Marshall & Ilsley (MI) is the country’s 19th largest bank in terms of assets, with over $56 billion in assets, and 20th in terms of market capitalization. M&I still operates primarily as a regional bank, with over more than half of its 300+ branches operating in Wisconsin (giving it the largest presence in the state of any bank). The bank has recently been expanding into other areas with high growth rates, like St. Louis, Minneapolis, and Phoenix. As a smaller bank, M&I has traditionally relied on its customer service and small-town-bank feel in cases where it cannot compete with the Interest Rates of larger banks. To this end, the company’s management has suggested it will attempt to broaden its exposure in the high-growth areas instead of trying to expand beyond the nine states in which it currently operates branches. While some banks were hard hit during the July '07 credit crunch, Marshall & Ilsley emerged relatively unscathed. Although the increased their provisions for loan and lease foreclosures to just over 1 % of total loans (about double from the previous year), M&I's net interest income was still up 2 % in the third quarter of '07 compared to the same quarter of the year before. Additionally, more than 60% of M&I's outstanding loans are commercial, meaning that the plight of individuals with overstretched credit forced to foreclose would not affect M&I as drastically as other regional banks that cater more towards individuals. A final factor affecting the performance of M%I in the near future is the result of spinning off Metavante, the segment of the bank (comprising approximately 20% of total revenue) in charge of data processing services. Despite the previous success of the Metavante segment, M&I could use the cash from the transaction to increase its other acquisitions and offset the lost revenue. 
M&I's net annual income has continued to rise at a fairly steady rate over the past five years (14.4% in 2006) as the company expands its branch operations to other states.
Although M&I is taking further steps to expand beyond its Wisconsin roots, the bank still operates approximately 60% of its branch offices in its home state. As a big supplier of small business loans, any event or long-term trend that would adversely affect the economy of Wisconsin would have an overly large effect on M&I compared to its competitors.
The stock market as a whole has suffered some drastic shocks due to an overdrawn credit market and increased rate of mortgage foreclosures. While M&I has traditionally been known for a relatively risk-averse credit team and balanced credit portfolio, another stretch of market uncertainty like the one seen at the end of summer 2007 would hurt their earnings, along with those of the industry as a whole.
The federal funds rate is the interest rate at which banks lend money to each other. It is set by the Federal Reserve Bank in response to various economic factors. A higher federal funds rate would correspond to a higher saving/lending rate for a bank, meaning that more people would be willing to save but fewer willing to borrow, whereas a lower rate would lead to more borrowing but less money being deposited for savings. The Fed has not changed the federal funds rate as often lately, but changes have big effects on banks.
As online-only banks like Capital One gain greater prominence in an increasingly-digital world, banks that rely on customer service and friendly bank tellers at local branches will have a harder time competing with the larger banks because of higher capital costs.
Marshall & Ilsley ranked in the top 20 in income ($808 million) in 2006 among "regional" banks in the United States.
The top 5 regional banks, by income: