<PAGE>  1
==========================================================================

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                  Form 10-Q

 (Mark One)

  [X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended June 30, 2005

                                      OR

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

           For the transition period from __________ to __________

                       Commission file number  1-15403

                        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

                                     None
             (Former name, former address and former fiscal year,
                        if changed since last report)

       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 whether the registrant is an accelerated
filer (as defined by Rule 12b-2 of the Exchange Act).
                                             Yes   [X]       No   [ ]

       Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

                                                   Outstanding at
                  Class                             July 31, 2005
                  -----                           ----------------
     Common Stock, $1.00 Par Value                   232,803,375

==========================================================================
<PAGE>  2
                        PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                           MARSHALL & ILSLEY CORPORATION
                     CONSOLIDATED BALANCE SHEETS (Unaudited)
                           ($000's except share data)

                                                               June 30,    December 31,      June 30,
                                                                 2005          2004            2004
                                                            -------------- ------------- --------------
<S>                                                       <C>            <C>            <C>
Assets
------
Cash and cash equivalents:
  Cash and due from banks                                  $     976,073  $     838,668  $     823,790
  Federal funds sold and security resale agreements              217,139         72,515        259,964
  Money market funds                                              51,410         76,955         52,144
                                                            -------------  -------------  -------------
Total cash and cash equivalents                                1,244,622        988,138      1,135,898

Investment securities:
  Trading securities, at market value                             22,539         18,418         27,982
  Interest bearing deposits at other banks                        14,362         23,105         24,091
  Available for sale, at market value                          5,572,628      5,358,999      5,144,611
  Held to maturity, market value $698,534
    ($765,101 December 31, and $802,354 June 30, 2004)           668,107        726,386        769,899
                                                            -------------  -------------  -------------
Total investment securities                                    6,277,636      6,126,908      5,966,583

Loans held for sale                                              193,092         81,662         84,301

Loans and leases:
  Loans and leases, net of unearned income                    31,952,759     29,455,110     27,111,014
Less: Allowance for loan and lease losses                        360,138        358,110        357,898
                                                            -------------  -------------  -------------
  Net loans and leases                                        31,592,621     29,097,000     26,753,116

Premises and equipment, net                                      448,730        467,225        433,562
Goodwill and other intangibles                                 2,159,624      2,126,433      1,269,059
Accrued interest and other assets                              1,567,395      1,550,036      1,429,099
                                                            -------------  -------------  -------------
Total Assets                                               $  43,483,720  $  40,437,402  $  37,071,618
                                                            =============  =============  =============

Liabilities and Shareholders' Equity
------------------------------------
Deposits:
  Noninterest bearing                                      $   5,088,947  $   4,888,426  $   4,709,873
  Interest bearing                                            20,972,493     21,566,661     20,515,413
                                                            -------------  -------------  -------------
Total deposits                                                26,061,440     26,455,087     25,225,286

Federal funds purchased and security repurchase agreements     1,705,817      1,488,855      1,263,129
Other short-term borrowings                                    3,456,383      2,041,181      2,298,897
Accrued expenses and other liabilities                         1,576,211      1,535,866      1,149,379
Long-term borrowings                                           6,470,684      5,026,599      3,700,764
                                                            -------------  -------------  -------------
Total liabilities                                             39,270,535     36,547,588     33,637,455

Shareholders' equity:
---------------------
  Series A convertible preferred stock, $1.00 par value;
    2,000,000 shares authorized                                       --             --             --
  Common stock, $1.00 par value; 244,432,222 shares
    issued (244,432,222 shares at December 31, 2004
    and 240,832,522 shares at June 30, 2004)                     244,432        244,432        240,833
  Additional paid-in capital                                     676,386        671,815        549,579
  Retained earnings                                            3,763,977      3,508,477      3,272,646
  Accumulated other comprehensive income,
    net of related taxes                                          15,508         23,338        (51,912)
  Less: Treasury stock, at cost: 14,782,208 shares
           (17,091,528 December 31, and
            18,056,286 June 30, 2004)                            448,212        518,231        547,469
            Deferred compensation                                 38,906         40,017         29,514
                                                            -------------  -------------  -------------
Total shareholders' equity                                     4,213,185      3,889,814      3,434,163
                                                            -------------  -------------  -------------
Total Liabilities and Shareholders' Equity                 $  43,483,720  $  40,437,402  $  37,071,618
                                                            =============  =============  =============

See notes to financial statements.
</TABLE>

<PAGE>  3
<TABLE>
<CAPTION>
                             MARSHALL & ILSLEY CORPORATION
                    CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                             ($000's except per share data)

                                                                  Three Months Ended
                                                                       June 30,
                                                             ----------------------------
                                                                  2005           2004
                                                             -------------  -------------
<S>                                                        <C>            <C>
Interest income
---------------
  Loans and leases                                          $     461,532  $     334,525
  Investment securities:
    Taxable                                                        53,265         48,623
    Exempt from federal income taxes                               16,103         14,422
  Trading securities                                                   47             55
  Short-term investments                                            2,294            404
                                                             -------------  -------------
Total interest income                                             533,241        398,029

Interest expense
----------------
  Deposits                                                        122,803         57,999
  Short-term borrowings                                            28,391         14,260
  Long-term borrowings                                             77,284         41,762
                                                             -------------  -------------
Total interest expense                                            228,478        114,021

Net interest income                                               304,763        284,008
Provision for loan and lease losses                                13,725          9,227
                                                             -------------  -------------
Net interest income after provision
  for loan and lease losses                                       291,038        274,781

Other income
------------
  Data processing services                                        271,664        197,344
  Item processing                                                  10,716         10,902
  Trust services                                                   41,107         37,922
  Service charges on deposits                                      23,936         25,083
  Gains on sale of mortgage loans                                   9,489          8,976
  Other mortgage banking revenue                                      984          2,725
  Net investment securities gains                                  29,422             77
  Life insurance revenue                                            8,055          7,096
  Other                                                            47,193         39,860
                                                             -------------  -------------
Total other income                                                442,566        329,985

Other expense
-------------
  Salaries and employee benefits                                  262,389        211,881
  Net occupancy                                                    20,789         18,238
  Equipment                                                        30,076         26,244
  Software expenses                                                14,143         12,481
  Processing charges                                               13,517         11,812
  Supplies and printing                                             5,791          5,806
  Professional services                                            12,802         10,288
  Shipping and handling                                            16,751         18,087
  Amortization of intangibles                                       8,106          5,438
  Other                                                            68,204         54,403
                                                             -------------  -------------
Total other expense                                               452,568        374,678

Income before income taxes                                        281,036        230,088
Provision for income taxes                                         92,549         78,379
                                                             -------------  -------------
Net income                                                  $     188,487  $     151,709
                                                             =============  =============

Net income per common share
  Basic                                                     $        0.82  $        0.68
  Diluted                                                            0.81           0.67

Dividends paid per common share                             $       0.240  $       0.210

Weighted average common shares outstanding (000's):
  Basic                                                           228,630        221,950
  Diluted                                                         232,747        225,502

See notes to financial statements.
</TABLE>

<PAGE>  4
<TABLE>
<CAPTION>
                             MARSHALL & ILSLEY CORPORATION
                    CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                             ($000's except per share data)

                                                                  Six Months Ended
                                                                       June 30,
                                                             ----------------------------
                                                                  2005           2004
                                                             -------------  -------------
<S>                                                        <C>            <C>
Interest income
---------------
  Loans and leases                                          $     878,376  $     660,477
  Investment securities:
    Taxable                                                       105,208         96,940
    Exempt from federal income taxes                               31,510         28,593
  Trading securities                                                  116            145
  Short-term investments                                            3,638            947
                                                             -------------  -------------
Total interest income                                           1,018,848        787,102

Interest expense
  Deposits                                                        226,293        113,548
  Short-term borrowings                                            50,353         30,096
  Long-term borrowings                                            145,658         80,814
                                                             -------------  -------------
Total interest expense                                            422,304        224,458

Net interest income                                               596,544        562,644
Provision for loan and lease losses                                21,851         18,254
                                                             -------------  -------------
Net interest income after provision
  for loan and lease losses                                       574,693        544,390

Other income
------------
  Data processing services                                        544,031        383,468
  Item processing                                                  21,281         22,334
  Trust services                                                   81,453         74,172
  Service charges on deposits                                      47,506         50,606
  Gains on sale of mortgage loans                                  16,426         14,175
  Other mortgage banking revenue                                    2,017          4,490
  Net investment securities gains (losses)                         35,271           (452)
  Life insurance revenue                                           14,264         13,776
  Other                                                            89,851         80,845
                                                             -------------  -------------
Total other income                                                852,100        643,414

Other expense
-------------
  Salaries and employee benefits                                  500,921        415,809
  Net occupancy                                                    43,153         37,433
  Equipment                                                        61,086         54,412
  Software expenses                                                27,495         23,706
  Processing charges                                               28,442         24,861
  Supplies and printing                                            12,287         11,512
  Professional services                                            23,688         19,360
  Shipping and handling                                            36,386         34,511
  Amortization of intangibles                                      16,198         10,890
  Other                                                           139,358        104,512
                                                             -------------  -------------
Total other expense                                               889,014        737,006

Income before income taxes                                        537,779        450,798
Provision for income taxes                                        179,712        152,980
                                                             -------------  -------------
Net income                                                  $     358,067  $     297,818
                                                             =============  =============

Net income per common share
  Basic                                                     $        1.57  $        1.34
  Diluted                                                            1.54           1.32

Dividends paid per common share                             $       0.450  $       0.390

Weighted average common shares outstanding (000's) :
  Basic                                                           228,097        222,125
  Diluted                                                         232,125        225,764

See notes to financial statements.
</TABLE>

<PAGE>  5
<TABLE>
<CAPTION>
                             MARSHALL & ILSLEY CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                     ($000's)

                                                                  Six Months Ended
                                                                       June 30,
                                                             ----------------------------
                                                                  2005           2004
                                                             -------------  -------------
<S>                                                        <C>            <C>
Net Cash Provided by Operating Activities                   $     349,951  $     418,748

Cash Flows From Investing Activities:
-------------------------------------
  Proceeds from sales of securities available for sale             82,409          8,890
  Proceeds from maturities of securities available for sale       575,259        740,921
  Proceeds from maturities of securities held to maturity          58,468         51,142
  Purchases of securities available for sale                     (857,602)    (1,183,926)
  Net increase in loans                                        (2,526,610)    (2,118,630)
  Purchases of assets to be leased                               (142,589)      (104,414)
  Principal payments on lease receivables                         100,071        151,108
  Purchases of premises and equipment, net                        (18,022)       (28,519)
  Acquisitions, net of cash and cash equivalents acquired         (15,910)      (165,673)
  Other                                                             3,270         11,207
                                                             -------------  -------------
Net cash used in investing activities                          (2,741,256)    (2,637,894)

Cash Flows From Financing Activities:
-------------------------------------
  Net (decrease)  increase in deposits                           (369,087)     2,970,412
  Proceeds from issuance of commercial paper                    2,566,764      3,029,442
  Principal payments on commercial paper                       (2,582,429)    (3,027,527)
  Net increase (decrease) in other short-term borrowings        1,197,465     (1,444,961)
  Proceeds from issuance of long-term borrowings                2,030,041      1,178,185
  Payments of long-term borrowings                               (123,569)      (117,094)
  Dividends paid                                                 (102,567)       (86,417)
  Purchases of common stock                                            --        (98,381)
  Other                                                            31,171         39,759
                                                             -------------  -------------
Net cash provided by financing activities                       2,647,789      2,443,418
                                                             -------------  -------------
Net increase (decrease) in cash and cash equivalents              256,484        224,272

Cash and cash equivalents, beginning of year                      988,138        911,626
                                                             -------------  -------------
Cash and cash equivalents, end of period                    $   1,244,622  $   1,135,898
                                                             =============  =============

Supplemental cash flow information:
  Cash paid during the period for:
    Interest                                               $     355,298  $     194,136
    Income taxes                                                 169,032        138,953

See notes to financial statements.
</TABLE>

<PAGE>  6
                          MARSHALL & ILSLEY CORPORATION
                          Notes to Financial Statements
                         June 30, 2005 & 2004 (Unaudited)

  1.  The accompanying unaudited consolidated financial statements should
      be read in conjunction with Marshall & Ilsley Corporation's ("M&I"
      or "Corporation") 2004 Annual Report on Form 10-K.  The unaudited
      financial information included in this report reflects all
      adjustments consisting only of normal recurring accruals and
      adjustments which are necessary for a fair statement of the
      financial position and results of operations as of and for the three
      and six months ended June 30, 2005 and 2004.  The results of
      operations for the three and six months ended June 30, 2005 and 2004
      are not necessarily indicative of results to be expected for the
      entire year.  Certain amounts in the 2004 consolidated financial
      statements and analyses have been reclassified to conform with the
      2005 presentation.


  2.  New Accounting Pronouncements

      The Financial Accounting Standards Board ("FASB") issued Statement
      of Financial Accounting Standards No. 154, Accounting Changes and
      Error Corrections ("SFAS 154").  This statement is effective for
      accounting changes and corrections of errors made after January 1,
      2006.  SFAS 154 generally requires retrospective application of
      prior periods' financial statements of a voluntary change in
      accounting principle.  However, this statement does not change the
      transition provisions of any existing accounting pronouncement,
      including those that are in a transition phase as of the effective
      date of SFAS 154.

      In December 2004, the Financial Accounting Standards Board ("FASB")
      issued Statement of Financial Accounting Standards No. 123 (revised
      2004), Share-based Payment ("SFAS 123(R)").  SFAS 123(R) replaces
      FASB Statement No. 123, Accounting for Stock-Based Compensation and
      supercedes Accounting Principles Board Opinion No. 25, Accounting
      for Stock Issued to Employees.  SFAS 123(R) requires that
      compensation costs relating to share-based payment transactions be
      recognized in financial statements.  That cost is measured based on
      the fair value of the equity or liability instruments issued.  SFAS
      123(R) covers a wide range of share-based compensation arrangements
      including share options, restricted share plans, performance based
      awards, share appreciation rights, and employee share purchase
      plans.  SFAS 123(R) also provides guidance on measuring the fair
      value of share-based payment awards.

      The Corporation was originally required to adopt SFAS 123(R)
      beginning in the third quarter of 2005.  In April 2005, the
      Securities and Exchange Commission ("SEC") announced the adoption of
      a new rule that amends the compliance dates for SFAS 123(R).  The
      new rule allows companies to implement SFAS 123(R) at the beginning
      of their next fiscal year.  The Corporation plans to adopt SFAS
      123(R) effective January 1, 2006.

      On March 29, 2005 the SEC released Staff Accounting Bulletin No.
      107, "Share-based Payment" ("SAB 107").  SAB 107 expresses views of
      the SEC Staff regarding the application of SFAS 123(R).  SAB 107 is
      intended to assist both public entities in applying the provisions
      of SFAS 123(R) and investors and other users of financial statements
      in analyzing the information provided under SFAS 123(R).

      On May 31, 2005, the FASB issued FSP EITF 00-19-1, "Application of
      EITF Issue No. 00-19 to Freestanding Financial Instruments
      Originally Issued as Employee Compensation."  The guidance in this
      FSP should be applied in accordance with the effective date and
      transition provisions of Statement 123(R).  This FSP clarifies that
      a requirement to deliver registered shares, in and of itself, will
      not result in liability classification for freestanding financial
      instruments originally issued as employee compensation.

<PAGE>  7
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)

  3.  Comprehensive Income

      The following tables present the Corporation's comprehensive income
      (000's):
<TABLE>
<CAPTION>
                                                              Three Months Ended June 30, 2005
                                                        -------------------------------------------
                                                          Before-Tax   Tax (Expense)    Net-of-Tax
                                                            Amount        Benefit         Amount
                                                        -------------  -------------  -------------
   <S>                                                <C>            <C>            <C>
    Net income                                                                       $     188,487

    Other comprehensive income:
      Unrealized gains (losses) on securities:
      Arising during the period                        $      49,028  $     (17,313)        31,715
      Reclassification for securities
        transactions included in net income                     (144)            50            (94)
                                                        -------------  -------------  -------------
          Unrealized gains (losses)                           48,884        (17,263)        31,621

      Net gains (losses) on derivatives
        hedging variability of cash flows:
        Arising during the period                                403           (141)           262
        Reclassification adjustments for
        hedging activities included in net income                (34)            12            (22)
                                                        -------------  -------------  -------------
          Net gains (losses)                           $         369  $        (129)           240
                                                        -------------  -------------  -------------
    Other comprehensive income (loss)                                                       31,861
                                                                                      -------------
    Total comprehensive income                                                       $     220,348
                                                                                      =============
</TABLE>
<TABLE>
<CAPTION>
                                                              Three Months Ended June 30, 2004
                                                        -------------------------------------------
                                                          Before-Tax   Tax (Expense)    Net-of-Tax
                                                            Amount        Benefit         Amount
                                                        -------------  -------------  -------------
   <S>                                                <C>            <C>            <C>
    Net income                                                                       $     151,709

    Other comprehensive income:
      Unrealized gains (losses) on securities:
      Arising during the period                        $    (142,839) $      50,282        (92,557)
      Reclassification for securities
        transactions included in net income                       10             (3)             7
                                                        -------------  -------------  -------------
          Unrealized gains (losses)                         (142,829)        50,279        (92,550)

      Net gains (losses) on derivatives
        hedging variability of cash flows:
        Arising during the period                             (4,286)         1,500         (2,786)
        Reclassification adjustments for
        hedging activities included in net income              7,991         (2,797)         5,194
                                                        -------------  -------------  -------------
          Net gains (losses)                           $       3,705  $      (1,297)         2,408
                                                        -------------  -------------  -------------
    Other comprehensive income (loss)                                                      (90,142)
                                                                                      -------------
    Total comprehensive income                                                       $      61,567
                                                                                      =============
</TABLE>

<PAGE>  8
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)
<TABLE>
<CAPTION>
                                                               Six Months Ended June 30, 2005
                                                        -------------------------------------------
                                                          Before-Tax   Tax (Expense)    Net-of-Tax
                                                            Amount        Benefit         Amount
                                                        -------------  -------------  -------------
   <S>                                                <C>            <C>            <C>
    Net income                                                                       $     358,067

    Other comprehensive income:

      Unrealized gains (losses) on securities:
      Arising during the period                        $     (26,691) $       9,426        (17,265)
      Reclassification for securities
        transactions included in net income                     (118)            41            (77)
                                                        -------------  -------------  -------------
          Unrealized gains (losses)                          (26,809)         9,467        (17,342)

      Net gains (losses) on derivatives
        hedging variability of cash flows:
        Arising during the period                             11,594         (4,058)         7,536
        Reclassification adjustments for
        hedging activities included in net income              3,040         (1,064)         1,976
                                                        -------------  -------------  -------------
          Net gains (losses)                           $      14,634  $      (5,122)         9,512
                                                        -------------  -------------  -------------
    Other comprehensive income (loss)                                                       (7,830)
                                                                                      -------------
    Total comprehensive income                                                       $     350,237
                                                                                      =============
</TABLE>
<TABLE>
<CAPTION>
                                                               Six Months Ended June 30, 2004
                                                        -------------------------------------------
                                                          Before-Tax   Tax (Expense)    Net-of-Tax
                                                            Amount        Benefit         Amount
                                                        -------------  -------------  -------------
   <S>                                                <C>            <C>            <C>
    Net income                                                                       $     297,818

    Other comprehensive income:

      Unrealized gains (losses) on securities:
      Arising during the period                        $    (100,395) $      35,385        (65,010)
      Reclassification for securities
        transactions included in net income                       10             (3)             7
                                                        -------------  -------------  -------------
          Unrealized gains (losses)                         (100,385)        35,382        (65,003)

      Net gains (losses) on derivatives
        hedging variability of cash flows:
        Arising during the period                               (989)           346           (643)
        Reclassification adjustments for
        hedging activities included in net income             16,985         (5,945)        11,040
                                                        -------------  -------------  -------------
          Net gains (losses)                           $      15,996  $      (5,599)        10,397
                                                        -------------  -------------  -------------
    Other comprehensive income (loss)                                                      (54,606)
                                                                                      -------------
    Total comprehensive income                                                       $     243,212
                                                                                      =============
</TABLE>

  4.  A reconciliation of the numerators and denominators of the basic and
      diluted per share computations are as follows (dollars and shares in
      thousands, except per share data):
<TABLE>
<CAPTION>
                                                             Three Months Ended June 30, 2005
                                                      --------------------------------------------
                                                           Income     Average Shares    Per Share
                                                        (Numerator)   (Denominator)      Amount
                                                      -------------   -------------  -------------
   <S>                                              <C>             <C>            <C>
    Basic Earnings Per Share
      Income Available to Common Shareholders        $     188,487         228,630  $        0.82
                                                                                     =============
    Effect of Dilutive Securities
      Stock Options, Restricted Stock
         and Other Plans                                        --           4,117
                                                      -------------   -------------
    Diluted Earnings Per Share
      Income Available to Common Shareholders        $     188,487         232,747  $        0.81
                                                                                     =============
</TABLE>

<PAGE>  9
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)
<TABLE>
<CAPTION>
                                                             Three Months Ended June 30, 2004
                                                      --------------------------------------------
                                                           Income     Average Shares    Per Share
                                                        (Numerator)   (Denominator)      Amount
                                                      -------------   -------------  -------------
   <S>                                              <C>             <C>            <C>
    Basic Earnings Per Share
      Income Available to Common Shareholders        $     151,709         221,950  $        0.68
                                                                                     =============
    Effect of Dilutive Securities
      Stock Options, Restricted Stock
         and Other Plans                                        --           3,552
                                                      -------------   -------------
    Diluted Earnings Per Share
      Income Available to Common Shareholders        $     151,709         225,502  $        0.67
                                                                                     =============
</TABLE>
<TABLE>
<CAPTION>
                                                              Six Months Ended June 30, 2005
                                                      --------------------------------------------
                                                           Income     Average Shares    Per Share
                                                        (Numerator)   (Denominator)      Amount
                                                      -------------   -------------  -------------
   <S>                                              <C>             <C>            <C>
    Basic Earnings Per Share
      Income Available to Common Shareholders        $     358,067         228,097  $        1.57
                                                                                     =============
    Effect of Dilutive Securities
      Stock Options, Restricted Stock
         and Other Plans                                        --           4,028
                                                      -------------   -------------
    Diluted Earnings Per Share
      Income Available to Common Shareholders        $     358,067         232,125  $        1.54
                                                                                     =============
</TABLE>
<TABLE>
<CAPTION>
                                                              Six Months Ended June 30, 2004
                                                      --------------------------------------------
                                                           Income     Average Shares    Per Share
                                                        (Numerator)   (Denominator)      Amount
                                                      -------------   -------------  -------------
   <S>                                              <C>             <C>            <C>
    Basic Earnings Per Share
      Income Available to Common Shareholders        $     297,818         222,125  $        1.34
                                                                                     =============
    Effect of Dilutive Securities
      Stock Options, Restricted Stock
         and Other Plans                                        --           3,639
                                                      -------------   -------------
    Diluted Earnings Per Share
      Income Available to Common Shareholders        $     297,818         225,764  $        1.32
                                                                                     =============
</TABLE>

      Options to purchase shares of common stock not included in the
      computation of diluted net income per share because the exercise
      prices of the options were greater than the average market price of
      the common shares are as follows:
<TABLE>
<CAPTION>
                   Three Months Ended June 30,              Six Months Ended June 30,
             -------------------------------------   -------------------------------------
                    2005                2004                2005                2004
             -----------------   -----------------   -----------------   -----------------
<S>         <C>                 <C>                 <C>                 <C>
Shares                8                  33                  34                  33

Price Range  $43.310 - $44.200   $39.090 - $41.150   $42.710 - $44.200   $39.090 - $41.150
</TABLE>

      Statement of Financial Accounting Standards No. 123 ("SFAS 123"),
      "Accounting for Stock-Based Compensation," establishes financial
      accounting and reporting standards for stock based employee
      compensation plans.

      SFAS 123 defines a fair value based method of accounting for
      employee stock options 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.

<PAGE> 10
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)

      Compensation cost can also be 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 they relate
      to the Corporation is the amount of compensation cost attributable
      to the Corporation's fixed stock option plans and employee stock
      purchase plan ("ESPP").  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 calculated fair value of the options granted.  Under
      APBO 25 no compensation cost is recognized for the ESPP because the
      discount (15%) and the plan meets the definition of a qualified plan
      under the Internal Revenue Code and meets the requirements of APBO
      25.  Under SFAS 123 the safe-harbor discount threshold is 5% for a
      plan to be non-compensatory.  SFAS 123 compensation cost would equal
      the initial discount (15% of beginning of plan period price per
      share) plus the value of a one year call option on 85% of a share of
      stock for each share purchased.

      As permitted by SFAS 123, the Corporation continues to measure
      compensation cost for such plans using the accounting method
      prescribed by APBO 25.  See Note 2.

      Had compensation cost for the Corporation's ESPP and options granted
      after January 1, 1995 been determined consistent with SFAS 123, the
      Corporation's net income and earnings per share would have been
      reduced to the following estimated pro forma amounts ($000's except
      per share data):
<TABLE>
<CAPTION>
                                                  Three Months Ended            Six Months Ended
                                                       June 30,                      June 30,
                                               ------------------------      ------------------------
                                                   2005          2004            2005          2004
                                               ----------    ----------      ----------    ----------
<S>                                           <C>           <C>             <C>           <C>
Net Income, as reported                        $ 188,487     $ 151,709       $ 358,067     $ 297,818
Add:  Stock-based employee compensation
        expense included in reported
        net income, net of tax                     4,560         1,432           5,632         2,854
Less: Total stock-based employee compensation
        expense determined under fair
        value based method for all awards,
        net of tax                                (9,477)       (6,784)        (15,045)      (12,972)
                                                ---------     ---------       ---------     ---------
Pro forma net income                           $ 183,570     $ 146,357       $ 348,654     $ 287,700
                                                =========     =========       =========     =========
Basic earnings per share:
      As reported                                  $0.82         $0.68           $1.57         $1.34
      Pro forma                                     0.80          0.66            1.53          1.30

Diluted earnings per share:
      As reported                                  $0.81         $0.67           $1.54         $1.32
      Pro forma                                     0.78          0.65            1.50          1.27
</TABLE>

      The fair value of each option grant was estimated as of the date of
      grant using the Black-Scholes closed form option-pricing model for
      options granted prior to September 30, 2004.  A form of a lattice
      option-pricing model was used for options granted after September
      30, 2004.


  5.  Recently Announced Acquisitions

      The following acquisitions, which are not considered to be material
      business combinations, were announced during the second quarter of
      2005:

      In May 2005, Metavante announced the signing of a definitive
      agreement to acquire Med-i-Bank, Inc. ("MBI") of Waltham,
      Massachusetts.  MBI provides electronic payment services for
      employee benefit and consumer-directed healthcare accounts.  MBI
      offers flexible spending accounts, health reimbursement arrangement
      and health savings account systems for third-party administrators
      and health plans.  On July 22, 2005, Metavante completed the
      acquisition of all of the outstanding capital stock of MBI for
      $150.5 million.  Total consideration consisted of 2.9 million shares
      of  the Corporation's common stock valued at $133.8 million and
      $16.7 million in cash.  Initial goodwill, subject to the completion
      of appraisals and valuations of the assets acquired and liabilities
      assumed, amounted to $123.4 million.  The estimated identifiable
      intangible asset to be amortized (customer relationships) with an
      estimated useful life of 10 years amounted to $25.0 million.  The
      goodwill and intangibles resulting from this transaction are not
      deductible for tax purposes.

<PAGE> 11
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)

      In June 2005, Metavante signed a definitive agreement to acquire
      TREEV LLC ("TREEV"), of Herndon, Virginia.  On August 8, 2005,
      Metavante completed the acquisition of all of the outstanding stock
      of TREEV for $19.5 million.  Total consideration consisted of 0.4
      million shares of the Corporation's common stock valued at $16.4
      million and $3.0 million in cash.  TREEV provides browser-based
      document and report management software and consulting services to
      the financial-services industry in both lending and deposit
      environments.  TREEV will complement Metavante's check-imaging
      products and services by providing solutions for document storage
      and retrieval, including electronic report storage.

      In June 2005, Metavante agreed to buy GHR Systems, Inc. ("GHR") for
      $65 million.  This transaction will add consumer finance and
      mortgage loan origination solutions to Metavante's financial
      services lines.  GHR of Wayne, Pennsylvania provides loan
      origination technologies for the residential mortgage and consumer
      finance industries, offering point of sale products for any channel
      together with comprehensive underwriting, processing and closing
      technologies.  It is expected that this transaction will be funded
      with approximately $55 million of the Corporation's common stock and
      $10 million in cash.  The transaction is expected to close in the
      third quarter of 2005 pending regulatory approval and satisfaction
      of other customary closing conditions.


  6.  Selected investment securities, by type, held by the Corporation are
      as follows ($000's):
<TABLE>
<CAPTION>
                                                     June 30,     December 31,     June 30,
                                                       2005           2004           2004
                                                  -------------  -------------  -------------
<S>                                             <C>            <C>            <C>
Investment securities available for sale:
  U.S. treasury and government agencies          $   4,254,711  $   4,157,374  $   4,096,353
  State and political subdivisions                     671,782        504,027        397,764
  Mortgage backed securities                           144,070        150,658        141,448
  Other                                                502,065        546,940        509,046
                                                  -------------  -------------  -------------
Total                                            $   5,572,628  $   5,358,999  $   5,144,611
                                                  =============  =============  =============

Investment securities held to maturity:
  State and political subdivisions               $     665,807  $     724,086  $     767,580
  Other                                                  2,300          2,300          2,319
                                                  -------------  -------------  -------------
Total                                            $     668,107  $     726,386  $     769,899
                                                  =============  =============  =============
</TABLE>

      The following table provides the gross unrealized losses and fair
      value, aggregated by investment category and the length of time the
      individual securities have been in a continuous unrealized loss
      position, at June 30, 2005 ($000's):
<TABLE>
<CAPTION>
                              Less than 12 months        12 months or more              Total
                          ------------------------- ------------------------- -------------------------
                               Fair     Unrealized       Fair     Unrealized       Fair     Unrealized
                              Value       Losses        Value       Losses        Value       Losses
                          ------------ ------------ ------------ ------------ ------------ ------------
 <S>                    <C>          <C>          <C>          <C>          <C>          <C>
  U.S. treasury and
    government agencies  $  1,936,074 $     14,752 $    727,179 $     14,305 $  2,663,253 $     29,057
  State and political
    subdivisions               44,000          393       53,690          728       97,690        1,121
  Mortgage backed securities   92,158          804           --           --       92,158          804
  Other                         6,999            1          972           10        7,971           11
                          ------------ ------------ ------------ ------------ ------------ ------------
  Total                  $  2,079,231 $     15,950 $    781,841 $     15,043 $  2,861,072 $     30,993
                          ============ ============ ============ ============ ============ ============
</TABLE>

      The Corporation believes that the unrealized losses in the
      investment securities portfolio resulted from increases in market
      interest rates and not from deterioration in the creditworthiness of
      the issuer.

<PAGE> 12
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)

  7.  The Corporation's loan and lease portfolio, including loans held for
      sale, consisted of the following ($000's):
<TABLE>
<CAPTION>
                                                     June 30,     December 31,     June 30,
                                                       2005           2004           2004
                                                  -------------  -------------  -------------
<S>                                             <C>            <C>            <C>
Commercial, financial and agricultural           $   9,147,994  $   8,483,046  $   7,785,955
Cash flow hedging instruments at fair value             (4,549)        (1,583)       (26,772)
                                                  -------------  -------------  -------------
  Commercial, financial and agricultural             9,143,445      8,481,463      7,759,183

Real estate:
  Construction                                       2,984,601      2,265,227      1,875,852
  Residential mortgage                               9,313,118      8,548,029      7,720,641
  Commercial mortgage                                8,585,700      8,164,099      7,696,070
                                                  -------------  -------------  -------------
Total real estate                                   20,883,419     18,977,355     17,292,563

Personal                                             1,526,442      1,540,024      1,590,166
Lease financing                                        592,545        537,930        553,403
                                                  -------------  -------------  -------------
    Total loans and leases                       $  32,145,851  $  29,536,772  $  27,195,315
                                                  =============  =============  =============
</TABLE>

  8.  Sale of Receivables

      During the second quarter of 2005, automobile loans with principal
      balances of $115.4 million were sold in securitization transactions.
      Net losses of $1.9 million were recognized and are reported in Other
      income in the Consolidated Statements of Income.  Other income
      associated with auto securitizations, primarily servicing fees,
      amounted to $3.5 million in the current quarter.

      Key economic assumptions used in measuring the retained interests at
      the date of securitization resulting from securitizations completed
      during the second quarter were as follows (rate per annum):
<TABLE>
<CAPTION>
<S>                                                 <C>
Prepayment speed (CPR)                                          15-40 %
Weighted average life (in months)                                20.0
Expected credit losses (based on original balance)          0.22-0.74 %
Residual cash flow discount rate                                 12.0 %
Variable returns to transferees                       Forward one month
                                                       LIBOR yield curve
</TABLE>

      At June 30, 2005, securitized automobile loans and other automobile
      loans managed together with them, along with delinquency and credit
      loss information consisted of the following ($000's):
<TABLE>
<CAPTION>
                                                                                    Total
                                                  Securitized     Portfolio        Managed
                                                 -------------  -------------  -------------
<S>                                            <C>            <C>            <C>
Loan balances                                   $     950,358  $     246,847  $   1,197,205
Principal amounts of loans
  60 days or more past due                                908            443          1,351
Net credit losses year to date                          1,010            342          1,352
</TABLE>

  9.  Goodwill and Other Intangibles

      The changes in the carrying amount of goodwill for the six months
      ended June 30, 2005 are as follows ($000's):
<TABLE>
<CAPTION>
                                          Banking       Metavante       Others         Total
                                      -------------  -------------  -------------  -------------
<S>                                 <C>            <C>            <C>            <C>
Goodwill balance as of
  January 1, 2005                    $     815,086  $     978,418  $       5,412  $   1,798,916
Goodwill acquired during the period             --         20,675             --         20,675
Purchase accounting adjustments               (114)        20,270          3,598         23,754
                                      -------------  -------------  -------------  -------------
Goodwill balance as of
  June 30, 2005                      $     814,972  $   1,019,363  $       9,010  $   1,843,345
                                      =============  =============  =============  =============
</TABLE>

      Goodwill acquired for the Metavante segment includes initial
      goodwill relating to the acquisition of Prime Associates, Inc. in
      the first quarter of 2005.

<PAGE> 13
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)

      Purchase accounting adjustments for Metavante for the six months
      ended June 2005 represent adjustments made to the initial estimates
      of fair value associated with the acquisitions of Kirchman
      Corporation, Advanced Financial Solutions, Inc. and its affiliated
      companies, NYCE Corporation, Response Data Corp., NuEdge Systems
      LLC, and VECTORsgi Holdings, Inc.  Purchase accounting adjustments
      for Metavante also include the effect of a contingent payment made
      in the first quarter of 2005 in connection with the Printing For
      Systems, Inc. acquisition.  Purchase accounting adjustments for the
      Others segment included the effect of a contingent payment made for
      an acquisition made by the Corporation's Trust subsidiary in 2004,
      net of the reduction of goodwill allocated to the sale of a small
      business line.  Purchase accounting adjustments for the Banking
      segment was the reduction of goodwill allocated to a branch
      divestiture.

      At June 30, 2005, the Corporation's other intangible assets
      consisted of the following ($000's):
<TABLE>
<CAPTION>
                                                                   June 30, 2005
                                                    -------------------------------------------
                                                                       Accum-
                                                         Gross         ulated           Net
                                                       Carrying        Amort-        Carrying
                                                        Amount         ization         Value
                                                    -------------  -------------  -------------
<S>                                               <C>            <C>            <C>
Other intangible assets:
  Core deposit intangible                          $     152,816  $      74,538  $      78,278
  Data processing contract rights/customer lists         254,780         25,150        229,630
  Trust customers                                          4,750          1,011          3,739
  Tradename                                                2,775          2,325            450
  Other Intangibles                                        1,250            277            973
                                                    -------------  -------------  -------------
                                                   $     416,371  $     103,301  $     313,070
                                                    =============  =============  =============

Mortgage loan servicing rights                                                   $       3,209
                                                                                  =============
</TABLE>

 10.  The Corporation's deposit liabilities consisted of the following
      ($000's):
<TABLE>
<CAPTION>

                                                     June 30,     December 31,     June 30,
                                                       2005           2004           2004
                                                  -------------  -------------  -------------
<S>                                             <C>            <C>            <C>
Noninterest bearing demand                       $   5,088,947  $   4,888,426  $   4,709,873

Savings and NOW                                      9,999,393     10,118,415      9,101,821
Cash flow hedge-Brokered MMDA                           (2,998)        (1,445)            --
                                                  -------------  -------------  -------------
  Total Savings and NOW                              9,996,395     10,116,970      9,101,821

CD's $100,000 and over                               5,980,536      5,592,947      5,379,731
Cash flow hedge-Institutional CDs                      (13,944)        (8,977)        (8,613)
                                                  -------------  -------------  -------------
  Total CD's $100,000 and over                       5,966,592      5,583,970      5,371,118

Other time deposits                                  3,006,936      2,721,214      2,632,467
Foreign deposits                                     2,002,570      3,144,507      3,410,007
                                                  -------------  -------------  -------------
    Total deposits                               $  26,061,440  $  26,455,087  $  25,225,286
                                                  =============  =============  =============
</TABLE>

 11.  Derivative Financial Instruments and Hedging Activities

      The following is an update of the Corporation's use of derivative
      financial instruments and its hedging activities as described in its
      Annual Report on Form 10-K for the year ended December 31, 2004.
      Generally there were no substantive changes in the types of
      derivative financial instruments the Corporation employs or its
      hedging activities in the six months ended June 30, 2005.

      Trading Instruments and Other Free Standing Derivatives
      -------------------------------------------------------
      Loan commitments accounted for as derivatives are not material to
      the Corporation and the Corporation does not employ any formal
      hedging strategies.

      Trading and free-standing derivative contracts are not linked to
      specific assets and liabilities on the balance sheet or to
      forecasted transactions in an accounting hedge relationship and,
      therefore, do not qualify for hedge accounting under SFAS 133.  They
      are carried at fair value with changes in fair value recorded as a
      component of other noninterest income.

<PAGE> 14
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)

      At June 30, 2005, free standing interest rate swaps consisted of
      $1.8 billion in notional amount of receive fixed/pay floating with
      an aggregate negative fair value of $1.7 million and $1.0 billion in
      notional amount of pay fixed/receive floating with an aggregate
      positive fair value of $1.5 million.

      At June 30, 2005, interest rate caps purchased amounted to $33.8
      million in notional amount with a positive fair value of $0.2
      million and interest rate caps sold amounted to $33.8 million in
      notional amount with a negative fair value of $0.2 million.

      At June 30, 2005, the notional value of interest rate futures
      designated as trading was $4.1 billion with an immaterial fair
      value.

      Fair Value Hedges
      -----------------
      The following table presents updated information with respect to
      selected fair value hedges.
<TABLE>
<CAPTION>
Fair Value Hedges                                             Weighted
June 30, 2005                             Notional    Fair    Average
                                           Amount    Value    Remaining
       Hedged              Hedging         ($ in      ($ in     Term
        Item              Instrument      millions) millions)   (Yrs)
--------------------  ------------------  --------  --------- ---------
<S>                  <C>                <C>       <C>       <C>
Fixed Rate CDs        Receive Fixed Swap $  747.5  $   (9.7)      9.2

Medium Term Notes     Receive Fixed Swap    366.9      (1.6)      8.1

Fixed Rate
  Bank Notes          Receive Fixed Swap    838.6       7.7       8.0

Institutional CDs     Receive Fixed Swap    120.0      (0.1)      1.5
</TABLE>

      The impact from fair value hedges to total net interest income for
      the three and six months ended June 30, 2005 was a positive $9.1
      million and $19.1 million, respectively.  The impact to net interest
      income due to ineffectiveness was immaterial.

      Cash Flow Hedges
      ----------------
      The following table updates the Corporation's cash flow hedges.
<TABLE>
<CAPTION>
Cash Flow Hedges                                              Weighted
June 30, 2005                             Notional    Fair    Average
                                           Amount    Value    Remaining
       Hedged              Hedging         ($ in      ($ in     Term
        Item              Instrument      millions) millions)   (Yrs)
--------------------  ------------------  --------  --------- ---------
<S>                  <C>                <C>       <C>       <C>
Variable Rate Loans   Receive Fixed Swap $ 1,150.0 $    (4.5)     4.4

Institutional CDs     Pay Fixed Swap       2,305.0      13.9      1.1

Federal Funds
  Purchased           Pay Fixed Swap         300.0      (6.2)     1.9

FHLB Advances         Pay Fixed Swap         920.0       8.9      2.9

Floating Rate
  Bank Notes          Pay Fixed Swap         125.0      (0.3)     1.8

Money Market Account  Pay Fixed Swap         250.0       3.0      2.0
</TABLE>

      The impact to total net interest income from cash flow hedges,
      including amortization of terminated cash flow hedges was immaterial
      for the three  months ended June 30, 2005  and $3.0 million for the
      six months ended June 30, 2005. The impact due to ineffectiveness
      was immaterial.

<PAGE> 15
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)

 12.  Postretirement Health Plan

      The Corporation sponsors a defined benefit health plan that provides
      health care benefits to eligible current and retired employees.
      Eligibility for retiree benefits is dependent upon age, years of
      service, and participation in the health plan during active service.
      The plan is contributory and in 1997 and 2002 the plan was amended.
      Employees hired or retained from mergers after September 1, 1997
      will be granted access to the Corporation's plan upon becoming an
      eligible retiree; however, such retirees must pay 100% of the cost
      of health care benefits.  The plan continues to contain other cost-
      sharing features such as deductibles and coinsurance.

      Net periodic postretirement benefit costs for the three and six
      month periods ended June 30, 2005 and 2004 included the following
      components ($000's):
<TABLE>
<CAPTION>
                                              Three Months Ended           Six Months Ended
                                                   June 30,                     June 30,
                                           -----------------------     ----------------------
                                               2005        2004           2005        2004
                                           -----------  ----------     ----------  ----------
<S>                                      <C>          <C>            <C>         <C>
Service cost                              $       552  $      631     $    1,105  $    1,262
Interest on APBO                                1,159       1,366          2,318       2,732
Expected return on assets                        (150)         --           (299)         --
Prior service amortization                       (680)       (680)        (1,361)     (1,360)
Actuarial loss amortization                       264         562            528       1,125
Other                                              --          --             --          --
                                           -----------  ----------     ----------  ----------
                                          $     1,145  $    1,879     $    2,291  $    3,759
                                           ===========  ==========     ==========  ==========
</TABLE>

      Benefit payments and expenses, net of participant contributions, for
      the three and six months ended June 30, 2005 amounted to $1.0
      million and $2.0 million, respectively.

<PAGE> 16
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)

 13.  Segments

      The following represents the Corporation's operating segments as of
      and for the three and six months ended June 30, 2005 and 2004.
      There have not been any changes to the way the Corporation organizes
      its segments.  Fees - intercompany represent intercompany revenues
      charged to other segments for providing certain services.  Expenses
      - intercompany represent fees charged by other segments for certain
      services received.  For each segment, Expenses - intercompany are
      not the costs of that segment's reported intercompany revenues.
      Intersegment revenues, expenses and assets have been eliminated ($
      in millions):
<TABLE>
<CAPTION>
                                                    Three Months Ended June 30, 2005
                          ---------------------------------------------------------------------------------
                                                                                    Reclass-
                                                                                   ifications      Consol-
                                                                      Corporate     & Elimi-       idated
                             Banking      Metavante       Others       Overhead      nations       Income
                          ------------  ------------  ------------  ------------  -----------  -------------
<S>                      <C>           <C>           <C>           <C>           <C>          <C>
Net interest income       $     307.2   $      (6.6)  $       6.1   $      (2.0)  $      --    $      304.7

Other income
  Fees - other                   91.9         271.7          70.7           8.3          --           442.6
  Fees - intercompany            14.2          23.1           5.6          21.6       (64.5)             --
                          ------------  ------------  ------------  ------------  -----------  -------------
Total other income              106.1         294.8          76.3          29.9       (64.5)          442.6

Other expense
  Expenses - other              158.5         227.6          32.9          34.7        (1.1)          452.6
  Expenses - intercompany        41.5           9.5          12.0           0.4       (63.4)             --
                          ------------  ------------  ------------  ------------  -----------  -------------
Total other expense             200.0         237.1          44.9          35.1       (64.5)          452.6
Provision for loan
  and lease losses               13.4            --           0.3            --          --            13.7
                          ------------  ------------  ------------  ------------  -----------  -------------
Income (loss) before taxes      199.9          51.1          37.2          (7.2)         --           281.0
Income tax expense
  (benefit)                      60.4          20.3          14.4          (2.6)         --            92.5
                          ------------  ------------  ------------  ------------  -----------  -------------
Segment income            $     139.5   $      30.8   $      22.8   $      (4.6)  $      --    $      188.5
                          ============  ============  ============  ============  ===========  =============
Identifiable assets       $  41,164.6   $   2,454.4   $     759.5   $     733.1   $(1,627.9)   $   43,483.7
                          ============  ============  ============  ============  ===========  =============
Return on average equity         16.3 %        19.7 %        34.5 %                                    18.3 %
                          ============  ============  ============                             =============
</TABLE>
<TABLE>
<CAPTION>
                                                    Three Months Ended June 30, 2004
                          ---------------------------------------------------------------------------------
                                                                                    Reclass-
                                                                                   ifications      Consol-
                                                                      Corporate     & Elimi-       idated
                             Banking      Metavante       Others       Overhead      nations       Income
                          ------------  ------------  ------------  ------------  -----------  -------------
<S>                      <C>           <C>           <C>           <C>           <C>          <C>
Net interest income       $     280.2   $      (0.9)  $       6.6   $      (1.9)  $       --   $      284.0

Other income
  Fees - other                   85.6         197.4          45.8           1.2           --          330.0
  Fees - intercompany            16.6          19.2           7.0          17.6        (60.4)            --
                          ------------  ------------  ------------  ------------  -----------  -------------
Total other income              102.2         216.6          52.8          18.8        (60.4)         330.0

Other expense
  Expenses - other              152.4         171.3          29.7          21.0          0.3          374.7
  Expenses - intercompany        38.5          12.2          11.5          (1.5)       (60.7)            --
                          ------------  ------------  ------------  ------------  -----------  -------------
Total other expense             190.9         183.5          41.2          19.5        (60.4)         374.7
Provision for loan
  and lease losses                8.5            --           0.7            --           --            9.2
                          ------------  ------------  ------------  ------------  -----------  -------------
Income (loss) before taxes      183.0          32.2          17.5          (2.6)          --          230.1
Income tax expense
  (benefit)                      60.0          12.6           6.9          (1.1)          --           78.4
                          ------------  ------------  ------------  ------------  -----------  -------------
Segment income            $     123.0   $      19.6    $     10.6   $      (1.5)  $       --   $      151.7
                          ============  ============  ============  ============  ===========  =============
Identifiable assets       $  35,778.8   $   1,218.0    $    610.0   $     624.2   $ (1,159.4)  $   37,071.6
                          ============  ============  ============  ============  ===========  =============
Return on average equity         16.4 %        19.3 %        16.8 %                                    17.9 %
                          ============  ============  ============                             =============
</TABLE>

<PAGE> 17
                          MARSHALL & ILSLEY CORPORATION
                   Notes to Financial Statements - Continued
                         June 30, 2005 & 2004 (Unaudited)
<TABLE>
<CAPTION>
                                                     Six Months Ended June 30, 2005
                          ---------------------------------------------------------------------------------
                                                                                    Reclass-
                                                                                   ifications      Consol-
                                                                      Corporate     & Elimi-       idated
                             Banking      Metavante       Others       Overhead      nations       Income
                          ------------  ------------  ------------  ------------  -----------  -------------
<S>                      <C>           <C>           <C>           <C>           <C>          <C>
Net interest income       $     603.9   $     (14.7)  $      11.1   $      (3.8)  $       --   $      596.5

Other income
  Fees - other                  179.1         544.1         118.9          10.0           --          852.1
  Fees - intercompany            28.8          45.2          10.3          43.3       (127.6)            --
                          ------------  ------------  ------------  ------------  -----------  -------------
Total other income              207.9         589.3         129.2          53.3       (127.6)         852.1

Other expense
  Expenses - other              312.1         457.0          64.0          56.4         (0.5)         889.0
  Expenses - intercompany        80.8          19.9          24.5           1.9       (127.1)            --
                          ------------  ------------  ------------  ------------  -----------  -------------
Total other expense             392.9         476.9          88.5          58.3       (127.6)         889.0
Provision for loan
 and lease losses                21.2            --           0.6            --           --           21.8
                          ------------  ------------  ------------  ------------  -----------  -------------
Income (loss) before taxes      397.7          97.7          51.2          (8.8)          --          537.8
Income tax expense
  (benefit)                     125.0          38.8          19.8          (3.9)          --          179.7
                          ------------  ------------  ------------  ------------  -----------  -------------
Segment income            $     272.7   $      58.9   $      31.4   $      (4.9)  $       --   $      358.1
                          ============  ============  ============  ============  ===========  =============
Identifiable assets       $  41,164.6   $   2,454.4   $     759.5   $     733.1   $ (1,627.9)  $   43,483.7
                          ============  ============  ============  ============  ===========  =============
Return on average equity         16.3 %        19.7 %        24.7 %                                    17.8 %
                          ============  ============  ============                             =============
</TABLE>
<TABLE>
<CAPTION>
                                                     Six Months Ended June 30, 2004
                          ---------------------------------------------------------------------------------
                                                                                    Reclass-
                                                                                   ifications      Consol-
                                                                      Corporate     & Elimi-       idated
                             Banking      Metavante       Others       Overhead      nations       Income
                          ------------  ------------  ------------  ------------  -----------  -------------
<S>                      <C>           <C>           <C>           <C>           <C>          <C>
Net interest income       $     555.1   $      (1.1)  $      13.0   $      (4.3)  $       --   $      562.7

Other income
  Fees - other                  168.7         383.5          89.1           2.1           --          643.4
  Fees - intercompany            32.2          38.1          11.8          35.1       (117.2)            --
                          ------------  ------------  ------------  ------------  -----------  -------------
Total other income              200.9         421.6         100.9          37.2       (117.2)         643.4

Other expense
  Expenses - other              304.6         335.3          59.6          37.8         (0.3)         737.0
  Expenses - intercompany        71.6          23.1          23.6          (1.4)      (116.9)            --
                          ------------  ------------  ------------  ------------  -----------  -------------
Total other expense             376.2         358.4          83.2          36.4       (117.2)         737.0
Provision for loan
  and lease losses               16.9            --           1.4            --           --           18.3
                          ------------  ------------  ------------  ------------  -----------  -------------
Income (loss) before taxes      362.9          62.1          29.3          (3.5)          --          450.8
Income tax expense
  (benefit)                     118.9          24.4          11.4          (1.7)          --          153.0
                          ------------  ------------  ------------  ------------  -----------  -------------
Segment income            $     244.0   $      37.7   $      17.9   $      (1.8)  $       --   $      297.8
                          ============  ============  ============  ============  ===========  =============
Identifiable assets        $ 35,778.8   $   1,218.0   $     610.0   $     624.2   $ (1,159.4)  $   37,071.6
                          ============  ============  ============  ============  ===========  =============
Return on average equity         16.3 %        19.1 %        14.2 %                                    17.7 %
                          ============  ============  ============                             =============
</TABLE>

      Total revenue, net interest income plus other income, by type in
      Others consisted of the following:
<TABLE>
<CAPTION>
                                              Three Months Ended           Six Months Ended
                                                   June 30,                     June 30,
                                           -----------------------     ----------------------
                                               2005        2004           2005        2004
                                           -----------  ----------     ----------  ----------
<S>                                      <C>          <C>            <C>         <C>
Trust Services                            $      40.6  $     37.2     $     80.2  $     72.7
Residential Mortgage Banking                      6.1         9.0           11.1        15.2
Capital Markets                                  21.5         0.3           22.2        (0.4)
Brokerage and Insurance                           7.2         6.7           14.3        13.5
Commercial Leasing                                4.2         4.2            7.6         8.2
Commercial Mortgage Banking                       1.6         1.4            2.8         3.0
Others                                            1.2         0.6            2.1         1.7
                                           -----------  ----------     ----------  ----------
Total revenue                             $      82.4  $     59.4     $    140.3  $    113.9
                                           ===========  ==========     ==========  ==========
</TABLE>

<PAGE> 18
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
                           MARSHALL & ILSLEY CORPORATION
                  CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
                                      ($000's)

                                                                 Three Months Ended
                                                                       June 30,
                                                             ----------------------------
                                                                  2005           2004
                                                             -------------  -------------
<S>                                                        <C>            <C>
Assets
------
Cash and due from banks                                     $     938,451  $     801,986

Investment securities:
  Trading securities                                               25,582         22,138
  Short-term investments                                          271,731        164,685
  Other investment securities:
    Taxable                                                     4,828,606      4,671,113
    Tax-exempt                                                  1,333,700      1,171,209
                                                             -------------  -------------
Total investment securities                                     6,459,619      6,029,145

Loans and leases:
  Loans and leases, net of unearned income                     31,294,058     26,507,894
  Less: Allowance for loan and lease losses                       361,488        359,856
                                                             -------------  -------------
  Net loans and leases                                         30,932,570     26,148,038

Premises and equipment, net                                       445,382        434,888
Accrued interest and other assets                               3,877,271      2,757,888
                                                             -------------  -------------
Total Assets                                                $  42,653,293  $  36,171,945
                                                             =============  =============

Liabilities and Shareholders' Equity
------------------------------------
Deposits:
  Noninterest bearing                                       $   4,826,304  $   4,513,599
  Interest bearing                                             20,643,276     18,995,645
                                                             -------------  -------------
Total deposits                                                 25,469,580     23,509,244

Federal funds purchased and security repurchase agreements      2,393,989      2,279,498
Other short-term borrowings                                       998,363        979,383
Long-term borrowings                                            7,920,117      4,703,870
Accrued expenses and other liabilities                          1,729,455      1,294,056
                                                             -------------  -------------
Total liabilities                                              38,511,504     32,766,051

Shareholders' equity                                            4,141,789      3,405,894
                                                             -------------  -------------
Total Liabilities and Shareholders' Equity                  $  42,653,293  $  36,171,945
                                                             =============  =============
</TABLE>

<PAGE> 19
<TABLE>
<CAPTION>
                           MARSHALL & ILSLEY CORPORATION
                  CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
                                      ($000's)

                                                                  Six Months Ended
                                                                       June 30,
                                                             ----------------------------
                                                                  2005           2004
                                                             -------------  -------------
<S>                                                        <C>            <C>
Assets
------
Cash and due from banks                                     $     928,733  $     786,580

Investment securities:
  Trading securities                                               24,355         22,703
  Short-term investments                                          229,595        188,598
  Other investment securities:
    Taxable                                                     4,825,732      4,602,099
    Tax-exempt                                                  1,306,082      1,158,940
                                                             -------------  -------------
Total investment securities                                     6,385,764      5,972,340

Loans and leases:
  Loans and leases, net of unearned income                     30,592,745     25,967,707
  Less: Allowance for loan and lease losses                       361,220        358,001
                                                             -------------  -------------
  Net loans and leases                                         30,231,525     25,609,706

Premises and equipment, net                                       448,079        436,637
Accrued interest and other assets                               3,857,632      2,702,534
                                                             -------------  -------------
Total Assets                                                $  41,851,733  $  35,507,797
                                                             =============  =============

Liabilities and Shareholders' Equity
------------------------------------
Deposits:
  Noninterest bearing                                       $   4,760,154  $   4,414,879
  Interest bearing                                             20,592,326     18,597,021
                                                             -------------  -------------
Total deposits                                                 25,352,480     23,011,900

Federal funds purchased and security repurchase agreements      2,170,661      2,400,570
Other short-term borrowings                                       973,360        943,148
Long-term borrowings                                            7,564,611      4,473,229
Accrued expenses and other liabilities                          1,729,499      1,288,997
                                                             -------------  -------------
Total liabilities                                              37,790,611     32,117,844

Shareholders' equity                                            4,061,122      3,389,953
                                                             -------------  -------------
Total Liabilities and Shareholders' Equity                  $  41,851,733  $  35,507,797
                                                             =============  =============
</TABLE>

<PAGE> 20
                                   OVERVIEW
                                   --------
Current operating trends and financial results have been positive and are
a confirmation of the Corporation's overall strategy of driving earnings
per share growth by: (1) expanding banking operations into faster growing
regions beyond Wisconsin; (2) increasing the number of financial
institutions to which the Corporation provides correspondent banking
services; (3) expanding trust services and other wealth management product
and service offerings for high net-worth individuals; and (4) growing
Metavante's business through organic growth and acquisitions.

The Corporation continues to focus on its key metrics of growing revenues
through balance sheet growth, fee-based income growth and strong credit
quality.  Management believes that the Corporation has demonstrated solid
fundamental performance in each of these key areas and as a result, the
second quarter and first half of 2005 produced strong financial results.

Net income for the second quarter of 2005 amounted to $188.5 million
compared to $151.7 million for the same period in the prior year, an
increase of $36.8 million, or 24.2%.  Diluted earnings per share were
$0.81 for the three months ended June 30, 2005, compared with $0.67 for
the three months ended June 30, 2004, an increase of 20.9%.  The return on
average assets and average equity was 1.77% and 18.25%, respectively, for
the quarter ended June 30, 2005, and 1.69% and 17.92%, respectively, for
the quarter ended June 30, 2004.

For the six months ended June 30, 2005, net income amounted to $358.1
million compared to $297.8 million for the first half of 2004, an increase
of $60.3 million, or 20.2%.  Diluted earnings per share were $1.54 for the
six months ended June 30, 2005, compared with $1.32 for the six months
ended June 30, 2004, an increase of 16.7%.  The return on average assets
and average equity was 1.73% and 17.78%, respectively, for the first six
months of 2005, and 1.69% and 17.67%, respectively, for the first six
months of 2004.

Earnings growth for the three and six months ended June 30, 2005 compared
to the three and six months ended June 30, 2004 was attributable to a
number of factors.  The increase in net interest income was driven by loan
and deposit growth.  Net interest income growth was somewhat mitigated by
the financing costs associated with Metavante's 2004 acquisitions.  On a
comparative basis, net charge-offs and the resulting provisions for loan
and lease losses were higher in the second quarter and first half of 2005
than the second quarter and first half of 2004.  Despite the increase, net
charge-offs  for the three and six months ended June 30, 2005 continue to
be below the Corporation's five-year historical average.  Metavante and
the trust services reporting unit continued to exhibit growth in both
revenue and earnings.  Metavante's growth in revenue and earnings
reflects, in part, the impact of its acquisition and divestiture
activities and higher transaction volumes in payment processing and
electronic banking.  The acquisition and divestiture activities included
one acquisition completed in the first quarter of 2005 and six
acquisitions and two divestitures completed in 2004.  For the three and
six months ended June 30, 2005, the Corporation realized a gain due to the
sale of an entity associated with the Corporation's investment in an
independent private equity and venture capital partnership.  In addition,
during the first quarter of 2005 the Corporation realized a gain due to
the change in control of PULSE EFT Associates.  These factors along with
continued expense management resulted in double-digit earnings growth in
the three and six months ended June 30, 2005 compared to the three and six
months ended June 30, 2004.

Management continues to believe that there are some key factors that could
affect future operating trends and financial results.  Management believes
that credit losses will likely return to historical levels.  While it is
unclear when this will occur, management does not believe that current net
charge-off levels are sustainable indefinitely.  Rapidly shifting and
unstable yield curves make balance sheet management vulnerable to
potential earnings volatility.  While the Corporation has taken what it
believes to be a conservative position relative to a generally rising
interest rate environment, shifts in customer behavior and re-pricing
characteristics present a persistent challenge.

Based on its performance in the first half of 2005, management expects
Metavante's total 2005 revenues (internal and external) will be at the
upper end of the $1.1 to $1.2 billion revenue range previously provided
and segment earnings will be in the range of $115.0 million to $120.0
million, excluding the impact of recently announced acquisitions.  In the
Banking segment, management expects double digit loan growth for the
remainder of 2005.  However, it is possible that loan growth will not be
at the same levels experienced during the first half of the current year.
The Corporation's actual results for the year ended December 31, 2005
could differ materially from those expected by management.  See "Forward-
Looking Statements" in this Form 10-Q and the Corporation's 2004 Annual
Report on Form 10-K for a discussion of the various risk factors that
could cause actual results to be different than expected results.

<PAGE> 21
                  NOTEWORTHY TRANSACTIONS AND EVENTS
                  ----------------------------------
Some of the more noteworthy transactions and events that occurred in the
three and six months ended June 30, 2005 and 2004 consisted of the
following:

Second quarter 2005
-------------------
As announced in the Corporation's Form 8-K dated May 26, 2005, the
Corporation realized a gain due to the sale of an entity associated with
its investment in an independent private equity and venture capital
partnership.  The gross gain amounted to $29.0 million and is reported in
Net investment securities gains (losses) in the Consolidated Statements of
Income.  On an after-tax basis, and net of related compensation expense,
the gain amounted to $16.2 million or $0.07 per diluted share for the
three and six months ended June 30, 2005.

During the second quarter Metavante announced three acquisitions.  It is
expected that these will be funded primarily with the Corporation's common
stock.  See Note 5 in Notes to Financial Statements for further
discussion.

First quarter 2005
------------------
On February  9, 2005, Metavante completed the acquisition of  all of the
outstanding common stock of Prime Associates, Inc. ("Prime") of Clark, New
Jersey for $24.5 million.  Total consideration consisted of 563,114 shares
of Marshall & Ilsley Corporation common stock valued at $24.0 million and
$0.5 million in cash.  Prime is a provider of anti-money laundering and
fraud interdiction software and data products for financial institutions,
insurance companies and securities firms.

During the first quarter of 2005, the Corporation's banking segment's
investment in certain membership interests of PULSE EFT Associates
("PULSE") was liquidated by PULSE due to a change in control.  The cash
received resulted in a gain of $5.3 million which is reported in Net
investment securities gains (losses) in the Consolidated Statements of
Income.  An additional $0.3 million was received in the second quarter of
2005.

Second quarter 2004
-------------------
On May 27, 2004, Metavante completed the purchase of certain assets and
the assumption of certain liabilities of Kirchman Corporation
("Kirchman").  Kirchman is a provider of automation software and
compliance services to the banking industry.  This acquisition provided
Metavante with core-processing software that financial institutions can
run in-house, a solution Metavante previously did not offer.

First quarter 2004
------------------
On January 1, 2004, the Corporation's Banking segment completed the
purchase for cash of certain assets and the assumption of certain
liabilities of AmerUs Home Lending, Inc. ("AmerUs"), an Iowa-based
corporation engaged in the business of brokering and servicing mortgage
and home equity loans.  Although not material to the Corporation, this
acquisition enhances the Corporation's wholesale lending activities by
expanding its broker network.

During the first quarter of 2004, the Corporation prepaid and retired
$55.0 million of higher cost fixed rate debt that resulted in a charge to
earnings of $4.9 million.  The loss is reported in other in Other expense
in the Consolidated Statements of Income.


                          NET INTEREST INCOME
                          -------------------
Net interest income is the difference between interest earned on earning
assets and interest owed on interest bearing liabilities.  Net interest
income represented approximately 40.8% and 41.2% of the Corporation's source
of revenues for the three and six months ended June 30, 2005 compared to
46.3% and 46.7% , respectively for the three and six months ended June 30,
2004.

Net interest income for the second quarter of 2005 amounted to $304.8 million
compared to $284.0 million reported for the second quarter of 2004, an
increase of $20.8 million or 7.3%.  For the six months ended June 30, 2005,
net interest income amounted to $596.5 million compared to $562.6 million for
the six months ended June 30, 2004, an increase of $33.9 million or 6.0%.
Loan growth and the growth in noninterest bearing deposits were the primary
contributors to the increase in net interest income.  Factors negatively
affecting net interest income compared to the prior year three and six month
periods included the impact of lengthening liabilities in order to reduce
future volatility in net interest income due to interest rate changes and the
interest expense associated with the incremental debt issued in the third
quarter of 2004 to fund Metavante's acquisitions in 2004.

<PAGE> 22
Average earning assets in the second quarter of 2005 amounted to $37.8
billion compared to $32.5 billion in the second quarter of 2004, an increase
of $5.3 billion or 16.0%.  Average loans and leases accounted for $4.8
billion of the growth in average earning assets in the second quarter of 2005
compared to the second quarter of 2004. Average investment securities
increased $0.3 billion over the prior quarter.  Average earning assets for
the six months ended June 30, 2005 amounted to $37.0 billion compared to
$31.9 billion for the six months ended June 30, 2004, an increase of $5.1
billion or 15.8%.  Average loans and leases accounted for $4.6 billion of the
growth in average earning assets over the respective periods.  Average
investment securities increased $0.4 billion.

Average interest bearing liabilities increased $5.0 billion or 18.5% in the
second quarter of 2005 compared to the second quarter of 2004.  Average
interest bearing deposits increased $1.6 billion or 8.7% in the second
quarter of 2005 compared to the second quarter of last year.  Average total
borrowings increased $3.4 billion or 42.1% in the second quarter of 2005
compared to the same period in 2004.  For the six months ended June 30, 2005,
average interest bearing liabilities increased $4.9 billion or 18.5% compared
to the same period in 2004.  Average interest bearing deposits increased $2.0
billion or 10.7% in the first six months of 2005 compared to the first six
months of last year.  Average total borrowings increased $2.9 billion or
37.0% in the first half of 2005 compared to the same period in 2004.

Average noninterest bearing deposits increased $0.3 billion or 6.9% in the
three months ended June 30, 2005 compared to the same period last year.  On
a year-to-date basis, average noninterest bearing deposits increased $0.3
billion or 7.8% in the first six months of 2005 compared to the first six
months of 2004.

The growth and composition of the Corporation's quarterly average loan and
lease portfolio for the current quarter and previous four quarters are
reflected in the following table  ($ in millions):

                  Consolidated Average Loans and Leases
                  --------------------------------------
<TABLE>
<CAPTION>
                                       2005                    2004                  Growth Pct.
                               ------------------- ------------------------------ ------------------
                                 Second    First     Fourth    Third     Second             Prior
                                Quarter   Quarter   Quarter   Quarter   Quarter   Annual   Quarter
                               --------- --------- --------- --------- --------- -------- ---------
<S>                           <C>       <C>       <C>       <C>       <C>       <C>       <C>
Commercial Loans and Leases
---------------------------
  Commercial                   $  8,932  $  8,460  $  8,076  $  7,796  $  7,463     19.7 %     5.6 %

  Commercial real estate
    Commercial mortgages          8,509     8,275     8,042     7,826     7,512     13.3       2.8
    Construction                  1,358     1,241     1,143     1,100     1,071     26.8       9.4
                               --------- --------- --------- --------- --------- -------- ---------
  Total commercial real estate    9,867     9,516     9,185     8,926     8,583     15.0       3.7

  Commercial lease financing        425       398       402       395       393      8.2       6.8
                               --------- --------- --------- --------- --------- -------- ---------
Total Commercial
  Loans and Leases               19,224    18,374    17,663    17,117    16,439     16.9       4.6

Personal Loans and Leases
-------------------------
  Residential real estate
    Residential mortgages         3,986     3,562     3,234     2,929     2,743     45.3      11.9
    Construction                  1,382     1,167     1,017       865       759     82.0      18.4
                               --------- --------- --------- --------- --------- -------- ---------
  Total residential
    real estate                   5,368     4,729     4,251     3,794     3,502     53.3      13.5

  Personal loans
    Student                          78        88        85        79        83     (6.0)    (11.6)
    Credit card                     217       217       208       214       244    (11.4)     (0.3)
    Home equity
      loans and lines             5,098     5,131     5,035     4,894     4,688      8.7      (0.6)
    Other                         1,186     1,217     1,251     1,256     1,388    (14.5)     (2.5)
                               --------- --------- --------- --------- --------- -------- ---------
  Total personal loans            6,579     6,653     6,579     6,443     6,403      2.7      (1.1)

  Personal lease financing          123       128       135       146       164    (24.9)     (3.8)
                               --------- --------- --------- --------- --------- -------- ---------
Total Personal
  Loans and Leases               12,070    11,510    10,965    10,383    10,069     19.9       4.9
                               --------- --------- --------- --------- --------- -------- ---------
Total Consolidated Average
  Loans and Leases             $ 31,294  $ 29,884  $ 28,628  $ 27,500  $ 26,508     18.1 %     4.7 %
                               ========= ========= ========= ========= ========= ======== =========
</TABLE>

Total consolidated average loans and leases increased $4.8 billion or
18.1% in the second quarter of 2005 compared to the second quarter of
2004.  Total average commercial loan and lease growth was $2.8 billion, a
16.9% increase in the current quarter compared to the second quarter of
the prior year.  Approximately 52.7% of the growth in total average
commercial loans and leases was attributable to commercial and industrial
loans.  Total average personal loans and leases increased $2.0 billion or
19.9% in the second quarter of 2005 compared to the second quarter of
2004.  This growth was driven primarily by growth in residential real
estate loans and home equity loans and lines. Average indirect auto loans
and leases declined in the current quarter compared to the second quarter
of the prior year which reflects, in part, the effect of the sale and
securitization of indirect auto loans.  From a production standpoint,
residential real estate loan closings in the second quarter of 2005 were
$0.3 billion or 21.1% greater than loan closings in the second quarter of
2004 and were $0.4 billion or 34.4% greater than loan closings in the
first quarter of 2005.

<PAGE> 23
For the six months ended June 30, 2005, total consolidated average loans
and leases increased $4.6 billion or 17.8% compared to the six months
ended June 30, 2004.  Total average commercial loan and lease growth was
$2.6 billion, a 16.4% increase in the first six months of 2005 compared to
the first six months of the prior year.  Approximately 52.6% of the growth
in total average commercial loans and leases was attributable to
commercial and industrial loans.  Total average personal loans and leases
increased $2.0 billion or 20.1% in the first half of 2005 compared to the
first half of 2004.  This growth was driven primarily by growth in
residential real estate loans and home equity loans and lines.  Year-to-
date average indirect auto loans and leases declined in the first six
months of 2005 compared to the same period of the prior year which, as
previously discussed, reflects in part, the effect of the sale and
securitization of indirect auto loans.  From a production standpoint,
residential real estate loan closings in the first half of 2005 were $0.6
billion or 29.4% greater than loan closings in the first half of 2004.

Total average commercial loan and lease growth continued to be strong in
the second quarter and first six months of 2005.  This growth was spread
relatively evenly throughout the first two quarters, was experienced in
all of the Corporation's markets and came from both relatively new and
existing customers across a variety of industries.  Management attributes
the loan growth to the strength of the local economies in the markets the
Corporation serves, sales success and continued customer satisfaction.
The Corporation continues to believe that double-digit loan growth is a
reasonable expectation for the year ended December 31, 2005.  However, it
is uncertain whether the growth rates experienced in the first half of
2005 can be sustained for the remainder of the year.

Home equity loans and lines, which includes M&I's wholesale activity,
continue to be the primary consumer loan product.  The Corporation
anticipates these products will continue to drive growth in the consumer
side of its banking activities.

The Corporation sells some of its residential real estate production
(residential real estate and home equity loans) in the secondary market.
Selected residential real estate loans with rate and term characteristics
that are considered desirable are periodically retained in the portfolio.
For the three months ended June 30, 2005 and 2004 real estate loans sold
to investors amounted to $0.5 billion, respectively.  For the six months
ended June 30, 2005, real estate loans sold to investors amounted to $0.9
billion compared to $0.8 billion in the six months ended June 30, 2004.
At June 30, 2005 and 2004, the Corporation had approximately $153.8
million and $84.3 million of mortgage loans held for sale, respectively.
Gains from the sale of mortgage loans amounted to $9.5 million in the
second quarter of 2005 compared to $9.0 million in the second quarter of
2004. For the six months ended June 30, 2005, gains from the sale of
mortgage loans amounted to $16.4 compared to $14.2 million in the six
months ended June 30, 2004.

Auto loans securitized and sold in the second quarter of 2005 amounted to
$0.1 billion compared to $0.3 billion in the second quarter of 2004.  For
the six months ended June 30, 2005, auto loans securitized and sold
amounted to $0.2 billion compared to $0.4 billion in the six months ended
June 30, 2004.  For the three months ended June 30, 2005, net losses from
the sale and securitization of auto loans amounted to $1.9 million
compared to net losses of $3.2 million in the second quarter of 2004. For
the six months ended June 30, 2005, net gains from the sale and
securitization of auto loans were approximately break-even compared to net
losses of $2.3 million for the six month ended June 30, 2004. The losses
incurred were primarily due to lower loan interest spreads associated with
new auto loan production in a rising interest rate environment.  Auto
loans held for sale amounted to $39.3 million at June 30, 2005.

The Corporation anticipates that it will continue to divest itself of
selected assets through sale or securitization in future periods.

<PAGE> 24
The growth and composition of the Corporation's quarterly average deposits
for the current and previous four quarters are as follows ($ in millions):

                       Consolidated Average Deposits
                       -----------------------------
<TABLE>
<CAPTION>
                                       2005                    2004                  Growth Pct.
                               ------------------- ------------------------------ ------------------
                                 Second    First     Fourth    Third     Second             Prior
                                Quarter   Quarter   Quarter   Quarter   Quarter   Annual   Quarter
                               --------- --------- --------- --------- --------- -------- ---------
<S>                           <C>       <C>       <C>       <C>       <C>       <C>       <C>
Bank issued deposits
--------------------
  Noninterest bearing deposits
    Commercial                 $  3,377  $  3,263  $  3,427  $  3,280  $  3,143      7.4 %     3.5 %
    Personal                        958       930       923       902       908      5.6       3.0
    Other                           491       500       521       456       463      6.1      (1.9)
                               --------- --------- --------- --------- --------- -------- ---------
  Total noninterest
    bearing deposits              4,826     4,693     4,871     4,638     4,514      6.9       2.8

  Interest bearing deposits
    Savings and NOW               3,149     3,281     3,402     3,452     3,395     (7.3)     (4.0)
    Money market                  5,819     5,692     5,654     5,612     5,657      2.9       2.2
    Foreign activity                882       904       887       849       943     (6.4)     (2.4)
                               --------- --------- --------- --------- --------- -------- ---------
  Total interest
    bearing deposits              9,850     9,877     9,943     9,913     9,995     (1.5)     (0.3)

  Time deposits
    Other CDs and time deposits   2,951     2,787     2,685     2,653     2,582     14.3       5.8
    CDs greater than $100,000     1,243     1,074       906       805       660     88.3      15.8
                               --------- --------- --------- --------- --------- -------- ---------
  Total time deposits             4,194     3,861     3,591     3,458     3,242     29.4       8.6

Total bank issued deposits       18,870    18,431    18,405    18,009    17,751      6.3       2.4

Wholesale deposits
------------------
  Money market                    1,077     1,073     1,096       747        72  1,389.6       0.3
  Brokered CDs                    4,437     4,761     4,960     5,009     4,498     (1.4)     (6.8)
  Foreign time                    1,086       969       811       869     1,188     (8.5)     12.2
                               --------- --------- --------- --------- --------- -------- ---------
Total wholesale deposits          6,600     6,803     6,867     6,625     5,758     14.6      (3.0)
                               --------- --------- --------- --------- --------- -------- ---------
Total consolidated
  average deposits             $ 25,470  $ 25,234  $ 25,272  $ 24,634  $ 23,509      8.3 %     0.9 %
                               ========= ========= ========= ========= ========= ======== =========
</TABLE>

Total consolidated average deposits increased $2.0 billion or 8.3% in the
second quarter of 2005 compared to the second quarter of 2004.  Average
noninterest bearing deposits increased $0.3 billion or 6.9% while average
bank-issued interest bearing deposits increased $0.8 billion or 6.1% in
the current quarter compared to the second quarter of the prior year.  For
the six months ended June 30, 2005, total consolidated average deposits
increased $2.3 billion or 10.2% compared to the six months ended June 30,
2004.  Average noninterest bearing deposits increased $0.3 billion or 7.8%
while average bank-issued interest bearing deposits increased $0.7 billion
or 5.0% in the first six months of 2005 compared to the first six months
of the prior year.  The Corporation has recently experienced success in
competing for bank issued time deposits without pricing above comparable
wholesale levels.

The growth in bank issued deposits, especially noninterest bearing
deposits, includes both commercial and retail banking. Noninterest bearing
deposits are subject to seasonality and are influenced by the interest
rate environment.  In commercial banking, the focus remains on developing
deeper relationships through the sale of treasury management products and
services along with revised incentive plans focused on growing deposits.
The retail banking strategy continues to focus on aggressively selling the
right products to meet the needs of customers and enhance the
Corporation's profitability.  The Corporation continues to emphasize the
sale of checking products.

<PAGE> 25
For the three months ended June 30, 2005, average wholesale deposits
increased $0.8 billion, or 14.6% compared to the three months ended June
30, 2004. For the six months ended June 30, 2005, average wholesale
deposits increased $1.3 billion, or 25.0% compared to the six months ended
June 30, 2004.  The Corporation continues to make greater use of wholesale
funding alternatives, especially brokered money market deposits and
institutional certificates of deposit.  These deposits are funds in the
form of deposits generated through distribution channels other than M&I's
own banking branches.  These deposits allow the Corporation's bank
subsidiaries to gather funds across a wider geographic base and at pricing
levels considered attractive, where the underlying depositor may be retail
or institutional.  Access to and use of these funding sources also provide
the Corporation with the flexibility to not pursue unprofitable single
service time deposit relationships.

During the second quarter of 2005, $350.0  million of subordinated bank
notes were issued.  The subordinated bank notes mature in 2015 and have a
coupon rate of 4.85%.  Senior bank notes in an aggregate amount of $525.0
million were also issued during the second quarter of 2005.  The senior
bank notes are floating rate and mature at various time in 2007 and 2010.
Approximately $125.0 million of the senior bank notes were converted to a
fixed rate through the use of an interest rate swap. In addition, during
the second quarter of 2005, the Corporation issued $3.6 million of MiNotes
with an annual weighted average coupon interest rate of  4.51%.  The
MiNotes mature at various times in 2010 and 2012.  Series E medium-term
notes in the amount of $100.0 million with an annual coupon rate of 1.72%
matured during the second quarter of 2005.

During the first quarter of 2005, a new floating rate advance from the
Federal Home Loan Bank ("FHLB") aggregating $250.0 million was obtained.
The FHLB advance matures in 2011 and was converted to a fixed rate through
the use of an interest rate swap. During the first quarter of 2005, $900.0
million of senior bank notes with an annual weighted average coupon
interest rate of 4.13% were issued.  The notes mature at various times
beginning in 2008 through 2017.  In addition, during the first quarter of
2005, the Corporation issued $4.5 million of MiNotes with an annual
weighted average coupon interest rate of 5.02%.  The MiNotes mature at
various times beginning 2012 through 2023.

During the first quarter of 2004, a fixed rate FHLB advance aggregating
$55.0 million with an annual coupon interest rate of 5.06% was prepaid and
retired resulting in a charge to earnings of $4.9 million.

<PAGE> 26
The Corporation's consolidated average interest earning assets and
interest bearing liabilities, interest earned and interest paid for the
three and six months ended June 30, 2005 and 2004, are presented in the
following tables ($ in millions):

                   Consolidated Yield and Cost Analysis
                   ------------------------------------
<TABLE>
<CAPTION>
                                         Three Months Ended          Three Months Ended
                                            June 30, 2005               June 30, 2004
                                    ---------------------------  ---------------------------
                                                        Average                     Average
                                      Average          Yield or    Average          Yield or
                                      Balance Interest Cost (b)    Balance Interest Cost (b)
                                    ---------------------------  ---------------------------
<S>                               <C>        <C>     <C>       <C>        <C>     <C>
Loans and leases: (a)
  Commercial loans and leases      $  9,357.0 $ 134.1    5.75 % $  7,855.9 $  89.7    4.59 %
  Commercial real estate loans        9,867.4   149.4    6.07      8,582.9   113.9    5.34
  Residential real estate loans       5,367.6    79.3    5.92      3,501.8    47.2    5.42
  Home equity loans and lines         5,098.3    76.1    5.99      4,688.6    61.1    5.24
  Personal loans and leases           1,603.8    23.3    5.83      1,878.7    23.3    5.00
                                    ---------- ------- -------   ---------- ------- -------
Total loans and leases               31,294.1   462.2    5.92     26,507.9   335.2    5.09

Investment securities (b):
  Taxable                             4,828.6    53.3    4.41      4,671.1    48.6    4.19
  Tax Exempt (a)                      1,333.7    23.9    7.34      1,171.2    21.7    7.59
                                    ---------- ------- -------   ---------- ------- -------
Total investment securities           6,162.3    77.2    5.03      5,842.3    70.3    4.87

Trading securities (a)                   25.6     0.1    0.78         22.1     0.1    1.05

Other short-term investments            271.7     2.2    3.39        164.7     0.4    1.00
                                    ---------- ------- -------   ---------- ------- -------
Total interest earning assets      $ 37,753.7 $ 541.7    5.76 % $ 32,537.0 $ 406.0    5.02 %
                                    ========== ======= =======   ========== ======= =======
Interest bearing deposits:
  Bank issued deposits:
    Bank issued interest
      bearing activity deposits    $  9,850.0 $  41.8    1.70 % $  9,995.5 $  15.8    0.64 %
    Bank issued time deposits         4,193.2    31.6    3.02      3,241.8    19.2    2.38
                                    ---------- ------- -------   ---------- ------- -------
  Total bank issued deposits         14,043.2    73.4    2.10     13,237.3    35.0    1.06
  Wholesale deposits                  6,600.1    49.4    3.00      5,758.3    23.0    1.61
                                    ---------- ------- -------   ---------- ------- -------
Total interest bearing deposits      20,643.3   122.8    2.39     18,995.6    58.0    1.23

Short-term borrowings                 3,392.3    28.4    3.36      3,258.9    14.2    1.76
Long-term borrowings                  7,920.1    77.3    3.91      4,703.9    41.8    3.57
                                    ---------- ------- -------   ---------- ------- -------
Total interest
  bearing liabilities              $ 31,955.7 $ 228.5    2.87 % $ 26,958.4 $ 114.0    1.70 %
                                    ========== ======= =======   ========== ======= =======
Net interest margin (FTE) as a
  percent of average earning assets           $ 313.2    3.33 %            $ 292.0    3.61 %
                                               ======= =======              ======= =======
Net interest spread (FTE)                                2.89 %                       3.32 %
                                                       =======                      =======
</TABLE>

 (a)  Fully taxable equivalent basis (FTE), assuming a Federal income tax
      rate of 35%, and excluding disallowed interest expense.
 (b)  Based on average balances excluding fair value adjustments for
      available for sale securities.

<PAGE> 27

                   Consolidated Yield and Cost Analysis
                   ------------------------------------
<TABLE>
<CAPTION>
                                          Six Months Ended            Six Months Ended
                                            June 30, 2005               June 30, 2004
                                    ----------------------------  ----------------------------
                                                        Average                      Average
                                      Average          Yield or    Average           Yield or
                                      Balance Interest Cost (b)    Balance  Interest Cost (b)
                                    ----------------------------  ----------------------------
<S>                               <C>        <C>      <C>       <C>        <C>      <C>
Loans and leases: (a)
  Commercial loans and leases      $  9,108.7 $  252.6    5.59 % $  7,698.4 $  177.2    4.63 %
  Commercial real estate loans        9,692.9    286.6    5.96      8,452.1    225.0    5.35
  Residential real estate loans       5,050.1    145.9    5.83      3,364.2     91.9    5.49
  Home equity loans and lines         5,114.4    148.7    5.86      4,563.4    120.1    5.29
  Personal loans and leases           1,626.6     45.8    5.68      1,889.6     47.6    5.07
                                    ---------- -------- --------  ---------- -------- -------
Total loans and leases               30,592.7    879.6    5.80     25,967.7    661.8    5.13

Investment securities (b):
  Taxable                             4,825.7    105.2    4.39      4,602.1     96.9    4.26
  Tax Exempt (a)                      1,306.1     46.9    7.41      1,158.9     43.1    7.64
                                    ---------- -------- -------   ---------- -------- -------
Total investment securities           6,131.8    152.1    5.02      5,761.0    140.0    4.93

Trading securities (a)                   24.4      0.1    0.99         22.7      0.2    1.33

Other short-term investments            229.6      3.7    3.20        188.6      0.9    1.01
                                    ---------- -------- -------   ---------- -------- -------
Total interest earning assets      $ 36,978.5 $1,035.5    5.65 % $ 31,940.0 $  802.9    5.06 %
                                    ========== ======== =======   ========== ======== =======
Interest bearing deposits:
  Bank issued deposits:
    Bank issued interest
      bearing activity deposits    $  9,863.4 $   75.5    1.54 % $  9,993.7 $   31.3    0.63 %
    Bank issued time deposits         4,028.1     57.6    2.89      3,242.0     38.4    2.38
                                    ---------- -------- -------   ---------- -------- -------
  Total bank issued deposits         13,891.5    133.1    1.93     13,235.7     69.7    1.06
  Wholesale deposits                  6,700.8     93.2    2.80      5,361.3     43.8    1.65
                                    ---------- -------- -------   ---------- -------- -------
Total interest bearing deposits      20,592.3    226.3    2.22     18,597.0    113.5    1.23

Short-term borrowings                 3,144.0     50.3    3.23      3,343.7     30.1    1.81
Long-term borrowings                  7,564.6    145.7    3.88      4,473.3     80.8    3.63
                                    ---------- -------- -------   ---------- -------- -------
Total interest
  bearing liabilities              $ 31,300.9 $  422.3    2.72 % $ 26,414.0 $  224.4    1.71 %
                                    ========== ======== =======   ========== ======== =======
Net interest margin (FTE) as a
  percent of average earning assets           $  613.2    3.35 %            $  578.5    3.65 %
                                               ======== =======              ======== =======
Net interest spread (FTE)                                 2.93 %                        3.35 %
                                                        =======                       =======
</TABLE>

 (a)  Fully taxable equivalent basis (FTE), assuming a Federal income tax
      rate of 35%, and excluding disallowed interest expense.
 (b)  Based on average balances excluding fair value adjustments for
      available for sale securities.

The net interest margin, as a percent of average earning assets on a fully
taxable equivalent basis ("FTE"), decreased 28 basis points from 3.61% in the
second quarter of 2004 to 3.33% in the second quarter of 2005.  For the six
months ended June 30, 2005, the net interest margin, as a percent of average
earning assets on a FTE basis was 3.35% compared to 3.65% for the six months
ended June 30, 2004, a decrease of 30 basis points.  The decrease in net
interest margin in 2005 was offset, in part, by the increase in noninterest
bearing deposits as previously discussed.  When comparing the net interest
margin percentage for the three  and six months ended June 30, 2005 to the
three and six months ended June 30, 2004, the Corporation estimates that the
additional interest expense associated with the $1.0 billion of debt issued
in late July 2004 to finance Metavante's acquisitions lowered the net
interest margin by approximately 12 basis points in the second quarter and
first half of 2005.  Unlike a bank acquisition or loan growth, where the
primary source of revenue is interest income, the revenue impact of
Metavante's acquisitions is recorded in Other income and is not a component
of the net interest margin statistic.  Compared to the first quarter of 2005,
the net interest margin, as a percent of average earning assets on a FTE
basis, decreased 3 basis points from 3.36% in the first quarter of 2005 to
3.33% in the second quarter of 2005.

<PAGE> 28
The contraction of the net interest margin as a percent of average earning
assets is primarily driven by the continued growth in loan balances beyond
the Corporation's capacity to generate bank-issued deposit growth below the
wholesale costs of funds.  Management expects modest downward pressure on the
net interest margin percentage to continue.  Net interest income and the net
interest margin percentage can vary and continue to be influenced by loan and
deposit growth, product spreads, pricing competition in the Corporation's
markets, prepayment activity, future interest rate changes and various other
factors.

            PROVISION FOR LOAN AND LEASE LOSSES AND CREDIT QUALITY
            ------------------------------------------------------

The following tables present comparative consolidated credit quality
information as of June 30, 2005, and the prior four quarters:

                            Nonperforming Assets
                            --------------------
                                   ($000's)
<TABLE>
<CAPTION>
                                         2005                          2004
                                ----------------------  ----------------------------------
                                   Second      First       Fourth      Third       Second
                                  Quarter     Quarter     Quarter     Quarter     Quarter
                                ----------  ----------  ----------  ----------  ----------
<S>                           <C>         <C>         <C>         <C>         <C>
Nonaccrual                     $  126,920  $  124,416  $  127,722  $  139,154  $  137,845

Renegotiated                          176         220         236         244         253

Past due 90 days or more            4,514       5,314       4,405       3,148       6,902
                                ----------  ----------  ----------  ----------  ----------
Total nonperforming
  loans and leases                131,610     129,950     132,363     142,546     145,000

Other real estate owned             9,124       6,770       8,056       7,098      10,394
                                ----------  ----------  ----------  ----------  ----------
Total nonperforming assets     $  140,734  $  136,720  $  140,419  $  149,644  $  155,394
                                ==========  ==========  ==========  ==========  ==========

Allowance for loan
  and lease losses             $  360,138  $  358,280  $  358,110  $  358,072  $  357,898
                                ==========  ==========  ==========  ==========  ==========
</TABLE>

                          Consolidated Statistics
                          -----------------------
<TABLE>
<CAPTION>
                                         2005                          2004
                                ----------------------  ----------------------------------
                                   Second      First       Fourth      Third       Second
                                  Quarter     Quarter     Quarter     Quarter     Quarter
                                ----------  ----------  ----------  ----------  ----------
<S>                           <C>         <C>         <C>         <C>         <C>
Net charge-offs to average
  loans and leases annualized        0.15 %      0.11 %      0.18 %      0.10 %      0.08 %
Total nonperforming loans
  and leases to total
  loans and leases                   0.41        0.42        0.45        0.51        0.53
Total nonperforming assets
  to total loans and leases
  and other real estate              0.44        0.45        0.48        0.53        0.57
Allowance for loan and
  lease losses to total
  loans and leases                   1.12        1.17        1.21        1.27        1.32
Allowance for loan and
  lease losses to total
  nonperforming loans
  and leases                          274         276         271         251         247
</TABLE>

<PAGE> 29
                    Nonaccrual Loans and Leases By Type
                    -----------------------------------
                                   ($000's)
<TABLE>
<CAPTION>
                                            2005                          2004
                                ----------------------  ----------------------------------
                                   Second      First       Fourth      Third       Second
                                  Quarter     Quarter     Quarter     Quarter     Quarter
                                ----------  ----------  ----------  ----------  ----------
<S>                           <C>         <C>         <C>         <C>         <C>
Commercial
  Commercial, financial
    and agricultural           $   35,777  $   37,587  $   41,047  $   49,714  $   39,473
  Lease financing receivables       3,990       4,882       4,463       5,476       6,398
                                ----------  ----------  ----------  ----------  ----------
Total commercial                   39,767      42,469      45,510      55,190      45,871

Real estate
  Construction and
    land development                1,500         785         578         207       1,724
  Commercial mortgage              37,107      28,115      31,852      33,817      38,561
  Residential mortgage             47,797      52,056      49,206      48,715      50,776
                                ----------  ----------  ----------  ----------  ----------
Total real estate                  86,404      80,956      81,636      82,739      91,061

Personal                              749         991         576       1,225         913
                                ----------  ----------  ----------  ----------  ----------
Total nonaccrual
  loans and leases             $  126,920  $  124,416  $  127,722  $  139,154  $  137,845
                                ==========  ==========  ==========  ==========  ==========
</TABLE>

             Reconciliation of Allowance for Loan and Lease Losses
             -----------------------------------------------------
                                   ($000's)
<TABLE>
<CAPTION>
                                            2005                          2004
                                ----------------------  ----------------------------------
                                   Second      First       Fourth      Third       Second
                                  Quarter     Quarter     Quarter     Quarter     Quarter
                                ----------  ----------  ----------  ----------  ----------
<S>                           <C>         <C>         <C>         <C>         <C>
Beginning balance              $  358,280  $  358,110  $  358,072  $  357,898  $  353,687

Provision for loan
  and lease losses                 13,725       8,126      12,837       6,872       9,227

Allowance of banks
  and loans acquired                   --          --          --          --          --

Loans and leases charged-off
  Commercial                        3,767       6,036       5,453       4,403       4,015
  Real estate                       8,190       3,339       4,342       3,047       2,765
  Personal                          3,765       3,416       3,345       3,207       2,616
  Leases                              380         246       6,178         252         536
                                ----------  ----------  ----------  ----------  ----------
Total charge-offs                  16,102      13,037      19,318      10,909       9,932

Recoveries on loans and leases
  Commercial                        2,264       2,604       5,100       2,366       2,279
  Real estate                         413       1,380         387         611       1,336
  Personal                            782         719         765         900         906
  Leases                              776         378         267         334         395
                                ----------  ----------  ----------  ----------  ----------
Total recoveries                    4,235       5,081       6,519       4,211       4,916
                                ----------  ----------  ----------  ----------  ----------
Net loans and leases charge-offs   11,867       7,956      12,799       6,698       5,016
                                ----------  ----------  ----------  ----------  ----------
Ending balance                 $  360,138  $  358,280  $  358,110  $  358,072  $  357,898
                                ==========  ==========  ==========  ==========  ==========
</TABLE>

Nonperforming assets consist of nonperforming loans and leases and other real
estate owned ("OREO").

OREO is principally comprised of commercial and residential properties
acquired in partial or total satisfaction of problem loans and amounted to
$9.1 million at June 30, 2005, compared to $6.8 million at March 31, 2005 and
$8.1 million at December 31, 2004.  The increase in OREO at June 30, 2005
compared to March 31, 2005 was primarily attributable to acquired non-
residential properties.

Nonperforming loans and leases consist of nonaccrual, renegotiated or
restructured loans, and loans and leases that are delinquent 90 days or more
and still accruing interest.  The balance of nonperforming loans and leases
can fluctuate widely based on the timing of cash collections, renegotiations
and renewals.

<PAGE> 30
Maintaining nonperforming assets at an acceptable level is important to the
ongoing success of a financial services institution.  The Corporation's
comprehensive credit review and approval process are critical to ensuring
that the amount of nonperforming assets on a long-term basis is minimized
within the overall framework of acceptable levels of credit risk.  In
addition to the negative impact on net interest income and credit losses,
nonperforming assets also increase operating costs due to the expense
associated with collection efforts.

At June 30, 2005, nonperforming loans and leases amounted to $131.6 million
or 0.41% of consolidated loans and leases compared to $130.0 million or 0.42%
of consolidated loans and leases at March 31, 2005, and $132.4 million or
0.45% of consolidated loans and leases at December 31, 2004.  At June 30,
2005 nonperforming loans and leases increased slightly compared to
nonperforming loans and leases at March 31, 2005.  The ratio of nonperforming
loans and leases to consolidated  loans and leases at June 30, 2005
represents the ninth consecutive quarter that the Corporation has experienced
a decline in that ratio.  Nonaccrual loans and leases continue to be the
primary source of nonperforming loans and leases.  Since December 31, 2004,
the decline in nonaccrual commercial loans and leases and nonaccrual
residential real estate loans was offset by increases in nonaccrual
commercial real estate loans and nonaccrual construction and land development
loans.

Net charge-offs amounted to $11.9 million or 0.15% of average loans and
leases in the second quarter of 2005 compared to $8.0 million or 0.11% of
average loans and leases in the first quarter of 2005 and $12.8 million or
0.18% of average loans and leases in the fourth quarter of 2004.  The lower
level of net charge-offs experienced throughout 2004 and the first half of
2005 has to some extent been the result of higher than normal recoveries.
Based on the status of some of the larger charge-offs recognized in recent
quarters, management expects recoveries will likely return to lower levels
in future periods.  Recoveries in the second quarter of 2005 were $0.8
million lower than recoveries in the first quarter of 2005 and $2.3 million
lower than recoveries in the fourth quarter of 2004.  The ratio of recoveries
to charge-offs was 26.3% in the second quarter of 2005 which was slightly
below the Corporation's five year historical average ratio of recoveries to
charge-offs of 26.9%.  For the six month ended June 30, 2005, the ratio of
recoveries to charge-offs was 32.0%.

Management continues to expect the longer term level of nonperforming loans
and leases to be in the range of 50-60 basis points of total loans and leases
and expects net charge-offs to trend to historical levels.  While it is
unclear when this will occur, management does not believe that current net
charge-off levels are sustainable indefinitely.

The provisions for loan and lease losses amounted to $13.7 million for the
three months ended June 30, 2005 compared to $8.1 million for the three
months ended March 31, 2005 and $9.2 million for the three months ended June
30, 2004.  For the six months ended June 30, 2005, the provision for loan and
lease losses amounted to $21.9 million compared to $18.3 million for the six
months ended June 30, 2004.  The allowance for loan and lease losses as a
percent of consolidated loans and leases outstanding was 1.12% at June 30,
2005, 1.17% at March 31, 2005 and 1.32% at June 30, 2004.


                              OTHER INCOME
                              ------------
Other income or noninterest sources of revenue represented approximately
59.2% and 53.7% of the Corporation's total sources of revenues for the three
months ended June 30, 2005 and 2004, respectively.  Total other income in the
second quarter of 2005 amounted to $442.6 million compared to $330.0 million
in the same period last year, an increase of $112.6 million or 34.1%.  For
the six months ended June 30, 2005, other income  represented approximately
58.8% of the Corporation's total sources of revenues and amounted to $852.1
million.  By comparison, for the six months ended June 30, 2004, other income
represented approximately 53.4% of the Corporation's total sources of
revenues and amounted to $643.4 million.  For the six months ended June 30,
2005 other income increased $208.7 million or 32.4% compared to the six
months ended June 30, 2004.

The increase in other income in the second quarter and first half of 2005
compared to the same periods in 2004 was primarily due to growth in data
processing services and trust services revenue and, as previously discussed,
the gain from the sale of an entity associated with the Corporation's
investment in an independent private equity and venture capital partnership.


<PAGE> 31
Data processing services revenue amounted to $271.7 million in the second
quarter of 2005 compared to $197.3 million in the second quarter of 2004, an
increase of $74.4 million or 37.7%.  For the six months ended June 30, 2005,
data processing services revenue amounted to $544.0 million compared to
$383.5 million in the six months ended June 30, 2004, an increase of $160.5
million or 41.9%.  Overall, revenue growth was generally stronger than
expected throughout this segment and was driven by revenue associated with
acquisitions and higher transaction volumes in payment processing and
electronic banking.  Revenue associated with Metavante's acquisitions
completed in 2005 and 2004 net of revenue lost from the 2004 divestitures
(collectively "acquisitions"), contributed a significant portion of the
revenue growth in the three and six months ended June 30, 2005, over the
comparable three and six months ended June 30, 2004, respectively.  The
acquisition related revenue growth includes cross sales of acquired products
to clients across the entire segment.  Total buyout revenue, which varies
from period to period, increased $0.2 million in the current quarter compared
to the second quarter of last year and was $3.0 million higher in the first
half of 2005 compared to the first half of 2004.

Based on its performance in the first half of 2005, management expects
Metavante's total 2005 revenues (internal and external) will be at the upper
end of the $1.1 to $1.2 billion revenue range previously provided and segment
earnings will be in the range of $115.0 million to $120.0 million, excluding
the impact of recently announced acquisitions.

Trust services revenue amounted to $41.1 million in the second quarter of
2005 compared to $37.9 million in the second quarter of 2004, an increase of
$3.2 million or 8.4%.  For the six months ended June 30, 2005, trust services
revenue amounted to $81.5 million compared to $74.2 million for the six
months ended June 30, 2004, an increase of $7.3 million or 9.8%.  The
increase in revenue was due to sales efforts that continue to emphasize
cross-selling and integrated delivery.  Assets under management were
approximately $18.5 billion at June 30, 2005, compared to $18.3 billion at
December 31, 2004, and $17.1 billion at June 30, 2004.

Service charges on deposits amounted to $23.9 million in the second quarter
of 2005 compared to $25.1 million in the second quarter of 2004, a decrease
of $1.2 million.  For the six months ended June 30, 2005, service charges on
deposits amounted to $47.5 million compared to $50.6 million for the six
months ended June 30, 2004, a decrease of $3.1 million.  A portion of this
source of fee income is sensitive to changes in interest rates.  In a rising
interest rate environment customers receive a higher earnings credit for
maintaining balances which results in lower fee income. Service charges on
deposits associated with commercial demand deposits accounted for the
majority of the decline in this revenue in both the three and six months
ended June 30, 2005 compared to the three and six months ended June 30, 2004.

Total mortgage banking revenue was $10.5 million in the second quarter of
2005 compared with $11.7 million in the second quarter of 2004, a decrease
of $1.2 million. Total mortgage banking revenue was $18.4 million in the
first six months of 2005 compared with $18.7 million in the first six months
of 2004.  For the three months ended June 30, 2005 and 2004, the Corporation
sold $0.5 billion of residential mortgage and home equity loans to the
secondary market.  For the six months ended June 30, 2005 and 2004, the
Corporation sold $0.9 billion and $0.8 billion of residential mortgage and
home equity loans to the secondary market, respectively.  Retained interests
in the form of mortgage servicing rights on residential mortgage loans
amounted to $0.5 million for the six months ended June 30, 2005 and $0.7
million for the six months ended June 30, 2004.

Net investment securities gains amounted to $29.4 million and $35.3 million
for the three and six months ended June 30, 2005, respectively.  As
previously discussed, during the second quarter of 2005, the Corporation
realized a gain due to the sale of an entity associated with its investment
in an independent private equity and venture capital partnership.  The gross
gain amounted to $29.0 million.  During the first quarter of 2005, the
Corporation's banking segment's investment in certain membership interests
of PULSE was liquidated by PULSE.  The cash received resulted in a gain of
$5.3 million. An additional $0.3 million was received in the second quarter
of 2005.  Net investment securities activities for the three and six months
ended June 30, 2004 were not significant.

Other income in the second quarter of 2005 amounted to $47.2 million compared
to $39.9 million in the second quarter of 2004, an increase of $7.3 million
or 18.4%.  For the six months ended June 30, 2005, other income amounted to
$89.9 million compared to $80.8 million for the six months ended June 30,
2004, an increase of $9.1 million or 11.1%. Higher auto securitization
income, as previously discussed, and increases in loan related and card
related fees were the primary contributors to the increase in other income
in the three and six months ended June 30, 2005 compared to the three and six
months ended June 30, 2004.  Other income for the three and six months ended
June 30, 2005 includes a gain from a branch divestiture of $0.9 million.  In
addition, other income for the six months ended June 30, 2005 includes a gain
of $0.8 million from the required sale of a facility that was completed
during the first quarter of 2005.


                               OTHER EXPENSE
                               -------------
Total other expense for the three months ended June 30, 2005 amounted to
$452.6 million compared to $374.7 million for the three months ended June 30,
2004, an increase of $77.9 million or 20.8%.  For the six months ended June
30, 2005, total other expense amounted to $889.0 million compared to $737.0
million for the six months ended June 30, 2004, an increase of $152.0 million
or 20.6%.

<PAGE> 32
Total other expense for the three and six months ended June 30, 2005 included
the operating expenses associated with Metavante's acquisitions of Kirchman
Corporation in May 2004, Advanced Financial Solutions, Inc. and its
affiliated companies in July 2004, the NYCE Corporation in July 2004,
Response Data Corp. in September 2004, NuEdge Systems LLC in October 2004,
VECTORsgi Holdings, Inc. in November 2004 and Prime Associates, Inc. on
February 9, 2005.  Total other expense for the three and six months ended
June 30, 2005 excluded the operating expenses associated with the 401k
Retirement Plan Services operations and the direct customer base of
Paytrust.com that were sold in the fourth quarter of 2004.

Metavante's acquisitions and divestitures had a significant impact on the
period-to-period comparability of operating expenses in 2005 compared to
2004.  Approximately $54.9 million of the operating expense growth in the
second quarter of 2005 compared to the second quarter of 2004 was
attributable to the acquisitions and divestitures.  Approximately $117.4
million of the operating expense growth in the first six months of 2005
compared to the first six months of 2004 was attributable to the acquisitions
and divestitures.  The operating expenses of the acquired and divested
entities have been included in or excluded from the Corporation's
consolidated operating expenses from the dates the transactions were
completed.

Other expense for the three and six months ended June 30, 2004, included a
product impairment charge by Metavante that amounted to $5.5 million.  As
previously discussed, other expense for the six months ended June 30, 2004
included a charge to earnings of $4.9 million because the Corporation prepaid
and retired $55.0 million of higher cost fixed rate debt during the first
quarter of 2004.

The Corporation estimates that its expense growth in the three and six months
ended June 30, 2005 compared to the three and six months ended June 2004,
excluding the effects of the acquisitions and divestitures, the debt
prepayment and the impairment charge, was approximately $28.5 million or 7.9%
and $45.0 million or 6.3%, respectively.

Expense control is sometimes measured in the financial services industry by
the efficiency ratio statistic.  The efficiency ratio is calculated by taking
total other expense divided by the sum of total other income (including
Capital Markets revenue but excluding investment securities gains or losses)
and net interest income on a fully taxable equivalent basis.  The
Corporation's efficiency ratios for the three months ended June 30, 2005, and
prior four quarters were:

                             Efficiency Ratios
                             -----------------
<TABLE>
<CAPTION>
                                                   Three Months Ended
                             ----------------------------------------------------------------
                               June 30,     March 31,  December 31, September 30,  June 30,
                                 2005         2005         2004         2004         2004
                             ------------ ------------ ------------ ------------ ------------
<S>                         <C>          <C>          <C>          <C>          <C>
Consolidated Corporation         59.9 %       62.0 %       61.6 %       62.2 %       60.2 %

Consolidated Corporation
  Excluding Metavante            47.7 %       48.8 %       47.0 %       49.0 %       48.8 %
</TABLE>

Salaries and employee benefits expense amounted to $262.4 million in the
second quarter of 2005 compared to $211.9 million in the second quarter of
2005, an increase of $50.5 million or 23.8%.  For the six months ended June
30, 2005, salaries and employee benefits expense amounted to $500.9 million
compared to $415.8 million for the six months ended June 30, 2004, an
increase of $85.1 million or 20.5%.  Salaries and benefits associated with
acquisitions and divestitures previously discussed accounted for
approximately $25.7 million and $55.1 million of the increase in salaries and
employee benefits expense in the second quarter and first six months of 2005
compared to the second quarter and first six months of 2004, respectively.
Long-term incentive plans, which are tied to consolidated performance and the
Corporation's common stock price, and business-line performance incentives,
which increased due to significant business success especially in the current
quarter, accounted for over half of the remaining increase in salaries and
employee benefit expense in the three and six months ended June 30, 2005
compared to the three and six months ended June 30, 2004.  From June 30, 2004
to June 30, 2005, the Corporation's common stock price increased 13.7%.

For the second quarter of 2005, occupancy and equipment expense amounted to
$50.9 million compared to $44.5 million in the second quarter of 2004, an
increase of $6.4 million or 14.3%.  For the six months ended June 30, 2005,
occupancy and equipment expense amounted to $104.2 million compared to $91.8
million for the six months ended June 30, 2004, an increase of $12.4 million
or 13.5%.  The acquisitions and divestitures accounted for approximately all
of the increase in occupancy and equipment expense in the three and six
months ended June 30, 2005 compared to the three and six months ended June
30, 2004, respectively.

<PAGE> 33
Software expenses, processing charges, supplies and printing, professional
services and shipping and handling expenses totaled $63.0 million in the
second quarter of 2005 compared to $58.5 million in the second quarter of
2004, an increase of $4.5 million or 7.7%.  For the six months ended June 30,
2005, software expenses, processing charges, supplies and printing,
professional services and shipping and handling expenses totaled $128.3
million compared to $114.0 million, for the six months ended June 30, 2004,
an increase of $14.3 million or 12.6%.  The acquisitions and divestitures
accounted for approximately $6.6 million of the increase in these expense
items in the second quarter of 2005 compared to the second quarter of 2004.
The increase in these expense items due to the acquisitions and divestitures
in the second quarter of 2005 compared to the second quarter of 2004 were
offset by lower shipping and handling charges at Metavante and lower
processing charges in the other business segments. The acquisitions and
divestitures accounted for approximately all of the increase in these expense
items in the six months ended June 30, 2005 compared to the six months ended
June 30, 2004.

Amortization of intangibles amounted to $8.1 million in the second quarter
of 2005 compared to $5.4 million in the second quarter of 2004, an increase
of $2.7 million.  For the six months ended June 30, 2005, amortization of
intangibles amounted to $16.2 million compared to $10.9 million for the six
months ended June 30, 2004, an increase of $5.3 million. Amortization and
valuation reserve adjustments associated with mortgage servicing rights
decreased amortization expense $0.1 million and $0.8 million in the second
quarter of 2005 and first six months of 2005 compared to the second quarter
and first six months of 2004, respectively.  The carrying value of the
Corporation's mortgage servicing rights was $3.2 million at June 30, 2005.
Amortization of core deposit intangibles, which is based on a declining
balance method, decreased $0.6 million and $1.1 million in the second quarter
and first six months of 2005 compared to the second quarter and first six
months of the prior year.  For the three and six months ended June 30, 2005
compared to the three and six months ended June 30, 2004, the acquisitions
and divestitures contributed approximately $3.9 million and $7.9 million,
respectively to the increase in intangibles amortization expense in the
respective periods.

Other expense amounted to $68.2 million in the second quarter of 2005
compared to $54.4 million in the second quarter of 2004, an increase of $13.8
million or 25.4%. The acquisitions and divestitures accounted for
approximately $10.6 million of the increase in other expense in the second
quarter of 2005 compared to the second quarter of 2004.  For the six months
ended June 30, 2005, other expense amounted to $139.4 million compared to
$104.5 million for the six months ended June 30, 2004, an increase of $34.9
million or 33.3%.  The acquisitions and divestitures accounted for
approximately $23.5 million of the increase in other expense in the first six
months of 2005 compared to the first six months of 2004.  As previously
discussed, other expense for the six months ended June 30, 2004 includes a
charge to earnings of $4.9 million for the early retirement of $55.0 million
of higher cost fixed rate debt during the first quarter of 2004.

Other expense is affected by the capitalization of costs, net of amortization
associated with software development and customer data processing
conversions.  Net software and conversion amortization was $5.6 million in
the second quarter of 2005 compared to $6.7 million in the second quarter of
2004, resulting in a decrease to other expense over the comparative quarters
of $1.1 million.  For the six months ended June 30, 2005 net software and
conversion amortization was $11.4 million compared to $9.8 million for the
six months ended June 30, 2004, resulting in an increase to other expense
over the comparative six months of $1.6 million.  The acquisitions and
divestitures increased net software and conversion amortization expense in
the three and six months ended June 30, 2005 compared to the three and six
months ended June 30, 2004 by $1.2 million and $2.8 million, respectively.
Included in net software and conversion amortization for the three and six
months ended June 30, 2004 is Metavante's write-off of capitalized software
associated with an impaired product as previously discussed.

Higher expenses associated with credit cards, advertising and promotion and
various other expenses accounted for the remaining increase in other expense
in the three and six months ended June  30, 2005 compared to the three and
six months ended June 30, 2004, respectively.


                               INCOME TAXES
                               ------------
The provision for income taxes for the three months ended June 30, 2005
amounted to $92.5 million or 32.9% of pre-tax income compared to $78.4
million or 34.1% of pre-tax income for the three months ended June 30, 2004.
For the six months ended June 30, 2005 the provision for income taxes
amounted to $179.7 million or 33.4% of pre-tax income compared to $153.0
million or 33.9% of pre-tax income for the six months ended June 30, 2004.
In the normal course of business, the Corporation and its affiliates are
routinely subject to examinations from federal and state tax authorities.
During the second quarter of 2005, an income tax issue was resolved which
primarily affected the banking segment and resulted in a lower provision for
income taxes in the consolidated statements of income for the three and six
months ended June 30, 2005.

<PAGE> 34
                       LIQUIDITY AND CAPITAL RESOURCES
                       -------------------------------
Shareholders' equity was $4.2 billion or 9.7% of total consolidated assets
at June 30, 2005, compared to $3.9 billion or 9.6% of total consolidated
assets at December 31, 2004, and $3.4 billion or 9.3% of total consolidated
assets at June 30, 2004.  The increase in shareholders' equity at June 30,
2005 was primarily due to earnings net of dividends paid. In the second
quarter of 2005, the Corporation's Board of Directors authorized an increase
in the quarterly cash dividend paid on the Corporation's common stock, from
$0.21 per share to $0.24 per share, or 14.3%.  Shareholders' equity at June
30, 2005 includes the effect of certain common stock issuances in the first
quarter of 2005.  During the first quarter of 2005, the Corporation issued
563,114 shares of its common stock valued at $24.0 million in conjunction
with Metavante's acquisition of Prime Associates, Inc.  Also during the first
quarter of 2005, the Corporation issued 355,046 shares of its common stock
valued at $14.4 million to fund its 2004 obligations under its retirement and
employee stock ownership plans.

At June 30, 2005, the net gain in accumulated other comprehensive income
amounted to $15.5 million which represented a negative change in accumulated
other comprehensive income of $7.8 million since December 31, 2004.  Net
accumulated other comprehensive income associated with available for sale
investment securities was a net gain of $13.7 million at June 30, 2005,
compared to a net gain of $31.1 million at December 31, 2004, resulting in
a net loss of $17.4 million over the six month period. Net accumulated other
comprehensive income associated with the change in fair value of the
Corporation's derivative financial instruments designated as cash flow hedges
was a net gain of $9.5 million over the six month period.

The Corporation has a Stock Repurchase Program under which it may repurchase
up to 12 million shares of its common stock annually.  No shares were
acquired under the program in the second quarter or first six months of 2005.
For the six months ended June 30, 2004, 2.3 million shares were acquired at
an aggregate cost of $88.5 million or an average price of $38.98 per common
share.  As a result of the Metavante acquisitions, the Corporation does not
expect that it will acquire shares of its common stock under the Stock
Repurchase Program in the near term.

The Corporation continues to have a strong capital base and its regulatory
capital ratios are significantly above the minimum requirements as shown in
the following tables.

                        RISK-BASED CAPITAL RATIOS
                        -------------------------
                             ($ in millions)
<TABLE>
<CAPTION>
                                       June 30, 2005                   December 31, 2004
                            ---------------------------------  ---------------------------------
                                  Amount           Ratio             Amount           Ratio
                            ---------------------------------  ---------------------------------
<S>                       <C>                <C>             <C>                <C>
 Tier 1 Capital            $           2,809           7.55 % $           2,520           7.42 %
 Tier 1 Capital
   Minimum Requirement                 1,488           4.00               1,358           4.00
                            --------------------------------   --------------------------------
 Excess                    $           1,321           3.55 % $           1,162           3.42 %
                            ================================   ================================

 Total Capital             $           4,434          11.92 % $           3,802          11.20 %
 Total Capital
   Minimum Requirement                 2,976           8.00               2,716           8.00
                            --------------------------------   --------------------------------
 Excess                    $           1,458           3.92 % $           1,086           3.20 %
                            ================================   ================================

 Risk-Adjusted Assets      $          37,198                  $          33,948
                            =================                  =================
</TABLE>

                              LEVERAGE RATIOS
                              ---------------
                              ($ in millions)
<TABLE>
<CAPTION>
                                       June 30, 2005                   December 31, 2004
                            ---------------------------------  ---------------------------------
                                  Amount           Ratio             Amount           Ratio
                            ---------------------------------  ---------------------------------
<S>                       <C>       <C>     <C>      <C>     <C>       <C>     <C>     <C>
 Tier 1 Capital            $           2,809           6.91 % $           2,520           6.72 %
 Minimum Leverage
   Requirement               1,219  -  2,032   3.00 -  5.00     1,126  -  1,876   3.00 -  5.00
                            --------------------------------   --------------------------------
 Excess                    $ 1,590  -    777   3.91 -  1.91 % $ 1,394  -    644   3.72 -  1.72 %
                            ================================   ================================
 Adjusted Average
   Total Assets            $          40,648                  $          37,509
                            =================                  =================
</TABLE>

<PAGE> 35
M&I manages its liquidity to ensure that funds are available to each of its
banks to satisfy the cash flow requirements of depositors and borrowers and
to ensure the Corporation's own cash requirements are met.  M&I maintains
liquidity by obtaining funds from several sources.

The Corporation's most readily available source of liquidity is its
investment portfolio.  Investment securities available for sale, which
totaled $5.6 billion at June 30, 2005, represent a highly accessible source
of liquidity.  The Corporation's portfolio of held-to-maturity investment
securities, which totaled $0.7 billion at June 30, 2005, provides liquidity
from maturities and amortization payments.  The Corporation's loans held-for-
sale provide additional liquidity.  These loans represent recently funded
loans that are prepared for delivery to investors, which generally occurs
within thirty to ninety days after the loan has been funded.

Depositors within M&I's defined markets are another source of liquidity.
Core deposits (demand, savings, money market and consumer time deposits)
averaged $16.7 billion in the second quarter of 2005.  The Corporation's
banking affiliates may also access the federal funds markets or utilize
collateralized borrowings such as treasury demand notes or FHLB advances.

The banking affiliates may use wholesale deposits.  Wholesale deposits are
funds in the form of deposits generated through distribution channels other
than the Corporation's own banking branches.  These deposits allow the
Corporation's banking subsidiaries to gather funds across a national
geographic base and at pricing levels considered attractive, where the
underlying depositor may be retail or institutional.  Access to wholesale
deposits also provides the Corporation with the flexibility to not pursue
single service time deposit relationships in markets that have experienced
some unprofitable pricing levels.  Wholesale deposits averaged $6.6 billion
in the second quarter of 2005.

The Corporation utilizes certain financing arrangements to meet its balance
sheet management, funding, liquidity, and market or credit risk management
needs.  The majority of these activities are basic term or revolving
securitization vehicles.  These vehicles are generally funded through term-
amortizing debt structures or with short-term commercial paper designed to
be paid off based on the underlying cash flows of the assets securitized.
These vehicles provide access to funding sources substantially separate from
the general credit risk of the Corporation and its subsidiaries.  See Note
8 to the Consolidated Financial Statements for an update of the Corporation's
securitization activities in the second quarter of 2005.

The Corporation's lead bank, M&I Marshall & Ilsley Bank ("the Bank"), has
implemented a bank note program which permits it to issue up to $7.0 billion
of short-term and medium-term notes which are offered and sold only to
institutional investors.  This program is intended to enhance liquidity by
enabling the Bank to sell its debt instruments in private markets in the
future without the delays which would otherwise be incurred.  Bank notes
outstanding at June 30, 2005, amounted to $4.8 billion of which $1.3 billion
is subordinated and qualifies as supplementary capital for regulatory capital
purposes.  Bank notes issued during the second quarter of 2005 amounted to
$875.0 million.

The national capital markets represent a further source of liquidity to M&I.
M&I has filed a number of shelf registration statements that are intended to
permit M&I to raise funds through sales of corporate debt and/or equity
securities with a relatively short lead time.

During the second quarter of 2004, the Corporation filed a shelf registration
statement with the Securities and Exchange Commission which will enable the
Corporation to issue various securities, including debt securities, common
stock, preferred stock, depositary shares, purchase contracts, units,
warrants, and trust preferred securities, up to an aggregate amount of $3.0
billion.  At June 30, 2005, approximately $1.45 billion was available for
future securities issuances.

During the fourth quarter of 2004, the Corporation filed a shelf registration
statement with the Securities and Exchange Commission which will enable the
Corporation to issue up to 6.0 million shares of its common stock which may
be offered and issued from time to time in connection with the acquisition
by M&I, Metavante and/or other consolidated subsidiaries of businesses that
the Corporation determines to be to its advantage as they become available.
At June 30, 2005, 5.4 million shares of common stock were available for
future issuances.

Under other shelf registration statements, the Corporation may issue up to
$0.6 billion of medium-term Series F notes with maturities ranging from 9
months to 30 years and at fixed or floating rates.  At June 30, 2005, no
Series F notes had been issued.  The Corporation may issue up to $0.5 billion
of medium-term MiNotes with maturities ranging from 9 months to 30 years and
at fixed or floating rates.  The MiNotes are issued in smaller denominations
to attract retail investors.  At June 30, 2005, MiNotes issued amounted to
$0.2 billion. Additionally, the Corporation has a commercial paper program.
At June 30, 2005, commercial paper outstanding amounted to $0.3 billion.

<PAGE> 36
Short-term borrowings represent contractual debt obligations with maturities
of one year or less and amounted to $3.1 billion at June 30, 2005.  Long-term
borrowings amounted to $8.5 billion at June 30, 2005.  The scheduled
maturities of long-term borrowings including estimated interest payments at
June 30, 2005 are as follows: $2.4 billion is due in less than one year; $2.7
billion is due in one to three years; $2.1 billion is due in three to five
years; and $3.7 billion is due in more than five years.  As previously
discussed, during the first quarter of 2005, the Corporation issued shares
of its common stock valued at $14.4 million to fund a portion of its 2004
obligations under its retirement and employee stock ownership plans.  There
have been no other substantive changes to the Corporation's contractual
obligations as reported in the Corporation's Annual Report on Form 10-K for
the year ended December 31, 2004.


                     OFF-BALANCE SHEET ARRANGEMENTS
                     ------------------------------
At June 30, 2005, there have been no substantive changes with respect to the
Corporation's off-balance sheet activities as disclosed in the Corporation's
2004 Annual Report on Form 10-K.  See Note 8 to the Consolidated Financial
Statements for an update of the Corporation's securitization activities in
the second quarter of 2005.  The Corporation continues to believe that based
on the off-balance sheet arrangements with which it is presently involved,
such off-balance sheet arrangements neither have, or are reasonably likely
to have, a material impact to its current or future financial condition,
results of operations, liquidity or capital.


                      CRITICAL ACCOUNTING POLICIES
                      ----------------------------
The Corporation has established various accounting policies which govern the
application of accounting principles generally accepted in the United States
in the preparation of the Corporation's consolidated financial statements.
The significant accounting policies of the Corporation are described in the
footnotes to the consolidated financial statements contained in the
Corporation's Annual Report on Form 10-K and updated as necessary in its
Quarterly Reports on Form 10-Q.  Certain accounting policies involve
significant judgments and assumptions by management that may have a material
impact on the carrying value of certain assets and liabilities.  Management
considers such accounting policies to be critical accounting policies.  The
judgments and assumptions used by management are based on historical
experience and other factors, which are believed to be reasonable under the
circumstances.  Because of the nature of judgments and assumptions made by
management, actual results could differ from these judgments and estimates
which could have a material impact on the carrying values of assets and
liabilities and the results of the operations of the Corporation.  Management
continues to consider the following to be those accounting policies that
require significant judgments and assumptions:

                   Allowance for Loan and Lease Losses
                   -----------------------------------
The allowance for loan and lease losses represents management's estimate of
probable losses inherent in the Corporation's loan and lease portfolio.
Management evaluates the allowance each quarter to determine that it is
adequate to absorb these inherent losses.  This evaluation is supported by
a methodology that identifies estimated losses based on assessments of
individual problem loans and historical loss patterns of homogeneous loan
pools.  In addition, environmental factors, including economic conditions and
regulatory guidance, unique to each measurement date are also considered.
This reserving methodology has the following components:

Specific Reserve.  The Corporation's internal risk rating system is used to
identify loans and leases that meet the criteria as being "impaired" under
the definition in SFAS 114.  A loan is impaired when, based on current
information and events, it is probable that a creditor will be unable to
collect all amounts due according to the contractual terms of the loan
agreement.  For impaired loans, impairment is measured using one of three
alternatives: (1) the present value of expected future cash flows discounted
at the loan's effective interest rate; (2) the loan's observable market
price, if available; or (3) the fair value of the collateral for collateral
dependent loans and loans for which foreclosure is deemed to be probable.
In general, these loans have been internally identified as credits requiring
management's attention due to underlying problems in the borrower's business
or collateral concerns.  Subject to a minimum size, a quarterly review of
these loans is performed to identify the specific reserve necessary to be
allocated to each of these loans.  This analysis considers expected future
cash flows, the value of collateral and also other factors that may impact
the borrower's ability to make payments when due.

Collective Loan Impairment.  This component of the allowance for loan and
lease losses is comprised of two elements.  First, the Corporation makes a
significant number of loans and leases, which due to their underlying similar
characteristics, are assessed for loss as homogeneous pools.  Included in the
homogeneous pools are loans and leases from the retail sector and commercial
loans under a certain size that have been excluded from the specific reserve
allocation previously discussed.  The Corporation segments the pools by type
of loan or lease and, using historical loss information, estimates a loss
reserve for each pool.

The second element reflects management's recognition of the uncertainty and
imprecision underlying the process of estimating losses.  The internal risk
rating system is used to identify those loans within certain industry
segments that based on financial, payment or collateral performance, warrant
closer ongoing monitoring by management.  The specific loans mentioned
earlier are excluded from this analysis.  Based on management's judgment,
reserve ranges are allocated to industry segments due to environmental
conditions unique to the measurement period.  Consideration is given to both
internal and external environmental factors such as economic conditions in
certain geographic or industry segments of the portfolio, economic trends,
risk profile, and portfolio composition.  Reserve ranges are then allocated
using estimates of loss exposure that management has identified based on
these economic trends or conditions.

<PAGE> 37
The following factors were taken into consideration in determining the
adequacy of the allowance for loan and lease losses at June 30, 2005:

     In general, the Corporation's borrowing customers appear to have
     successfully managed their businesses through the slower economic
     conditions, the economy is improving and the Corporation's customer base
     is showing signs of increased business activity as evidenced by the loan
     growth in this quarter.

     At June 30, 2005, allowances for loan and lease losses continue to be
     carried for exposures to manufacturing, healthcare, production
     agriculture (including dairy and cropping operations), truck
     transportation, accommodation, general contracting, motor vehicle and
     parts dealers and the airline industries.  The majority of the
     commercial charge-offs incurred during the past two years were in these
     industry segments.  While most loans in these categories are still
     performing, the Corporation continues to believe these sectors have been
     more adversely affected by the previous economic slowdown.  Reduced
     revenues causing a declining utilization of the industry's capacity
     levels have impacted manufacturing.  As a result, collateral values and
     the amounts realized through the sale or liquidation of manufacturing
     plant and equipment have declined accordingly.

     During the second quarter of 2005, the Corporation's commitments to
     Shared National Credits were approximately $2.9 billion with usage
     averaging around 40%.  Many of the Corporation's largest charge-offs
     have come from the Shared National Credit portfolio.  Although these
     factors result in an increased risk profile, as of June 30, 2005 Shared
     National Credit nonperforming loans amounted to $4.0 million.  The
     Corporation's exposure to Shared National Credits is monitored closely
     given this lending group's loss experience.

     The Corporation's primary lending areas are Wisconsin, Arizona,
     Minnesota and Missouri.  The Minnesota and Missouri markets continue to
     represent relatively new geographic regions for the Corporation.  Each
     of these regions has cultural and environmental factors that are unique
     to them.  The uncertainty regarding the inherent losses in their
     respective loan portfolios continue to present increased risks which
     have been mitigated by the implementation of the Corporation's credit
     underwriting and monitoring processes.  At June 30, 2005, total
     nonperforming loans and leases as a percent of total loans and leases
     for the Minnesota and Missouri regions combined was somewhat higher than
     the consolidated total of nonperforming loans and leases as a percent
     of total consolidated loans and leases.

     At June 30, 2005, nonperforming loans and leases amounted to $131.6
     million or 0.41% of consolidated loans and leases compared to $130.0
     million or 0.42% of consolidated loans and leases at March 31, 2005, and
     $132.4 million or 0.45% of consolidated loans and leases at December 31,
     2004.  At June 30, 2005 nonperforming loans and leases increased
     slightly compared to nonperforming loans and leases at March 31, 2005.
     The ratio of nonperforming loans and leases to consolidated  loans and
     leases at June 30, 2005 represents the ninth consecutive quarter that
     the Corporation has experienced a decline in that ratio.  Nonaccrual
     loans and leases continue to be the primary source of nonperforming
     loans and leases.  Since December 31, 2004, the decline in nonaccrual
     commercial loans and leases and nonaccrual residential real estate loans
     was offset by increases in nonaccrual commercial real estate loans and
     nonaccrual construction and land development loans.

     Net charge-offs amounted to $11.9 million or 0.15% of average loans and
     leases in the second quarter of 2005 compared to $8.0 million or 0.11%
     of average loans and leases in the first quarter of 2005 and $12.8
     million or 0.18% of average loans and leases in the fourth quarter of
     2004.  The lower level of net charge-offs experienced throughout 2004
     and the first half of 2005 has to some extent been the result of higher
     than normal recoveries.  Based on the status of some of the larger
     charge-offs recognized in recent quarters, management expects recoveries
     will likely return to lower levels in future periods.  Recoveries in the
     second quarter of 2005 were $0.8 million lower than recoveries in the
     first quarter of 2005 and $2.3 million lower than recoveries in the
     fourth quarter of 2004.  The ratio of recoveries to charge-offs was
     26.3% in the second quarter of 2005 which was slightly below the
     Corporation's five year historical average ratio of recoveries to
     charge-offs of 26.9%.  For the six month ended June 30, 2005, the ratio
     of recoveries to charge-offs was 32.0%.

<PAGE> 38
     Management continues to expect the longer term level of nonperforming
     loans and leases to be in the range of 50-60 basis points of total loans
     and leases and expects net charge-offs to trend to historical levels.
     While it is unclear when this will occur, management does not believe
     that current net charge-off levels are sustainable indefinitely.

Based on the above loss estimates, management determined its best estimate
of the required allowance for loans and leases.  Management's evaluation of
the factors described above resulted in an allowance for loan and lease
losses of $360.1 million or 1.12% of loans and leases outstanding at June 30,
2005.  The allowance for loan and lease losses was $358.1 million or 1.21%
of loans and leases outstanding at December 31, 2004 and $357.9 million or
1.32% of loans and leases outstanding at June 30, 2004.  Consistent with the
credit quality trends noted above, the provision for loan and lease losses
amounted to $13.7 million and $21.9 million for the three and six months
ended June 30, 2005, respectively.  The resulting provisions for loan and
lease losses are the amounts required to establish the allowance for loan and
lease losses at the required level after considering charge-offs and
recoveries.  Management recognizes there are significant estimates in the
process and the ultimate losses could be significantly different from those
currently estimated.

The Corporation has not materially changed any aspect of its overall approach
in the determination of the allowance for loan and lease losses.  There have
been no material changes in assumptions or estimation techniques as compared
to prior periods that impacted the determination of the current period
allowance.  However, on an on-going basis the Corporation continues to refine
the methods used in determining management's best estimate of the allowance
for loan and lease losses.

                Capitalized Software and Conversion Costs
                -----------------------------------------
Direct costs associated with the production of computer software that will
be licensed externally or used in a service bureau environment are
capitalized.  Capitalization of such costs is subject to strict accounting
policy criteria, although the appropriate time to initiate capitalization
requires management judgment.  Once the specific capitalized project is put
into production, the software cost is amortized over its estimated useful
life, generally four years.  Each quarter, the Corporation performs net
realizable value tests to ensure the assets are recoverable.  Such tests
require management judgment as to the future sales and profitability of a
particular product which involves, in some cases, multi-year projections.
Technology changes and changes in customer requirements can have a
significant impact on the recoverability of these assets and can be difficult
to predict.  Should significant adverse changes occur, estimates of useful
life may have to be revised or write-offs would be required to recognize
impairment.  For the three months ended June 30, 2005 and 2004, the amount
of software costs capitalized amounted to $9.9 million and $10.4 million,
respectively.  Amortization expense of software costs amounted to $15.4
million for the three months ended June 30, 2005 compared to $16.7 million
for the three months ended June 30, 2004. For the six months ended June 30,
2005 and 2004, the amount of software costs capitalized amounted to $18.9
million and $20.4 million, respectively.  Amortization expense of software
costs amounted to $30.3 million for the six months ended June 30, 2005
compared to $28.1 million for the six months ended June 30, 2004.

Based on a strategic product review performed during the second quarter of
2004, Metavante determined that a certain product had limited growth
potential and that future marketing of the product should be discontinued.
As a result of the strategic product review and net realizable value test on
this product, Metavante determined that the capitalized software associated
with the product was impaired and recorded a write-down.  Amortization
expense for the three and six months ended June 30, 2004, includes $4.9
million for the write-down of the capitalized software costs associated with
the impaired product.

Direct costs associated with customer system conversions to the data
processing operations are capitalized and amortized on a straight-line basis
over the terms, generally five to seven years, of the related servicing
contracts.

Capitalization only occurs when management is satisfied that such costs are
recoverable through future operations or penalties (buyout fees) in case of
early termination.  For the three months ended June 30, 2005 and 2004, the
amount of conversion costs capitalized amounted to $2.7 million and $2.8
million, respectively.  Amortization expense of conversion costs amounted to
$2.8 million and $3.2 million for the three months ended June 30, 2005 and
2004, respectively. For the six months ended June 30, 2005 and 2004, the
amount of conversion costs capitalized amounted to $5.6 million and $4.4
million, respectively.  Amortization expense of conversion costs amounted to
$5.6 million and $6.5 million for the six months ended June 30, 2005 and
2004, respectively.

<PAGE> 39
Net unamortized costs were ($ in millions):
<TABLE>
<CAPTION>
                                   June 30,
                          -------------------------
                              2005          2004
                          -----------   -----------
<S>                     <C>           <C>
Software                 $     151.6   $     139.1

Conversions                     26.5          28.6
                          -----------   -----------
  Total                  $     178.1   $     167.7
                          ===========   ===========
</TABLE>

The Corporation has not substantively changed any aspect to its overall
approach in the determination of the amount of costs that are capitalized for
software development or conversion activities.  There have been no material
changes in assumptions or estimation techniques as compared to prior periods
that impacted the determination of the periodic amortization of such costs.


               Financial Asset Sales and Securitizations
               -----------------------------------------
The Corporation utilizes certain financing arrangements to meet its balance
sheet management, funding, liquidity, and market or credit risk management
needs.  The majority of these activities are basic term or revolving
securitization vehicles.  These vehicles are generally funded through term-
amortizing debt structures or with short-term commercial paper designed to
be paid off based on the underlying cash flows of the assets securitized.
These financing entities are contractually limited to a narrow range of
activities that facilitate the transfer of or access to various types of
assets or financial instruments.  In certain situations, the Corporation
provides liquidity and/or loss protection agreements.  In determining whether
the financing entity should be consolidated, the Corporation considers
whether the entity is a qualifying special-purpose entity ("QSPE") as defined
in Statement of Financial Accounting Standards ("SFAS") No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities.  For non-consolidation, a QSPE must be demonstrably distinct,
have significantly limited permitted activities, hold assets that are
restricted to transferred financial assets and related assets, and can sell
or dispose of non-cash financial assets only in response to specified
conditions.

In December 2003, the Corporation adopted Financial Accounting Standards
Board Interpretation No. 46 ("FIN 46R"), Consolidation of Variable Interest
Entities (revised December 2003).  This interpretation addresses
consolidation by business enterprises of variable interest entities.  Under
current practice, entities generally have been included in consolidated
financial statements because they are controlled through voting interests.
This interpretation explains how to identify variable interest entities and
how an entity assesses its interests in a variable interest entity to decide
whether to consolidate that entity.  FIN 46R requires existing unconsolidated
variable interest entities to be consolidated by their primary beneficiaries
if the entities do not effectively disperse risks among parties involved.
Variable interest entities that effectively disperse risks will not be
consolidated unless a single party holds an interest or combination of
interests that effectively recombines risks that were previously dispersed.
Transferors to QSPEs and "grandfathered" QSPEs subject to the reporting
requirements of SFAS 140 are outside the scope of FIN 46R and do not
consolidate those entities.  FIN 46R also requires certain disclosures by the
primary beneficiary of a variable interest entity or an entity that holds a
significant variable interest in a variable interest entity.

With respect to the Corporation's securitization activities, the adoption of
FIN 46R did not have an impact on its consolidated financial statements
because its transfers are generally to QSPEs.

The Corporation sells financial assets in a two-step process that results in
a surrender of control over the assets as evidenced by true-sale opinions
from legal counsel, to unconsolidated entities that securitize the assets.
The Corporation retains interests in the securitized assets in the form of
interest-only strips and a cash reserve account.  Gain or loss on sale of the
assets depends in part on the carrying amount assigned to the assets sold
allocated between the asset sold and retained interests based on their
relative fair values at the date of transfer.  The value of the retained
interests is based on the present value of expected cash flows estimated
using management's best estimates of the key assumptions - credit losses,
prepayment speeds, forward yield curves and discount rates commensurate with
the risks involved.  Actual results can differ from expected results.

The Corporation reviews the carrying values of the retained interests monthly
to determine if there is a decline in value that is other than temporary and
periodically reviews the propriety of the assumptions used based on current
historical experience as well as the sensitivities of the carrying value of
the retained interests to adverse changes in the key assumptions.  The
Corporation believes that its estimates result in a reasonable carrying value
of the retained interests.

The Corporation regularly sells automobile loans to an unconsolidated multi-
seller special purpose entity commercial paper conduit in securitization
transactions in which servicing responsibilities and subordinated interests
are retained.  The outstanding balances of automobile loans sold in these
securitization transactions were $950.4 million at June 30, 2005.  At June
30, 2005 the carrying amount of retained interests amounted to $28.7 million.

<PAGE> 40
The Corporation also sells, from time to time, debt securities classified as
available for sale that are highly rated to an unconsolidated bankruptcy
remote QSPE whose activities are limited to issuing highly rated asset-backed
commercial paper with maturities up to 180 days which is used to finance the
purchase of the investment securities.  The Corporation provides liquidity
back-up in the form of Liquidity Purchase Agreements.  In addition, the
Corporation acts as counterparty to interest rate swaps that enable the QSPE
to hedge its interest rate risk.  Such swaps are designated as free-standing
derivative financial instruments in the Corporation's Consolidated Balance
Sheet.

At June 30, 2005, highly rated investment securities in the amount of $274.5
million were outstanding in the QSPE to support the outstanding commercial
paper.


                               Income Taxes
                               ------------
Income taxes are accounted for using the asset and liability method.  Under
this method, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis.  Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.  The
effect on tax assets and liabilities of a change in tax rates is recognized
in the income statement in the period that includes the enactment date.

The determination of current and deferred income taxes is based on complex
analyses of many factors, including interpretation of Federal and state
income tax laws, the difference between tax and financial reporting basis of
assets and liabilities (temporary differences), estimates of amounts
currently due or owed, such as the timing of reversals of temporary
differences and current accounting standards.  The Federal and state taxing
authorities who make assessments based on their determination of tax laws
periodically review the Corporation's interpretation of Federal and state
income tax laws.  Tax liabilities could differ significantly from the
estimates and interpretations used in determining the current and deferred
income tax liabilities based on the completion of taxing authority
examinations.


                        FORWARD-LOOKING STATEMENTS
                        --------------------------
Items 2 and 3 of this Form 10-Q, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Quantitative and
Qualitative Disclosures about Market Risk," respectively, contain forward-
looking statements within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.  Such forward-looking
statements include, without limitation, statements regarding expected
financial and operating activities and results which are preceded by words
such as "expects", "anticipates" or "believes".  Such statements are subject
to important factors that could cause the Corporation's actual results to
differ materially from those anticipated by the forward-looking statements.
These factors include those referenced in Item 1, Business, of the
Corporation's Annual Report on Form 10-K for the period ending December 31,
2004 under the heading "Forward-Looking Statements" and as may be described
from time to time in the Corporation's subsequent SEC filings, and such
factors are incorporated herein by reference.


ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following updated information should be read in conjunction with the
Corporation's 2004 Annual Report on Form 10-K.  Updated information regarding
the Corporation's use of derivative financial instruments is contained in
Note 11, Notes to Financial Statements contained in Item 1 herein.

Market risk arises from exposure to changes in interest rates, exchange
rates, commodity prices, and other relevant market rate or price risk.  The
Corporation faces market risk through trading and other than trading
activities.  While market risk that arises from trading activities in the
form of foreign exchange and interest rate risk is immaterial to the
Corporation, market risk from other than trading activities in the form of
interest rate risk is measured and managed through a number of methods.


                           Interest Rate Risk
                           ------------------
The Corporation uses financial modeling techniques to identify potential
changes in income under a variety of possible interest rate scenarios.
Financial institutions, by their nature, bear interest rate and liquidity
risk as a necessary part of the business of managing financial assets and
liabilities.  The Corporation has designed strategies to limit these risks
within prudent parameters and identify appropriate risk/reward tradeoffs in
the financial structure of the balance sheet.

The financial models identify the specific cash flows, repricing timing and
embedded option characteristics of the assets and liabilities held by the
Corporation.  Policies are in place to assure that neither earnings nor fair
value at risk exceed appropriate limits.  The use of a limited array of
derivative financial instruments has allowed the Corporation to achieve the
desired balance sheet repricing structure while simultaneously meeting the
desired objectives of both its borrowing and depositing customers.

The models used include measures of the expected repricing characteristics
of administered rate (NOW, savings and money market accounts) and non-rate
related products (demand deposit accounts, other assets and other
liabilities).  These measures recognize the relative insensitivity of these
accounts to changes in market interest rates, as demonstrated through current
and historical experiences.  However, during the second quarter of 2003, the
Corporation increased the proportion of these accounts modeled as rate
sensitive, in order to recognize the instability of some of the recent
balance growth in these accounts.  This modeling treatment will be maintained
until the incremental balances can be observed across a more complete
interest rate cycle.  In addition to contractual payment information for most
other assets and liabilities, the models also include estimates of expected
prepayment characteristics for those items that are likely to materially
change their payment structures in different rate environments, including
residential mortgage products, certain commercial and commercial real estate
loans and certain mortgage-related securities.  Estimates for these
sensitivities are based on industry assessments and are substantially driven
by the differential between the contractual coupon of the item and current
market rates for similar products.

This information is incorporated into a model that allows the projection of
future income levels in several different interest rate environments.
Earnings at risk are calculated by modeling income in an environment where
rates remain constant, and comparing this result to income in a different
rate environment, and then dividing this difference by the Corporation's
budgeted operating income before taxes for the calendar year.  Since future
interest rate moves are difficult to predict, the following table presents
two potential scenarios - a gradual increase of 100bp across the entire yield
curve over the course of the year (+25bp per quarter), and a gradual decrease
of 100bp across the entire yield curve over the course of the year (-25bp per
quarter) for the balance sheet as of the indicated dates:
<TABLE>
<CAPTION>
                                                Impact to Annual Pretax Income as of
                                --------------------------------------------------------------------
                                  June 30,      March 31,   December 31,  September 30,   June 30,
                                    2005          2005          2004          2004          2004
                                ------------  ------------  ------------  ------------  ------------
<S>                            <C>           <C>           <C>           <C>           <C>
Hypothetical Change in Interest Rate
------------------------------------
  100 basis point gradual:
     Rise in rates                   0.3 %        (0.2)%        (0.1)%         0.4 %        (0.6)%
     Decline in rates               (0.6)%         0.3 %         0.2 %        (0.4)%         0.6 %
</TABLE>

These results are based solely on the modeled parallel changes in market
rates, and do not reflect the earnings sensitivity that may arise from other
factors such as changes in the shape of the yield curve and changes in spread
between key market rates.  These results also do not include any management
action to mitigate potential income variances within the simulation process.
Such action could potentially include, but would not be limited to,
adjustments to the repricing characteristics of any on- or off-balance sheet
item with regard to short-term rate projections and current market value
assessments.

Actual results will differ from simulated results due to the timing,
magnitude, and frequency of interest rate changes as well as changes in
market conditions and management strategies.

Another component of interest rate risk is measuring the fair value at risk
for a given change in market interest rates.  The Corporation also uses
computer modeling techniques to determine the present value of all asset and
liability cash flows (both on- and off-balance sheet), adjusted for
prepayment expectations, using a market discount rate.  The net change in the
present value of the asset and liability cash flows in different market rate
environments is the amount of fair value at risk from those rate movements.
As of June 30, 2005 the fair value of equity at risk for a gradual 100bp
shift in rates was no more than 2.0% of the market value of the Corporation.


                              Equity Risk
                              -----------
In addition to interest rate risk, the Corporation incurs market risk in the
form of equity risk.  The Corporation invests directly and indirectly through
investment funds, in private medium-sized companies to help establish new
businesses or recapitalize existing ones.  Exposure to the change in equity
values for the companies that are held in their portfolio exists.  However,
fair values are difficult to determine until an actual sale or liquidation
transaction actually occurs.  At June 30, 2005 the carrying value of total
active capital markets investments amounted to approximately $32.7 million.

<PAGE> 42
As of June 30, 2005, M&I Trust Services administered $78.5 billion in assets
and directly managed a portfolio of $18.5 billion.  Exposure exists to
changes in equity values due to the fact that fee income is partially based
on equity balances.  While this exposure is present, quantification remains
difficult due to the number of other variables affecting fee income.
Interest rate changes can also have an effect on fee income for the above
stated reasons.


ITEM 4.     CONTROLS AND PROCEDURES

We maintain a set of disclosure controls and procedures that are designed to
ensure that information required to be disclosed by us in the reports filed
by us under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms.  We carried out an evaluation, under the supervision
and with the participation of our management, including our Chief Executive
Officer and our Senior Vice President and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13a-15 of the Exchange Act.  Based on that
evaluation, our Chief Executive Officer and our Senior Vice President and
Chief Financial Officer concluded that our disclosure controls and procedures
are effective as of the end of the period covered by this report.

There have been no changes in our internal control over financial reporting
identified in connection with the evaluation discussed above that occurred
during our last fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

<PAGE> 43
                           PART II - OTHER INFORMATION

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table reflects the purchases of Marshall & Ilsley Corporation
stock for the specified period:
<TABLE>
<CAPTION>
                                                 Total Number of    Maximum Number
                                                Shares Purchased    of Shares that
                                                    as Part of        May Yet Be
                     Total Number    Average       of Publicly     Purchased Under
                      of Shares    Price Paid    Announced Plans      the Plans
      Period         Purchased(1)   per Share      or Programs       or Programs
 -----------------  -------------  ----------- ------------------ -----------------
<S>                 <C>            <C>         <C>                <C>
   January 1 to
 January 31, 2005         18,100    $  43.35                --          12,000,000

   February 1 to
 February 28, 2005        13,523    $  37.77                --          12,000,000

    March 1 to
  March 31, 2005           1,000    $  30.32                --          12,000,000

    April 1 to
  April 30, 2005           6,048    $  41.97                --          12,000,000

     May 1 to
   May 31, 2005            1,108    $  41.89                --          12,000,000

    June 1 to
  June 30, 2005            4,888    $  43.51                --          12,000,000
                     ------------   ---------   ---------------
      Total               51,532    $  41.79                --
                     ============   =========   ===============
</TABLE>

The Corporation's Share Repurchase Program was publicly reconfirmed in April
2004 and again in April 2005.  The Share Repurchase Program authorizes the
purchase of up to 12 million shares annually and renews each year at that
level unless changed or terminated by subsequent Board action.

(1)  Includes shares purchased by rabbi trusts pursuant to nonqualified
     deferred compensation plans.


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

(a)  The Corporation held its Annual Meeting of Shareholders on April 26,
     2005.

(b)  Votes cast for the election of five directors to serve until the 2008
     Annual Meeting of Shareholders are as follows:
<TABLE>
<CAPTION>
         Director               For         Withheld      Abstentions      Non-Vote
    --------------------- ------------- ------------- ---------------- -------------
   <S>                   <C>           <C>           <C>              <C>
     Andrew N. Baur         182,359,417     6,515,109          --             --
     John W. Daniels, Jr.   181,912,241     6,962,285          --             --
     John A. Mellowes       176,385,088    12,489,438          --             --
     Robert J. O'Toole      186,210,789     2,663,737          --             --
     John S. Shiely         186,234,471     2,640,055          --             --
</TABLE>

<PAGE>44
The continuing directors of the Corporation are as follows:

           Richard A. Abdoo             Jon F. Chait
           Ted D. Kellner               Bruce E. Jacobs
           Katharine C. Lyall           Dennis J. Kuester
           Peter M. Platten, III        Edward L. Meyer, Jr.
           James A. Urdan               San W. Orr, Jr.
           James B. Wigdale             Debra S. Waller
                                        George E. Wardeberg

(c)  Votes cast for the ratification of the appointment of Deloitte &
     Touche LLP to audit the statements of the Company for the fiscal year
     ending December 31, 2005 are as follows:
<TABLE>
<CAPTION>
                                For         Withheld      Abstentions      Non-Vote
                           ------------- ------------- ---------------- -------------
   <S>                   <C>           <C>           <C>              <C>
     Ratification of
      Auditors             184,696,099     2,681,021       1,497,406           --
</TABLE>

ITEM 6.     EXHIBITS

   Exhibit 10(a) - Form of Restricted Stock Agreement.

   Exhibit 10(b) - Change of Control Agreement dated as of
                   January 12, 2005 between the Corporation
                   and Ronald E. Smith.

    Exhibit 11  -  Statement Regarding Computation of Earnings
                   Per Share, Incorporated by Reference to
                   NOTE 4 of Notes to Financial Statements
                   contained in Item 1 - Financial Statements
                   (unaudited) of Part 1 - Financial Information
                   herein.

    Exhibit 12  -  Statement Regarding Computation of Ratio of
                   Earnings to Fixed Charges

   Exhibit 31(a) - Certification of Chief Executive Officer
                   pursuant to Rule 13a-14(a) under the Securities
                   Exchange Act of 1934, as amended.

   Exhibit 31(b) - Certification of Chief Financial Officer
                   pursuant to Rule 13a-14(a) under the Securities
                   Exchange Act of 1934, as amended.

   Exhibit 32(a) - Certification of Chief Executive Officer
                   pursuant to 18 U.S.C. Section 1350.

   Exhibit 32(b) - Certification of Chief Financial Officer
                   pursuant to 18 U.S.C. Section 1350.

<PAGE> 45
                               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 thereunto duly authorized.


                                  MARSHALL & ILSLEY CORPORATION
                                  (Registrant)


                                  /s/  Patricia R. Justiliano
                                  __________________________________

                                  Patricia R. Justiliano
                                  Senior Vice President and
                                    Corporate Controller
                                  (Chief Accounting Officer)


                                  /s/  James E. Sandy
                                  __________________________________

                                  James E. Sandy
                                  Vice President




August 9, 2005

<PAGE> 46
                               EXHIBIT INDEX
                               -------------

     Exhibit Number                Description of Exhibit
     ______________     ____________________________________________

        (10)(a)         Form of Restricted Stock Agreement.

        (10)(b)         Change of Control Agreement dated as of
                        January 12, 2005 between the Corporation
                        and Ronald E. Smith.

          (11)          Statement Regarding Computation of Earnings
                        Per Share, Incorporated by Reference to
                        NOTE 4 of Notes to Financial Statements
                        contained in Item 1 - Financial Statements
                        (unaudited) of Part 1 - Financial Information
                        herein.

          (12)          Statement Regarding Computation of Ratio
                        of Earnings to Fixed Charges.

        (31)(a)         Certification of Chief Executive Officer
                        pursuant to Rule 13a-14(a) under the
                        Securities Exchange Act of 1934, as amended.

        (31)(b)         Certification of Chief Financial Officer
                        pursuant to Rule 13a-14(a) under the
                        Securities Exchange Act of 1934, as amended.

        (32)(a)         Certification of Chief Executive Officer
                        pursuant to 18 U.S.C. Section 1350.

        (32)(b)         Certification of Chief Financial Officer
                        pursuant to 18 U.S.C. Section 1350.