consent of such person to serve as a director, must be received by the
Secretary of the Corporation not less than 90 days prior to the anniversary
date of the annual meeting of shareholders in the immediately preceding year.
To be in proper written form, such shareholder's notice shall set forth in
writing (a) as to each person whom the shareholder proposes to nominate for
election or re-election as a director, (i) the name, age, business address and
residence address of such person, (ii) the principal occupation or employment
of such person, (iii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by such person, (iv) a description of
all arrangements and understandings between the shareholder or beneficial owner
or owners on whose behalf the nomination is made and each proposed nominee and
any person or persons (naming such person or persons) pursuant to which the
intended nomination or nominations are to be made by the shareholder, and (v)
such other information relating to such person as is required to be disclosed
in solicitations of proxies for election of directors, or as otherwise
required, in each case pursuant to Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended; and (b) as to the shareholder
giving the notice, (i) the name and address, as they appear on the
Corporation's books, of such shareholder and the beneficial owner or owners, if
any, on whose behalf the nomination is made, (ii) a representation that the
shareholder is a shareholder of record and will remain such through the record
date for the meeting and that the shareholder intends to appear in person or by
proxy at such meeting to make the nomination(s) set forth in the notice, and
(iii) the class and number of shares of capital stock of the Corporation which
are beneficially owned by such shareholder and the beneficial owner or owners
on whose behalf the nomination is made. The Corporation may require any
proposed nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such proposed
nominee to serve as a director of the Corporation. No persons shall be
eligible for election as a director of the Corporation unless nominated in
accordance with the procedures set forth herein and in the Articles. The
Chairman of any meeting of shareholders shall, if the facts so warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the

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procedures prescribed by the Articles and these By-laws; and if he should so
determine, he shall so declare to the meeting and the defective nomination(s)
shall be disregarded.

2.7. Fixing of Record Date. For the purpose of determining
any voting group entitled to notice of or to vote at any meeting of
shareholders, or shareholders entitled to receive any distribution or dividend
from the Corporation, or in order to determine those shareholders entitled to
take any other action authorized by these By-laws or the WBCL, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders. Such record date shall not be more than 70 days
prior to the date on which the particular action, requiring such determination
of shareholders, is to be taken. If no record date is so fixed for the
determination of shareholders entitled to notice of, or to vote at a meeting of
shareholders, or shareholders entitled to receive a dividend or any other
distribution, the record date for determination of such shareholders shall be
at the close of business on:

(a) with respect to an annual shareholders' meeting
or any special shareholders' meeting called by the Board of Directors
or any person specifically authorized by these By-laws to call a
meeting, the day before the first notice is given to shareholders;

(b) with respect to a special shareholders' meeting
demanded by one or more shareholders, the date the first shareholder
signs a demand for the special meeting;

(d) with respect to any other distribution to
shareholders, other than one involving a repurchase or reacquisition
of shares, the date the Board of Directors authorizes the
distribution.

When a determination of shareholders entitled to notice of or to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall be applied to any adjournment thereof unless the Board of
Directors fixes a new record date, which it shall do if the meeting is
adjourned to a date more than 120 days after the date fixed for the original
meeting.

2.8. Shareholders' List. After fixing a record date for a
meeting of shareholders, the Corporation shall prepare a list of the names of
all its shareholders who are entitled to

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notice of a shareholders' meeting. The list shall be arranged by class or
series of shares and show the address of and the number of shares held by each
shareholder. The shareholder list shall be available for inspection by any
shareholder beginning two business days after notice of the meeting is given
for which the list was prepared and continuing through the meeting. The list
shall be available at the Corporation's principal office or at a place
identified in the meeting notice in the city where the meeting is to be held.
A shareholder, or his or her agent or attorney, is entitled, on written demand,
to inspect and to copy the list during regular business hours and at his
expense, during the period it is available for inspection, provided the
shareholder, or his or her agent or attorney, demonstrates to the satisfaction
of the Corporation he or she satisfies the requirements of the WBCL. The
Corporation shall make the shareholders' list available at the meeting and
shall be subject to the inspection of any shareholder, or his or her agent or
attorney, during the time of the meeting or any adjournment thereof. Refusal
or failure to prepare or make available the shareholders' list shall not affect
the validity of any action taken at such meeting.

2.9. Quorum; Votes. Shares entitled to vote as a separate
voting group may take action on a matter at a meeting only if a quorum of those
shares exists with respect to that matter. Unless the Articles or the WBCL
provides otherwise, a majority of the votes entitled to be cast on the matter
by the voting group constitutes a quorum of that voting group for action on
that matter.

If the Articles or the WBCL provide for voting by two or more
voting groups on a matter, action on that matter is taken only when voted upon
by each of those voting groups counted separately. Action may be taken by one
voting group on a matter even though no action is taken by another voting group
entitled to vote on the matter.

Once a share is represented for any purpose at a meeting,
other than for the purpose of objecting to holding the meeting or transacting
business at the meeting, it is deemed present for purposes of determining
whether a quorum exists for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting. If a quorum exists, action on a matter by a voting group is
approved if the votes cast within the voting group favoring the action exceed
the votes cast opposing the action, unless the Articles or the WBCL requires a
greater number of affirmative votes, provided, however, that unless otherwise
provided in the Articles, directors are elected by a plurality of

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the votes cast by the shares entitled to vote in the election at a meeting at
which a quorum is present.

2.10. Proxies. At all meetings of shareholders, a
shareholder entitled to vote may vote by proxy appointed in writing by the
shareholder or by his duly authorized attorney in fact. Such proxy shall be
filed with the Secretary of the Corporation before or at the time of the
meeting. No proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy.

2.11. Voting Shares Owned by the Corporation. Shares of the
Corporation belonging to it shall not be voted directly or indirectly at any
meeting of shareholders and shall not be considered in determining whether a
quorum exists or for any other purpose relating to the voting of shares.
Notwithstanding the foregoing, shares held by the Corporation in a fiduciary
capacity are outstanding shares and may be voted and shall be considered in any
such determination.

2.12. Shares in the Name of Another Corporation or a Trustee.
Shares issued in the name of another corporation may be voted by the president
of such corporation, or any other officer or proxy appointed by such president
in the absence of express written notice to the Corporation of the designation
of some other person by the board of directors or by-laws of such other
corporation. Shares in the name of a trustee shall be voted in the manner
designated by a majority of the trustees or their proxy unless a greater
concurrence of trustees is required by the trust, of which the Corporation
shall have actual notice.

2.13. Adjournments. An annual or special meeting of
shareholders may be adjourned by a vote of a majority of the shares represented
at the meeting entitled to vote in the election of directors, even if less than
a quorum. Upon being reconvened, the adjourned meeting shall be deemed to be a
continuation of the initial meeting. A quorum will be deemed present if a
quorum of shares was represented at the initial meeting and any business that
could be conducted at the initial meeting may be considered at the adjourned
meeting. A meeting may be adjourned at any time, including after action on one
or more matters, and for any purpose, including, but not limited to, allowing
additional time to solicit votes on one or more matters, to disseminate
additional information to shareholders or to count votes. Notice is not
required for an adjourned meeting if the date, time and place of the
adjournment are announced at the meeting before adjournment. If a new record
date for an adjourned meeting is fixed, notice of the adjourned meeting must be
given to persons who are shareholders as of the new record

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date. Only those shares entitled to vote at the initial meeting will be
entitled to vote at the adjourned meeting.

2.14. Polling. In the discretion of the chairman of an
annual or special meeting of shareholders, polls may be closed at any time
after commencement of the meeting. When there are several matters to be
considered at a meeting, the polls may remain open during the meeting as to any
or all matters to be considered, as the chairman may declare. Polls will
remain open as to matters to be considered at any adjournment of the meeting
unless the chairman declares otherwise. At the discretion of the chairman, the
polls may remain open after adjournment of a meeting for not more than 72 hours
for the purpose of collecting proxies and counting votes. All votes submitted
prior to the announcement of the results of the balloting shall be valid and
counted. The results of balloting shall be final and binding after
announcement of such results.

2.15 Chairman of Meetings. The Chairman of the Board or, in
his absence or inability or refusal to act, the Chairman of the Executive
Committee, shall preside at all meetings of the shareholders.

3. BOARD OF DIRECTORS

3.1. General Powers. All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the Corporation
managed under the direction of, its Board of Directors, subject to any
limitations set forth in the Articles.

3.2. Number, Tenure and Qualifications. The number of
directors (exclusive of directors, if any, elected by the holders of one or
more series of preferred stock, voting separately as a series pursuant to the
provisions of the Articles applicable thereto) shall not be less than three
directors, the exact number of directors to be determined from time to time by
resolution adopted by affirmative vote of a majority of the entire Board of
Directors then in office. The directors shall be divided into three classes,
designated Class I, Class II and Class III, and the term of directors of each
class shall be three years. Each class shall consist, as nearly as possible,
of one-third of the total number of directors constituting the entire Board of
Directors. If the number of directors is changed by resolution of the Board of
Directors pursuant to this Section 3.2, any increase or decrease shall be
apportioned among the various classes of directors so as to maintain the number
of directors in each class as nearly equal as possible, but in no case shall a
decrease in the number of directors shorten the term of any

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<PAGE> 9
incumbent director. A director shall hold office until the annual meeting for
the year in which his term expires and until his successor shall be duly
elected and shall qualify. Directors need not be residents of the State of
Wisconsin or shareholders of the Corporation. No person shall be eligible to
be elected a director at any meeting of shareholders held on or after the date
he attains age seventy-two (72). The Board of Directors, at its discretion,
may waive the age limitation or establish a greater age from time to time. The
Board of Directors, at its discretion, may designate a person who has served as
a director of the Corporation as a "Director Emeritus" upon such terms and
conditions and at such compensation as may be fixed by resolution of the Board
from time to time. A Director Emeritus shall have the right to attend meetings
of the Board of Directors but shall have no vote and shall not be counted in
determining the presence of a quorum.

Notwithstanding the foregoing, whenever the holders of any one
or more classes or series of preferred stock issued by the Corporation shall
have the right, voting separately by class or series, to elect directors at an
annual or special meeting of shareholders, the election, term of office,
filling of vacancies and other features of such directorships shall be governed
by the terms of the Articles applicable thereto. Directors so elected shall
not be divided into classes unless expressly provided by such Articles, and
during the prescribed terms of office of such directors, the Board of Directors
shall consist of such directors in addition to the number of directors
determined as provided in the first paragraph of this Section 3.2.

3.3. Regular Meeting. A regular meeting of the Board of
Directors shall be held, without other notice, immediately after and at the
same place as the annual meeting of shareholders, and each adjourned session
thereof. The Board of Directors may provide, by resolution, the time and place
for the holding of additional regular meetings without other notice than such
resolution.

3.4. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board,
President, Secretary or three-quarters of the members of the Board of
Directors. The person or persons authorized to call special meetings of the
Board of Directors may fix any place either within or without the State of
Wisconsin as the place for holding any special meeting of the Board of
Directors called by them.

3.5. Notice. Notice of meetings of the Board of Directors
may be communicated in person, by telephone, telegraph,

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teletype, facsimile or other form of wire or wireless communication, or by mail
or private carrier. Notice of meetings, except the regular annual meeting,
shall be given at least 48 hours prior to the time set for the meeting if
communicated orally or by telegraph, teletype, facsimile or other form of wire
or wireless communication, and at least 5 days prior to the date set for the
meeting if communicated by any other means. Written notice shall be deemed
effective and given on the earlier of: (a) when received; (b) 2 days after the
date it is deposited in the United States mail, with postage prepaid, when
addressed to the director at an address designated by him to receive such
notice or, in the absence of such designation, at his business or home address
as they appear in the Corporation's records; (c) the date and time sent, if
transmitted by telegraph, teletype, facsimile or other form of wire or wireless
communication when sent to the director at a location designated by the
director to receive such notice or, in the absence of such designation, at his
business or home as those locations appear in the Corporation's records; or (d)
the date delivered to a courier or deposited in a designated receptacle, if
sent by private carrier, when addressed to the director at an address
designated by him to receive such notice or, in the absence of such
designation, at his business or home address as it appears in the Corporation's
records. Oral notice shall be deemed effective when communicated. Whenever
any notice whatever is required to be given to any director of the Corporation
under these By-laws, the Articles or under the provisions of any statute, a
waiver thereof in writing, signed at any time whether before or after the time
of meeting, by the director entitled to such notice, shall be deemed equivalent
to timely notice. A director's attendance at, or participation in, a meeting
waives any required notice unless the director at the beginning of the meeting
or promptly upon his or her arrival objects to holding the meeting or
transacting business at the meeting and does not thereafter vote for or assent
to action taken at the meeting. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the Board of Directors need
be specified in the notice or waiver of such meeting.

3.6. Quorum; Votes. A majority of the number of directors in
accordance with Section 3.2 shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but though less than such
quorum is present at a meeting, a majority of the directors present may adjourn
the meeting from time to time without further notice. The affirmative vote of
a majority of directors present shall be the act of the Board of Directors, or
a committee of the Board of Directors created under Section 3.11, unless the
Articles or these By-laws require the vote of a greater number of directors.

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3.7. Removal and Resignation. Exclusive of directors, if
any, elected by the holders of one or more classes of preferred stock, no
director of the Corporation may be removed from office except for "Cause" and
by the affirmative vote of two-thirds of the outstanding shares of capital
stock of the Corporation entitled to vote at a meeting of shareholders duly
called for such purpose. As used in this Section 3.7, the term "Cause" shall
mean solely malfeasance arising from the performance of a director's duties
which has a materially adverse effect on the business of the Corporation. A
director may resign at any time by delivering written notice to the Board of
Directors, Chairman of the Board or to the Corporation.

3.8. Vacancies. Any vacancy on the Board of Directors,
however caused, including, without limitation, any vacancy resulting from an
increase in the number of directors, shall be filled by the vote of a majority
of the directors then in office, although less than a quorum, or by a sole
remaining director. Any director so elected to fill any vacancy on the Board
of Directors, including a vacancy created by an increase in the size of the
Board of Directors, shall hold office for the remaining term of directors of
the class to which he has been elected and until his successor shall be elected
and shall qualify.

3.9. Compensation. The Board of Directors, by affirmative
vote of a majority of the directors then in office, and irrespective of any
personal interest of any of its members, may establish reasonable compensation
of all directors for services to the Corporation as directors or otherwise, or
may delegate such authority to an appropriate committee.

3.10. Presumption of Assent. A director of the Corporation
who is present at a meeting of the Board of Directors or a committee thereof at
which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless: (a) the director objects at the beginning
of the meeting (or promptly upon his arrival) to holding the meeting or
transacting business at the meeting; or (b) the director dissents or abstains
from an action taken and minutes of the meeting are prepared that show the
director's dissent or abstention from the action taken; or (c) the director
delivers written notice of his dissent or abstention to the presiding officer
of the meeting before its adjournment or to the Corporation immediately after
adjournment of the meeting; or (d) the director dissents or abstains from an
action taken, minutes of the meeting are prepared that fail to show the
director's dissent or abstention from the action taken and the director
delivers to the Corporation a written notice of that failure promptly after

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receiving the minutes. Such right to dissent shall not apply to a director who
voted in favor of such action.

3.11. Committees. The Board of Directors, by resolution
adopted by the affirmative vote of a majority of the number of directors then
in office, may designate one or more committees, each committee to consist of
two or more directors elected by the Board of Directors. The Board of
Directors may elect one or more of its members as alternate members of any such
committee and such alternate member may take the place of any absent member or
members at any meeting of such committee upon request of the Chairman of the
Board or upon request of the chairman of such meeting. Unless limited by the
Articles, each committee may exercise those aspects of the authority of the
Board of Directors which are within the scope of the committee's assigned
responsibilities or which the Board of Directors otherwise specifically confers
upon such committee; provided, however, that no committee of the Board may do
any of the following:

(a) authorize distributions;

(b) approve or propose to shareholders action that
the WBCL requires be approved by shareholders;

(c) fill vacancies on the Board of Directors or on
any of its committees, unless the Board of Directors has specifically
granted such authority to the committee;

(d) amend the Articles;

(e) adopt, amend, or repeal these By-laws;

(f) approve a plan of merger not requiring
shareholder approval;

(g) authorize or approve reacquisition of shares,
except according to a formula or method prescribed by the Board of
Directors; or

(h) authorize or approve the issuance or sale or
contract for sale of shares or determine the designation and relative
rights, preferences, and limitations of a class or series of shares,
except that the Board of Directors may authorize a committee (or a
senior executive officer of the Corporation) to do so within limits
specifically prescribed by the Board of Directors.

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3.12. Informal Action Without Meeting. Any action required
or permitted by the Articles or these By-laws or any provision of law to be
taken by the Board of Directors or a committee at a meeting may be taken
without a meeting if the action is taken by all members of the Board of
Directors. The action shall be evidenced by one or more written consents
describing the action taken, signed by each director and retained by the
Corporation.

3.13. Telephonic Meetings. Any or all directors may
participate in a regular or special meeting by, or conduct the meeting through
the use of, any means of communication which allows all directors participating
to simultaneously hear each other during the meeting. In the case of any such
meeting all participating directors must be informed that a meeting is taking
place at which official business may be transacted. A director participating
in a meeting by this means is deemed to be present in person at the meeting.

3.14 Chairman of Meetings. The Chairman of the Board or, in
his absence or inability or refusal to act, the Chairman of the Executive
Committee, shall preside at all meetings of the Board of Directors.

4. OFFICERS

4.1. Number. The principal officers of the Corporation shall
be a Chairman of the Board, a Vice Chairman of the Board, a Chief Executive
Officer, a President, one or more Vice Presidents, any one of whom may be
designated as Executive Vice President, and a Secretary, each of whom shall be
elected by the Board of Directors. Such other officers and assistant officers
as may be deemed necessary may be elected or appointed by the Board of
Directors.

4.2. Election and Term of Office. The officers of the
Corporation to be elected by the Board of Directors shall be elected annually
by the Board of Directors at the first meeting of the Board of Directors held
after the annual meeting of the shareholders. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as convenient. Each officer shall hold office until his successor
shall have been duly elected or until his death or until he shall resign or
shall have been removed in the manner hereinafter provided.

4.3. Removal. Any officer or agent elected or appointed by
the Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the

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Corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Election or
appointment shall not of itself create contract rights.

4.4. Vacancies. A vacancy in any principal office occurring
for any reason shall be filled by the Board of Directors for the unexpired
portion of the term as soon as reasonably practicable at the convenience of the
Board.

4.5. Chairman of the Board. The Chairman of the Board shall
have such duties as the Board of Directors shall prescribe from time to time.

4.6. Vice Chairman of the Board. The Vice Chairman of the
Board shall be responsible for the administration and management of the areas
of the business and affairs of the Corporation assigned to him from time to
time by the Board of Directors or the Chief Executive Officer.

4.7. Chief Executive Officer. The Chief Executive Officer
shall be the principal executive officer of the Corporation and, subject to the
control of the Board of Directors, shall have general supervision and control
of the business and affairs of the Corporation and its officers. The Chief
Executive Officer shall have the authority, subject to such rules as may be
prescribed by the Board of Directors, to appoint such agents and employees of
the Corporation as the Chief Executive Officer deems necessary, prescribe their
powers, duties and compensation, and delegate authority to them. Such agents
and employees shall hold offices at the discretion of the Chief Executive
Officer. The Chief Executive Officer shall have authority to sign, execute and
acknowledge, on behalf of the Corporation, all deeds, mortgages, bonds, stock
certificates, contracts, leases, reports and all other documents or instruments
necessary or proper to be executed in the course of the Corporation's regular
business or which shall be authorized by the Board of Directors. Except as
otherwise provided by the WBCL or the Board of Directors, the Chief Executive
Officer may authorize any other officer or agent of the Corporation to sign,
execute and acknowledge such documents or instruments in his place and stead.
In general, the Chief Executive Officer shall have all authority and perform
all duties incident to the office of the chief executive officer and such other
duties as may be prescribed by the Board of Directors from time to time.

4.8. President. In the absence of the Chief Executive
Officer or in the event of his death, inability or refusal to act, the
President shall perform the duties of the Chief

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Executive Officer, and when so acting shall have all the powers and duties of
the Chief Executive Officer. In addition, the President shall be responsible
for the administration and management of the areas of the business and affairs
of the Corporation assigned to him from time to time by the Board of Directors
or the Chief Executive Officer.

4.9. Vice Presidents. One or more of the Vice Presidents may
be designated as Executive Vice President. In the absence of the President or
in the event of his death, inability or refusal to act, the Vice Presidents in
the order designated at the time of their election (or in the absence of any
designation, then in the order of their appointment), shall perform the duties
of the President and when so acting shall have all the powers of and be subject
to all the restrictions upon the President. Any Vice President may sign with
the Secretary or Assistant Secretary certificates for shares of the Corporation
and shall perform such other duties as from time to time may be assigned to him
by the Chief Executive Officer, the President or the Board of Directors.

4.10. Secretary. The Secretary shall: (a) keep the minutes
of the shareholders' and of the Board of Directors' meetings in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these By-laws or as required by the WBCL; (c)
be custodian of the corporate records and of the seal of the Corporation and
see that the seal of the Corporation is affixed to all documents, the execution
of which on behalf of the Corporation under its seal is duly authorized; (d)
keep a register of the post office address of each shareholder which shall be
furnished to the Secretary by such shareholder or delegate that responsibility
to a stock transfer agent; (e) sign with the President or a Vice President
certificates for shares of the Corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; and (f) in general
have all authority and perform all duties incident to the office of Secretary
and such other duties as from time to time may be assigned to him by the Chief
Executive Officer or by the Board of Directors.

4.11. Assistant Secretaries. The Assistant Secretaries, when
authorized by the Board of Directors, may sign with the President or a Vice
President certificates for shares of the Corporation, the issuance of which
shall have been authorized by a resolution of the Board of Directors. The
Assistant Secretaries, in general, shall have such authority and perform such
duties as shall be assigned to them by the Secretary, the President or the
Board of Directors.

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4.12. Salaries. The salaries of the officers shall be fixed
from time to time by the Board of Directors or a committee authorized by the
Board to fix the same and no officer shall be prevented from receiving such
salary by reason of the fact that he is also a director of the Corporation or a
member of such a committee.

4.13. Voting of Stock in Other Corporations. The Board of
Directors by resolution shall from time to time designate one or more persons
who shall vote all stock held by this Corporation in any other corporation,
banking corporation or banking association. Such resolution may designate such
persons in the alternative and may empower them to execute proxies to vote in
their stead. Where time permits, however, the manner in which such shares
shall be voted shall be determined by the Board of Directors of this
Corporation or the appropriate committee thereof while the Board is not in
session.

5. CERTIFICATES FOR SHARES AND THEIR TRANSFER

5.1. Certificates for Shares. Subject to the requirements of
the WBCL, certificates representing shares of the Corporation shall be in such
form as shall be determined by the Board of Directors. Such certificates shall
be signed, either manually or by facsimile, by the President or a Vice
President and by the Secretary or an Assistant Secretary. All certificates for
shares shall be consecutively numbered or otherwise identified. The name and
address of the person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the stock transfer
books of the Corporation. All certificates surrendered to the Corporation for
transfer shall be cancelled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
cancelled, except that in the case of a lost, destroyed or mutilated
certificate a new one may be issued therefor upon such terms and indemnity to
the Corporation as the Board of Directors or the Secretary may prescribe.

5.2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books of the Corporation
by the holder of record thereof or by his legal representative, who shall
furnish proper evidence of authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the Corporation, and on surrender for cancellation of the certificate for such
shares.

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5.3. Stock Regulations. The Board of Directors shall have
the power and authority to make all such further rules and regulations not
inconsistent with the WBCL as they may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
Corporation, including the appointment or designation of one or more stock
transfer agents and one or more stock registrars.

6. EMERGENCY BY-LAWS

Unless the Articles provide otherwise, the following
provisions of this Article 6 shall be effective during an "emergency" which is
defined as a catastrophic event that prevents a quorum of the Corporation's
directors from being readily assembled.

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During such emergency:

(a) Any one member of the Board of Directors or any
one of the following officers: Chief Executive Officer, President,
any Vice-President or Secretary, may call a meeting of the Board of
Directors. Notice of such meeting need be given only to those
directors whom it is practicable to reach, and may be given in any
practical manner, including by publication or radio. Such notice
shall be given at least six hours prior to the commencement of the
meeting.

(b) One or more officers of the corporation present
at the emergency meeting of the Board of Directors, as is necessary to
achieve a quorum, shall be considered to be directors for the meeting,
and shall so serve in order of rank, and within the same rank, in
order of seniority. In the event that less than a quorum of the
directors are present (including any officers who are to serve as
directors for the meeting), those directors present (including the
officers serving as directors) shall constitute a quorum.

(1) prescribe emergency powers to any
officer of the corporation;

(2) delegate to any officer or director, any
of the powers of the Board of Directors;

(3) designate lines of succession of
officers and agents, in the event that any of them are unable
to discharge their duties;

(4) relocate the principal place of
business, or designate successive or simultaneous principal
places of business; and

(5) take any other action, convenient,
helpful, or necessary to carry on the business of the
corporation.

Corporate action taken in good faith in accordance with this
Article 6 binds the Corporation and may not be used to impose liability on a
corporate director, officer, employee or agent.

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7. GENERAL

7.1. Indemnify of Officers and Directors.

(a) Definitions to Indemnification and Insurance
Provisions.

(1) "Director, Officer, Employee or Agent"
means any of the following: (i) a natural person who, is or
was a director, officer, employee or agent of the Corporation;
(ii) a natural person who, while a director, officer, employee
or agent of the Corporation, is or was serving either pursuant
to the Corporation's specific request or as a result of the
nature of such person's duties to the Corporation as a
director, officer, partner, trustee, member of any governing
or decision making committee, employee or agent of another
corporation or foreign corporation, partnership, joint
venture, trust or other enterprise; (iii) a natural person
who, while a director, officer, employee or agent of the
Corporation, is or was serving an employee benefit plan
because his or her duties to the Corporation also impose
duties on, or otherwise involve services by, the person to the
plan or to participants in or beneficiaries of the plan; or
(iv) unless the context requires otherwise, the estate or
personal representative of a director, officer, employee or
agent.

(2) "Liability" means the obligation to pay
a judgment, penalty, assessment, forfeiture or fine, including
an excise tax assessed with respect to an employee benefit
plan, the agreement to pay any amount in settlement of a
Proceeding (whether or not approved by a court order), and
reasonable expenses and interest related to the foregoing.

(3) "Party" means a natural person who was
or is, or who is threatened to be made, a named defendant or
respondent in a Proceeding.

(4) "Proceeding" means any threatened,
pending or completed civil, criminal, administrative or
investigative action, suit, arbitration or other proceeding,
whether formal or informal (including but not limited to any
act or failure to act alleged or determined to have been
negligent, to have violated the Employee Retirement Income
Security Act of 1974, or to have violated Section 180.40
[180.0826, 180.0832 and

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<PAGE> 20
180.0833] of the Wisconsin Statutes, or any successor thereto,
regarding improper dividends, distributions of assets,
purchases of shares of the Corporation, or loans to officers),
which involves foreign, federal, state or local law and which
is brought by or in the right of the Corporation or by any
other person or entity, to which the Director, Officer,
Employee or Agent was a party because he or she is a Director,
Officer, Employee or Agent.

(5) "Expenses" means all reasonable fees,
costs, charges, disbursements, attorneys' fees and any other
expenses incurred in connection with the Proceeding.

(b) Indemnification of Officers, Directors,
Employees and Agents.

(1) The Corporation shall indemnify a
Director, Officer, Employee or Agent to the extent he or she
has been successful on the merits or otherwise in the defense
of any Proceeding, for all reasonable Expenses.

(2) In cases not included under subsection
(1), the Corporation shall indemnify a Director, Officer,
Employee or Agent against Liability and Expenses incurred by
such person in a Proceeding unless it shall have been proven
by final judicial adjudication that such person breached or
failed to perform a duty owned to the Corporation which
constituted:

(i) A willful failure to deal fairly
with the Corporation or its shareholders in
connection with a matter in which the Director,
Officer, Employee or Agent has a material conflict of
interest;

(ii) A violation of criminal law,
unless the Director, Officer, Employee or Agent had
reasonable cause to believe his or her conduct was
lawful or no reasonable cause to believe his or her
conduct was unlawful;

(iii) A transaction from which the
Director, Officer, Employee or Agent derived an
improper personal profit; or

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<PAGE> 21
(iv) Willful misconduct.

(1) Unless provided otherwise by a written
agreement between the Director, Officer, Employee or Agent and
the Corporation, determination of whether indemnification is
required under Section (b) shall be made by any method set
forth in Section 180.046 [180.0855] of the Wisconsin Statutes.

(2) A Director, Officer, Employee or Agent
who seeks indemnification under this section shall make a
written request to the Corporation. As a further
pre-condition to any right to receive indemnification, the
writing shall contain a declaration that the Corporation shall
have the right to exercise all rights and remedies available
to such Director, Officer, Employee or Agent against any other
person, corporation, foreign corporation, partnership, joint
venture, trust or other enterprise, arising out of, or related
to, the Proceeding which resulted in the Liability and the
Expense for which such Director, Officer, Employee or Agent is
seeking indemnification, and that the Director, Officer,
Employee or Agent is hereby deemed to have assigned to the
Corporation all such rights and remedies.

(3) Indemnification under subsection (b)(1)
shall be made within 10 days of receipt of a written demand
for indemnification. Indemnification required under
subsection (b)(2) shall be made within 30 days of receipt of a
written demand for indemnification.

(4) Indemnification under this section is
not required to the extent the Director, Officer, Employee or
Agent has previously received indemnification or allowance of
expenses from any person or entity, including the Corporation,
in connection with the same Proceeding.

(5) Upon written request by a Director,
Officer, Employee or Agent who is a Party to a Proceeding, the
Corporation shall pay or reimburse his or her reasonable
Expenses as incurred if the Director, Officer, Employee or
Agent provides the Corporation with all of the following:

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<PAGE> 22
(i) A written affirmation of his or
her good faith belief that he or she is entitled to
indemnification under Article 7.1; and

(ii) A written undertaking, executed
personally or on his or her behalf, to repay all
amounts advanced without interest to the extent that
it is ultimately determined that indemnification
under 7.1(b)(2) is prohibited.

The undertaking under this subsection shall be
accepted without reference to the Director's,
Officer's, Employee's or Agent's ability to repay the
allowance. The undertaking shall be unsecured.

(6) The right to indemnification under this
Article may be amended only by a subsequent vote of not less
than two-thirds of the Corporation's outstanding capital stock
entitled to vote on such matters. Any reduction in the right
to indemnification may only be prospective from the date of
such vote.

(d) Insurance. The Corporation shall have the power
to purchase and maintain insurance on behalf of any person who is a
Director, Officer, Employee or Agent against any Liability asserted
against or incurred by the individual in any such capacity or arising
out of his status as such, regardless of whether the Corporation is
required or authorized to indemnify or allow Expenses to the
individual under this section.

(e) Severability. The provisions of this Article
shall not apply in any circumstance where a court of competent
jurisdiction determines that indemnification would be invalid as
against public policy.

8. AMENDMENT

These By-laws may be amended, altered or repealed, and new
By-laws may be enacted, only by the affirmative vote of not less than
two-thirds of the outstanding shares of capital stock of the Corporation
entitled to vote at a meeting of shareholders duly called for such purpose,
upon a proposal adopted by the Board of Directors, or by a vote of not less
than three-quarters of the entire Board of Directors then in office; provided,
however, that no By-law hereafter adopted, amended or repealed by the
shareholders as provided herein shall thereafter be enacted, amended or
repealed by the directors unless such action by the

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<PAGE> 23
shareholders shall expressly confer upon the directors authority to thereafter
enact, amend or repeal such By-law as so amended, and; provided, further, that
any By-law adopted, repealed or amended by the Board of Directors as provided
herein shall be subject to reenactment, repeal or amendment by the shareholders
acting at any meeting of the shareholders in accordance with the terms hereof.

<PAGE> 1
Exhibit 10(cc)

EMPLOYMENT AGREEMENT

THIS AGREEMENT, entered into as of the 14th day of December,
1995, by and between MARSHALL & ILSLEY CORPORATION (the "Company"), and
Patricia R. Justiliano (the "Executive") (hereinafter collectively referred to
as "the parties").

W I T N E S S E T H :

WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that the possibility of a Change of Control (as hereinafter defined
in Section 2) exists and that the threat of or the occurrence of a Change of
Control can result in significant distractions of its key management personnel
because of the uncertainties inherent in such a situation; and

WHEREAS, the Board has determined that it is essential and in the
best interest of the Company and its shareholders to retain the services of the
Executive in the event of a threat or occurrence of a Change of Control and to
ensure his continued dedication and efforts in such event without undue concern
for his personal financial and employment security; and

WHEREAS, in order to induce the Executive to remain in the employ
of the Company, particularly in the event of a threat of or the occurrence of a
Change of Control, the Company desires to enter into this Agreement with the
Executive.

NOW, THEREFORE, in consideration of the respective agreements of
the parties contained herein, it is agreed as follows:

1. Employment Term. (a) The "Employment Term" shall
commence on the first date during the Protected Period (as defined in Section
1(c), below) on which a Change of Control (as defined in Section 2, below)
occurs (the "Effective Date") and shall expire on the second anniversary of the
Effective Date; provided, however, that at the end of each day of the
Employment Term the Employment Term shall automatically be extended for one (1)
day unless either the Company or the Executive shall have given written notice
to the other at least thirty (30) days prior thereto that the Employment Term
shall not be so extended; and provided, further, that the Employment Term shall
not be automatically extended beyond the first day of the month following the
month in which the Executive attains age sixty-five (65).

(b) Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated prior to the
Effective Date and the Executive reasonably demonstrates that such termination
(i) was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change of Control, or (ii) otherwise
occurred in connection with or in anticipation of a Change of Control, then for
all purposes of this Agreement, the Effective Date shall mean the date
immediately prior to the date of such termination of the Executive's
employment.

(c) For purposes of this Agreement, the "Protected Period"
shall be the two (2) year period commencing on the date hereof, provided,
however, that at the end of each day the Protected Period shall be
automatically extended for one (1) day unless at least thirty (30) days prior
thereto the Company shall have given written notice to the Executive that the
Protected Period shall not be so extended; and provided, further, that
notwithstanding any such notice by the Company not to extend, the Protected
Period shall not end if prior to the expiration thereof any third party has
indicated an intention or taken steps reasonably calculated to effect a Change
of Control, in which event the Protected Period shall end only after such third
party publicly announces that it has abandoned all efforts to effect a Change
of Control.
<PAGE> 2
2. Change of Control. For purposes of this Agreement, a
"Change of Control, shall mean the first to occur of the following:

(a) The acquisition by any individual, entity or "group"
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty-three
percent (33%) or more of either (i) the then outstanding shares of common stock
of the Company (the "Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that the following acquisitions of common
stock shall not constitute a Change of Control: (i) any acquisition directly
from the Company (excluding an acquisition by virtue of the exercise of a
conversion privilege or by one person or a group of persons acting in concert),
(ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation which would
not be a Change of Control under subsection (c) of this Section 2; or

(b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened "election contest"
or other actual or threatened "solicitation" (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) of proxies or
consents by or on behalf of a person other than the Incumbent Board; or

(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, unless, following such reorganization,
merger or consolidation, (i) more than two-thirds (2/3) of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same proportions
as their ownership, immediately prior to such reorganization, merger or
consolidation, (ii) no person (excluding the Company, any employee benefit plan
(or related trust) of the Company or such corporation resulting from such
reorganization, merger or consolidation and any person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, thirty-three percent (33%) or more of the Outstanding Company
Common Stock or Outstanding Voting Securities, as the case may be) beneficially
owns, directly or indirectly, thirty-three percent (33%) or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities of such corporation,
entitled to vote generally in the election of directors and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or

(d) Approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company, other
than to a

2
<PAGE> 3
corporation, with respect to which following such sale or other disposition,
(A) more than two-thirds (2/3) of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (B)
no person (excluding the Company and any employee benefit plan (or related
trust) of the Company or such corporation and any person beneficially owning,
immediately prior to such sale or other disposition, directly or indirectly,
thirty-three percent (33%) or more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, thirty-three percent (33%) or more of, respectively,
the then outstanding shares of common stock of such corporation or the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (C) at least a
majority of the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition
of assets of the Company.

3. Employment. (a) Subject to the provisions of Section 3,
hereof, the Company agrees to continue to employ the Executive and the
Executive agrees to remain in the employ of the Company during the Employment
Term. During the Employment Term, the Executive shall be employed as Senior
Vice President of M&I Marshall & Ilsley Corporation or in such other executive
capacity as may be mutually agreed to in writing by the parties. During the
Employment Term, Executive's position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities shall be at
least commensurate in all material respects with the most significant of those
held or assigned at any time during the twelve (12) month period immediately
preceding the Effective Date, and Executive's services shall be performed at
the location where Executive was employed immediately preceding the Effective
Date or at any office or location less than thirty-five (35) miles from such
location, unless mutually agreed to in writing by the parties.

(b) Excluding periods of vacation and sick leave to which the
Executive is entitled, during the Employment Term the Executive agrees to
devote full time attention to the business and affairs of the Company to the
extent necessary to discharge the responsibilities assigned to the Executive
hereunder, provided that the Executive may take reasonable amounts of time to
(i) serve on corporate, civil or charitable boards or committees, and (ii)
deliver lectures, fulfill speaking engagements or teach at educational
institutions, if such activities do not significantly interfere with the
performance of the Executive's responsibilities hereunder. It is expressly
understood and agreed that to the extent any such activities have been
conducted by the Executive prior to the Effective Date, the continued conduct
of such activities (or the conduct of activities similar in nature and scope)
subsequent to the Effective Date shall not thereafter be deemed to interfere
with the performance of Executive's responsibilities hereunder.

4. Compensation. (a) Base Salary. During the Employment
Term, the Executive shall receive an annual base salary ("Annual Base Salary"),
which shall be paid at a monthly rate, at least equal to twelve (12) times the
highest monthly base salary paid or payable to the Executive by the Company and
its affiliated companies in respect of the twelve (12) month period immediately
preceding the month in which the Effective Date occurs. During the Employment
Term, the Annual Base Salary shall be reviewed at least annually and shall be
increased at any time and from time to time as shall be substantially
consistent with increases in base salary generally awarded in the ordinary
course of business to other peer executives of the Company and its affiliated
companies.

3
<PAGE> 4
Any increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary shall not
be reduced after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased. As used
in this Agreement, the term "affiliated companies" shall include any company
controlled by, controlling or under common control with the Company.

(b) Annual Bonus. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Term, an annual bonus (the "Annual Bonus") in cash at least equal to the
average annualized (for any fiscal year consisting of less than twelve (12)
full months or with respect to which the Executive has been employed by the
Company for less than twelve (12) full months) bonuses paid or payable,
including any amounts which were deferred under any plans of the Company and
its affiliated companies, to the Executive by the Company and its affiliated
companies in respect of the three (3) fiscal years immediately preceding the
fiscal year in which the Effective Date occurs (the "Recent Average Bonus").
Each such Annual Bonus shall be paid no later than seventy-five (75) days after
the end of the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus under any plan
or arrangement of the Company allowing therefor.

(c) Incentive, Savings and Retirement Plans. During the
Employment Term, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to
both regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in effect at
any time during the twelve (12) month period immediately preceding the
Effective Date, or, if more favorable to the Executive, those provided
generally at any time after the Effective Date to other peer executives of the
Company and its affiliated companies.

(d) Benefit Plans. During the Employment Term, the Executive
and/or the Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under benefit plans, practices,
policies and programs provided by the Company and its affiliated companies
(including, without limitation, medical, prescription drug, dental, disability,
salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other peer executives of the Company and its affiliated companies and their
families; but in no event shall such plans, practices, policies and programs
provide the Executive with benefits which are less favorable, in the aggregate,
than the most favorable of such plans, practices, policies and programs in
effect for the Executive and his family at any time during the twelve (12)
month period immediately preceding the Effective Date or, if more favorable to
the Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies and their
families.

(e) Expenses. During the Employment Term, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in effect
for the Executive at any time during the twelve (12) month period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.

(f) Fringe Benefits. During the Employment Term, the
Executive shall be entitled to fringe benefits (including but not limited to
Company cars, club

4
<PAGE> 5
dues and physical examinations) in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated companies in
effect for the Executive at any time during the twelve (12) month period
immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.

(g) Office and Support Staff. During the Employment Term, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at any
time during the twelve (12) month period immediately preceding the Effective
Date or, if more favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.

(h) Vacation and Sick Leave. During the Employment Term, the
Executive shall be entitled to paid vacation and sick leave (without loss of
pay) in accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect for the
Executive at any time during the twelve (12) month period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies.

(i) Restrictions. As of the Effective Date, all restrictions
limiting the exercise, transferability or other incidents of ownership of any
outstanding award, including but not limited to restricted stock, options,
stock appreciation rights, or other property or rights of the Company granted
to the Executive shall lapse, and such awards shall become fully vested and be
held by the Executive free and clear of all such restrictions. This provision
shall apply to all such property or rights notwithstanding the provisions of
any other plan or agreement, unless the effect of the application of this
provision to a particular right or property would result in such right or
property failing to qualify for favorable tax treatment under the particular
section of the Internal Revenue Code for which it was designed to qualify, or
would result in the loss of favorable securities law treatment for participants
under the plan pursuant to which the award was granted.

5. Termination of Employment. During the Employment Term,
the Executive's employment hereunder may be terminated under the following
circumstances:

(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Term.
If the Company determines in good faith that the Disability of the Executive
has occurred during the Employment Term (pursuant to the definition of
Disability set forth below), it may give to the Executive written notice in
accordance with Section 5 of this Agreement of its intention to terminate the
Executive's employment. In such event, the Executive's employment with the
Company shall terminate effective on the thirtieth (30th) day after receipt of
such notice by the Executive (the "Disability Effective Date"), provided that,
within thirty (30) days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" shall mean the absence of the Executive from the
Executive's duties with the Company on a full-time basis for one hundred eighty
(180) consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative, provided if the parties are unable to agree,
the parties shall request the Dean of the Medical College of Wisconsin to
choose such physician.

(b) Cause. The Company may terminate the Executive's
employment for "Cause." A termination for Cause is a termination evidenced by
a resolution

5
<PAGE> 6
adopted in good faith by a majority of the Board that the Executive (i)
willfully, deliberately and continually failed to substantially perform his
duties under Section 3, above (other than a failure resulting from the
Executive's incapacity due to physical or mental illness) which failure
constitutes gross misconduct, and results in and was intended to result in
demonstrable material injury to the Company, monetary or otherwise, or (ii)
committed acts of fraud and dishonesty constituting a felony, as determined by
a final judgment or order of a court of competent jurisdiction, and resulting
or intended to result in gain to or personal enrichment of the Executive at the
Company's expense, provided, however, that no termination of the Executive's
employment shall be for Cause as set forth in (i), above, until (a) Executive
shall have had at least sixty (60) days to cure any conduct or act alleged to
provide Cause for termination after a written notice of demand has been
delivered to the Executive specifying in detail the manner in which the
Executive's conduct violates this Agreement, and (b) the Executive shall have
been provided an opportunity to be heard by the Board (with the assistance of
the Executive's counsel if the Executive so desires). No act, or failure to
act, on the Executive's part, shall be considered "willful" unless he has acted
or failed to act in bad faith and without a reasonable belief that his action
or failure to act was in the best interest of the Company. Notwithstanding
anything contained in this Agreement to the contrary, no failure to perform by
the Executive after Notice of Termination is given by the Executive shall
constitute Cause for purposes of this Agreement.

(1) The Executive may terminate his employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall mean the
occurrence after a Change of Control of any of the events or conditions
described in Subsections (i) through (vi) hereof:

(i) A change in the Executive's status, title, position
or responsibilities (including reporting responsibilities) which, in the
Executive's reasonable judgment, does not represent a promotion from his
status, title, position or responsibilities as in effect immediately
prior thereto; the assignment to the Executive of any duties or
responsibilities which, in the Executive's reasonable judgment, are
inconsistent with his status, title, position or responsibilities in
effect immediately prior to such assignment; or any removal of the
Executive from or failure to reappoint or reelect him to any position,
except in connection with the termination of his employment for
Disability, Cause, as a result of his death or by the Executive other
than for Good Reason;

(ii) Any failure by the Company to comply with any of the
provisions of Section 4 of this Agreement.

(iii) The insolvency or the filing (by any party,
including the Company) of a petition for bankruptcy of the Company;

(iv) Any material breach by the Company of any provision
of this Agreement;

(v) Any purported termination of the Executive's
employment for Cause by the Company which does not comply with the terms
of Section 5 of this Agreement; and

(vi) The failure of the Company to obtain an agreement,
satisfactory to the Executive, from any successor or assign of the
Company, to assume and agree to perform this Agreement, as contemplated
in Section 10 hereof.

(2) Any event or condition described in Section 5(c) (1)
which occurs prior to the Effective Date but which the Executive reasonably
demonstrates (i) was at the request of a third party who has indicated an

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<PAGE> 7
intention or taken steps reasonably calculated to effect a Change of Control,
or (ii) otherwise arose in connection with or in anticipation of a Change of
Control, shall constitute Good Reason for purposes of this Agreement
notwithstanding that it occurred prior to the Effective Date.

(3) The Executive's right to terminate his employment
pursuant to this Section 5(c) shall not be affected by his incapacity due to
physical or mental illness. The Executive's continued employment or failure to
give Notice of Termination shall not constitute consent to, or a waiver of
rights with respect to, any circumstances constituting Good Reason hereunder.

(4) For purposes of this Section 5(c), any good faith
determination of Good Reason made by the Executive shall be conclusive.

(d) Voluntary Termination. The Executive may voluntarily
terminate his employment hereunder at any time.

(e) Notice of Termination. Any purported termination by the
Company or by the Executive (other than by death of the Executive) shall be
communicated by Notice of Termination to the other. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) the Termination Date.
For purposes of this Agreement, no such purported termination of employment
shall be effective without such Notice of Termination.

(f) Termination Date, Etc. "Termination Date" shall mean in
the case of the Executive's death, his date of death, or in all other cases,
the date specified in the Notice of Termination subject to the following:

(1) If the Executive's employment is terminated by the
Company, the date specified in the Notice of Termination shall be at least
thirty (30) days after the date the Notice of Termination is given to the
Executive, provided, however, that in the case of Disability, the Executive
shall not have returned to the full-time performance of his duties during such
period of at least thirty (30) days;

(2) If the Executive's employment is terminated for Good
Reason, the date specified in the Notice of Termination shall not be more than
sixty (60) days after the date the Notice of Termination is given to the
Company; and

(3) In the event that within thirty (30) days following
the date of receipt of the Notice of Termination, one party notifies the other
that a dispute exists concerning the basis for termination, the Executive's
employment hereunder shall not be terminated except after the dispute is
finally resolved and a Termination Date is determined either by a mutual
written agreement of the parties, or by a binding and final judgment order or
decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected).

6. Obligations of the Company Upon Termination.

(a) Good Reason; Other Than for Cause, Death or Disability. If,
during the Employment Term, the Company shall terminate the Executive's
employment other than for Cause or Disability or the Executive shall terminate
employment for Good Reason:

(i) The Company shall pay to the Executive in a lump sum
in cash within five (5) days after the Termination Date the aggregate of the
following amounts:

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<PAGE> 8
A. The sum of:

(1) The Executive's Annual Base Salary through the
Termination Date to the extent not theretofore paid.

(2) The product of (x) the higher of (I) the
Recent Average Bonus and (II) the Annual Bonus paid or payable,
including any amount deferred, (and annualized for any fiscal
year consisting of less than twelve (12) full months or for which
the Executive has been employed for less than twelve (12) full
months) for the most recently completed fiscal year during the
Employment Period, if any (such higher amount being referred to
as the "Highest Annual Bonus") and (y) a fraction, the numerator
of which is the number of days completed in the current fiscal
year through the Termination Date, and the denominator of which
is 365; and

(3) Any compensation previously deferred by the
Executive (together with any accrued interest or earnings
thereon) and any accrued vacation pay, in each case to the extent
not theretofore paid.

The sum of the amounts described in Clauses (1), (2) and
(3) shall be hereinafter referred to as the "Accrued Obligations."

B. The amount equal to the product of (1) two and (2) the
sum of (x) the Executive's Annual Base Salary (increased for this
purpose by any Section 401(k) deferrals, cafeteria plan elections, or
other deferrals that would have increased Executive's Annual Base Salary
if paid in cash to Executive when earned) and (y) the Executive's
Highest Annual Bonus;

C. A separate lump-sum supplemental retirement benefit
equal to the difference between (1) the actuarial equivalent (utilizing
for this purpose the most favorable to the Executive actuarial
assumptions and Company contribution history with respect to the
applicable retirement plan, incentive plans, savings plans and other
plans described in Section 4(c) (or any successor plan thereto) (the
"Retirement Plans") during the twelve (12) month period immediately
preceding the Effective Date) of the benefit payable under the
Retirement Plans and any supplemental and/or excess retirement plan
providing benefits for the Executive (the "SERP") which the Executive
would receive if the Executive's employment continued for an additional
two (2) years after the Termination Date with annual compensation equal
to the sum of the Annual Base Salary and Highest Annual Bonus, assuming
for this purpose that all accrued benefits and contributions are fully
vested and that benefit accrual formulas and Company contributions are
no less advantageous to the Executive than those in effect during the
twelve (12) month period immediately preceding the Effective Date, and
(2) the actuarial equivalent (utilizing for this purpose the actuarial
assumptions utilized with respect to the Retirement Plans during the
twelve (12) month period immediately preceding the Effective Date) of
the Executive's actual benefit (paid or payable), if any, under the
Retirement Plans and the SERP. For example, if there were a termination
today this supplemental retirement benefit would be interpreted with
respect to two plans in existence today as follows: (i) with respect to
the Retirement Growth Plan of the Company, the Executive would receive
no less than two times eight percent (8%) of the maximum compensation
that can be taken into account under the Plan assuming Executive's
compensation is as set forth above, and (ii) with respect to the
Incentive Savings Plan of the Company, the Executive would receive no
less than two times an annual Company match of fifty percent (50%) of
Employee's maximum allowable contribution to the Plan assuming
Executive's compensation is as set forth above;

D. The amount equal to the product of (i) two and (ii)
the sum of (x) the imputed income reflected on Executive's W-2
attributable to the car provided to Executive by the Company or its
affiliates for the last

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<PAGE> 9
calendar year ending before the Effective Date and (y) the club dues for
Executive paid by the Company or its affiliates attributable to such
year.

(ii) For twenty-four (24) months after the Termination
Date, or such longer period as any plan, program, practice or policy may
provide, the Company shall continue benefits to the Executive and/or the
Executive's family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described
in Section 4(d) of this Agreement if the Executive's employment had not been
terminated in accordance with the most favorable plans, practices, programs or
policies of the Company and its affiliated companies applicable generally to
other peer executives and their families during the twelve (12) month period
immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies and their families;
provided, however, that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other benefits under another
employer provided plan, the medical and other benefits described herein shall
be secondary to those provided under such other plan during such applicable
period of eligibility, provided that the aggregate coverage of the combined
benefit plans is no less favorable to the Executive, in terms of amounts and
deductibles and costs to him, than the coverage required hereunder. For
purposes of determining eligibility of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the Executive shall
be considered to have remained employed until the end of such twenty-four (24)
month period and to have retired on the last day of such period.

(iii) The Executive shall have the right to purchase the
car provided to him by the Company or its affiliates during the twelve (12)
month period immediately preceding the Effective Date (or a comparable car
acceptable to the Executive if such car is no longer owned by the Company or
its affiliates), at the book value thereof on the Termination Date, exercisable
within thirty (30) days after the Termination Date; and if the car is not
purchased, Executive shall return the car to the Company.

(iv) To the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is eligible to
receive pursuant to this Agreement under any plan, program, policy or practice
or contract or agreement of the Company and its affiliated companies (such
other amounts and benefits shall be hereinafter referred to as the "Other
Benefits").

(b) Death. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Term, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, except that the Company shall pay or provide the Accrued
Obligations, six (6) months of Annual Base Salary, and the Other Benefits. The
Accrued Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within thirty (30) days of the Termination
Date. The six (6) months of Annual Base Salary shall be paid during the six
(6) month period following the Termination Date on a monthly basis. With
respect to the provision of Other Benefits, the term Other Benefits as utilized
in this Section 6(b) shall include, and the Executive's family shall be
entitled to receive, benefits at least equal to the most favorable benefits
provided by the Company and any of its affiliated companies to surviving
families of peer executives of the Company and such affiliated companies under
such plans, programs, practices and policies relating to family death benefits,
if any, as in effect with respect to other peer executives and their families
at any time during the twelve (12) month period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect on the date of the Executive's death with respect to other
peer executives of the Company and its affiliated companies and their families.

(c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Term, this Agreement
shall

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<PAGE> 10
terminate without further obligations to the Executive, except that the Company
shall pay or provide the Accrued Obligations and the Other Benefits. The
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
thirty (30) days of the Termination Date. With respect to the provision of
Other Benefits, the term Other Benefits as utilized in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective
Date to receive, disability and other benefits at least equal to the most
favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at
any time during the twelve (12) month period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter generally with respect to other
peer executives of the Company and its affiliated companies and their families.

(d) Cause; Other Than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Term, or if the Executive
voluntarily terminates employment during the Employment Term for other than
Good Reason, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive Annual Base Salary
through the Date of Termination, any other amounts earned or accrued through
the Termination Date, and the amount of any compensation previously deferred by
the Executive, in each case to the extent theretofore unpaid; provided that if
Executive voluntarily terminates Executive shall receive the benefits normally
provided upon normal or early retirement with respect to other peer Executives
and their families to the extent he qualifies therefore. All salary or
compensation hereunder shall be paid to the Executive in a lump sum in cash
within thirty (30) days of the Date of Termination.

(e) If any of the payments referred to in this Section 6 are not paid
within the time specified after the Termination Date (hereinafter a "Delinquent
Payment"), in addition to such principal sum, the Company will pay to the
Executive interest on all such Delinquent Payments computed at the prime rate
as announced from time to time by M&I Marshall & Ilsley Bank, or its successor,
compounded monthly.

7. No Mitigation. In no event shall the Executive be obligated to
seek other employment to take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced (except to the extent set forth in
Section 6(a)(ii)) whether or not the Executive obtains other employment.

8. Unauthorized Disclosure. The Executive shall not make any
Unauthorized Disclosure. For purposes of this Agreement, "Unauthorized
Disclosure" shall mean disclosure by the Executive without the consent of the
Board to any person, other than an employee of the Company or a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance by the Executive of his duties as an executive of the Company or as
may be legally required, of any confidential information obtained by the
Executive while in the employ of the Company (including, but not limited to,
any confidential information with respect to any of the Company's customers or
methods of operation) the disclosure of which he knows or has reason to believe
will be materially injurious to the Company; provided, however, that such term
shall not include the use or disclosure by the Executive, without consent, of
any information known generally to the public (other than as a result of
disclosure by him in violation of this Section 8) or any information not
otherwise considered confidential by a reasonable person engaged in the same
business as that conducted by the Company. In no event shall an asserted
violation of this Section 8 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.

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9. Successors and Assigns.

(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns and the company shall
require any successor or assign (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession or assignment had taken place.
The term "Company" as used herein shall include such successors and assigns.
The term "successors and assigns" as used herein shall mean a corporation or
other entity acquiring all or substantially all the assets and business of the
Company (including this Agreement) whether by operation of law or otherwise.

(b) Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representative.

10. Fees and Expenses. From and after the Effective Date, the
Company shall pay all legal fees and related expenses (including the costs of
experts, evidence and counsel) reasonably incurred by the Executive as they
become due as a result of (i) the Executive's termination of employment
(including all such fees and expenses, if any, incurred in contesting or
disputing any such termination of employment), (ii) the Executive's hearing
before the Board as contemplated in Section 5(b) of this Agreement or (iii) the
Executive's seeking to obtain or enforce any right or benefit provided by this
Agreement or by any other plan or arrangement maintained by the Company under
which the Executive is or may be entitled to receive benefits.

11. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, if to the Company, to Marshall & Ilsley Corporation, 770 North
Water Street, Milwaukee, Wisconsin 53202, or if to Executive, to the address
set forth below Executive's signature, or to such other address as the party
may be notified, provided that all notices to the Company shall be directed to
the attention of the Board with a copy to the Secretary of the Company. All
notices and communications shall be deemed to have been received on the date of
delivery thereof or on the third business day after the mailing thereof, except
that notice of change of address shall be effective only upon receipt.

12. Non-Exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its subsidiaries for which the Executive may qualify. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan or program of the Company or any of its subsidiaries shall be payable
in accordance with such plan or program, except as explicitly modified by this
Agreement.

13. Settlement of Claims. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company may have against the Executive or others.

14. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions

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<PAGE> 12
at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly
set forth in this Agreement.

15. Employment. The Executive and the Company acknowledge that the
employment of the Executive by the Company is "at will" and prior to the
Effective Date, may be terminated by either the Executive or the Company at any
time. Moreover, if prior to the Effective Date, the Executive's employment
with the Company terminates then the Executive shall have no further rights
under this Agreement.

16. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Wisconsin without
giving effect to the conflict of law principles thereof.

17. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

18. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.

19. Headings. The headings herein contained are for reference only
and shall not affect the meaning or interpretation of any provision of this
Agreement.

20. Modification. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in writing signed by both the Executive and the Company.

21. Withholding. The Company shall be entitled to withhold from
amounts paid to the Executive hereunder any federal, estate or local
withholding or other taxes or charges which it is, from time to time, required
to withhold. The Company shall be entitled to rely on an opinion of counsel if
any question as to the amount or requirement of any such withholding shall
arise.

22. Limitation on Payments.

(a) Within fifteen (15) business days of the Termination Date, an
independent national accounting firm designated by the Company (the "Accounting
Firm") shall compute whether there would be any "excess parachute payments"
payable to the Executive, within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), taking into account the total
"parachute payments," within the meaning of Section 280G of the Code, payable
to the Executive by the Company or any successor thereto under this Agreement
and any other plan, agreement or otherwise. If there would be any excess
parachute payments, the Accounting Firm will compute the net after-tax proceeds
to the Executive, taking into account the excise tax imposed by Section 4999 of
the Code, if (i) the payments hereunder were reduced, but not below zero, such
that the total parachute payments payable to the Executive would not exceed
299% of the "base amount" as defined in Section 280G of the Code, or (ii) the
payments hereunder were not reduced. If reducing the payments hereunder would
result in a greater after-tax amount to the Executive, such lesser amount shall
be paid to the Executive. If not reducing the payments hereunder would result
in a greater after-tax amount to the Executive, such payments shall not be
reduced. The determination by the Accounting Firm shall be binding upon the
Company and the Executive subject to the application of Section 22(b) hereof.

(b) As a result of the uncertainty in the application of Sections 280G
of the Code, it is possible that excess parachute payments will be paid when
such payment would result in a lesser after-tax amount to the Executive; this
is not

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the intent hereof. In such cases, the payment of any excess parachute payments
will be void ab initio as regards any such excess. Any excess will be treated
as a loan by the Company to the Executive. The Executive will return the
excess to the Company, within fifteen (15) business days of any determination
by the Accounting Firm that excess parachute payments have been paid when not
so intended, with interest at an annual rate equal to the rate provided in
Section 1274(b)(2)(B) of the Code (or 120% of such rate if the Accounting Firm
determines that such rate is necessary to avoid an excise tax under Section
4999 of the Code) from the date the Executive received the excess until it is
repaid to the Company.

(c) All fees, costs and expenses (including, but not limited to, the
cost of retaining experts) of the Accounting Firm shall be borne by the Company
and the Company shall pay such fees, costs and expenses as they become due. In
performing the computations required hereunder, the Accounting Firm shall
assume that taxes will be paid for state and federal purposes at the highest
possible marginal tax rates which could be applicable to the Executive in the
year of receipt of the payments, unless the Executive agrees otherwise."

IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has executed this
Agreement as of the day and year first above written.

MARSHALL & ILSLEY CORPORATION

By: /s/ J.B. Wigdale
--------------------------------
Chairman
ATTEST:

/s/ M.A. Hatfield
- -----------------------------------
Secretary
EXECUTIVE:

/s/ Patricia R. Justiliano
------------------------------------
(employee)

Address: W265 N6920 Thousand Oaks
--------------------------
Sussex, WI 53089
--------------------------

<PAGE> 1

Exhibit 10(s)

MARSHALL & ILSLEY CORPORATION
1993 EXECUTIVE STOCK OPTION PLAN

1. PURPOSE OF THE PLAN.

The purpose of the Plan is to promote the best interests of Marshall &
Ilsley Corporation and its shareholders by providing key employees of Marshall
& Ilsley Corporation and its Subsidiaries with an opportunity to acquire a
proprietary interest in Marshall & Ilsley Corporation thereby providing a
stronger incentive for them to put forth maximum effort for the continued
success and growth of Marshall & Ilsley Corporation. In addition, the
opportunity to acquire a proprietary interest in Marshall & Ilsley Corporation
will aid in attracting and retaining key personnel.

2. DEFINITIONS.

Unless the context otherwise requires, the following terms shall have
the meanings set forth below:

(a) "Cause" shall mean the discharge of an Employee on account of
fraud or embezzlement against the Company or its Subsidiaries or serious and
wilful acts of misconduct detrimental to the business of the Company or its
Subsidiaries or their reputations.

(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

(d) "Company" shall mean Marshall & Ilsley Corporation, a Wisconsin
corporation.

(e) "Employees" shall mean those individuals who are full-time
employees of the Company or its Subsidiaries, from among whom the Committee may
select the holders of Options.

(f) "Holder" shall mean an Employee to whom an Option has been
granted.

(g) "Incentive Stock Option" shall mean an option to purchase Shares
which complies with the provisions of Section 422 of the Code.
<PAGE> 2
(h) "Market Price" shall mean the closing sale price of a Share on
the NASDAQ National Market System as reported in the Midwest Edition of the
Wall Street Journal, or such other market price as the Committee may determine
in conformity with pertinent law and regulations of the Treasury Department.

(i) "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.

(j) "Nonstatutory Stock Option" shall mean an option to purchase
Shares which does not comply with the provisions of Section 422 of the Code.

(k) "Option" shall mean an Incentive Stock Option or Nonstatutory
Stock Option granted under the Plan.

(l) "Option Agreement" shall mean the agreement between the Company
and an Employee whereby an Option is granted to such Employee.

(m) "Parent" shall mean a parent corporation of the Company as
defined in Section 424(e) of the Code.

(n) "Plan" shall mean the 1993 Executive Stock Option Plan of the
Company.

(o) "Share" or "Shares" shall mean the $1.00 par value Common Stock
of the Company.

(p) "Subsidiary" shall mean a subsidiary corporation of the Company
as defined in Section 424(f) of the Code.

(q) "Triggering Event" shall mean any of the following: (A) the
commencement by any person or group of persons, other than the Company or a
Subsidiary, of a tender or exchange offer for twenty-five percent (25%) or more
of the outstanding shares of the common stock of the Company; (b) the
acceptance by the Board of Directors of the Company of, or the public
recommendation by the Board that the stockholders of the Company accept, an
offer from any person or group of persons, other than the Company or a
Subsidiary, to acquire twenty-five percent (25%) or more of either the
outstanding shares of the common stock of the Company or the consolidated
assets of the Company; (c) the acquisition, by any person or group of persons,
of the beneficial ownership or the right to acquire beneficial ownership of
twenty-five percent (25%) or more of the outstanding shares of the common stock
of the Company (the term "group" and "beneficial ownership" as used in this
paragraph having the meanings assigned thereto in Section 13(d) of the 1934 Act
and the regulations promulgated there-

2
<PAGE> 3
under); or (d) the Company (or any Subsidiary or Subsidiaries in the aggregate
representing at least 25% of the consolidated assets of the Company), shall
have entered into an agreement with any person, or any person shall have filed
a draft or final application or notice with the Board of Governors of the
Federal Reserve System or the Office of the Comptroller of the Currency or any
other federal or state regulatory agency for approval, to (i) merge or
consolidate with, or enter into any similar transaction with, the Company or
such Subsidiary, in which the Company or Subsidiary is not the survivor (ii)
purchase, lease or otherwise acquire all or substantially all of the assets of
the Company or such Subsidiary or (iii) purchase or otherwise acquire
(including by way of merger, consolidation, share exchange or any similar
transaction) or otherwise hold or own, securities representing twenty-five
percent (25%) or more of the voting power of the Company or such Subsidiary.

3. SHARES RESERVED UNDER PLAN.

The aggregate number of Shares which may be issued or sold under the
Plan shall not exceed 3,000,000 Shares, which may be treasury Shares or
authorized but unissued Shares, or a combination of the two, subject to
adjustment as provided in Paragraph 12 hereof. Any Shares subject to an Option
which expires or terminated for any reason (whether by voluntary surrender,
lapse of time, termination of employment or otherwise) and is unexercised as to
such Shares may again be the subject of an Option under the Plan. The Holder
of an Option shall be entitled to the rights and privileges of ownership with
respect to the Shares subject to the Option only after actual purchase and
issuance of such Shares pursuant to exercise of all or part of an Option. No
Employee shall be eligible to receive Options for Shares aggregating more than
600,000 of the Shares reserved under the Plan during the term of the Plan,
subject to adjustment as provided in Paragraph 12 hereof.

4. ADMINISTRATION OF THE PLAN.

(a) The Plan shall be administered by the Committee. The Committee
shall consist of not less than three members of the Board of Directors of the
Company and shall be so constituted as to permit the Plan to comply with Rule
16b-3 under the 1934 Act, as such rule is currently in effect or as hereafter
modified or amended ("Rule 16b-3"), Section 162(m) of the Code, or any
successor rule or other statutory or regulatory requirements. The members of
the Committee shall be appointed from time to time by the Board of Directors.

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<PAGE> 4
(b) The Committee shall have sole authority in its discretion, but
always subject to the express provisions of the Plan, to determine the
Employees to whom and the time or times at which Options shall be granted, the
number of Shares to be subject to each Option, and the extent to which Options
may be exercised in installments; to interpret the Plan; to prescribe, amend,
and rescind rules and regulations pertaining to the Plan; to determine the
terms and provisions of the respective Option Agreements; and to make all other
determinations and interpretations deemed necessary or advisable for the
administration of the Plan. The Committee's determination of the foregoing
matters shall be conclusive and binding on the Company, all Employees, all
Holders, and all other persons.

5. ELIGIBILITY.

Only Employees shall be eligible to receive Options under the Plan.
In determining the Employees to whom Options shall be granted and the number of
Shares to be covered by each Option, the Committee may take into account the
nature of the services rendered by the respective Employees, their present and
potential contributions to the success of the Company, and other such factors
as the Committee in its discretion shall deem relevant. An Employee who has
been granted an Option under the Plan may be granted additional Options under
the Plan if the Committee shall so determine. The Company shall effect the
granting of Options under the Plan by execution of Option Agreements in such
form as shall be approved by the Committee. No Option may be granted under the
Plan to any person who is then a member of the Committee.

6. OPTIONS: GENERAL PROVISIONS.

(a) Types of Options. Options to purchase Shares granted pursuant to
this Plan shall be specified to be either an Incentive Stock Option (as
described in Paragraph 7) or a Nonstatutory Stock Option. An Option Agreement
executed pursuant to this Plan may include both an Incentive Stock Option and a
Nonstatutory Stock Option. An Option Agreement executed pursuant to this Plan
shall in no event provide for the grant of a tandem Option, wherein two Options
are issued together and the exercise of one affects the right to exercise the
other.

(b) Option Exercise Price. The per share exercise price of the
Shares under each Option granted pursuant to this Plan shall be determined by
the Committee but shall not be less than one hundred percent (100%) of the fair
market value per share on the date of grant of such Option. The fair market
value per Share on

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<PAGE> 5
the date of grant shall be the Market Price for the business day immediately
preceding the date of grant of such Option.

(c) General Exercise Period. No Option granted under this Plan shall
provide for its exercise earlier than six (6) months from its date of grant.
The Committee may, in its discretion, (i) require that a Holder be employed by
the Company or a Subsidiary for a designated number of years prior to the
exercise by the Holder of any Option or portion of an Option granted under this
Plan or (ii) impose additional restrictions on exercise of any Option. The
Committee may, in its discretion, determine the periods during which Options or
portions of Options may be exercised by a Holder, subject only to the terms of
this Plan. Any of the foregoing requirements or limitations subsequently may
be reduced or waived by the Committee in its discretion, unless such reduction
or waiver is prohibited by the Code or other applicable law.

(d) Vesting. If an Option Agreement provides that a Holder must be
employed by the Company or a Subsidiary for a designated period before an
Option becomes exercisable, such Option will become immediately exercisable
upon the occurrence of a Triggering Event.

(e) Payment of Exercise Price. The exercise price shall be payable
in whole or in part in cash or in Shares held by the Holder for more than six
months. If the Employee elects to pay all or a part of the exercise price in
Shares, such Employee may make such payment by delivering to the Company a
number of Shares already owned by the Employee equal in value to the exercise
price. All Shares so delivered shall be valued at their Market Price on the
date delivered.

7. INCENTIVE STOCK OPTIONS.

This Paragraph sets forth the special provisions that govern Incentive
Stock Options granted under this Plan.

(a) Maximum Calendar Year Grant to Any Employee. The aggregate fair
market value (determined at the time the Option is granted) of the Shares with
respect to which Incentive Stock Options are exercisable for the first time
during any calendar year under this Plan (and under all other plans of the
Company or any Parent or Subsidiary qualifying under Section 422 of the Code)
shall not exceed $100,000 per Employee, and/or any other limit as may be
prescribed by the Code from time to time.

(b) Grant and Exercise Period. No Incentive Stock Option shall (i)
be granted after ten (10) years from the date this Plan

5
<PAGE> 6
is adopted by the Company's Board of Directors, or (ii) be exercisable after
the expiration of ten (10) years from its date of grant. Every Incentive Stock
Option which has not been exercised within ten years of its date of grant shall
lapse upon the expiration of said ten-year period unless it shall have lapsed
at an earlier date.

8. TERMINATION OF EMPLOYMENT.

(a) Any Holder whose employment with the Company or a Subsidiary is
terminated due to retirement on such Holder's normal retirement date (as
defined in the M&I Retirement Growth Plan or any successor thereto) or due to
early retirement with the consent of the Committee shall have one (1) year from
the date of such termination of employment to exercise any Option granted
hereunder as to all or part of the Shares subject to such Option, provided,
however, that no Incentive Stock Option shall be exercisable subsequent to ten
(10) years after its date of grant; and provided, further, that on the date of
termination of employment, the Holder then had a present right to exercise such
Option.

(b) Any Holder whose employment with the Company or a Subsidiary is
terminated due to disability (as defined in Section 22(e)(3) of the Code) shall
have one (1) year from the date of termination of employment to exercise any
Option granted hereunder as to all or part of the Shares subject to such
Option; provided, however that no Incentive Stock Option shall be exercisable
subsequent to ten (10) years after its date of grant; and provided, further,
that on the date of termination of employment, the Holder then had a present
right to exercise such Option.

(c) In the event of the death of a Holder while in the employ of the
Company or a Subsidiary, any Option theretofore granted to such Holder shall be
exercisable:

(1) For one (1) year after the Holder's death, but in no
event later than ten (10) years from its date of grant in the case of
an Incentive Stock Option;

(2) Only by the personal representative, administrator or
other representative of the estate of the deceased Holder or by the
person or persons to whom the deceased Holder's right under the Option
shall pass by will or the laws of descent and distribution; and

(3) Only to the extent that the deceased Holder would have
been entitled to exercise such Option on the date of the Holder's
death.

6
<PAGE> 7
(d) If a Holder's employment is terminated for a reason other than
those specified above, the Holder shall have three (3) months from the date of
termination of employment to exercise any Option granted hereunder as to all or
part of the Shares subject thereto, provided, however, that no Incentive Stock
Option shall be exercisable subsequent to ten (10) years after its date of
grant; and provided, further, that on the date of termination of employment,
the Holder then had a present right to exercise such Option. Notwithstanding
the foregoing, (i) if a Holder's employment is terminated for Cause, to the
extent an Option is not effectively exercised prior to such termination, it
shall lapse immediately upon termination and (ii) if a Holder's employment is
terminated in anticipation of, or as a result of, a Triggering Event which
results in a transaction which will be accounted for using the pooling of
interests accounting method, any Holder who is an executive officer for
purposes of Section 16(b) of the 1934 Act shall have the greater of (a) six (6)
months and (1) day or (b) ten (10) business days following the release of 30
days of combined results of the Company and any acquiring company, to exercise
any Option granted hereunder as to all or part of the Shares subject thereto.

(e) The Committee may in its sole discretion increase the periods
permitted for exercise of an Option following a termination of employment as
provided in Subparagraphs 8(a), (b), (c), and (d), above if allowable under
applicable law; provided, however, in no event shall an Incentive Stock Option
be exercisable subsequent to ten (10) years after its date of grant.

(f) The Plan shall not confer upon any Holder any right with respect
to continuation of employment by the Company or a Subsidiary, nor shall it
interfere in any way with the right of the Company or such Subsidiary to
terminate any Holder's employment at any time.

9. TRANSFERABILITY.

(a) Except as provided in this Paragraph 9, Options granted to a
Holder under this Plan shall be not transferable and during the lifetime of the
Holder shall be exercisable only by the Holder. A Holder shall have the right
to transfer the Options granted to such Holder upon such Holder's death, either
by the terms of such Holder's will or under the laws of descent and
distribution, subject to the limitations set forth in Paragraph 8 above, and
all such distributees shall be subject to all terms and conditions of this Plan
to the same extent as would the Holder if still alive, except as otherwise
expressly provided herein or as determined by the Committee.

7
<PAGE> 8
(b) An Option Agreement may provide that Options are transferable to
members of a Holder's immediate family, to trusts for the benefit of such
immediate family members and to partnerships in which such family members are
the only partners. For purposes of the preceding sentence, "immediate family"
shall mean a Holder's children, grandchildren and spouse.

10. EXERCISE.

An Option Agreement may provide for exercise of its respective Option
in such amounts and at such times as shall be specified therein; provided,
however, except as provided in Paragraph 8, above, no Option may be exercised
unless the Holder is then in the employ of the Company or a Subsidiary and
shall have been continuously so employed since its date of grant. An Option
shall be exercisable by a Holder's giving written notice of exercise to the
Secretary of the Company accompanied by payment of the required exercise price.
The Company shall have the right to delay the issue or delivery of any Shares
under the Plan until (a) the completion of such registration or qualification
of such Shares under any federal or state law, ruling or regulation as the
Company shall determine to be necessary or advisable, and (b) receipt from the
Holder of such documents and information as the Committee may deem necessary or
appropriate in connection with such registration or qualification.

11. SECURITIES LAWS.

Each Option Agreement shall contain such representations, warranties
and other terms and conditions as shall be necessary in the opinion of counsel
to the Company to comply with all applicable federal and state securities laws.

12. ADJUSTMENT PROVISIONS.

If the Company shall effect a subdivision or consolidation of Shares
or other capital readjustment, the payment of a stock dividend, or other
increase or reduction in the number of Shares outstanding, or shall effect a
spin-off, split-off, or other distribution of assets to shareholders, without
receiving consideration therefor in money, services or property, the number of
Shares then remaining subject to or available for Options, including Shares as
to which Options have been granted but which remain unexercised and Shares
reserved for Options, shall be appropriately adjusted by the Company's Board of
Directors upon the recommendation of the Committee, subject to the express
terms and conditions of this Plan. The limitation on the number of Options for
shares which may be awarded to any Employee contained in Paragraph 3 hereof
shall be adjusted in the same manner.

8
<PAGE> 9
Subject to any required action by the Company's shareholders, if the
Company shall be a party to any merger or consolidation in which the Company is
not the surviving corporation or any other transaction or series of
transactions which has a reasonable likelihood or a purpose of causing the
Shares to be neither listed on any national securities exchange nor authorized
to be quoted on an inter-dealer quotation system of any registered national
securities association, or registered under Section 12 of the 1934 Act, each
outstanding Option shall pertain to and apply to the securities which a Holder
of the number of Shares subject to the Option would have been entitled to
receive pursuant to such transaction, with any such adjustment in the exercise
price as the Committee shall deem appropriate. A dissolution of the Company or
a sale of all or substantially all of the assets and property of the Company
shall cause each outstanding Option to terminate forthwith; provided, however,
that the Holders of outstanding Options may exercise such Options to the extent
exercisable immediately prior to such dissolution or sale.

13. TIME OF GRANTING.

Nothing contained in the Plan or in any resolution adopted or to be
adopted by the Board of Directors or the shareholders of the Company and no
action taken by the Committee shall constitute the granting of any Option
hereunder. The granting of an Option pursuant to the Plan shall take place
only when a written Option Agreement shall have been duly executed by and on
behalf of the Company.

14. TAXES.

The Company shall be entitled to pay or withhold the amount of any tax
which it believes is required as a result of the grant or exercise of any
Option under the Plan, and the Company may defer making delivery with respect
to Shares obtained pursuant to exercise of any Option, until arrangements
satisfactory to it have been made with respect to any such withholding
obligations. An Employee exercising a Nonstatutory Stock Option may, at his
election, satisfy his obligation for payment of withholding taxes either by
having the Company retain a number of Shares having an aggregate Market Price
on the date the Shares are withheld equal to the amount of the withholding tax
or by delivering to the Company Shares already owned by the Employee having an
aggregate Market Price on the date the Shares are delivered equal to the amount
of the withholding tax.

9
<PAGE> 10
15. EFFECTIVENESS OF THE PLAN.

The Plan shall become effective, upon approval of the Company's
Compensation Committee and the Board of Directors on December 16, 1993, subject
to ratification of the Plan by the vote of the holders of a majority of Shares
present or represented and entitled to vote at an annual or special meeting
thereof duly called and held.

16. TERMINATION AND AMENDMENT.

Unless the Plan shall theretofore have been terminated as hereinafter
provided, no Incentive Stock Option hereunder shall be granted after December
15, 2003. The Plan may be terminated, modified or amended by the affirmative
vote of the holders of a majority of the Shares of the Company present, or
represented, and entitled to vote at a meeting of the shareholders of the
Company. The Board of Directors of the Company may also terminate the Plan or
make such modifications or amendments thereof as it shall deem advisable,
including such modifications or amendments as it shall deem advisable in order
to conform to any law or regulation applicable thereto; provided, however, that
the Board of Directors may not, unless otherwise permitted under the federal
securities laws, without further approval of the shareholders of the Company,
adopt any amendment to the Plan which would cause the Plan to no longer comply
with Rule 16b-3, or any successor rule or other regulatory requirements. No
termination, modification or amendment of the Plan may, without the consent of
the Holder, adversely affect the rights of such Holder under an outstanding
Option then held by the Holder.

17. RULE 16b-3.

(a) It is intended that the Plan meet all of the requirements of Rule
16b-3. If any provision of the Plan would disqualify the Plan, or would not
comply with Rule 16b-3, such provision shall be construed or deemed amended to
conform to Rule 16b-3.

(b) Any election by an Employee subject to Section 16 of the 1934
Act, pursuant to Paragraph 6(e) or 14 hereof, may be made only during such
times as permitted by Rule 16b-3 and may be disapproved by the Committee at any
time after the election.

<PAGE> 1

EXHIBIT 11
MARSHALL & ILSLEY CORPORATION

COMPUTATION OF NET INCOME PER COMMON SHARE
($000'S, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
PRIMARY:
Weighted average common shares outstanding during
each year......................................... 93,697,513 94,850,595 98,497,435
Incremental shares relating to:
Conversion of preferred stock..................... 3,832,957 3,095,181 1,962,900
Dilutive stock options outstanding at end of each
year and exercised during each year(1)......... 1,226,577 1,474,294 2,212,026
----------- ----------- -----------
Average number of common and common equivalent
shares for primary net income per share........... 98,757,047 99,420,070 102,672,361
=========== =========== ===========
FULLY DILUTED:
Weighted average common shares outstanding during
each year......................................... 93,697,513 94,850,595 98,497,435
Incremental shares relating to:
Conversion of preferred stock..................... 3,832,957 3,095,181 1,962,900
Dilutive stock options outstanding at end of each
year and exercised during each year(2)......... 1,580,124 1,523,584 2,594,292
Conversion of convertible notes................... 3,844,229 4,582,005 5,819,973
----------- ----------- -----------
Average number of common and common equivalent
shares for fully diluted net income per share..... 102,954,823 104,051,365 108,874,600
=========== =========== ===========
</TABLE>
<PAGE> 2

EXHIBIT 11 (CONTINUED)
MARSHALL & ILSLEY CORPORATION

COMPUTATION OF NET INCOME PER COMMON SHARE
($000'S, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
PRIMARY:
Income before extraordinary items and cumulative effect of
changes in accounting principles......................... $193,299 $ 94,398 $171,394
Extraordinary items, net of income taxes................... -- 11,542 --
-------- -------- --------
Net income applicable to common shares..................... $193,299 $105,940 $171,394
======== ======== ========
FULLY DILUTED:
Income before extraordinary items and cumulative effect of
changes in accounting principles......................... $193,299 $ 94,398 $171,394
Add: interest expense, less income tax effect on
convertible notes..................................... 1,859 2,047 2,938
-------- -------- --------
195,158 96,445 174,332
Extraordinary items, net of income taxes................... -- 11,542 --
-------- -------- --------
Net income applicable to common shares..................... $195,158 $107,987 $174,332
======== ======== ========
PER COMMON SHARE AMOUNTS:
Primary:
Income before extraordinary items and cumulative effect
of changes in accounting principles................... $ 1.96 $ 0.95 $ 1.67
Extraordinary items...................................... -- .12 --
-------- -------- --------
Net income................................................. $ 1.96 $ 1.07 $ 1.67
======== ======== ========
Fully diluted:
Income before extraordinary items and cumulative effect
of changes in accounting principles................... $ 1.90 $ 0.93 $ 1.60
Extraordinary items...................................... -- .11 --
-------- -------- --------
Net income................................................. $ 1.90 $ 1.04 $ 1.60
======== ======== ========
</TABLE>

- ---------------
(1) Based on treasury stock method using average market price.

(2) Based on treasury stock method using year-end market price, if higher than
average market price for options outstanding at end of each year and market
price at date of exercise for options exercised during each year.

<PAGE> 1
EXHIBIT 12
MARSHALL & ILSLEY CORPORATION

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
($000'S)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
EARNINGS:
Earnings before income taxes, extraordinary
items and cumulative effect of changes in
accounting principles....................... $299,879 $167,803 $264,584 $231,792 $186,738
Fixed charges, excluding interest on
deposits.................................... 108,683 77,074 47,905 50,687 66,641
Earnings including fixed charges but excluding
interest on deposits........................ 408,562 244,877 312,489 282,479 253,379
Interest on deposits.......................... 331,734 255,861 272,100 334,443 448,757
-------- -------- -------- -------- --------
Earnings including fixed charges and interest
on deposits................................. $740,296 $500,738 $584,589 $616,922 $702,136
======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense:
Borrowings:
Short-term.................................. $ 47,740 $ 39,681 $ 18,010 $ 17,606 $ 32,065
Long-term................................... 53,709 30,537 23,088 26,439 27,770
One-third of rental expense for all operating
leases (the amount deemed representative of
the interest factor)........................ 7,234 6,856 6,807 6,642 6,806
-------- -------- -------- -------- --------
Fixed charges excluding interest on
deposits.................................... 108,683 77,074 47,905 50,687 66,641
Interest on deposits.......................... 331,734 255,861 272,100 334,443 448,757
-------- -------- -------- -------- --------
Fixed charges including interest on
deposits.................................... $440,417 $332,935 $320,005 $385,130 $515,398
======== ======== ======== ======== ========
RATIO OF EARNINGS TO FIXED CHARGES:
Excluding interest on deposits................ 3.76x 3.18x 6.52x 5.57x 3.80x
Including interest on deposits................ 1.68x 1.50x 1.83x 1.60x 1.36x
</TABLE>

<PAGE> 1
Exhibit 21

MARSHALL & ILSLEY CORPORATION

SUBSIDIARIES

February 29, 1996

<TABLE>
<S> <C>
M&I Bank (Ashland) M&I First National Bank
M&I Bank (Superior) M&I Lake Country Bank
M&I Bank of Beloit M&I Madison Bank
M&I Bank of Burlington M&I Marshall & Ilsley Bank
M&I Bank of Delavan M&I Merchants Bank
M&I Bank of Eagle River M&I Mid-State Bank
M&I Bank of Janesville M&I Northern Bank
M&I Bank of LaCrosse M&I Thunderbird Bank
M&I Bank of Mayville M&I Asia Pacific Sdn. Bhd.
M&I Bank of Menomonee Falls M&I Brokerage Services, Inc.
M&I Bank of Racine M&I Capital Markets Group, Inc.
M&I Bank of Shawano M&I Financial Corp.
M&I Bank Fox Valley M&I First National Leasing Corp.
M&I Bank Northeast M&I Insurance Company of Arizona, Inc.
M&I Bank South Central M&I Investment Management Corp.
M&I Bank Southwest M&I Marshall & Ilsley Trust Company of Arizona
M&I Bank S.S.B. M&I Mortgage Corp.
M&I Central Bank & Trust M&I Servicing Corp.
M&I Central State Bank M&I Support Services Corp.
M&I Citizens American Bank Community Life Insurance Company
M&I Community State Bank Marshall & Ilsley Trust Company
M&I First American Bank Marshall & Ilsley Trust Company of Florida
Richter-Schroeder Company, Inc.

</TABLE>

Each subsidiary was incorporated in Wisconsin, except M&I Marshall & Ilsley
Trust Company of Arizona, M&I Insurance Company of Arizona, Inc., M&I
Thunderbird Bank and Community Life Insurance Company, which were incorporated
in Arizona; Marshall & Ilsley Trust Company of Florida, which was incorporated
in Florida; M&I Servicing Corp., which was incorporated in Nevada; M&I First
National Bank, which was organized under the laws of the United States; and
M&I Asia Pacific Sdn. Bhd., which was organized under the laws of Malaysia.

<PAGE> 1
Exhibit 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated January 26, 1996, included in and made a part of the Annual Report on Form
10-K for the year ended December 31, 1995 of Marshall & Ilsley Corporation.

We also consent to the incorporation by reference of such report in the
following Registration Statements of Marshall & Ilsley Corporation: Registration
Statement No. 33-3415 (Form S-8) pertaining to the Marshall & Ilsley Corporation
Retirement Growth Plan; Registration Statement No. 33-33153 (Form S-8)
pertaining to the Marshall & Ilsley Corporation 1989 Executive Stock Option and
Restricted Stock Plan; Registration Statement No. 33-33090 (Form S-8) pertaining
to the Marshall & Ilsley Corporation 1988 Restricted Stock Plan; Registration
Statement No. 33-2642 (Form S-8) pertaining to the Marshall & Ilsley Corporation
1985 Executive Stock Option and Restricted Stock Plan; Registration Statement
No. 2-89605 (Form S-8) pertaining to the Marshall & Ilsley Corporation 1983
Executive Stock Option and Restricted Stock Plan; Registration Statement No.
33-53155 (Form S-8) pertaining to the Marshall & Ilsley Corporation 1993
Executive Stock Option Plan; Registration Statement No. 33-53897 (Form S-8)
pertaining to the stock option plans of Valley Bancorporation assumed by
Marshall & Ilsley Corporation; Registration Statement No. 33-55317 (Form S-8)
pertaining to the Marshall & Ilsley Corporation 1994 Long-Term Incentive Plan
for Executives; Registration Statement No. 33-58787 (Form S-8) pertaining to the
Marshall & Ilsley Corporation 1995 Directors Stock Option Plan; Registration
Statement No. 2-80293 (Form S-3) pertaining to shares of Marshall & Ilsley
Corporation held by those persons named in such Registration Statement;
Registration Statement No. 33-21377 (Form S-3) pertaining to the issuance by
Marshall & Ilsley Corporation of Debt Securities; Registration Statement No.
33-64054 (Form S-3) pertaining to the issuance by Marshall & Ilsley Corporation
of Debt Securities; and Registration Statement No. 33-64425 (Form S-3)
pertaining to the issuance by Marshall & Ilsley Corporation of Debt Securities.

ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin,
February 27, 1996

<PAGE> 1
Exhibit 24

DIRECTOR'S POWER OF ATTORNEY

The undersigned Director of Marshall & Ilsley Corporation, a
Wisconsin corporation, hereby constitutes and designates each of J.B. Wigdale
and M.A. Hatfield, with the power of substitution, the true and lawful
attorney-in-fact of the undersigned to sign for him in his name, the Form 10-K
of Marshall & Ilsley Corporation for its fiscal year ended December 31, 1995 and
any and all amendments and/or supplements to said Form 10-K, generally to do all
such things in his name and behalf in his capacity as a director to enable
Marshall & Ilsley Corporation to comply with the provisions of the Securities
Exchange Act of 1934, as amended, and all requirements of the Securities and
Exchange Commission, and hereby ratifying and confirming his signature as it may
be signed by said attorney-in-fact to said Form 10-K and any and all amendments
and/or supplements thereto.

Dated this 15th day of February, 1996.

/s/ Richard A. Abdoo
--------------------
Richard A. Abdoo

<PAGE> 2
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ J.P. Bolduc
------------------
J.P. Bolduc

<PAGE> 3
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ Wendell F. Bueche
----------------------
Wendell F. Bueche

<PAGE> 4
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ G.H. Gunnlaugsson
-----------------------
G.H. Gunnlaugsson

<PAGE> 5
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ Burleigh E. Jacobs
------------------------
Burleigh E. Jacobs

<PAGE> 6
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ Jack F. Kellner
---------------------
Jack F. Kellner

<PAGE> 7
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ D.J. Kuester
------------------
D.J. Kuester

<PAGE> 8
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ Edward L. Meyer, Jr.
-------------------------
Edward L. Meyer, Jr.

<PAGE> 9
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ Don R. O'Hare
-------------------
Don R. O'Hare

<PAGE> 10
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ Oscar C. Boldt
-------------------
Oscar C. Boldt

<PAGE> 11
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ Peter M. Platten, III
--------------------------
Peter M. Platten, III

<PAGE> 12
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ Stuart W. Tisdale
----------------------
Stuart W. Tisdale

<PAGE> 13
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ J.B. Wigdale
------------------
J.B. Wigdale

<PAGE> 14
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ James O. Wright
--------------------
James O. Wright

<PAGE> 15
DIRECTOR'S POWER OF ATTORNEY

Dated this 15th day of February, 1996.

/s/ Gus A. Zuehlke
--------------------
Gus A. Zuehlke

<ARTICLE> 9 EXHIBIT 27
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 745911
<INT-BEARING-DEPOSITS> 28812
<FED-FUNDS-SOLD> 66618
<TRADING-ASSETS> 38601
<INVESTMENTS-HELD-FOR-SALE> 2458600
<INVESTMENTS-CARRYING> 450457
<INVESTMENTS-MARKET> 453240
<LOANS> 8868902
<ALLOWANCE> 161430
<TOTAL-ASSETS> 13343097
<DEPOSITS> 10280777
<SHORT-TERM> 1015022
<LIABILITIES-OTHER> 367131
<LONG-TERM> 422550
0
349
<COMMON> 99494
<OTHER-SE> 1157774
<TOTAL-LIABILITIES-AND-EQUITY> 13343097
<INTEREST-LOAN> 774256
<INTEREST-INVEST> 136980
<INTEREST-OTHER> 13424
<INTEREST-TOTAL> 924660
<INTEREST-DEPOSIT> 331734
<INTEREST-EXPENSE> 101449
<INTEREST-INCOME-NET> 491477
<LOAN-LOSSES> 16158
<SECURITIES-GAINS> 4555
<EXPENSE-OTHER> 599622
<INCOME-PRETAX> 299879
<INCOME-PRE-EXTRAORDINARY> 193299
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 193299
<EPS-PRIMARY> 1.96
<EPS-DILUTED> 1.90
<YIELD-ACTUAL> 4.30
<LOANS-NON> 50598
<LOANS-PAST> 8184
<LOANS-TROUBLED> 3087
<LOANS-PROBLEM> 61869
<ALLOWANCE-OPEN> 153961
<CHARGE-OFFS> 14615
<RECOVERIES> 5358
<ALLOWANCE-CLOSE> 161430
<ALLOWANCE-DOMESTIC> 161430
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0

</TABLE>