<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 1, 1997
MARSHALL & ILSLEY CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 0-1220 39-0968604
- ---------------------------------- ---------------- ----------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) 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
<PAGE>
<PAGE>
Item 2. Acquisition or Disposition of Assets.
-------------------------------------
On October 1, 1997, Marshall & Ilsley Corporation (the "Corporation" or
"M&I") acquired Security Capital Corporation ("Security") pursuant to an
Agreement and Plan of Merger dated as of March 14, 1997 (the "Merger
Agreement"). Security merged with and into the Corporation (the "Merger"), and
the outstanding shares of Security Common Stock were converted in the Merger
into an aggregate of approximately 12,327,390 shares of Corporation Common Stock
and approximately $376,335,605 in cash. The cash portion of the consideration
was funded from the available cash of the combined entity. Security
shareholders were entitled to elect what form of consideration they received,
subject to limitations set forth in the Merger Agreement. Information concerning
the consideration to be received by the former Security shareholders is included
in the Corporation's press release dated October 1, 1997 announcing completion
of the Merger which is attached as an exhibit hereto and is incorporated herein
by reference.
Certain other information regarding the Merger, the Corporation and
Security, including a description of the assets involved, the nature and amount
of consideration paid by the Corporation, the method used for determining the
amount of such consideration, and the nature of any material relationship
between Security and the Corporation, is incorporated by reference herein to
certain sections of the Corporation's Registration Statement on Form S-4 (Reg.
No. 333-28761) which sections are identified in the exhibit list below.
Item 7. Financial Statements and Exhibits.
----------------------------------
(a) Financial Statements of Business Acquired
The following financial statements of Security are incorporated
herein by reference to Security's Annual Report on Form 10-K
(File No. 0-22588) for the Fiscal Year Ended June 30, 1997:
(i) Audited Consolidated Statements of Financial Condition
of Security as of June 30, 1997
(ii) Audited Consolidated Statements of Income of Security
for the year ended June 30, 1997
(iii) Independent Auditors' Report of KPMG Peat Marwick LLP.
(b) Unaudited Pro Forma Financial Information
(i) Unaudited Pro Forma Condensed Balance Sheet as of
June 30, 1997 (attached as Exhibit 99.5 hereto and
incorporated herein by reference)
<PAGE>
<PAGE>
(ii) Unaudited Pro Forma Condensed Statement of Income
for the twelve months ended December 31, 1996
(incorporated by reference to the Corporation's
Registration Statement on Form S-4
(Reg. No. 333-28761))
(iii) Unaudited Pro Forma Condensed Statement of Income
for the six months ended June 30, 1997 (attached
as Exhibit 99.5 hereto and incorporated herein
by reference)
(c) Exhibits
Exhibit No. Description
----------- -----------
2 Agreement and Plan of Merger dated as of
March 14, 1997 between the Corporation and
Security. (Incorporated by reference to the
Corporation's Current Report on Form 8-K
(File No. 0-1220) dated March 14, 1997)
23 Consent of KPMG Peat Marwick LLP
99.1 Audited Consolidated Statements of Financial
Condition of Security as of June 30, 1997;
Audited Consolidated Statements of Income of
Security for year ended June 30, 1997; Audited
Consolidated Statements of Cash Flows of
Security for the year ended June 30, 1997; and
Independent Auditors' Report of KPMG Peat
Marwick LLP (Incorporated by reference to
Security's Annual Report on Form 10-K
(File No. 0-22588) for the Fiscal Year Ended
June 30, 1997)
99.2 Unaudited Pro Forma Condensed Statement of
Income for twelve months ended December 31,
1996 (Incorporated by reference to the
Corporation's Registration Statement on
Form S-4 (Reg. No. 333-28761))
99.3 The following sections of the Corporation's
Registration Statement on Form S-4
(Reg. No. 333-28761) which are incorporated
herein by reference: "The Merger" and "Certain
Related Transactions"
99.4 Press release dated October 1, 1997 announcing
completion of the Corporation's Merger with
Security
99.5 Unaudited Pro Forma Condensed Balance Sheet as
of June 30, 1997 and Unaudited Pro Forma
Condensed Statement of Income for the six
months ended June 30, 1997
MW1-94865-1
<PAGE>
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 3, 1997 MARSHALL & ILSLEY CORPORATION
By: /s/ M.A. Hatfield
-------------------------------------
M.A. Hatfield
Secretary
MW1-94865-1
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2 Agreement and Plan of Merger dated as of March 14, 1997
between the Corporation and Security. (Incorporated by
reference to the Corporation's Current Report on
Form 8-K (File No. 0-1220) dated March 14, 1997)
23 Consent of KPMG Peat Marwick LLP
99.1 Audited Consolidated Statements of Financial Condition
of Security as of June 30, 1997; Audited Consolidated
Statements of Income of Security for year ended
June 30, 1997; Audited Consolidated Statements of
Cash Flows of Security for the year ended June 30, 1997;
and Independent Auditors' Report of KPMG Peat
Marwick LLP (Incorporated by reference to Security's
Annual Report on Form 10-K (File No. 0-22588) for the
Fiscal Year Ended June 30, 1997)
99.2 Unaudited Pro Forma Condensed Statement of Income for
twelve months ended December 31, 1996 (Incorporated by
reference to the Corporation's Registration Statement
on Form S-4 (Reg. No. 333-28761))
99.3 The following sections of the Corporation's Registration
Statement on Form S-4 (Reg. No. 333-28761) which are
incorporated herein by reference: "The Merger" and
"Certain Related Transactions"
99.4 Press release dated October 1, 1997 announcing
completion of the Corporation's Merger with Security
99.5 Unaudited Pro Forma Condensed Balance Sheet as of
June 30, 1997 and Unaudited Pro Forma Condensed
Statement of Income for the six months ended
June 30, 1997
MW1-94865-1
<PAGE>
Exhibit 23
Consent of Independent Certified Public Accountants
The Board of Directors
Security Capital Corporation:
We consent to the inclusion of our report dated July 15, 1997, with respect to
the consolidated statements of financial condition of Security Capital
Corporation and Subsidiaries as of June 30, 1997 and 1996, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the years in the three-year period ended June 30, 1997, which report appears
in the Form 8-K of Marshall & Ilsley Corporation dated October 1, 1997.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Milwaukee, Wisconsin
October 7, 1997
<PAGE>
Exhibit 99.4
Company Press Release
MARSHALL & ILSLEY CORPORATION COMPLETES MERGER WITH
SECURITY CAPITAL CORPORATION
MILWAUKEE -- (BUSINESS WIRE) -- Oct. 1, 1997 -- Marshall & Ilsley Corporation
announced today the completion of its merger with Security Capital
Corporation.
According to the terms of the merger, Security Capital Corporation
shareholders who have made a valid stock election will receive approximately
90 percent stock and 10 percent cash, which is equivalent to a stock
distribution of 1.9494 shares of Marshall & Ilsley Corporation Common Stock
and $10.92 in cash for each share of Security Capital Corporation Common
Stock. The distribution will be adjusted as necessary to reflect the final
election tabulation. As stipulated in the merger agreement, Security Capital
Corporation shareholders who have made a cash election, no election, or who
have not otherwise made a valid stock election will receive $111.06 in cash
for each Security Capital Corporation share held. Those shareholders who
chose the mixed election will receive the agreed upon 1.3561 shares of M&I
stock and $41.40 cash for each of their Security shares. The transaction is
structured as a tax-free exchange for the portion of the distribution that
shareholders receive in stock.
Marshall & Ilsley Corporation, headquartered in Milwaukee, Wisconsin, has $19
billion in assets. The Corporation has 26 affiliate banks in Wisconsin with
more than 225 offices and a bank in Phoenix, Arizona with 12 offices. In
addition, the holding company owns and operates 54 offices throughout the
country that provide trust and investment management, equipment leasing,
mortgage banking, venture capital and data processing. Marshall & Ilsley
Corporation stock is traded on NASDAQ under the symbol "MRIS."
###
- -------------------------------------
Contact:
Marshall & Ilsley Corp., Milwaukee
M.A. Hatfield, 414/765-7809
- -------------------------------------
MW1-94865-1
<PAGE>
Exhibit 99.5
UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
The following unaudited Pro Forma Condensed Financial Information and
explanatory notes are presented to show the impact on the historical
financial position and results of operations of M&I from the Merger with
Security.
In accordance with the Merger Agreement, each share of Security's
Common Stock outstanding will be converted in the Merger into the right to
receive, at the election of the holder, M&I Common Stock or cash or some
combination thereof provided that, the aggregate number of shares of M&I
Common Stock issued in the Merger is equal to or nearly equal to 12,327,390
shares and the cash consideration is equal to or nearly equal to
$376,335,605.
The unaudited Pro Forma Condensed Financial Information reflects the
Merger using the purchase method of accounting. The cash component of the
purchase price was funded by the liquidation of investment securities held by
Security as available for sale.
The unaudited Pro Forma Condensed Balance Sheet assumes that the Merger
was consummated on June 30, 1997. Certain amounts in Security's historical
balance sheet as shown have been reclassified to conform to M&I's
presentation. The unaudited Pro Forma Condensed Statements of Income assumes
that the Merger was consummated on January 1, 1997 and reflects the
consolidation of the results of operations of M&I and Security for the six
months ended June 30, 1997.
The unaudited Pro Forma Condensed Financial Information reflects the
Merger based on preliminary purchase accounting adjustments. Estimates
relating to the fair value of certain assets, liabilities and other items
have been made as more fully described in the Notes to the unaudited Pro
Forma Condensed Financial Information. Actual adjustments, which may include
adjustments to additional assets, liabilities and other items, will be made
on the basis of appraisals and evaluations as of October 1, 1997, and,
therefore, will differ from those reflected in the unaudited Pro Forma
Condensed Financial Information.
Regulatory approvals of the Merger were conditioned upon divestitures
of certain bank branches. No adjustment for divestitures has been included
in the unaudited Pro Forma Condensed Financial Information. Seven branches
with total deposits of approximately $128 million will be divested in
conjunction with the Merger.
The combined company expects to achieve substantial Merger benefits
primarily in the area of operating cost savings. The unaudited pro forma
earnings, which do not reflect any direct costs or potential savings which
are expected to result from the consolidation of operations of M&I and
Security, are not indicative of the results of future operations. No
assurances can be given with respect to the ultimate level of expense savings
to be realized.
The following information should be read in conjunction with and is
qualified in its entirety by the consolidated financial statements and
accompanying notes of M&I and Security.
The unaudited Pro Forma Condensed Financial Information is intended for
information purposes and is not necessarily indicative of the future
financial position or future results of the combined company or of the
financial position or the results of operations of the combined company that
would have actually occurred had the Merger been in effect as of the date or
for the period presented.
<PAGE>
<PAGE>
PRO FORMA CONDENSED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
At June 30, 1997
----------------------------------------------------------------------------
M&I
and
Security Pro Forma Pro Forma
M&I Security Combined Adjustments Combined
ASSETS ------------ ------------ ------------ ------------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $930,595 $32,110 $962,705 $962,705
Trading securities & other
short-term investments 88,713 -- 88,713 88,713
Investment securities:
Available for sale 2,985,904 721,714 3,707,618 (376,336) (1)(2) 3,331,282
Held to maturity 850,339 -- 850,339 850,339
Loans and leases 9,912,723 2,820,456 12,733,179 40,050 (3) 12,773,229
Less: Allowance for loan losses 155,620 40,632 196,252 196,252
------------ ------------ ------------ ------------ ------------
Net loans and leases 9,757,103 2,779,824 12,536,927 40,050 12,576,977
Premises and equipment, net 319,354 23,775 343,129 (6,170) (4) 336,959
Intangibles 71,263 2,479 73,742 318,325 (1)(3)(4)(5) 392,067
Other assets 411,393 125,002 536,395 8,023 (5) 544,418
------------ ------------ ------------ ------------ ------------
Total Assets $15,414,664 $3,684,904 $19,099,568 ($16,108) $19,083,460
============ ============ ============ ============ ============
LIABILITIES and SHAREHOLDERS' EQUITY
Deposits
Noninterest bearing $2,443,022 $58,009 $2,501,031 $2,501,031
Interest bearing 8,740,638 2,289,405 11,030,043 11,030,043
------------ ------------ ------------ ------------ ------------
Total deposits 11,183,660 2,347,414 13,531,074 -- 13,531,074
Total borrowings 2,486,110 652,354 3,138,464 3,138,464
Accrued expenses and
other liabilities 409,749 90,155 499,904 118,907 (1)(6) 618,811
------------ ------------ ------------ ------------ ------------
Total liabilities 14,079,519 3,089,923 17,169,442 118,907 17,288,349
Shareholders' equity
Preferred stock 685 -- 685
Common stock 99,494 10,810 110,304 1,518 (1) 111,822
Additional paid-in capital 207,901 261,630 469,531 189,784 (1) 659,315
Retained earnings 1,283,797 413,878 1,697,675 (413,878) (1) 1,283,797
Unrealized gain on
securities available
for sale, net of tax 28,008 10,072 38,080 (10,072) (1) 28,008
Less:
Treasury stock, at cost 283,686 80,944 364,630 (80,944) (1) 283,686
Unearned ESOP Compensation -- 13,872 13,872 (13,872) (1) --
Other Deferred Compensation 1,054 6,593 7,647 (2,817) (1) 4,830
------------ ------------ ------------ ------------ ------------
Total shareholders' equity 1,335,145 594,981 1,930,126 (135,015) 1,795,111
------------ ------------ ------------ ------------ ------------
Total Liabilities and
Shareholders' Equity $15,414,664 $3,684,904 $19,099,568 ($16,108) $19,083,460
============ ============ ============ ============ ============
See Notes to the Unaudited Pro Forma Condensed Financial Information
</TABLE>
<PAGE>
<PAGE>
PRO FORMA CONDENSED STATEMENT OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
For the six months ended June 30, 1997
----------------------------------------------------------------------
M&I
and
Security Pro Forma Pro Forma
M&I Security Combined Adjustments Combined
------------ ------------ ------------ -------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Interest income
Loans and leases $399,215 $114,460 $513,675 ($1,430) (8) $512,245
Investment securities 119,916 23,048 142,964 (13,002) (9)(10) 129,962
Trading securities and other
short-term investments 6,072 407 6,479 6,479
------------ ------------ ------------ ------------ ------------
Total interest income 525,203 137,915 663,118 (14,432) 648,686
Interest expense:
Deposits 193,039 54,123 247,162 247,162
Borrowings 69,282 19,186 88,468 88,468
------------ ------------ ------------ ------------ ------------
Total interest expense: 262,321 73,309 335,630 -- 335,630
------------ ------------ ------------ ------------ ------------
Net interest income 262,882 64,606 327,488 (14,432) 313,056
Provision for loan losses 8,617 -- 8,617 8,617
------------ ------------ ------------ ------------ ------------
Net interest income after
provision for losses 254,265 64,606 318,871 (14,432) 304,439
Other income
Data processing services 162,421 -- 162,421 162,421
Trust services 37,729 -- 37,729 37,729
Securities gains (losses) 816 -- 816
Other,net 75,216 11,301 86,517 86,517
------------ ------------ ------------ ------------ ------------
Total other income 276,182 11,301 287,483 -- 287,483
Other expense
Salaries and employee benefits 213,264 18,667 231,931 231,931
Net occupancy 20,022 2,470 22,492 22,492
Equipment 42,442 1,274 43,716 43,716
Amortization 6,064 387 6,451 12,224 (11) 18,675
Other 81,502 12,129 93,631 93,631
------------ ------------ ------------ ------------ ------------
Total other expense 363,294 34,927 398,221 12,224 410,445
------------ ------------ ------------ ------------ ------------
Income before income taxes 167,153 40,980 208,133 (26,656) 181,477
Provision for income taxes 55,732 12,901 68,633 (8,474) (12) 60,159
------------ ------------ ------------ ------------ ------------
Net income $111,421 $28,079 $139,500 ($18,182) $121,318
============ ============ ============ ============ ============
Net Income Per Common Share (13):
Primary $1.15 $3.00 $1.10
Fully diluted $1.14 $2.99 $1.09
See Notes to the Unaudited Pro Forma Condensed Financial information
</TABLE>
<PAGE>
<PAGE>
NOTES TO THE UNAUDITED PRO FORMA
CONDENSED FINANCIAL INFORMATION
(Dollars in Thousands, Shares and Per Share Amounts Actuals)
The unaudited Pro Forma Condensed Financial Information is based on the
following adjustments and related assumptions. The actual purchase
accounting adjustments will be made on the basis of appraisals and
evaluations as of October 1, 1997, and, therefore, will differ from those
reflected in the unaudited Pro Forma Condensed Financial Information.
A summary of the purchase accounting adjustments to record the Merger used
in preparation of the unaudited Pro Forma Condensed Balance Sheet is as
follows:
<TABLE>
<CAPTION>
Increase (Decrease)
------------------------------------------------------------------------------------------------------
Investment Accrued
Adjustment Securities Premises and Expenses
Reference Available Equipment, Other and Other Shareholders'
Number For Sale Loans Net Intangibles Assets Liabilities Equity
---------- ------------ ------------ ------------ ------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
(1)(2) ($376,336) -- -- $227,449 -- ($13,872) ($135,015)
(3) -- 40,050 -- (40,050) -- -- --
(4) -- -- (6,170) 6,170 -- -- --
(5) -- -- -- (8,023) 8,023 -- --
(6) -- -- -- 132,779 -- 132,779 --
------------ ------------ ------------ ------------- ----------- ----------- -------------
($376,336) $40,050 ($6,170) $318,325 $8,023 $118,907 ($135,015)
============ ============ ============ ============= =========== =========== =============
</TABLE>
The purchase accounting adjustments to record the Merger used in the
preparation of the unaudited Pro Forma Condensed Balance Sheets are:
<TABLE>
<CAPTION>
June 30, 1997
---------------------------
<S> <C> <C>
(1) Security Capital Corporation at:
Common Stock issued 10,810,000
Treasury stock to be canceled (1,601,668)
Restricted stock unawarded to be canceled (112,700)
------------
Security Common Stock outstanding as adjusted (a) 9,095,632
Implied Exchange Ratio 1.3553
------------
M&I Common Stock to be issued 12,327,390
============
Assumed M&I Common Stock consideration $459,966
Cash Consideration 376,336
------------
Assumed total consideration $836,302
Historical net assets acquired:
Total stockholders' equity $594,981
Assumed payout of ESOP note payable 13,872
Accrue payout of nonqualified stock options (46,253)
------------
Assumed historical net assets acquired (b) 562,600
------------
Assumed premium to allocate $273,702
============
Adjustments to fair value of net assets acquired:
Premises and equipment ($6,170)
Loans 40,050
Other liabilities (86,526)
Other assets 8,023
Intangibles 318,325
------------
Assumed adjustments to fair value of net
assets acquired $273,702
============
</TABLE>
(a) The number of shares of Security's Common Stock to be exchanged
were those outstanding on October 1, 1997. The number of Security's shares
outstanding on June 30, 1997, as adjusted, has been used in the pro forma
computations.
(b) The historical net assets acquired were determined as at October
1, 1997. The historical net assets, as adjusted, for Security as of June 30,
1997, has been used in the pro forma computations.
<PAGE>
<PAGE>
NOTES TO THE UNAUDITED PRO FORMA
CONDENSED FINANCIAL INFORMATION - (Continued)
(2) The unaudited Pro Forma Condensed Financial Information assumes the
funding of the cash component of the consideration is provided by the
liquidation of investment securities available for sale.
(3) Reflects the preliminary estimate of premium associated with
establishing fair value for loans and leases.
(4) Reflects the preliminary estimate of writedowns associated with
duplicate facilities, equipment and leasehold interests to be disposed
of.
(5) Represents the estimated net tax asset associated with adjustments to
fair value of net assets acquired and the accrued payout for
nonqualified stock options assuming an income tax rate of 40% along
with the write-down of prepaid expenses which have no future benefit.
(6) Reflects the preliminary estimates of legal, accounting and investment
bankers' fees associated with the Merger, costs to convert Security's
processing systems to M&I systems, severance benefits associated with
the elimination of duplicate employment positions at Security,
incentive stock option plans which will roll into M&I and the accrued
payout for nonqualified stock options.
(7) Represents preliminary estimates of identifiable intangibles (mortgage
servicing rights and core deposit premiums) and goodwill. Since the
final determination of adjustments to assets and liabilities will be
made based upon the fair values as of October 1, 1997, and after
appraisals and evaluations are complete, the final amounts will differ
from the estimates provided herein.
The purchase accounting adjustments to record the Merger used in the
preparation of the unaudited Pro Forma Condensed Statements of Income are
summarized below:
Six Months
Ended
June 30, 1997
--------------
(8) Reflects the estimated amortization of the premium
related to loans and leases line basis over the
estimated maturities of the affected loans and leases
using average life of 14 years ($1,430)
(9) Reflects the estimated reduction in interest income
from investment securities liquidated to fund the
cash component of the Merger consideration assuming
an interest rate of 6.75% ($12,701)
(10) Reflects the estimated amortization of the premium
related to investment securities assumed to be retained
on a straight-line basis over the estimated maturities
of the affected securities using an estimated weighted
average life of 3.4 years ($301)
--------------
Estimated total impact on interest income ($14,432)
==============
(11) Reflects the amortization of identifiable intangibles and
goodwill assuming the following estimated lives (in years):
Mortgage servicing 10 years accelerated $683
Core deposit premium 10 years accelerated 6,072
Goodwill 25 years straight-line 5,469
--------------
$12,224
==============
(12) Income tax expense on pro forma adjustments is reflected using a 40%
tax rate.
(13) The pro forma earnings per share include the effect of the adjustments
described above, the issuance of 12,327,390 shares of M&I Common Stock
and the common stock equivalents associated with incentive stock option
plans which will roll into M&I and are assumed to be outstanding
throughout the periods presented.
