<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, 2006

                                      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 a large
accelerated filer, an accelerated filer, or a non-accelerated filer.  See
definition of "accelerated filer and large accelerated filer" in Rule 12b-
2 of the Exchange Act.   (Check one):   Large accelerated filer   [X]
       Accelerated filer   [ ]            Non-accelerated filer   [ ]

       Indicate by check mark whether the registrant is a shell company
(as defined by Rule 12b-2 of the Exchange Act).
                                             Yes   [ ]       No   [X]

       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, 2006
                  -----                           ----------------
     Common Stock, $1.00 Par Value                   254,295,652

==========================================================================

<PAGE>  2
                        PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                           MARSHALL & ILSLEY CORPORATION
                     CONSOLIDATED BALANCE SHEETS (Unaudited)
                           ($000's except share data)
                                                                                 As Adjusted Note 11
                                                                            ---------------------------
                                                               June 30,     December 31,     June 30,
                                                                 2006           2005           2005
                                                            -------------- ------------- --------------
<S>                                                       <C>            <C>            <C>
Assets
------
Cash and cash equivalents:
   Cash and due from banks                                 $   1,280,941  $   1,155,263  $     976,073
   Federal funds sold and security resale agreements             221,497        209,869        217,139
   Money market funds                                             40,831         49,219         51,410
                                                            -------------  -------------  -------------
Total cash and cash equivalents                                1,543,269      1,414,351      1,244,622

Investment securities:
   Trading securities, at market value                            54,928         29,779         22,539
   Interest bearing deposits at other banks                       18,252         40,659         14,362
   Available for sale, at market value                         6,627,287      5,701,703      5,572,628
   Held to maturity, market value $559,869
      ($638,135 December 31, 2005 and $698,534 June 30, 2005)    547,686        618,554        668,107
                                                            -------------  -------------  -------------
Total investment securities                                    7,248,153      6,390,695      6,277,636

Loans held for sale                                              157,041        277,847        193,092

Loans and leases:
   Loans and leases, net of unearned income                   40,230,299     33,889,066     31,952,759
Less: Allowance for loan and lease losses                        415,201        363,769        360,138
                                                            -------------  -------------  -------------
   Net loans and leases                                       39,815,098     33,525,297     31,592,621

Premises and equipment, net                                      569,240        490,687        448,730
Goodwill and other intangibles                                 3,154,828      2,461,461      2,159,624
Accrued interest and other assets                              1,931,237      1,652,379      1,567,395
                                                            -------------  -------------  -------------
Total Assets                                               $  54,418,866  $  46,212,717  $  43,483,720
                                                            =============  =============  =============

Liabilities and Shareholders' Equity
------------------------------------
Deposits:
   Noninterest bearing                                     $   5,773,090  $   5,525,019  $   5,088,947
   Interest bearing                                           27,184,702     22,149,202     20,972,493
                                                            -------------  -------------  -------------
Total deposits                                                32,957,792     27,674,221     26,061,440

Federal funds purchased and security repurchase agreements     2,378,380      2,327,258      1,705,817
Other short-term borrowings                                    4,399,478      3,299,476      3,456,383
Accrued expenses and other liabilities                         1,449,603      1,507,621      1,510,461
Long-term borrowings                                           7,476,087      6,668,670      6,470,684
                                                            -------------  -------------  -------------
Total liabilities                                             48,661,340     41,477,246     39,204,785

Shareholders' equity:
---------------------
   Series A convertible preferred stock, $1.00 par value;
      2,000,000 shares authorized                                    --             --             --
   Common stock, $1.00 par value; 261,972,933 shares issued
      (244,587,222 shares at December 31, 2005 and
       244,432,222 shares at June 30, 2005)                      261,973       244,587         244,432
   Additional paid-in capital                                  1,747,576       970,739         870,380
   Retained earnings                                           4,137,607     3,871,614       3,626,707
   Accumulated other comprehensive income,
      net of related taxes                                      (101,251)      (37,291)         15,508
   Less: Treasury stock, at cost: 8,000,318 shares
         (9,148,493 December 31, 2005 and
          14,782,208 June 30, 2005)                              253,201       277,423         448,212
         Deferred compensation                                    35,178        36,755          29,880
                                                            -------------  -------------  -------------
Total shareholders' equity                                     5,757,526     4,735,471       4,278,935
                                                            -------------  -------------  -------------
Total Liabilities and Shareholders' Equity                 $  54,418,866  $ 46,212,717   $  43,483,720
                                                            =============  =============  =============

See notes to financial statements.
</TABLE>

<PAGE>  3
<TABLE>
<CAPTION>
                           MARSHALL & ILSLEY CORPORATION
                  CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                          ($000's except per share data)
                                                                                 As Adjusted
                                                                                   Note 11
                                                                               ---------------
                                                                Three Months     Three Months
                                                               Ended June 30,   Ended June 30,
                                                                   2006             2005
                                                              ---------------  ---------------
<S>                                                          <C>              <C>
Interest and fee income
-----------------------
   Loans and leases                                           $     714,243    $     469,774
   Investment securities:
      Taxable                                                        70,908          53,265
      Exempt from federal income taxes                               15,749          16,103
   Trading securities                                                   198              47
   Short-term investments                                             5,011           2,294
                                                               -------------    ------------
Total interest and fee income                                       806,109         541,483

Interest expense
----------------
   Deposits                                                         271,592         122,803
   Short-term borrowings                                             43,124          28,391
   Long-term borrowings                                             117,336          77,284
                                                               -------------    ------------
Total interest expense                                              432,052         228,478
                                                               -------------    ------------
Net interest income                                                 374,057         313,005
Provision for loan and lease losses                                  11,053          13,725
                                                               -------------    ------------
Net interest income after provision for loan and lease losses       363,004         299,280

Other income
------------
   Data processing services                                         344,976         282,363
   Wealth management                                                 56,309          48,129
   Service charges on deposits                                       25,005          23,711
   Gains on sale of mortgage loans                                   10,219           9,489
   Other mortgage banking revenue                                     2,062           1,702
   Net investment securities gains                                      960          29,422
   Life insurance revenue                                             7,408           8,055
   Other                                                             37,434          31,453
                                                               -------------    ------------
Total other income                                                  484,373         434,324

Other expense
-------------
   Salaries and employee benefits                                   307,060         268,975
   Net occupancy                                                     25,698          20,789
   Equipment                                                         38,113          30,076
   Software expenses                                                 17,348          14,143
   Processing charges                                                29,586          13,517
   Supplies and printing                                              6,473           5,791
   Professional services                                             14,036          12,802
   Shipping and handling                                             21,669          16,751
   Amortization of intangibles                                       12,004           8,106
   Other                                                             72,269          68,903
                                                               -------------    ------------
Total other expense                                                 544,256         459,853
                                                               -------------    ------------
Income before income taxes                                          303,121         273,751
Provision for income taxes                                           99,372          90,006
                                                               -------------    ------------
Net income                                                    $     203,749    $    183,745
                                                               =============    ============
Net income per common share
   Basic                                                      $        0.81    $       0.80
   Diluted                                                             0.79            0.79

Dividends paid per common share                               $       0.270    $      0.240

Weighted average common shares outstanding (000's):
   Basic                                                            252,764         228,630
   Diluted                                                          258,298         233,904

See notes to financial statements.
</TABLE>

<PAGE>  4
<TABLE>
<CAPTION>
                           MARSHALL & ILSLEY CORPORATION
                  CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                          ($000's except per share data)
                                                                                 As Adjusted
                                                                                   Note 11
                                                                               ---------------
                                                                 Six Months      Six Months
                                                               Ended June 30,   Ended June 30,
                                                                   2006             2005
                                                              ---------------  ---------------
<S>                                                          <C>              <C>
Interest and fee income
-----------------------
   Loans and leases                                           $   1,303,126    $     893,695
   Investment securities:
      Taxable                                                       128,776          105,208
      Exempt from federal income taxes                               31,748           31,510
   Trading securities                                                   268              116
   Short-term investments                                             8,576            3,638
                                                               -------------    -------------
Total interest and fee income                                     1,472,494        1,034,167

Interest expense
----------------
   Deposits                                                         469,718          226,293
   Short-term borrowings                                             82,459           50,353
   Long-term borrowings                                             221,680          145,658
                                                               -------------    -------------
Total interest expense                                              773,857          422,304
                                                               -------------    -------------
Net interest income                                                 698,637          611,863
Provision for loan and lease losses                                  22,048           21,851
                                                               -------------    -------------
Net interest income after provision for loan and lease losses       676,589          590,012

Other income
------------
   Data processing services                                         687,956          565,297
   Wealth management                                                109,108           95,197
   Service charges on deposits                                       47,555           47,056
   Gains on sale of mortgage loans                                   20,960           16,426
   Other mortgage banking revenue                                     3,776            2,945
   Net investment securities gains                                    2,090           35,276
   Life insurance revenue                                            14,374           14,264
   Other                                                             71,324           60,320
                                                               -------------    -------------
Total other income                                                  957,143          836,781

Other expense
-------------
   Salaries and employee benefits                                   584,463          514,051
   Net occupancy                                                     50,579           43,153
   Equipment                                                         71,052           61,086
   Software expenses                                                 34,786           27,495
   Processing charges                                                56,599           28,442
   Supplies and printing                                             12,595           12,287
   Professional services                                             25,485           23,688
   Shipping and handling                                             45,571           36,386
   Amortization of intangibles                                       20,879           16,198
   Other                                                            147,380          140,058
                                                               -------------    -------------
Total other expense                                               1,049,389          902,844
                                                               -------------    -------------
Income before income taxes                                          584,343          523,949
Provision for income taxes                                          193,826          174,888
                                                               -------------    -------------
Net income                                                    $     390,517    $     349,061
                                                               =============    =============
Net income per common share
   Basic                                                      $        1.60    $        1.53
   Diluted                                                             1.57             1.50

Dividends paid per common share                               $       0.510    $       0.450

Weighted average common shares outstanding (000's) :
   Basic                                                            244,088          228,097
   Diluted                                                          249,379          233,310

See notes to financial statements.
</TABLE>

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

                                                                 Six Months      Six Months
                                                               Ended June 30,   Ended June 30,
                                                                   2006             2005
                                                              ---------------  ---------------
<S>                                                          <C>              <C>
Net Cash Provided by Operating Activities                     $     436,972    $     349,951

Cash Flows From Investing Activities:
-------------------------------------
   Proceeds from sales of securities available for sale             558,720           82,409
   Proceeds from maturities of securities available for sale        587,188          575,259
   Proceeds from maturities of securities held to maturity           71,539           58,468
   Purchases of securities available for sale                    (1,366,562)        (857,602)
   Net increase in loans                                         (2,609,407)      (2,526,610)
   Purchases of assets to be leased                                (101,711)        (142,589)
   Principal payments on lease receivables                          105,735          100,071
   Purchases of premises and equipment, net                         (56,977)         (18,022)
   Acquisitions, net of cash and cash equivalents acquired          (66,911)         (15,910)
   Other                                                             (1,684)           3,270
                                                               -------------    -------------
Net cash used in investing activities                            (2,880,070)      (2,741,256)

Cash Flows From Financing Activities:
-------------------------------------
   Net increase (decrease) in deposits                            1,596,693         (369,087)
   Proceeds from issuance of commercial paper                     2,019,445        2,566,764
   Principal payments on commercial paper                        (1,972,059)      (2,582,429)
   Net increase in other short-term borrowings                      521,658        1,197,465
   Proceeds from issuance of long-term borrowings                 1,199,051        2,030,041
   Payments of long-term borrowings                                (670,666)        (123,569)
   Dividends paid                                                  (124,524)        (102,567)
   Purchases of common stock                                        (41,790)             --
   Proceeds from exercise of stock options                           49,408           36,372
   Other                                                             (5,200)          (5,201)
                                                               -------------    -------------
Net cash provided by financing activities                         2,572,016        2,647,789
                                                               -------------    -------------
Net increase in cash and cash equivalents                           128,918          256,484

Cash and cash equivalents, beginning of year                      1,414,351          988,138
                                                               -------------    -------------
Cash and cash equivalents, end of period                      $   1,543,269    $   1,244,622
                                                               =============    =============

Supplemental cash flow information:
-----------------------------------
   Cash paid during the period for:
      Interest                                                $     688,262    $     355,298
      Income taxes                                                  174,028          169,032

See notes to financial statements.
</TABLE>

<PAGE>  6
                          MARSHALL & ILSLEY CORPORATION
                          Notes to Financial Statements
                         June 30, 2006 & 2005 (Unaudited)

  1. The accompanying unaudited consolidated financial statements should be
     read in conjunction with Marshall & Ilsley Corporation's ("M&I" or
     "Corporation") Annual Report on Form 10-K for the year ended December
     31, 2005.  The unaudited financial information included in this report
     reflects all adjustments consisting of normal recurring accruals and the
     adjustments as discussed in Note 11 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, 2006 and 2005.  The results
     of operations for the three and six months ended June 30, 2006 and 2005
     are not necessarily indicative of results to be expected for the entire
     year.  Certain amounts in the 2005 consolidated financial statements and
     analyses have been reclassified to conform with the 2006 presentation.

  2. New Accounting Pronouncements

     In June 2006, the Financial Accounting Standards Board ("FASB") issued
     FASB Interpretation No. 48 ("FIN 48") Accounting for Uncertainty in
     Income Taxes an interpretation of FASB Statement No. 109.  FIN 48
     clarifies the accounting for uncertainty in income taxes recognized in
     financial statements in accordance with FASB Statement No. 109,
     Accounting for Income Taxes.  FIN 48 prescribes a recognition threshold
     and measurement attribute for the financial statement recognition and
     measurement of a tax position taken or expected to be taken in a tax
     return.  FIN 48 also provides guidance on derecognition, classification,
     interest and penalties, accounting in interim periods, disclosure and
     transition.

     The provisions of FIN 48 are effective beginning January 1, 2007, with
     the cumulative effect of the change in accounting principle recorded as
     an adjustment to opening retained earnings.  The Corporation is
     currently evaluating the financial statement impact, if any, of adopting
     FIN 48.

     On June 28, 2006, the FASB ratified EITF Issue No. 06-3, How Taxes
     Collected from Customers and Remitted to Governmental Authorities Should
     Be Presented in the Income Statement (That Is, Gross versus Net
     Presentation).  Certain taxes such as sales taxes and other excise taxes
     are levied by various taxing authorities based on sales activity.
     Although generally levied on the purchaser of the goods or services, the
     selling party usually collects and remits the sales tax to the
     government.  However, in certain jurisdictions sales taxes are levied on
     sellers of the goods and services as opposed to the purchasers.  Under
     this consensus these taxes may be presented gross as revenue and an
     offsetting expense or may be presented net and excluded from revenue.
     The guidance in this consensus is effective January 1, 2007 with early
     application permitted.  This consensus will not impact the Corporation's
     results of operations or financial position and the Corporation will
     continue to report these taxes on a net basis.  Taxes subject to this
     consensus primarily relate to the Corporation's data processing
     subsidiary, Metavante.

<PAGE>  7
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

  3. Comprehensive Income

     The following tables present the Corporation's comprehensive income
     ($000's):
<TABLE>
<CAPTION>
                                                          Three Months Ended June 30, 2006
                                                     ------------------------------------------
                                                       Before-Tax   Tax (Expense)  Net-of-Tax
                                                         Amount        Benefit       Amount
                                                     -------------- ------------  -------------
     <S>                                            <C>            <C>           <C>
      Net income                                                                  $    203,749

      Other comprehensive income:

         Unrealized gains (losses) on securities:
            Arising during the period                $     (86,639) $     30,269       (56,370)
            Reclassification for securities
               transactions included in net income          (1,493)          522          (971)
                                                      -------------  ------------  ------------
                  Unrealized gains (losses)                (88,132)       30,791       (57,341)

      Net gains (losses) on derivatives
         hedging variability of cash flows:
         Arising during the period                           3,536        (1,238)        2,298
         Reclassification adjustments for
            hedging activities included in net income       (3,794)        1,328        (2,466)
                                                      -------------  ------------  ------------
               Net gains (losses)                    $        (258) $         90          (168)
                                                      -------------  ------------  ------------
      Other comprehensive income (loss)                                                (57,509)
                                                                                   ------------
      Total comprehensive income                                                  $    146,240
                                                                                   ============
</TABLE>
<TABLE>
<CAPTION>
                                                          Three Months Ended June 30, 2005
                                                                   As Adjusted
                                                     ------------------------------------------
                                                       Before-Tax   Tax (Expense)  Net-of-Tax
                                                         Amount        Benefit       Amount
                                                     -------------- ------------  -------------
     <S>                                            <C>            <C>           <C>
      Net income                                                                  $    183,745

      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                                                  $    215,606
                                                                                   ============
</TABLE>

<PAGE>  8
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)
<TABLE>
<CAPTION>
                                                           Six Months Ended June 30, 2006
                                                     ------------------------------------------
                                                       Before-Tax   Tax (Expense)  Net-of-Tax
                                                         Amount        Benefit       Amount
                                                     -------------- ------------  -------------
     <S>                                            <C>            <C>           <C>
      Net income                                                                  $    390,517

      Other comprehensive income:
         Unrealized gains (losses) on securities:
            Arising during the period                $    (102,563) $     35,865       (66,698)
            Reclassification for securities
               transactions included in net income          (1,941)          679        (1,262)
                                                      -------------  ------------  ------------
                  Unrealized gains (losses)               (104,504)       36,544       (67,960)

      Net gains (losses) on derivatives
         hedging variability of cash flows:
         Arising during the period                          11,873        (4,156)        7,717
         Reclassification adjustments for
            hedging activities included in net income       (5,719)        2,002        (3,717)
                                                      -------------  ------------  ------------
               Net gains (losses)                    $       6,154  $     (2,154)        4,000
                                                      -------------  ------------  ------------
      Other comprehensive income (loss)                                                (63,960)
                                                                                   ------------
      Total comprehensive income                                                   $   326,557
                                                                                   ============
</TABLE>
<TABLE>
<CAPTION>
                                                           Six Months Ended June 30, 2005
                                                                   As Adjusted
                                                     ------------------------------------------
                                                       Before-Tax   Tax (Expense)  Net-of-Tax
                                                         Amount        Benefit       Amount
                                                     -------------- ------------  -------------
     <S>                                            <C>            <C>           <C>
      Net income                                                                  $    349,061

      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                                                  $    341,231
                                                                                   ============
</TABLE>

<PAGE>  9
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

  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, 2006
                                                  ---------------------------------------
                                                     Income     Average Shares  Per Share
                                                   (Numerator)   (Denominator)   Amount
                                                  ------------ --------------- ----------
     <S>                                         <C>          <C>             <C>
      Basic Earnings Per Share
         Income Available to Common Shareholders  $  203,749          252,764  $    0.81
                                                                                =========
      Effect of Dilutive Securities
         Stock Options, Restricted Stock
           and Other Plans                               --            5,534
                                                   ----------   --------------
      Diluted Earnings Per Share
         Income Available to Common Shareholders  $  203,749          258,298  $    0.79
                                                                                =========
</TABLE>
<TABLE>
<CAPTION>
                                                      Three Months Ended June 30, 2005
                                                                 As Adjusted
                                                  ---------------------------------------
                                                     Income     Average Shares  Per Share
                                                   (Numerator)   (Denominator)   Amount
                                                  ------------ --------------- ----------
     <S>                                         <C>          <C>             <C>
      Basic Earnings Per Share
         Income Available to Common Shareholders  $  183,745          228,630  $    0.80
                                                                                =========
      Effect of Dilutive Securities
      Stock Options, Restricted Stock
           and Other Plans                               --            5,274
                                                   ----------   --------------
      Diluted Earnings Per Share
         Income Available to Common Shareholders  $  183,745          233,904  $    0.79
                                                                                =========
</TABLE>
<TABLE>
<CAPTION>
                                                       Six Months Ended June 30, 2006
                                                  ---------------------------------------
                                                     Income     Average Shares  Per Share
                                                   (Numerator)   (Denominator)   Amount
                                                  ------------ --------------- ----------
     <S>                                         <C>          <C>             <C>
      Basic Earnings Per Share
         Income Available to Common Shareholders  $  390,517          244,088  $    1.60
                                                                                =========
      Effect of Dilutive Securities
         Stock Options, Restricted Stock
           and Other Plans                                --            5,291
                                                   ----------   --------------
      Diluted Earnings Per Share
         Income Available to Common Shareholders  $  390,517          249,379  $    1.57
                                                                                =========
</TABLE>
<TABLE>
<CAPTION>
                                                       Six Months Ended June 30, 2005
                                                                 As Adjusted
                                                  ---------------------------------------
                                                     Income     Average Shares  Per Share
                                                   (Numerator)   (Denominator)   Amount
                                                  ------------ --------------- ----------
     <S>                                         <C>          <C>             <C>
      Basic Earnings Per Share
         Income Available to Common Shareholders  $  349,061          228,097  $    1.53
                                                                                =========
      Effect of Dilutive Securities
      Stock Options, Restricted Stock
           and Other Plans                                --            5,213
                                                   ----------   --------------
      Diluted Earnings Per Share
         Income Available to Common Shareholders  $  349,061          233,310  $    1.50
                                                                                =========
</TABLE>

<PAGE> 10
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

     Options to purchase shares of common stock not included in the
     computation of diluted net income per share because the stock options
     were antidilutive are as follows (shares in thousands):
<TABLE>
<CAPTION>
                       Three Months Ended June 30,            Six Months Ended June 30,
                  ------------------------------------  ------------------------------------
                        2006               2005               2006               2005
                  -----------------  -----------------  -----------------  -----------------
      <S>        <C>                <C>                <C>                <C>
      Shares             47                  8                 131                34

      Price Range $45.110 - $47.020  $43.310 - $44.200  $44.200 - $47.020  $42.710 - $44.200
</TABLE>

  5. Business Combinations

     The following acquisitions, which are not considered to be material
     business combinations individually or in the aggregate, were completed
     during the second quarter of 2006:

     On April 1, 2006, Marshall & Ilsley Corporation completed the
     acquisition of Gold Banc Corporation, Inc. ("Gold Banc"), a bank holding
     company headquartered in Leawood, Kansas, which offers commercial
     banking, retail banking, trust and asset management products and
     services through various subsidiaries.  Gold Banc had consolidated
     assets of $4.2 billion at the time of the merger.  Total consideration
     in this transaction, including the effect of terminating Gold Banc's
     employee stock ownership plan, amounted to $716.2 million, consisting of
     13,673,072 shares of M&I common stock valued at $601.0 million, the
     exchange of 119,816 vested options valued at $2.9 million and total cash
     consideration of $112.3 million.  Gold Banc's largest subsidiary, Gold
     Bank, a Kansas state-chartered bank, was merged with and into M&I
     Marshall & Ilsley Bank on April 1, 2006, at which time the 32 Gold Bank
     branch offices in Florida, Kansas, Missouri and Oklahoma became
     interstate branch offices of M&I Marshall & Ilsley Bank.  Initial
     goodwill, subject to the completion of appraisals and valuation of the
     assets acquired and liabilities assumed, amounted to $493.3 million.
     Approximately $485.4 million of the goodwill was assigned to the Banking
     segment and the remainder was assigned to the Corporation's Trust
     reporting unit.  The estimated identifiable intangible asset to be
     amortized (core deposits) with an estimated weighted average life of 5.0
     years amounted to $44.1 million.  The goodwill and intangibles resulting
     from this transaction are not deductible for tax purposes.

     On April 1, 2006, Marshall & Ilsley Corporation completed the
     acquisition of St. Louis-based Trustcorp Financial, Inc. ("Trustcorp").
     With the acquisition of Trustcorp, which had consolidated assets of
     $735.7 million at the time of the merger, the Corporation acquired
     Missouri State Bank and Trust Company, which provides commercial banking
     services in Missouri through seven bank locations.  In July 2006,
     Missouri State Bank and all of its branches were merged with and into
     Southwest Bank, the Corporation's St. Louis-based banking affiliate.
     Total consideration in this transaction amounted to $182.0 million,
     consisting of 3,069,430 shares of M&I common stock valued at $134.9
     million, the exchange of 412,317 vested options valued at $13.4 million
     and cash consideration of $33.7 million.  Initial goodwill, subject to
     the completion of appraisals and valuation of the assets acquired and
     liabilities assumed, amounted to $129.4 million.  The estimated
     identifiable intangible asset to be amortized (core deposits) with an
     estimated weighted average life of 7.5 years amounted to $10.9 million.
     The goodwill and intangibles resulting from this transaction are
     partially deductible for tax purposes.

     The common stock issued and vested options exchanged in the acquistion
     of Gold Banc and Trustcorp are non-cash transactions for purposes of the
     Consolidated Statements of Cash Flows.

     Recent acquisition activities
     -----------------------------
     On June 29, 2006, Metavante announced the signing of a definitive
     agreement to acquire VICOR, Inc. ("VICOR") of Richmond, California.
     VICOR is a provider of  software and solutions that simplify and
     automate the processing of complex payments for businesses and financial
     institutions.  The acquisition is expected to close in the third quarter
     of 2006, pending regulatory approval and other customary closing
     conditions.  The purchase is not expected to have a material impact on
     the financial results of Metavante or the Corporation.


<PAGE> 11
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

  6. Selected investment securities, by type, held by the Corporation were as
     follows ($000's):
<TABLE>
<CAPTION>
                                                    June 30,    December 31,      June 30,
                                                      2006          2005            2005
                                                -------------- -------------- --------------
     <S>                                       <C>            <C>            <C>
      Investment securities available for sale:
         U.S. treasury and government agencies  $   5,219,287  $   4,379,148  $   4,254,711
         State and political subdivisions             748,967        703,892        671,782
         Mortgage backed securities                   101,945        116,464        144,070
         Other                                        557,088        502,199        502,065
                                                 -------------  -------------  -------------
      Total                                     $   6,627,287  $   5,701,703  $   5,572,628
                                                 =============  =============  =============

      Investment securities held to maturity:
         State and political subdivisions       $     546,186  $     616,554  $     665,807
         Other                                          1,500          2,000          2,300
                                                 -------------  -------------  -------------
      Total                                     $     547,686  $     618,554  $     668,107
                                                 =============  =============  =============
</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, 2006 ($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 $  3,090,843  $    78,238  $  1,936,556  $    86,669  $  5,027,399  $    164,907
State and political
   subdivisions             328,100        7,300        82,492        4,070       410,592        11,370
Mortgage backed securities   36,796          910        65,149        2,912       101,945         3,822
Other                         1,822           62           --           --          1,822            62
                        -----------   ----------   -----------   ----------   -----------   -----------
Total                  $  3,457,561  $    86,510  $  2,084,197  $    93,651  $  5,541,758  $    180,161
                        ===========   ==========   ===========   ==========   ===========   ===========
</TABLE>

     The investment securities in the above table were temporarily impaired
     at June 30, 2006.  This temporary impairment represents the amount of
     loss that would have been realized if the investment securities had been
     sold on June 30, 2006.  The temporary impairment in the investment
     securities portfolio is predominantly the result of increases in market
     interest rates since the investment securities were acquired and not
     from deterioration in the creditworthiness of the issuer.

<PAGE> 12
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (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,
                                                      2006          2005            2005
                                                -------------- -------------- --------------
     <S>                                       <C>            <C>            <C>
      Commercial, financial and agricultural    $  11,763,501  $   9,599,361  $   9,147,994
      Cash flow hedging instruments at fair value     (55,541)       (33,886)        (4,549)
                                                 -------------  -------------  -------------
         Commercial, financial and agricultural    11,707,960      9,565,475      9,143,445

      Real estate:
         Construction                               5,402,120      3,641,942      2,984,601
         Residential mortgage                       5,816,886      5,050,803      4,335,593
         Home equity loans and lines of credit      4,537,014      4,833,480      4,977,525
         Commercial mortgage                       10,860,893      8,825,104      8,585,700
                                                 -------------  -------------  -------------
      Total real estate                            26,616,913     22,351,329     20,883,419

      Personal                                      1,408,973      1,617,761      1,526,442
      Lease financing                                 653,494        632,348        592,545
                                                 -------------  -------------  -------------
            Total loans and leases              $  40,387,340  $  34,166,913  $  32,145,851
                                                 =============  =============  =============
</TABLE>

  8. Financial Asset Sales

     During the second quarter of 2006, automobile loans with principal
     balances of $177.7 million were sold in securitization transactions.
     The net gains and losses from the sale and securitization of auto loans
     for the three and six months ended June 30, 2006 and 2005, respectively,
     were not significant.  Other income associated with auto
     securitizations, primarily servicing income, amounted to $3.0 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 quarter were as follows (rate per annum):
<TABLE>
<CAPTION>
     <S>                                <C>
      Prepayment speed (CPR)                                 17-42 %
      Weighted average life (in months)                       20.8
      Expected credit losses
        (based on original balance)                      0.36-1.03 %
      Residual cash flow discount rate                        12.0 %
      Variable returns to transferees    Forward one-month LIBOR yield curve
</TABLE>

     At June 30, 2006, 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                  $  1,028,361   $    152,716   $  1,181,077
     Principal amounts of loans
        60 days or more past due           2,075            390          2,465
     Net credit losses year to date        1,230            807          2,037
</TABLE>

  9. Goodwill and Other Intangibles

     The changes in the carrying amount of goodwill for the six months ended
     June 30, 2006 were as follows ($000's):
<TABLE>
<CAPTION>
                                                   Banking      Metavante       Others        Total
                                                ------------- ------------- ------------- -------------
     <S>                                       <C>           <C>           <C>           <C>
      Goodwill balance as of January 1, 2006    $    809,376  $  1,272,039  $      7,804  $  2,089,219
      Goodwill acquired during the period            614,801        21,767        21,251       657,819
      Purchase accounting adjustments                   (121)      (22,224)          --        (22,345)
                                                 ------------  ------------  ------------  ------------
      Goodwill balance as of  June 30, 2006     $  1,424,056  $  1,271,582  $     29,055  $  2,724,693
                                                 ============  ============  ============  ============
</TABLE>

<PAGE> 13
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

     Goodwill acquired during the second quarter of 2006 for the Banking
     segment includes initial goodwill of $485.4 million for the acquisition
     of Gold Banc and $129.4 million in initial goodwill relating to the
     acquisition of Trustcorp.  Goodwill acquired for the Metavante segment
     includes initial goodwill relating to the acquisition of AdminiSource in
     the first quarter of 2006.  Goodwill for the Others segment includes
     initial goodwill relating to the acquisition of FirstTrust Indiana of
     $13.4 million in the first quarter of 2006, and initial goodwill
     allocated to the Trust reporting unit of $7.9 million from the
     acquisition of Gold Banc in the second quarter of 2006.

     Purchase accounting adjustments for Metavante for the six months ended
     June 30, 2006 represent adjustments made to the initial estimates of
     fair value associated with the acquisitions of Everlink Payment
     Services, Inc., GHR Systems, Inc., Brasfield, AdminiSource, Med-i-Bank,
     Inc., LINK2GOV Corp. and NYCE Corporation ("NYCE") and its affiliate
     companies.  During the first quarter, Metavante received $29.9 million
     as a return of the purchase price associated with the NYCE acquisition.
     Purchase accounting adjustments for the Banking segment were
     attributable to the reduction of goodwill allocated to a branch
     divestiture.

     At June 30, 2006, the Corporation's other intangible assets consisted of
     the following ($000's):
<TABLE>
<CAPTION>
                                                                             June 30, 2006
                                                              -----------------------------------------
                                                                                Accum-
                                                                  Gross         ulated         Net
                                                                 Carrying       Amort-       Carrying
                                                                  Amount       ization        Value
                                                              ------------- ------------- -------------
     <S>                                                     <C>           <C>           <C>
      Other intangible assets
         Core deposit intangible                              $    207,805  $     86,516  $    121,289
         Data processing contract rights/customer lists            338,608        45,367       293,241
         Trust customers                                             6,750         1,580         5,170
         Tradename                                                   8,275           996         7,279
         Other Intangibles                                           1,250           552           698
                                                               ------------  ------------  ------------
                                                              $    562,688  $    135,011  $    427,677
                                                               ============  ============  ============

      Mortgage loan servicing rights                                                      $      2,458
                                                                                           ============
</TABLE>

     Amortization expense of other intangible assets for the three and six
     months ended June 30, 2006 amounted to $12.0 million and $20.9 million,
     respectively.  Amortization expense of other intangible assets for the
     three and six months ended June 30, 2005 was $8.1 million and $16.2
     million, respectively.

     The estimated amortization expense of other intangible assets and
     mortgage loan servicing rights for the next five annual fiscal years are
     ($000's):

               2007                      $     44,441
               2008                            40,863
               2009                            37,775
               2010                            35,455
               2011                            33,688

<PAGE> 14
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

 10. The Corporation's deposit liabilities consisted of the following
     ($000's):
<TABLE>
<CAPTION>
                                                    June 30,    December 31,      June 30,
                                                      2006          2005            2005
                                                -------------- -------------- --------------
     <S>                                       <C>            <C>            <C>
      Noninterest bearing demand                $   5,773,090  $   5,525,019  $   5,088,947

      Savings and NOW                              11,549,045     10,462,831      9,999,393
      Cash flow hedge-Brokered MMDA                    (5,633)        (5,326)     (2,998)
                                                 -------------  -------------  -------------
         Total Savings and NOW                     11,543,412     10,457,505      9,996,395

      CD's $100,000 and over                        8,107,033      5,652,359      5,980,536
      Cash flow hedge-Institutional CDs               (17,419)       (13,767)       (13,944)
                                                 -------------  -------------  -------------
         Total CD's $100,000 and over               8,089,614      5,638,592      5,966,592

      Other time deposits                           4,801,124      3,434,476      3,006,936
      Foreign deposits                              2,750,552      2,618,629      2,002,570
                                                 -------------  -------------  -------------
            Total deposits                      $  32,957,792  $  27,674,221  $  26,061,440
                                                 =============  =============  =============
</TABLE>

 11. Share-Based Compensation Plans

     The Corporation has Equity Incentive Plans which provide for the grant
     of nonqualified and incentive stock options, stock appreciation rights,
     rights to purchase shares of restricted stock and the award of
     restricted stock units to key employees and directors of the Corporation
     at prices ranging from zero to the market value of the shares at the
     date of grant.  The Equity Incentive Plans generally provide for the
     grant of options to purchase shares of the Corporation's common stock
     for a period of ten years from the date of grant.  Stock options granted
     generally become exercisable over a period of three years from the date
     of grant.  However, stock options granted to directors of the
     Corporation vest immediately and stock options granted after 1996
     provide accelerated or immediate vesting for grants to individuals who
     meet certain age and years of service criteria at the date of grant.
     Restrictions on stock or units issued pursuant to the Equity Incentive
     Plans generally lapse within a three to seven year period.

     The Corporation also has a Long-Term Incentive Plan.  Under the plan,
     performance units may be awarded from time to time.  Once awarded,
     additional performance units will be credited to each participant based
     on dividends paid by the Corporation on its common stock.  At the end of
     a designated vesting period, participants will receive a cash award
     equal to the Corporation's average common stock price over the last five
     days of the vesting period multiplied by some percent (0%-275%) of the
     initial performance units credited plus those additional units credited
     as dividends based on the established performance criteria.  The vesting
     period is three years from the date the performance units were awarded.

     The Corporation also has a qualified employee stock purchase plan (the
     "ESPP") which gives employees who elect to participate in the plan the
     right to acquire shares of the Corporation's common stock at the
     purchase price which is 85 percent of the lesser of the fair market
     value of the Corporation's common stock on the first or last day of the
     one-year offering period ("look-back feature") which has historically
     been from July 1 to June 30.  Effective July 1, 2006, the ESPP plan was
     amended to eliminate the look-back feature and to provide employees who
     elect to participate in the plan the right to acquire shares of the
     Corporation's common stock at the purchase price which is 85 percent of
     the fair market value of the Corporation's common stock on the last day
     of each three month period within the one-year offering period.

     Effective January 1, 2006, the Corporation adopted Statement of
     Financial Accounting Standard No. 123 (revised 2004), Share-Based
     Payment  ("SFAS 123(R)").  SFAS 123(R) replaces FASB Statement No. 123
     Accounting for Stock-Based Compensation ("SFAS 123"), and supercedes
     Accounting Principles Board Opinion No. 25 ("APBO 25") Accounting for
     Stock Issued to Employees.  Statement 123(R) requires that compensation
     cost 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.  Statement 123(R) covers a
     wide range of share-based compensation arrangements including stock
     options, restricted stock plans, performance-based awards, stock
     appreciation rights, and employee stock purchase plans. Statement 123(R)
     also provides guidance on measuring the fair value of share-based
     payments awards.

<PAGE> 15
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

     The Corporation elected the Modified Retrospective Application method to
     implement this new accounting standard.  Under that method, compensation
     cost is recognized beginning on the effective date based upon (a) the
     requirements of SFAS 123(R) for all share-based payments granted after
     the effective date and (b) the fair value method of accounting
     provisions of SFAS 123 for all awards granted to employees prior to the
     effective date of SFAS 123(R) that remain unvested on the effective
     date.

     As permitted under SFAS 123, the Corporation previously recognized
     compensation cost using the intrinsic value method of accounting
     prescribed in APBO 25.  Under the intrinsic value 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.  Under APBO 25, no compensation cost was recognized for the
     nonqualified and incentive stock options because the exercise price was
     equal to the quoted market price of the Corporation's common stock at
     the date of grant and therefore, those options had no intrinsic value on
     the date of grant.  Under APBO 25, no compensation cost was recognized
     for the Corporation's ESPP because the discount (15%) and the plan met
     the definition of a qualified plan of the Internal Revenue Code and met
     the requirements of APBO 25.

     Under the fair value method of accounting, 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
     for stock options that vest is recognized over the service period, which
     is usually the vesting period.  The fair value method of accounting
     provided under SFAS 123 is generally similar to the fair value method of
     accounting under SFAS 123(R).

     Under the Modified Retrospective Application method, in addition to
     recognizing compensation cost beginning on the effective date, financial
     statements prior to the effective date have been adjusted based on pro
     forma amounts previously disclosed under SFAS 123 for all periods for
     which SFAS 123 was effective.

     The impact to Shareholders' equity as a result of applying the Modified
     Retrospective Application method to adopt SFAS 123(R) is as follows
     ($000's):
<TABLE>
<CAPTION>
                                               December 31,      June 30,
                                                   2005            2005
                                               ------------   ------------
     <S>                                      <C>            <C>
      Decrease to Retained Earnings            $  (149,544)   $  (137,271)
      Increase to Additional Paid-in Capital       217,205        203,021
                                                -----------    -----------
         Net Increase to Shareholders' equity  $    67,661    $    65,750
                                                ===========    ===========
</TABLE>

     The net increase to Shareholders' equity represents the deferred income
     tax benefit outstanding associated with the cumulative effect on net
     income from January 1, 1995 to December 31, 2005 and June 30, 2005,
     respectively, from recognizing share-based compensation previously not
     reported.

<PAGE> 16
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

     The Corporation's net income and earnings per share as adjusted for the
     ESPP and stock options is as follows for the three and six months ended
     June 30, 2005 ($000's except per share data):
<TABLE>
<CAPTION>
                                                   Three Months     Six Months
                                                  Ended June 30,  Ended June 30,
                                                      2005            2005
                                                  -------------   -------------
     <S>                                         <C>             <C>
      Net Income, as originally reported          $    188,487    $    358,067
      Less: Stock-based employee compensation
            expense previously not included in
            net income under the intrinsic method
            of accounting, net of tax                   (4,742)         (9,006)
                                                   ------------    ------------
      Restated net income                         $    183,745        $349,061
                                                   ============    ============

      Basic earnings per share:
          As originally reported                          $0.82           $1.57
          Restated                                         0.80            1.53

      Diluted earnings per share:
          As originally reported                          $0.81           $1.54
          Restated                                         0.79            1.50
</TABLE>

     The Consolidated Statements of Cash Flows was not materially impacted.

     Activity relating to nonqualified and incentive stock options for the
     three months ended June 30, 2006 and 2005 was:
<TABLE>
<CAPTION>
                                                                                Weighted-
                                                                                 Average
                                                  Number      Option Price      Exercise
                                                of Shares       Per Share        Price
                                               ------------  ---------------  ------------
     <S>                                      <C>           <C>              <C>
      Shares under option at March 31, 2005     22,380,226   $10.13 - 44.20        $30.86
      Options granted                              102,750    41.72 - 44.96         42.24
      Options lapsed or surrendered                (77,815)   22.80 - 41.95         34.72
      Options exercised                           (594,584)   10.13 - 38.25         24.50
                                               ------------  ---------------  ------------
      Shares under option at June 30, 2005      21,810,577   $13.09 - 44.96        $31.07
                                               ============  ===============  ============

      Shares under option at March 31, 2006     23,806,283   $15.94 - 47.02        $33.30
      Options granted                              398,500    43.36 - 45.72         43.99
      Vested options exchanged in acquisitions     532,133     5.71 - 43.67         12.99
      Options lapsed or surrendered                (64,918)   31.72 - 44.96         42.60
      Options exercised                           (779,491)    5.71 - 42.82         23.22
                                               ------------  ---------------  ------------
      Shares under option at June 30, 2006      23,892,507   $ 5.71 - 47.02        $33.32
                                               ============  ===============  ============
</TABLE>


<PAGE> 17
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

     Activity relating to nonqualified and incentive stock options for the
     six months ended June 30, 2006 and 2005 was:
<TABLE>
<CAPTION>
                                                                                Weighted-
                                                                                 Average
                                                  Number      Option Price      Exercise
                                                of Shares       Per Share        Price
                                               ------------  ---------------  ------------
     <S>                                      <C>           <C>              <C>
      Shares under option at December 31, 2004  22,878,097   $10.13 - 44.20        $30.70
      Options granted                              153,250    40.49 - 44.96         42.20
      Options lapsed or surrendered               (149,339)   22.80 - 41.95         36.03
      Options exercised                         (1,071,431)   10.13 - 41.95         23.99
                                               ------------  ---------------  ------------
      Shares under option at June 30, 2005      21,810,577   $13.09 - 44.96        $31.07
                                               ============  ===============  ============

      Shares under option at December 31, 2005  24,655,317   $15.94 - 47.02        $33.09
      Options granted                              470,400    41.30 - 45.72         43.92
      Vested options exchanged in acquisitions     532,133     5.71 - 43.67         12.99
      Options lapsed or surrendered               (238,172)   31.72 - 44.96         41.73
      Options exercised                         (1,527,171)    5.71 - 42.82         24.46
                                               ------------  ---------------  ------------
      Shares under option at June 30, 2006      23,892,507   $ 5.71 - 47.02        $33.32
                                               ============  ===============  ============
</TABLE>

     Stock option awards to directors of the Corporation generally occur
     during the second quarter and stock option awards to employees primarily
     occur in the fourth quarter.  Generally, the Corporation uses shares of
     treasury stock to satisfy stock options exercised.

     The ranges of nonqualified and incentive stock options outstanding at
     June 30, 2006 were:
<TABLE>
<CAPTION>
                                                                                 Weighted-Average
                                                             Weighted-Average        Remaining
                                        Weighted-Average        Aggregate           Contractual
                   Number of Shares      Exercise Price      Intrinsic Value      Life (In Years)
               ----------------------- ------------------- ------------------- -------------------
                   Out-       Exer-      Out-      Exer-     Out-      Exer-     Out-      Exer-
  Price Range    standing    cisable   standing   cisable  standing   cisable  standing   cisable
-------------- ----------- ----------- --------- --------- --------- --------- --------- ---------
<S>           <C>         <C>         <C>       <C>       <C>       <C>       <C>       <C>
$ 5.50 - 24.99  2,579,983   2,579,983    $20.32    $20.32    $25.42    $25.42       4.0       4.0
$25.00 - 28.49  1,724,245   1,724,245     25.93     25.93     19.81     19.81       3.1       3.1
$28.50 - 30.49  4,025,390   4,022,990     28.59     28.59     17.15     17.15       5.2       5.2
$30.50 - 32.49  4,708,106   4,700,704     31.43     31.43     14.31     14.31       4.7       4.7
$32.50 - 35.49  3,092,706   2,281,898     34.77     34.76     10.97     10.98       7.3       7.2
$35.50 - 42.49  3,632,670   1,696,229     41.59     41.41      4.15      4.33       8.3       8.3
 Over $42.50    4,129,407     617,943     42.97     42.96      2.77      2.78       9.4       9.4
               ----------- ----------- --------- --------- --------- --------- --------- ---------
               23,892,507  17,623,992    $33.32    $30.41    $12.42    $15.33       6.3       5.4
               =========== =========== ========= ========= ========= ========= ========= =========
</TABLE>

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

     The grant date fair values and assumptions used to determine such value
     are as follows:
<TABLE>
<CAPTION>
                                      Three Months Ended June 30,        Six Months Ended June 30,
                                    ------------------------------   --------------------------------
                                         2006           2005              2006             2005
                                    --------------  --------------   --------------  ----------------
<S>                                <C>             <C>              <C>             <C>
Weighted-average grant
   date fair value                      $7.93          $8.38             $7.92            $8.02

Assumptions:
   Risk-free interest rates          4.87 - 5.66 %  3.33 -  4.45 %    4.22 -  5.66 %   3.33 -  4.45 %
   Expected volatility                     18.20 %         18.50 %   18.20 - 18.50 %  13.12 - 18.50 %
   Expected term (in years)          6.3  -  6.9    5.1  -   7.8      6.3  -   6.9     5.1  -   7.8
   Expected dividend yield                  2.20 %          2.19 %            2.20 %   1.92 -  2.19 %
</TABLE>

<PAGE> 18
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

     The total intrinsic value of nonqualified and incentive stock options
     exercised during the three months ended June 30, 2006 and 2005 was $17.2
     million and $11.2 million, respectively.  For the six months ended June
     30, 2006 and 2005, the total intrinsic value of nonqualified and
     incentive stock options exercised was $30.7 million and $19.9 million,
     respectively.  The total fair value of shares vested during the three
     months ended June 30, 2006 and 2005 amounted to $1.1  million and $1.2
     million, respectively.  For the six months ended June 30, 2006 and 2005,
     the total fair value of shares vested amounted to $1.6  million and $1.5
     million, respectively.

     There was approximately $24.7 million of total unrecognized compensation
     expense related to unvested nonqualified and incentive stock options at
     June 30, 2006.  The total unrecognized compensation expense will be
     recognized over a weighted average period of 2.0 years.  For awards with
     graded vesting, compensation expense was recognized using an accelerated
     method prior to the adoption of SFAS 123(R) and is recognized on a
     straight line basis for awards granted after the effective date.

     For the three months ended June 30, 2006 and 2005 the expense for
     nonqualified and incentive stock options that is included in Salaries
     and employee benefits expense in the Consolidated Statements of Income
     amounted to $6.7 million and $5.9 million, respectively.  For the six
     months ended June 30, 2006 and 2005 the expense for nonqualified and
     incentive stock options that is included in Salaries and employee
     benefits expense in the Consolidated Statements of Income amounted to
     $13.3 million and $11.7 million, respectively.  These amounts are
     considered non-cash expenses for the Statements of Cash Flow purposes.

     For the three and six months ended June 30, 2006 and 2005 the expense
     for Director's nonqualified and incentive stock options that is included
     in Other expense in the Consolidated Statements of Income amounted to
     $0.6 million and $0.7 million, respectively.

     Activity relating to the Corporation's Restricted Stock Purchase Rights
     was:
<TABLE>
<CAPTION>
                                                     Three Months Ended      Six Months Ended
                                                          June 30,               June 30,
                                                   ---------------------  ---------------------
                                                       2006       2005        2006       2005
                                                   ----------  ---------  ----------  ---------
<S>                                               <C>         <C>        <C>         <C>
Restricted stock purchase rights
   outstanding - Beginning of Year                       --         --          --         --
Restricted stock purchase rights granted              44,000      7,000      51,000     14,500
Restricted stock purchase rights exercised           (44,000)    (7,000)    (51,000)   (14,500)
                                                   ----------  ---------  ----------  ---------
Restricted stock purchase rights
   outstanding - End of Period                           --         --          --         --
                                                   ==========  =========  ==========  =========

Weighted-average grant date market value              $44.67     $42.61      $44.54     $41.95
Aggregate compensation expense ($000's)               $1,377       $977      $2,647     $2,027
Unamortized compensation expense ($000's)            $12,298     $9,027     $12,298     $9,027
</TABLE>

     Restrictions on stock issued pursuant to the exercise of stock purchase
     rights generally lapse within a three to seven year period.
     Accordingly, the compensation related to issuance of the rights is
     amortized over the vesting period.  At June 30, 2006, the unamortized
     compensation expense will be recognized over a weighted average period
     of 1.8 years.  Aggregate compensation expense for the three and six
     months ended June 30, 2006 amounted to $1.4 million and $2.6 million,
     respectively.  For the three and six months ended June 30, 2005, the
     aggregate compensation expense amounted to $1.0 million and $2.0
     million, respectively.  These amounts are considered non-cash expenses
     for the Statements of Cash Flow purposes.

     As participants in the Long-Term Incentive Plan will receive a cash
     award at the end of the designated vesting period, this plan meets the
     definition of a liability award.  Unlike equity awards, liability awards
     are remeasured at fair value at each balance sheet date until
     settlement.  For the three months ended June 30, 2006 and 2005 the
     expense for the Long-Term Incentive Plan that is included in Salaries
     and employee benefits expense in the Consolidated Statements of Income
     amounted to $5.4 million and $6.0 million, respectively.  For the six
     months ended June 30, 2006 and 2005 the expense for the Long-Term
     Incentive Plan that is included in Salaries and employee benefits
     expense in the Consolidated Statements of Income amounted to $3.5
     million and $6.6 million, respectively.

<PAGE> 19
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

     Under SFAS 123(R), compensation expense is recognized for the ESPP.  The
     compensation cost per share is approximately equal to the sum of:  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 common stock
     and the value of a one year put option on 15% of a share of common stock
     for each share purchased. The compensation cost per share for the ESPP
     was $9.96 and $8.04 for the three and six months ended June 30, 2006 and
     2005, respectively.  Employee contributions under the ESPP are made
     ratably during the plan period.  Employees may withdraw from the plan
     prior to the end of the one year offering period.  The total estimated
     shares to be purchased are estimated at the beginning of the plan period
     based on total expected contributions for the plan period and 85% of the
     market price at that date.  The Corporation estimated that 346,342
     shares would be purchased on July 1, 2006 for the purpose of determining
     compensation expense.  For the three months ended June 30, 2006 and 2005
     the total expense for the ESPP that is included in Salaries and employee
     benefits expense in the Consolidated Statements of Income amounted to
     $0.9 million and $0.7 million, respectively. For the six months ended
     June 30, 2006 and 2005 the total expense for the ESPP that is included
     in Salaries and employee benefits expense in the Consolidated Statements
     of Income amounted to $1.8 million and $1.4 million, respectively.
     These amounts are considered non-cash expenses for the Statements of
     Cash Flow purposes.

     As previously discussed, effective July 1, 2006 the ESPP plan was
     amended to eliminate the look-back feature and to provide employees, who
     elect to participate in the plan, the right to acquire shares of the
     Corporation's common stock at the purchase price, which is 85 percent of
     the fair market value of the Corporation's common stock on the last day
     of each three month period within the one-year offering period.  The
     effect of the amendment will be to lower the amount of expense in future
     quarters.  The Corporation estimates that the quarterly savings in
     expense will be approximately $0.3 million.


 12. 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, 2005.
     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, 2006.

     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 for these commitments.

     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.

     At June 30, 2006, free standing interest rate swaps consisted of $2.1
     billion in notional amount of receive fixed / pay floating with an
     aggregate negative fair value of $46.3 million and $1.4 billion in
     notional amount of pay fixed / receive floating with an aggregate
     positive fair value of $44.8 million.

     At June 30, 2006, interest rate caps purchased amounted to $20.5 million
     in notional amount with a positive fair value of $0.1 million and
     interest rate caps sold amounted to $20.5 million in notional amount
     with a negative fair value of $0.1 million.

     At June 30, 2006, the notional value of interest rate futures designated
     as trading was $3.4 billion with a negative fair value of $0.3 million.

<PAGE> 20
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

     Fair Value Hedges

     The Corporation has fixed rate CDs and fixed rate long-term debt which
     expose the Corporation to variability in fair values due to changes in
     market interest rates.

     To limit the Corporation's exposure to changes in interest rates, the
     Corporation has entered into received-fixed / pay floating interest rate
     swaps.

     The Corporation structures the interest rate swaps so that all of the
     critical terms of the fixed rate CDs and fixed rate borrowings match the
     receive fixed leg of the interest rate swaps at inception of the hedging
     relationship.  As a result, the Corporation expects the hedging
     relationship to be highly effective in achieving offsetting changes in
     fair value due to changes in market interest rates both at inception and
     on an on-going basis.

     At June 30, 2006, certain interest rate swaps designated as fair value
     hedges met the criteria required to qualify for the shortcut method of
     accounting.  Based on the shortcut method of accounting treatment, no
     ineffectiveness is assumed.

     At June 30, 2006, no component of the derivative instruments' gain or
     loss was excluded from the assessment of hedge effectiveness for
     derivative financial instruments designated as fair value hedges.

     The following table presents additional information with respect to
     selected fair value hedges.

<TABLE>
<CAPTION>
      Fair Value Hedges
      June 30, 2006                                                   Weighted
                                                 Notional     Fair     Average
             Hedged                 Hedging       Amount     Value    Remaining
              Item                Instrument    ($ in mil)($ in mil) Term (Yrs)
      ---------------------- ------------------- --------- --------- ----------
     <S>                    <C>                 <C>       <C>       <C>
      Fair Value Hedges that Qualify for Shortcut Accounting

         Fixed Rate
            Bank Notes        Receive Fixed Swap $  427.3  $  (27.7)      8.3

      Other Fair Value Hedges

         Fixed Rate CDs       Receive Fixed Swap $1,045.1  $  (40.9)      7.8

         Medium Term Notes    Receive Fixed Swap    359.3     (13.1)      6.9

         Fixed Rate
            Bank Notes        Receive Fixed Swap    625.0     (24.6)      4.4

         Institutional CDs    Receive Fixed Swap     65.0      (1.5)     24.8

         Brokered Bullet CDs  Receive Fixed Swap    627.9      (2.5)      0.6
</TABLE>

     The impact from fair value hedges to total net interest income for the
     three and six months ended June 30, 2006 was a negative $1.1 million and
     a positive $0.6 million, respectively.  The impact to net interest
     income due to ineffectiveness was not material.

     Cash Flow Hedges

     The Corporation has variable rate loans, deposits and borrowings that
     expose the Corporation to variability in interest rate payments due to
     changes in interest rates.  The Corporation believes it is prudent to
     limit the variability of a portion of its interest receipts and
     payments.  To meet this objective, the Corporation enters into various
     types of derivative financial instruments to manage fluctuations in cash
     flows resulting from interest rate risk.  At June 30, 2006, these
     instruments consisted of interest rate swaps.

     The Corporation regularly originates and holds floating rate commercial
     loans that reprice monthly on the first business day to one-month LIBOR.
     As a result, the Corporation's interest receipts are exposed to
     variability in cash flows due to changes in one-month LIBOR.

<PAGE> 21
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

     In order to hedge the interest rate risk associated with the floating
     rate commercial loans indexed to one-month LIBOR, the Corporation has
     entered into receive fixed / pay LIBOR-based floating interest rate
     swaps designated as cash flow hedges against the first LIBOR-based
     interest payments received that, in the aggregate for each period, are
     interest payments on such principal amount of its then existing LIBOR-
     indexed floating-rate commercial loans equal to the notional amount of
     the interest rate swaps outstanding.

     Hedge effectiveness is assessed at inception and each quarter on an on-
     going basis using regression analysis that takes into account reset date
     differences for certain designated interest rate swaps that reset
     quarterly.  Each month the Corporation makes a determination that it is
     probable that the Corporation will continue to receive interest payments
     on at least that amount of principal of its existing LIBOR-indexed
     floating-rate commercial loans that reprice monthly on the first
     business day to one-month LIBOR equal to the notional amount of the
     interest rate swaps outstanding.  Ineffectiveness is measured using the
     hypothetical derivative method and is recorded as a component of
     interest income on loans.

     The Corporation regularly issues floating rate institutional CDs indexed
     to three-month LIBOR.  As a result, the Corporation's interest payments
     are exposed to variability in cash flows due to changes in three-month
     LIBOR.

     In order to hedge the interest rate risk associated with floating rate
     institutional CDs, the Corporation has entered into pay fixed / receive
     LIBOR-based floating interest rate swaps designated as cash flow hedges
     against the interest payments on the forecasted issuance of floating
     rate institutional CDs.

     For certain institutional CDs, hedge effectiveness is assessed at
     inception and each quarter on an on-going basis using regression
     analysis that regresses daily observations of three-month LIBOR to
     itself with a five day mismatch on either side for potential reset date
     differences between the interest rate swaps and the floating rate
     institutional CDs.  The regression analysis is based on a rolling five
     years of daily observations.  Ineffectiveness is measured using the
     hypothetical derivative method and is recorded as a component of
     interest expense on deposits.

     The Corporation regularly purchases overnight borrowings indexed to the
     Federal funds rate.  As a result, the Corporation's interest payments
     are exposed to variability in cash flows due to changes in the Federal
     funds effective rate.

     In order to hedge the interest rate risk associated with overnight
     borrowings, the Corporation has entered into pay fixed / receive
     floating interest rate swaps designated as cash flow hedges against
     interest payments on the forecasted issuance of floating rate overnight
     borrowings.  The floating leg of the interest rate swap resets monthly
     to the H15 Federal Effective index.  The H15 Federal Effective index is
     not a benchmark rate, therefore hedge effectiveness is assessed at
     inception and each quarter on an on-going basis using regression
     analysis.  Each month the Corporation makes a determination that it is
     probable that the Corporation will continue to make interest payments on
     at least that amount of outstanding overnight floating-rate borrowings
     equal to the notional amount of the interest rate swaps outstanding.
     Ineffectiveness is measured using the hypothetical derivative method and
     is recorded as a component of interest expense on short-term borrowings.

     The Corporation structures the remaining interest rate swaps so that all
     of the critical terms of the LIBOR-based floating rate deposits and
     borrowings match the floating leg of the interest rate swaps at
     inception of the hedging relationship.  As a result, the Corporation
     expects those hedging relationships to be highly effective in achieving
     offsetting changes in cash flows due to changes in market interest rates
     both at inception and on an on-going basis.

     At June 30, 2006, one interest rate swap designated as a cash flow hedge
     met the criteria required to qualify for the shortcut method of
     accounting.  Based on the shortcut method of accounting treatment, no
     ineffectiveness is assumed.

     At June 30, 2006, no component of the derivative instruments' gain or
     loss was excluded from the assessment of hedge effectiveness for
     derivative financial instruments designated as cash flow hedges.

<PAGE> 22
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

     The following table summarizes the Corporation's cash flow hedges.
<TABLE>
<CAPTION>
      Cash Flow Hedges
      June 30, 2006                                                   Weighted
                                                 Notional     Fair     Average
             Hedged                 Hedging       Amount     Value    Remaining
              Item                Instrument    ($ in mil)($ in mil) Term (Yrs)
      ---------------------- ------------------- --------- --------- ----------
     <S>                    <C>                 <C>       <C>       <C>
      Cash Flow Hedges that Qualify for Shortcut Accounting

         Floating Rate
            Bank Notes          Pay Fixed Swap   $   125.0 $     1.5      0.8

      Other Cash Flow Hedges

         Variable Rate Loans  Receive Fixed Swap $ 1,150.0 $   (55.5)     3.4

         Institutional CDs      Pay Fixed Swap     1,980.0      17.4      2.0

         Federal Funds
            Purchased           Pay Fixed Swap       250.0       0.7      1.1

         FHLB Advances          Pay Fixed Swap     1,220.0      35.7      2.5

         Floating Rate
            Bank Notes          Pay Fixed Swap       300.0       4.2      2.2

         Money Market Accounts  Pay Fixed Swap       250.0       5.6      1.0
</TABLE>

     The impact to total net interest income from cash flow hedges, including
     amortization of terminated cash flow hedges for the three and six months
     ended June 30, 2006 was a positive $3.8 million and a positive $5.7
     million, respectively.  The impact due to ineffectiveness was not
     material.

     For the three and six months ended June 30, 2005, the total effect on
     net interest income resulting from derivative financial instruments was
     a positive $9.1 million and a positive $16.1 million, respectively,
     including the amortization of terminated derivative financial
     instruments.


 13. 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, 2006 and 2005 included the following components
     ($000's):
<TABLE>
<CAPTION>
                                                     Three Months Ended         Six Months Ended
                                                          June 30,                  June 30,
                                                  ------------------------  -------------------------
                                                      2006         2005          2006         2005
                                                  -----------  -----------   -----------  -----------
     <S>                                         <C>          <C>           <C>          <C>
      Service cost                                $      570   $      552    $    1,140   $    1,105
      Interest on APBO                                 1,022        1,159         2,044        2,318
      Expected return on assets                         (232)        (150)         (464)        (299)
      Prior service amortization                        (680)        (680)       (1,360)      (1,361)
      Actuarial loss amortization                        378          264           757          528
                                                   ----------   ----------    ----------   ----------
           Total postretirement benefit costs     $    1,058   $    1,145    $    2,117   $    2,291
                                                   ==========   ==========    ==========   ==========
</TABLE>

     Benefit payments and expenses, net of participant contributions, for the
     three and six months ended June 30, 2006 amounted to $1.1 million and
     $2.1 million, respectively.

<PAGE> 23
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)

 14. Segments

     The following represents the Corporation's operating segments as of and
     for the three and six months ended June 30, 2006 and 2005.  Effective
     January 1, 2006, the Corporation transferred a portion of its Item
     Processing business from the Banking segment to Metavante.  Prior period
     segment information has been adjusted for the transfer.  There have not
     been any other changes to the way the Corporation organizes its
     segments.  Beginning with the third quarter of 2005, total other income
     for Metavante includes float income which represents interest income on
     balances invested in an affiliate bank which arises from Electronic Bill
     Payment activities.  This income was formerly reported as a component of
     Net Interest Income for Metavante. Segment information for all periods
     has been adjusted for this reclassification.  Fees - intercompany
     represent intercompany revenue 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.  Intrasegment revenues, expenses and assets have
     been eliminated ($ in millions):

<TABLE>
<CAPTION>
                                                   Three Months Ended June 30, 2006
                          ---------------------------------------------------------------------------------
                                                                                    Reclass-
                                                                                   ifications      Consol-
                                                                      Corporate     & Elimi-       idated
                             Banking      Metavante       Others       Overhead      nations       Income
                          ------------  ------------  ------------  ------------  -----------  ------------
<S>                      <C>           <C>           <C>           <C>           <C>          <C>
Net interest income       $     381.3   $      (7.5)  $       5.9   $      (8.3)  $      2.7   $     374.1

Other income
   Fees - external               82.0         345.0          56.0           1.4           --         484.4
   Fees - internal
     Fees - intercompany         16.8          25.8           5.7          25.0        (73.3)           --
     Float income -
        intercompany               --           2.7            --            --         (2.7)           --
                           -----------   -----------   -----------   -----------   ----------   -----------
           Total other income    98.8         373.5          61.7          26.4        (76.0)        484.4

Other expense
   Expenses - other             179.3         294.6          41.6          28.4          0.4         544.3
   Expenses - intercompany       46.9          13.0          12.7           1.1        (73.7)           --
                           -----------   -----------   -----------   -----------   ----------   -----------
Total other expense             226.2         307.6          54.3          29.5        (73.3)        544.3
Provision for loan
   and lease losses              10.6            --           0.5            --           --          11.1
                           -----------   -----------   -----------   -----------   ----------   -----------
Income before taxes             243.3          58.4          12.8         (11.4)          --         303.1
Income tax expense               80.8          18.0           4.7          (4.1)          --          99.4
                           -----------   -----------   -----------   -----------   ----------   -----------
Segment income (loss)     $     162.5   $      40.4   $       8.1   $      (7.3)  $       --   $     203.7
                           ===========   ===========   ===========   ===========   ==========   ===========

Identifiable assets       $  51,578.5   $   2,790.6   $     821.4   $     684.9   $ (1,456.5)  $  54,418.9
                           ===========   ===========   ===========   ===========   ==========   ===========

Return on average equity         13.3%         14.5%         11.2%                                    14.4%
                           ===========   ===========   ===========                              ===========
</TABLE>
<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       $     314.9   $      (9.6)  $       6.8   $      (2.1)  $      3.0   $     313.0

Other income
   Fees - external               73.5         282.3          70.1           8.4           --         434.3
   Fees - internal
     Fees - intercompany         15.5          21.9           5.6          21.6        (64.6)           --
     Float income -
        intercompany               --           3.0            --            --         (3.0)           --
                           -----------   -----------   -----------   -----------   ----------   -----------
           Total other income    89.0         307.2          75.7          30.0        (67.6)        434.3

Other expense
   Expenses - other             153.6         237.6          33.7          36.4         (1.4)        459.9
   Expenses - intercompany       40.7          10.1          12.0           0.4        (63.2)           --
                           -----------   -----------   -----------   -----------   ----------   -----------
Total other expense             194.3         247.7          45.7          36.8        (64.6)        459.9
Provision for loan
   and lease losses              13.4            --           0.3            --           --          13.7
                           -----------   -----------   -----------   -----------   ----------   -----------
Income (loss) before taxes      196.2          49.9          36.5          (8.9)          --         273.7
Income tax expense (benefit)     59.1          19.9          14.3          (3.3)          --          90.0
                           -----------   -----------   -----------   -----------   ----------   -----------
Segment income (loss)
   As Adjusted            $     137.1   $      30.0   $      22.2   $      (5.6)  $       --   $     183.7
                           ===========   ===========   ===========   ===========   ==========   ===========

Identifiable assets       $  41,149.6   $   2,469.0   $     759.5   $     733.1   $ (1,627.5)  $  43,483.7
                           ===========   ===========   ===========   ===========   ==========   ===========

Return on average equity         16.0%         18.6%         33.0%                                    17.5%
                           ===========   ===========   ===========                              ===========
</TABLE>

<PAGE> 24
                          MARSHALL & ILSLEY CORPORATION
                    Notes to Financial Statements - Continued
                         June 30, 2006 & 2005 (Unaudited)
<TABLE>
<CAPTION>
                                                    Six Months Ended June 30, 2006
                          ---------------------------------------------------------------------------------
                                                                                    Reclass-
                                                                                   ifications      Consol-
                                                                      Corporate     & Elimi-       idated
                             Banking      Metavante       Others       Overhead      nations       Income
                          ------------  ------------  ------------  ------------  -----------  ------------
<S>                      <C>           <C>           <C>           <C>           <C>          <C>
Net interest income       $     708.9   $     (15.8)  $      11.6   $     (12.0)  $      5.9   $     698.6

Other income
   Fees - external              155.5         688.0         110.4           3.2           --         957.1
   Fees - internal
     Fees - intercompany         33.7          50.6          10.5          49.9       (144.7)           --
     Float income -
        intercompany               --           5.9            --            --         (5.9)           --
                           -----------   -----------   -----------   -----------   ----------   -----------
           Total other income   189.2         744.5         120.9          53.1       (150.6)        957.1

Other expense
   Expenses - other             337.7         590.7          81.1          40.5         (0.6)      1,049.4
   Expenses - intercompany       90.1          25.6          25.1           3.3       (144.1)           --
                           -----------   -----------   -----------   -----------   ----------   -----------
Total other expense             427.8         616.3         106.2          43.8       (144.7)      1,049.4
Provision for loan
   and lease losses              21.0            --           1.0            --           --          22.0
                           -----------   -----------   -----------   -----------   ----------   -----------
Income before taxes             449.3         112.4          25.3          (2.7)          --         584.3
Income tax expense              148.6          37.5           9.3          (1.6)          --         193.8
                           -----------   -----------   -----------   -----------   ----------   -----------
Segment income (loss)     $     300.7   $      74.9   $      16.0   $      (1.1)  $       --   $     390.5
                           ===========   ===========   ===========   ===========   ==========   ===========

Identifiable assets       $  51,578.5       2,790.6         821.4         684.9     (1,456.5)  $  54,418.9
                           ===========   ===========   ===========   ===========   ==========   ===========

Return on average equity         13.9%         13.8%         11.5%                                    15.0%
                           ===========   ===========   ===========                              ===========
</TABLE>
<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       $     618.1   $     (20.0)  $      12.4   $      (3.9)  $      5.3   $     611.9

Other income
   Fees - external              143.6         565.3         117.7          10.2           --         836.8
   Fees - internal
     Fees - intercompany         31.4          42.8          10.3          43.2       (127.7)           --
     Float income -
        intercompany               --           5.3            --            --         (5.3)           --
                           -----------   -----------   -----------   -----------   ----------   -----------
           Total other income   175.0         613.4         128.0          53.4       (133.0)        836.8

Other expense
   Expenses - other             300.5         478.6          65.6          59.0         (0.8)        902.9
   Expenses - intercompany       79.5          21.1          24.5           1.8       (126.9)           --
                           -----------   -----------   -----------   -----------   ----------   -----------
Total other expense             380.0         499.7          90.1          60.8       (127.7)        902.9
Provision for loan
   and lease losses              21.2            --           0.6            --           --          21.8
                           -----------   -----------   -----------   -----------   ----------   -----------
Income before taxes             391.9          93.7          49.7         (11.3)          --         524.0
Income tax expense              122.9          37.4          19.4          (4.8)          --         174.9
                           -----------   -----------   -----------   -----------   ----------   -----------
Segment income (loss)
   As Adjusted            $     269.0   $      56.3   $      30.3   $      (6.5)  $       --   $     349.1
                           ===========   ===========   ===========   ===========   ==========   ===========

Identifiable assets       $  41,149.6   $   2,469.0   $     759.5   $     733.1   $ (1,627.5)  $  43,483.7
                           ===========   ===========   ===========   ===========   ==========   ===========

Return on average equity         16.0%         18.1%         23.4%                                    17.1%
                           ===========   ===========   ===========                              ===========
</TABLE>

     Total revenue, which consists of net interest income plus total other
     income, by type in Others consisted of the following ($ in millions):

<TABLE>
<CAPTION>
                                                     Three Months               Six Months
                                                    Ended June 30,            Ended June 30,
                                              ------------------------  ------------------------
                                                  2006         2005         2006         2005
                                              -----------  -----------  -----------  -----------
       <S>                                   <C>          <C>          <C>          <C>
        Trust Services                        $     49.2   $     40.6   $     95.2   $     80.2
        Residential Mortgage Banking                 5.8          6.1         10.9         11.1
        Capital Markets                             (0.3)        21.6          0.3         22.3
        Brokerage and Insurance                      7.4          7.2         14.6         14.3
        Commercial Leasing                           2.9          4.1          5.8          7.6
        Commercial Mortgage Banking                  1.6          1.6          3.3          2.8
        Others                                       1.0          1.3          2.4          2.2
                                               ----------   ----------   ----------   ----------
     Total revenue                            $     67.6   $     82.5   $    132.5   $    140.5
                                               ==========   ==========   ==========   ==========
</TABLE>

<PAGE> 25
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,
                                                             ------------------------------
                                                                  2006            2005
                                                             --------------  --------------
<S>                                                         <C>             <C>
Assets
------
Cash and due from banks                                      $   1,030,657   $     938,451

Investment securities:
   Trading securities                                               50,268          25,582
   Short-term investments                                          374,212         271,731
   Other investment securities:
      Taxable                                                    5,818,278       4,828,606
      Tax-exempt                                                 1,316,122       1,333,700
                                                              -------------   -------------
Total investment securities                                      7,558,880       6,459,619

Loans and leases:
   Loans and leases, net of unearned income                     39,649,733      31,294,058
   Less: Allowance for loan and lease losses                       416,328         361,488
                                                              -------------   -------------
   Net loans and leases                                         39,233,405      30,932,570

Premises and equipment, net                                        565,369         445,382
Accrued interest and other assets                                5,199,418       3,877,271
                                                              -------------   -------------
Total Assets                                                 $  53,587,729   $  42,653,293
                                                              =============   =============

Liabilities and Shareholders' Equity
Deposits:
   Noninterest bearing                                       $   5,404,147   $   4,826,304
   Interest bearing                                             27,331,590      20,643,276
                                                              -------------   -------------
Total deposits                                                  32,735,737      25,469,580

Federal funds purchased and security repurchase agreements       2,332,734       2,393,989
Other short-term borrowings                                      1,085,859         998,363
Long-term borrowings                                            10,050,166       7,920,117
Accrued expenses and other liabilities                           1,691,978       1,664,868
                                                              -------------   -------------
Total liabilities                                               47,896,474      38,446,917

Shareholders' equity                                             5,691,255       4,206,376
                                                              -------------   -------------
Total Liabilities and Shareholders' Equity                   $  53,587,729   $  42,653,293
                                                              =============   =============
</TABLE>

<PAGE> 26
<TABLE>
<CAPTION>
                           MARSHALL & ILSLEY CORPORATION
                  CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
                                    ($000's)

                                                                Six Months Ended June 30,
                                                             ------------------------------
                                                                  2006            2005
                                                             --------------  --------------
<S>                                                         <C>             <C>
Assets
------
Cash and due from banks                                      $   1,005,507   $     928,733

Investment securities:
   Trading securities                                               42,267          24,355
   Short-term investments                                          345,127         229,595
   Other investment securities:
      Taxable                                                    5,401,133       4,825,732
      Tax-exempt                                                 1,328,293       1,306,082
                                                              -------------   -------------
Total investment securities                                      7,116,820       6,385,764

Loans and leases:
   Loans and leases, net of unearned income                     37,159,330      30,592,745
   Less: Allowance for loan and lease losses                       392,442         361,220
                                                              -------------   -------------
   Net loans and leases                                         36,766,888      30,231,525

Premises and equipment, net                                        530,820         448,079
Accrued interest and other assets                                4,769,638       3,857,632
                                                              -------------   -------------
Total Assets                                                 $  50,189,673   $  41,851,733
                                                              =============   =============

Liabilities and Shareholders' Equity
------------------------------------
Deposits:
   Noninterest bearing                                       $   5,174,349   $   4,760,154
   Interest bearing                                             24,944,683      20,592,326
                                                              -------------   -------------
Total deposits                                                  30,119,032      25,352,480

Federal funds purchased and security repurchase agreements       2,386,379       2,170,661
Other short-term borrowings                                      1,008,475         973,360
Long-term borrowings                                             9,728,869       7,564,611
Accrued expenses and other liabilities                           1,682,305       1,666,152
                                                              -------------   -------------
Total liabilities                                               44,925,060      37,727,264

Shareholders' equity                                             5,264,613       4,124,469
                                                              -------------   -------------
Total Liabilities and Shareholders' Equity                   $  50,189,673   $  41,851,733
                                                              =============   =============
</TABLE>

<PAGE> 27
                                OVERVIEW
                                --------

The Corporation's overall strategy is to drive earnings per share growth
by: (1) expanding banking operations not only in Wisconsin but also into
faster growing regions beyond Wisconsin; (2) increasing the number of
financial institutions to which the Corporation provides correspondent
banking services and products; (3) expanding trust services and other
wealth management product and service offerings; and (4) growing
Metavante's business through organic growth, cross sales of technology
products 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 2006 produced strong financial results.

Net income for the second quarter of 2006 amounted to $203.7 million
compared to $183.7 million for the same period in the prior year, an
increase of $20.0 million, or 10.9%.  Diluted earnings per share were
$0.79 for the three months ended June 30, 2006 and 2005, respectively.
The return on average assets and average equity was 1.53% and 14.36%,
respectively, for the quarter ended June 30, 2006, and 1.73% and 17.52%,
respectively, for the quarter ended June 30, 2005.

Net income for the first half of 2006 amounted to $390.5 million compared
to $349.1 million for the same period in the prior year, an increase of
$41.4 million, or 11.9%.  Diluted earnings per share were $1.57 for the
six months ended June 30, 2006, compared with $1.50 for the six months
ended June 30, 2005, an increase of 4.7%.  The return on average assets
and average equity was 1.57% and 14.96%, respectively, for the six months
ended June 30, 2006, and 1.68% and 17.07%, respectively, for the six
months ended June 30, 2005.

Earnings growth for the three and six months ended June 30, 2006 compared
to the three and six months ended June 30, 2005 was attributable to a
number of factors.  The increase in net interest income was due to strong
organic loan and bank-issued deposit growth and the contribution from the
two banking acquisitions that were completed on April 1, 2006.  Strong
credit quality has resulted in net charge-offs that continue to be below
the Corporation's five-year historical average.  Metavante continued to
exhibit growth in both revenue and earnings which was attributable, in
part, to the impact of its acquisition activities as well as success in
retaining and cross-selling products and services to its core customer
base.  Metavante's acquisition activities included one acquisition
completed in the first quarter of 2006,  two acquisitions completed in the
fourth quarter of 2005,  three acquisitions completed in the third quarter
of 2005 and one acquisition completed in the first quarter of 2005.  Net
investment securities gains were not significant in the three or six
months ended June 30, 2006.  During the second quarter of 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.  The gross gain amounted to $29.0 million and is
reported in Net investment securities gains 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.
The increase in expenses for the three and six months ended June 30, 2006
compared to the three and six months ended June 30, 2005 were primarily
due to the banking and Metavante acquisitions.  These factors along with
continued organic expense management resulted in the reported earnings
growth in the three and six months ended 2006 compared to the three and
six months ended June 30, 2005.

Management continues to believe that the 2006 outlook provided in the
Corporation's Annual Report on Form 10-K for the year ended December 31,
2005 is generally still representative of its expectations for the year
ended December 31, 2006.  Management expects Metavante revenue will be at
the high end of the previously forecasted revenue projection of $1.4
billion to $1.5 billion including all closed acquisitions and the transfer
of external item processing which is discussed in the next section.  The
Corporation's actual results for the year ended December 31, 2006 could
differ materially from those expected by management.  See "Forward-Looking
Statements" in this Form 10-Q and "Risk Factors" in Item 1A of the
Corporation's Annual Report on Form 10-K for the year ended December 31,
2005, for a discussion of the various risk factors that could cause actual
results to differ materially from expected results.


<PAGE> 28
                      NOTEWORTHY TRANSACTIONS AND EVENTS
                      ----------------------------------
Some of the more noteworthy transactions and events that occurred in the
three and six months ended June 30, 2006 and 2005 consisted of the
following:

Second quarter 2006

The results of operations and financial position as of and for the three
and six months ended June 30, 2006 include the effect of the previously
announced acquisitions of Gold Banc Corporation, Inc. and Trustcorp
Financial, Inc. which were both completed on April 1, 2006.  As of April
1, 2006, the combined assets of Gold Banc Corporation, Inc. and Trustcorp
Financial, Inc. amounted to approximately $4.9 billion.  The acquired
companies had combined loans of $3.9 billion and combined bank issued
deposits of $3.1 billion.  The combined purchase price for these
companies, which included approximately $146.0 million of cash, amounted
to $898.2 million.  In the aggregate, 16.74 million shares of the
Corporation's common stock were issued and fully vested stock options to
purchase 0.5 million of its common stock were exchanged in these
transactions.

For the three months ended June 30, 2006, Salaries and employee benefits
expense includes $7.6 million and Other expense includes $0.6 million of
expense for stock options and the Corporation's employee stock purchase
plan ("ESPP"), which reduced net income by $5.3 million or $0.02 per
diluted share.  The Corporation expects that the additional compensation
expense associated with stock options and the ESPP will be dilutive to the
Corporation's operating results by $0.02 per diluted share in the third
quarter of 2006 and $0.04 per diluted share in the fourth quarter of 2006.
The Corporation's largest stock option awards have historically been
granted during the fourth quarter and expense for stock options is larger
in the fourth quarter compared to the other quarters in any given year.
Under the existing plans, awards to individuals who meet certain age and
years of service criteria at the date of grant immediately vest and
therefore the full fair value of those awards are immediately expensed.
For the year ended December 31, 2006, the Corporation expects that the
additional compensation expense associated with stock options and the ESPP
will be dilutive to the Corporation's operating results by approximately
$0.10 per diluted share compared to $0.11 per diluted share for the year
ended December 31, 2005 as adjusted. See Note 11 in Notes to Financial
Statements for further information.

Beginning with the second quarter of 2006, trust services revenue,
brokerage and investment advisor revenue and noninterest revenue from the
private banking business have been combined and reported in the line item
Wealth management in the Consolidated Statements of Income in response to
requests by users of the Corporation's financial information.  All prior
periods have been adjusted for this reclassification.

First quarter 2006

On January 1, 2006 the Corporation adopted the accounting standard that
requires share-based compensation to be expensed.  The Corporation elected
the Modified Retrospective Application method to implement this new
accounting standard.  Under that method all prior period consolidated and
segment financial information was adjusted to reflect the effect of
expensing share-based compensation plans which were not previously
expensed.  Prior to the adoption of the new standard, the Corporation used
the intrinsic method of accounting for stock options.  Under that method
generally, no compensation expense was recognized for stock option awards
or the Corporation's ESPP.  Shareholders' equity as of January 1, 2006
increased $67.7 million due to the deferred income tax benefit recognized
from applying the Modified Retrospective Application method of adoption.
For the three months ended March 31, 2006, Salaries and employee benefits
expense includes $7.5 million of expense for stock options and the ESPP,
which reduced net income by $4.9 million or $0.02 per diluted share.

Beginning with the first quarter of 2006, the Corporation included certain
loan and lease fees, primarily prepayment fees, in reported interest
income on loans and leases. Previously, these fees were reported in Other
income.  Such fees are in addition to loan origination fees that are
capitalized and amortized over the life of a loan or lease on a basis that
produces a level yield in accordance with existing accounting standards.
Including these fees in interest income may result in more volatility in
net interest income and the net interest margin.  However, management
believes this reclassification will improve comparability of the net
interest margin between the Corporation and its peer banking group.  All
prior periods have been adjusted for this reclassification.

<PAGE> 29
On January 1, 2006 the Banking segment transferred its external item
processing business, including all check-processing client relationships,
to Metavante.  This transfer, together with recent investments in
electronic check image technology, enables Metavante to provide its
clients with an end-to-end image solution that includes check truncation
at the point of first presentment, image exchange through the Endpoint
Exchange Network and final settlement.  As a result of the transfer, the
previously reported Other income line, Item processing, was reclassified
to Data processing services in the Consolidated Statements of Income and
prior period segment financial information for both the Banking segment
and Metavante has been adjusted for the transfer.  See Note 14 in Notes to
Financial Statements for segment information.

Second quarter 2005

As a result of adopting the accounting standard that requires share-based
compensation to be expensed, as previously discussed, adjusted Salaries
and employee benefits expense includes $6.6 million and adjusted Other
expense includes $0.7 million of expense for stock options and the
Corporation's ESPP, which reduced previously reported net income by $4.7
million or $0.02 per diluted share for the three months ended June 30,
2005.

During the second quarter of 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.  The gross
gain amounted to $29.0 million and is reported in Net investment
securities gains 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.

First quarter 2005

As a result of adopting the accounting standard that requires share-based
compensation to be expensed, as previously discussed, adjusted Salaries
and employee benefits expense for the three months ended March 31, 2005
includes $6.5 million of expense for stock options and the ESPP which
reduced previously reported net income by $4.3 million or $0.02 per
diluted share.


                          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 43.6% of the Corporation's source of
revenues for the three months ended June 30, 2006 compared to 41.9% for
the three months ended June 30, 2005.  For the six months ended June 30,
2006 net interest income represented approximately 42.2% of the
Corporation's source of revenues compared to 42.2% for the six months
ended June 30, 2005.

Net interest income for the second quarter of 2006 amounted to $374.1
million compared to $313.0 million reported for the second quarter of
2005, an increase of $61.1 million or 19.5%.  For the six months ended
June 30, 2006, net interest income amounted to $698.6 million compared to
$611.9 million reported for the six months ended June 30, 2005, an
increase of $86.7 million or 14.2%.  Both acquisition related and organic
loan growth, as well as the growth in noninterest bearing and other bank-
issued deposits, were the primary contributors to the increase in net
interest income.  Factors negatively affecting net interest income
compared to the prior year included the impact of the financing costs
associated with the 2006 banking acquisitions and Metavante's
acquisitions, common stock buybacks and a general shift in the bank-issued
deposit mix from lower cost to higher cost deposit products in response to
increasing interest rates.

Average earning assets in the second quarter of 2006 amounted to $47.2
billion compared to $37.8 billion in the second quarter of 2005, an
increase of $9.4 billion or 25.0%.  Average loans and leases accounted for
$8.4 billion of the growth in average earning assets in the second quarter
of 2006 compared to the second quarter of 2005.  Average investment
securities increased $1.0 billion over the prior year quarter.  The growth
in average investment securities was primarily due to the banking
acquisitions.

Average interest bearing liabilities increased $8.8 billion or 27.7% in
the second quarter of 2006 compared to the second quarter of 2005.
Average interest bearing deposits increased $6.7 billion or 32.4% in the
second quarter of 2006 compared to the second quarter of last year.
Average total borrowings, primarily long-term borrowings, increased $2.2
billion or 19.1% in the second quarter of 2006 compared to the same period
in 2005.

<PAGE> 30
For the six months ended June 30, 2006, average earning assets amounted to
$44.3 billion compared to $37.0 billion in the six months ended June 30,
2005, an increase of $7.3 billion or 19.7%.  Average loans and leases
accounted for $6.6 billion of the growth in average earning assets in the
six months ended June 30, 2006 compared to the six months ended June 30,
2005.  Average investment securities increased $0.6 billion over the
comparative six month periods. The growth in average investment securities
was primarily due to the banking acquisitions.

Average interest bearing liabilities increased $6.8 billion or 21.6% in
the six months ended June 30, 2006 compared to the six months ended June
30, 2005.  Average interest bearing deposits increased $4.4 billion or
21.1% in the six months ended June 30, 2006 compared to the six months
ended June 30, 2005.  Average total borrowings, primarily long-term
borrowings, increased $2.4 billion or 22.6% over the comparative six month
periods.

Average noninterest bearing deposits increased $0.6 billion or 12.0% in
the three months ended June 30, 2006 compared to the three months ended
June 30, 2005.  For the six months ended June 30, 2006 compared to the six
months ended June 30, 2005, average noninterest bearing deposits increased
$0.4 billion or 8.7%

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>
                                       2006                     2005                  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                 $ 11,393   $  9,839  $  9,290  $  9,126  $  8,932    27.5 %   15.8 %

   Commercial real estate
      Commercial mortgages      10,746      8,839     8,850     8,661     8,509    26.3     21.6
      Construction               2,834      1,742     1,564     1,484     1,358   108.7     62.7
                               --------   --------  --------  --------  -------- -------  -------
Total commercial real estate    13,580     10,581    10,414    10,145     9,867    37.6     28.4

Commercial lease financing         504        493       471       462       425    18.6      2.2
                               --------   --------  --------  --------  -------- -------  -------
Total Commercial Loans
   and Leases                   25,477     20,913    20,175    19,733    19,224    32.5     21.8

Personal Loans and Leases
-------------------------
   Residential real estate
      Residential mortgages      5,621      5,190     4,855     4,537     3,986    41.0      8.3
      Construction               2,365      2,085     1,862     1,633     1,382    71.2     13.4
                               --------   --------  --------  --------  -------- -------  -------
   Total residential
      real estate                7,986      7,275     6,717     6,170     5,368    48.8      9.8

   Personal loans
      Student                       51         99        78        74        78   (33.7)   (48.0)
      Credit card                  237        227       233       228       217     9.5     (4.4)
      Home equity loans
         and lines               4,596      4,706     4,822     4,905     5,098    (9.9)    (2.3)
      Other                      1,167      1,289     1,245     1,241     1,186    (1.6)    (9.4)
                               --------   --------  --------  --------  -------- -------  -------
   Total personal loans          6,051      6,321     6,378     6,448     6,579    (8.0)    (4.3)

   Personal lease financing        136        132       132       128       123    10.3      2.8
                               --------   --------  --------  --------  -------- -------  -------
Total Personal Loans
   and Leases                   14,173     13,728    13,227    12,746    12,070    17.4      3.2
                               --------   --------  --------  --------  -------- -------  -------
Total Consolidated Average
   Loans and Leases           $ 39,650   $ 34,641  $ 33,402  $ 32,479  $ 31,294    26.7 %   14.5 %
                               ========   ========  ========  ========  ======== =======  =======
</TABLE>

Total consolidated average loans and leases increased $8.4 billion or
26.7% in the second quarter of 2006 compared to the second quarter of
2005.  Excluding the effect of the banking acquisitions, total
consolidated average loan and lease organic growth was 12.6% in the second
quarter of 2006 compared to the second quarter of 2005. Approximately $3.9
billion of the growth in total consolidated average loans and leases was
attributable to the banking acquisitions and $4.5 billion of the growth
was organic.  Of the $3.9 billion of average growth attributable to the
banking acquisitions, $2.8 billion was attributable to average commercial
real estate loans, $0.8 billion was attributable to average commercial
loans and leases and $0.3 billion was attributable to average residential
real estate loans. Of the $4.5 billion of average loan and lease organic
growth, $1.7 billion was attributable to average commercial loans and
leases, $0.9 billion was attributable to average commercial real estate
loans, and $2.4 billion was attributable to residential real estate loans.
From a production standpoint, residential real estate loan closings in the
second quarter of 2006 were $1.4 billion compared to $1.2 billion in the
first quarter of 2006 and $1.6 billion in the second quarter of 2005.
Average home equity loans and lines declined $0.5 billion in the second
quarter of 2006 compared to the second quarter of 2005.

<PAGE> 31
For the six months ended June 30, 2006, total consolidated average loans
and leases increased $6.6 billion or 21.5% compared to the six months
ended June 30, 2005. Excluding the effect of the banking acquisitions,
total consolidated average loan and lease organic growth was 14.1% for the
six months ended June 30, 2006 compared to the six months ended June 30,
2005.  Approximately $2.0 billion of the growth in total consolidated
average loans and leases was attributable to the banking acquisitions and
$4.6 billion of the growth was organic.  Of the $2.0 billion of average
growth attributable to the banking acquisitions, $1.4 billion was
attributable to average commercial real estate loans, $0.4 billion was
attributable to average commercial loans and leases and the remainder was
primarily attributable to average residential real estate loans. Of the
$4.6 billion of average loan and lease organic growth, $1.6 billion was
attributable to average commercial loans and leases, $1.0 billion was
attributable to average commercial real estate loans, and $2.5 billion was
attributable to residential real estate loans.  From a production
standpoint, residential real estate loan closings in the first half of
2006 and the first half of 2005 amounted to $2.6 billion and $2.7 billion,
respectively.  Average home equity loans and lines declined $0.5 billion
in the six months ended June 30, 2006 compared to the six months ended
June 30, 2005.

Total average commercial loan and lease organic growth continued to be
strong in the second quarter and first half of 2006.  Management
attributes the loan growth to the strength of the local economies in the
markets the Corporation serves, new business and continued customer
satisfaction. Management continues to expect that year over year organic
commercial loan growth (as a percentage) will reach low double digits in
2006.  The basis for this expectation includes continued success in
attracting new customers in all of the Corporation's markets and continued
modest economic growth in the primary markets that the Corporation serves.
Recently the Corporation has experienced some slowing in the construction
market for both commercial and residential developers, and to some extent
throughout the commercial real estate business.  As a result, management
expects that year over year organic commercial real estate loan growth (as
a percentage) will reach mid single digits in 2006.

Home equity loans and lines, which includes M&I's wholesale activity,
continue to be one of the primary consumer loan products.  Average home
equity loans and lines declined in the second quarter and first half of
2006 compared to the second quarter and first half of 2005. This is
consistent with what is occurring in many parts of the country.  The
softer home equity market, combined with the Corporation's continued sales
of certain loans at origination, which is partly in response to the demand
for home equity products with higher loan-to-value characteristics, will
impact balance sheet organic loan growth.  Management does not expect this
trend to change in the near term.

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, 2006 and 2005 real estate loans sold
to investors amounted to $0.6 billion and $0.5 billion, respectively. For
the six months ended June 30, 2006, real estate loans sold to investors
amounted to $1.2 billion compared to $0.9 billion for the six months ended
June 30, 2005.  At June 30, 2006 and 2005, the Corporation had
approximately $123.4 million and $153.8 million of mortgage loans held for
sale, respectively.  Gains from the sale of mortgage loans amounted to
$10.2 million in the second quarter of 2006 compared to $9.5 million in
the second quarter of 2005.  For the six months ended June 30, 2006, gains
from the sale of mortgage loans amounted to $21.0 million compared to
$16.4 million in the six months ended June 30, 2005.

Auto loans securitized and sold in the second quarters of 2006 and 2005
amounted to $0.2 billion and $0.1 billion, respectively. For the six
months ended June 30, 2006, auto loans securitized and sold amounted to
$0.3 billion compared to $0.2 billion in the six months ended June 30,
2005.  The net gains and losses from the sale and securitization of auto
loans for the three and six months ended June 30, 2006 and 2005,
respectively, were not significant.

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

<PAGE> 32
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>
                                       2006                     2005                  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              $  3,873   $  3,473  $  3,687  $  3,589  $  3,377    14.7 %   11.5 %
      Personal                     998        943       942       932       958     4.2      5.9
      Other                        533        526       566       528       491     8.5      1.2
                               --------   --------  --------  --------  -------- -------  -------
   Total noninterest
      bearing deposits           5,404      4,942     5,195     5,049     4,826    12.0      9.4

   Interest bearing deposits
      Savings and NOW            3,251      2,831     2,911     3,049     3,149     3.2     14.8
      Money market               7,389      6,599     6,354     6,047     5,819    27.0     12.0
      Foreign activity           1,000      1,034     1,084       932       882    13.4     (3.2)
                               --------   --------  --------  --------  -------- -------  -------
   Total interest
      bearing deposits          11,640     10,464    10,349    10,028     9,850    18.2     11.2

   Time deposits
      Other CDs and
         time deposits           4,769      3,509     3,354     3,095     2,951    61.7     35.9
      CDs greater than $100,000  2,878      2,035     1,703     1,421     1,243   131.5     41.4
                               --------   --------  --------  --------  -------- -------  -------
   Total time deposits           7,647      5,544     5,057     4,516     4,194    82.4     37.9
                               --------   --------  --------  --------  -------- -------  -------
Total bank issued deposits      24,691     20,950    20,601    19,593    18,870    30.8     17.9

Wholesale deposits
------------------
   Money market                    732        887     1,074     1,068     1,077   (32.1)   (17.5)
   Brokered CDs                  5,382      3,874     4,752     4,615     4,437    21.3     38.9
   Foreign time                  1,931      1,762       897     1,076     1,086    77.8      9.6
                               --------   --------  --------  --------  -------- -------  -------
Total wholesale deposits         8,045      6,523     6,723     6,759     6,600    21.9     23.3
                               --------   --------  --------  --------  -------- -------  -------
Total consolidated
   average deposits           $ 32,736   $ 27,473  $ 27,324  $ 26,352  $ 25,470    28.5 %   19.2 %
                               ========   ========  ========  ========  ======== =======  =======
</TABLE>

Average total bank issued deposits increased $5.8 billion or 30.8% in the
second quarter of 2006 compared to the second quarter of 2005. Excluding
the effect of the banking acquisitions, total average bank issued deposits
organic growth was 12.6% in the second quarter of 2006 compared to the
second quarter of 2005.  Approximately $3.0 billion of the growth in
average total bank issued deposits was attributable to the banking
acquisitions and $2.8 billion of the growth was organic.  Of the $3.0
billion of average growth attributable to the banking acquisitions, $0.4
billion was attributable to average noninterest bearing deposits, $0.9
billion was attributable to average interest bearing deposits and $1.7
billion was attributable to average time deposits. Of the $2.8 billion of
average bank issued deposit organic growth, $0.2 billion was attributable
to average noninterest bearing deposits, $0.8 billion was attributable to
average interest bearing deposits and $1.8 billion was attributable to
average time deposits.

For the six months ended June 30, 2006, average total bank issued deposits
increased $4.2 billion or 22.4% compared to the six month ended June 30,
2005. Excluding the effect of the banking acquisitions, total average bank
issued deposits organic growth was 13.1% in the six months ended June 30,
2006 compared to the six months ended June 30, 2005.  Approximately $1.5
billion of the growth in average total bank issued deposits was
attributable to the banking acquisitions and $2.7 billion of the growth
was organic.  Of the $1.5 billion of average growth attributable to the
banking acquisitions, $0.2 billion was attributable to average noninterest
bearing deposits, $0.5 billion was attributable to average interest
bearing deposits and $0.8 billion was attributable to average time
deposits. Of the $2.7 billion of average bank issued deposit organic
growth, $0.2 billion was attributable to average noninterest bearing
deposits, $0.8 billion was attributable to average interest bearing
deposits and $1.7 billion was attributable to average time deposits.

Noninterest bearing deposit balances tend to exhibit some seasonality with
a trend of balances declining somewhat in the early part of the year
followed by growth in balances throughout the remainder of the year.  A
portion of the noninterest balances, especially commercial balances, is
sensitive to the interest rate environment.  Larger balances tend to be
maintained when overall interest rates are low and smaller balances tend
to be maintained as overall interest rates increase.

<PAGE> 33
As interest rates have risen, the Corporation has increasingly been able
to competitively price deposit products which has contributed to the
growth in average bank-issued interest bearing deposits and average bank
issued time deposits.  In addition, rising interest rates have resulted in
a shift in the bank issued deposit mix.  In their search for higher
yields, both new and existing customers have been migrating their deposit
balances to higher cost money market and time deposit products.

In commercial banking, the focus remains on developing deeper
relationships by capitalizing on cross-sale opportunities.  Incentive
plans based on the sale of treasury management products and services are
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.

Wholesale deposits are funds in the form of deposits generated through
distribution channels other than M&I's own banking branches. The
Corporation continues to make use of wholesale funding alternatives,
especially brokered and institutional certificates of deposit. 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.  For the three
months ended June 30, 2006, average wholesale deposits increased $1.4
billion, or 21.9% compared to the three months ended June 30, 2005. For
the six months ended June 30, 2006 average wholesale deposits increased
$0.6 billion, or 8.8% compared to the six months ended June 30, 2005.
Average wholesale deposits for the three and six months ended June 30,
2006 include $0.6 billion and $0.3 billion, respectively, of wholesale
deposits that were assumed in the acquisitions.  During the first quarter
of 2006, a significant portion of longer-term institutional certificates
of deposits matured and were re-financed at a higher cost.

At June 30, 2006, long-term borrowings from the banking acquisitions
amounted to $229.0 million.  Approximately $30.0 million is subordinated,
$100.0 million of advances from the Federal Home Loan Bank ("FHLB") and
$99.0 million is subordinated debt associated with four separate issuances
of trust preferred securities. During the second quarter of 2006, $400.0
million of floating rate global senior bank notes were issued. These
floating rate senior bank notes mature in 2011 and have a coupon rate that
is indexed to the three-month London Inter-Bank Offered Rate ("LIBOR").

During the first quarter of 2006, the Corporation issued $250.0 million of
fixed rate senior notes. The fixed rate senior notes mature in 2011 and
have a coupon rate of 5.35%.  Also during the first quarter of 2006,
$500.0 million of floating rate senior bank notes were issued. These
floating rate senior bank notes mature in 2008 and have a coupon rate that
is indexed to the three-month LIBOR. During the first quarter of 2006,
$250.0 million of senior bank notes - Extendible Liquidity Securities
matured.

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 times in 2007 and 2010.

During the first quarter of 2005 the Corporation obtained a new floating
rate advance from the FHLB aggregating  $250.0 million.  The FHLB advance
matures in 2011.  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.

<PAGE> 34
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, 2006 and 2005, are presented in the
following tables ($ in millions):

                     Consolidated Yield and Cost Analysis
                     ------------------------------------
<TABLE>
<CAPTION>
                                         Three Months Ended          Three Months Ended
                                            June 30, 2006               June 30, 2005
                                    ---------------------------  ---------------------------
                                                        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     $ 11,896.4 $ 215.4    7.26 % $  9,357.0 $ 136.3    5.84 %
   Commercial real estate loans      13,580.4   248.6    7.34      9,867.4   151.4    6.15
   Residential real estate loans      7,985.7   139.7    7.01      5,367.6    79.9    5.97
   Home equity loans and lines        4,595.7    82.6    7.21      5,098.3    79.2    6.23
   Personal loans and leases          1,591.5    28.5    7.20      1,603.8    23.6    5.91
                                    ---------- ------- -------   ---------- ------- -------
Total loans and leases               39,649.7   714.8    7.23     31,294.1   470.4    6.03

Investment securities (b):
   Taxable                            5,818.3    70.9    4.79      4,828.6    53.3    4.41
   Tax Exempt (a)                     1,316.1    22.9    7.04      1,333.7    23.9    7.34
                                    ---------- ------- -------   ---------- ------- -------
Total investment securities           7,134.4    93.8    5.19      6,162.3    77.2    5.03

Trading securities (a)                   50.3     0.2    1.70         25.6     0.1    0.78

Other short-term investments            374.2     5.0    5.37        271.7     2.2    3.39
                                    ---------- ------- -------   ---------- ------- -------
Total interest earning assets      $ 47,208.6 $ 813.8    6.90 % $ 37,753.7 $ 549.9    5.84 %
                                    ========== ======= =======   ========== ======= =======

Interest bearing deposits:
   Bank issued deposits:
      Bank issued interest
         bearing activity deposits $ 11,639.6 $  94.6    3.26 % $  9,850.0 $  41.8    1.70 %
      Bank issued time deposits       7,646.9    80.9    4.24      4,193.2    31.6    3.02
                                    ---------- ------- -------   ---------- ------- -------
   Total bank issued deposits        19,286.5   175.5    3.65     14,043.2    73.4    2.10

   Wholesale deposits                 8,045.1    96.1    4.79      6,600.1    49.4    3.00
                                    ---------- ------- -------   ---------- ------- -------
Total interest bearing deposits      27,331.6   271.6    3.99     20,643.3   122.8    2.39

Short-term borrowings                 3,418.6    43.1    5.06      3,392.3    28.4    3.36
Long-term borrowings                 10,050.1   117.3    4.68      7,920.1    77.3    3.91
                                    ---------- ------- -------   ---------- ------- -------
Total interest bearing liabilities $ 40,800.3 $ 432.0    4.25 % $ 31,955.7 $ 228.5    2.87 %
                                    ========== ======= =======   ========== ======= =======

Net interest margin (FTE)                     $ 381.8    3.24 %            $ 321.4    3.42 %
                                               ======= =======              ======= =======

Net interest spread (FTE)                                2.65 %                       2.97 %
                                                       =======                      =======
</TABLE>

  (a) Fully taxable equivalent ("FTE") basis, 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> 35
                     Consolidated Yield and Cost Analysis
                     ------------------------------------
<TABLE>
<CAPTION>
                                           Six Months Ended            Six Months Ended
                                             June 30, 2006                June 30, 2005
                                    ---------------------------   ---------------------------
                                                        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     $ 11,118.8 $  390.6    7.09 % $  9,108.7 $  257.1    5.69 %
   Commercial real estate loans      12,088.7    429.7    7.17      9,692.9    290.0    6.03
   Residential real estate loans      7,632.5    262.5    6.94      5,050.1    147.2    5.88
   Home equity loans and lines        4,650.5    163.6    7.09      5,114.4    154.3    6.08
   Personal loans and leases          1,668.8     57.7    6.97      1,626.6     46.4    5.75
                                    ---------- -------- -------   ---------- -------- -------
Total loans and leases               37,159.3  1,304.1    7.08     30,592.7    895.0    5.90

Investment securities (b):
   Taxable                            5,401.1    128.8    4.72      4,825.7    105.2    4.39
   Tax Exempt (a)                     1,328.3     46.3    7.12      1,306.1     46.9    7.41
                                    ---------- -------- -------   ---------- -------- -------
Total investment securities           6,729.4    175.1    5.18      6,131.8    152.1    5.02

Trading securities (a)                   42.3      0.3    1.37         24.4      0.1    0.99

Other short-term investments            345.1      8.6    5.01        229.6      3.6    3.20
                                    ---------- -------- -------   ---------- -------- -------
Total interest earning assets       $44,276.1 $1,488.1    6.77 % $ 36,978.5 $1,050.8    5.73 %
                                    ========== ======== =======   ========== ======== =======

Interest bearing deposits:
   Bank issued deposits:
      Bank issued interest
         bearing activity deposits  $11,055.2 $  169.2    3.09 % $  9,863.4 $   75.5    1.54 %
      Bank issued time deposits       6,601.4    134.2    4.10      4,028.1     57.6    2.89
                                    ---------- -------- -------   ---------- -------- -------
   Total bank issued deposits        17,656.6    303.4    3.47     13,891.5    133.1    1.93
   Wholesale deposits                 7,288.0    166.2    4.60      6,700.8     93.2    2.80
                                    ---------- -------- -------   ---------- -------- -------
Total interest bearing deposits      24,944.6    469.6    3.80     20,592.3    226.3    2.22

Short-term borrowings                 3,394.9     82.5    4.90      3,144.0     50.3    3.23
Long-term borrowings                  9,728.9    221.7    4.59      7,564.6    145.7    3.88
                                    ---------- -------- -------   ---------- -------- -------
Total interest bearing liabilities  $38,068.4 $  773.8    4.10 % $ 31,300.9 $  422.3    2.72 %
                                    ========== ======== =======   ========== ======== =======

Net interest margin (FTE)                     $  714.3    3.25 %            $  628.5    3.43 %
                                               ======= ========               ======= =======

Net interest spread (FTE)                                 2.67 %                        3.01 %
                                                       ========                       =======
</TABLE>

  (a) Fully taxable equivalent ("FTE") basis, 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 FTE decreased 18 basis points from 3.42% in the
second quarter of 2005 to 3.24% in the second quarter of 2006.  For the
six months ended June 30, 2006, the net interest margin FTE was 3.25%
compared to 3.43% for the six months ended June 30, 2005, a decrease of 18
basis points. Beginning with the first quarter of 2006, the Corporation
included certain loan and lease fees in interest income on loans and
leases. All prior periods have been adjusted for this reclassification.
For the three and six months ended June 30, 2005, the net interest margin
FTE increased by approximately 9 basis points and 8 basis points,
respectively from the previously reported amounts due to this
reclassification.  Compared to the first quarter of 2006, the net interest
margin FTE decreased 2 basis points from 3.26% in the first quarter of
2006 to 3.24% in the second quarter of 2006.

Similar to the general trends being experienced throughout the industry,
the Corporation continues to be challenged by narrowing loan spreads in a
solid economy with a flat yield curve, loan growth that may exceed the
Corporation's ability to generate appropriately priced deposits and the
shift in the bank issued deposit mix by new and existing depositors into
higher yielding products.  Management expects these trends to continue and
expects that there will be modest downward pressure on the net interest
margin FTE for the remainder of 2006.  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.

<PAGE> 36
          PROVISION FOR LOAN AND LEASE LOSSES AND CREDIT QUALITY
          ------------------------------------------------------
The following tables present comparative consolidated credit quality
information as of June 30, 2006, and the prior four quarters:

                          Nonperforming Assets
                          --------------------
                                 ($000's)
<TABLE>
<CAPTION>
                                                  2006                           2005
                                         -----------------------  -----------------------------------
                                            Second      First        Fourth      Third       Second
                                           Quarter     Quarter      Quarter     Quarter     Quarter
                                         ----------- -----------  ----------- ----------- -----------
<S>                                     <C>         <C>          <C>         <C>         <C>
Nonaccrual                               $  193,028  $  144,484   $  134,718  $  141,408  $  126,920

Renegotiated                                    133         138          143         148         176

Past due 90 days or more                      4,855       4,523        5,725       5,743       4,514
                                          ----------  ----------   ----------  ----------  ----------
Total nonperforming loans and leases        198,016     149,145      140,586     147,299     131,610

Other real estate owned                      11,701       8,207        8,869       8,774       9,124
                                          ----------  ----------   ----------  ----------  ----------
Total nonperforming assets               $  209,717  $  157,352   $  149,455  $  156,073  $  140,734
                                          ==========  ==========   ==========  ==========  ==========

Allowance for loan and lease losses      $  415,201  $  368,760   $  363,769  $  362,257  $  360,138
                                          ==========  ==========   ==========  ==========  ==========
</TABLE>

                         Consolidated Statistics
                         -----------------------
<TABLE>
<CAPTION>
                                                  2006                           2005
                                         -----------------------  -----------------------------------
                                            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                 0.10 %      0.07 %       0.14 %      0.10 %      0.15 %
Total nonperforming loans and leases
   to total loans and leases                   0.49        0.42         0.41        0.44        0.41
Total nonperforming assets to total loans
   and leases and other real estate owned      0.52        0.45         0.44        0.47        0.44
Allowance for loan and lease losses
   to total loans and leases                   1.03        1.05         1.06        1.09        1.12
Allowance for loan and lease losses
   to total nonperforming loans and leases      210         247          259         246         274
</TABLE>

                   Nonaccrual Loans and Leases By Type
                   -----------------------------------
                                 ($000's)
<TABLE>
<CAPTION>
                                                  2006                           2005
                                         -----------------------  -----------------------------------
                                            Second      First        Fourth      Third       Second
                                           Quarter     Quarter      Quarter     Quarter     Quarter
                                         ----------- -----------  ----------- ----------- -----------
<S>                                     <C>         <C>          <C>         <C>         <C>
Commercial
   Commercial, financial
      and agricultural                   $   59,558  $   50,103   $   43,730  $   47,644  $   35,777
   Lease financing receivables                  454       1,399        1,539       3,012       3,990
                                          ----------  ----------   ----------  ----------  ----------
Total commercial                             60,012      51,502       45,269      50,656      39,767

Real estate
   Construction and land development         33,115       3,276          913       3,057       1,500
   Commercial mortgage                       34,260      30,633       28,644      30,351      37,107
   Residential mortgage                      64,151      57,425       57,982      56,488      47,797
                                          ----------  ----------   ----------  ----------  ----------
Total real estate                           131,526      91,334       87,539      89,896      86,404

Personal                                      1,490       1,648        1,910         856         749
                                          ----------  ----------   ----------  ----------  ----------
Total nonaccrual loans and leases        $  193,028  $  144,484   $  134,718  $  141,408  $  126,920
                                          ==========  ==========   ==========  ==========  ==========
</TABLE>

<PAGE> 37
           Reconciliation of Allowance for Loan and Lease Losses
           -----------------------------------------------------
                                 ($000's)
<TABLE>
<CAPTION>
                                                  2006                           2005
                                         -----------------------  -----------------------------------
                                            Second      First        Fourth      Third       Second
                                           Quarter     Quarter      Quarter     Quarter     Quarter
                                         ----------- -----------  ----------- ----------- -----------
<S>                                     <C>         <C>          <C>         <C>         <C>
Beginning balance                        $  368,760  $  363,769   $  362,257  $  360,138  $  358,280

Provision for loan and lease losses          11,053      10,995       12,995       9,949      13,725

Allowance of banks and loans acquired        45,258          --           --          --          --

Loans and leases charged-off
   Commercial                                 6,125       3,869        9,481       2,256       3,767
   Real estate                                3,385       2,901        3,110       6,576       8,190
   Personal                                   3,088       3,727        5,213       3,186       3,765
   Leases                                     1,253         189          226         337         380
                                          ----------  ----------   ----------  ----------  ----------
Total charge-offs                            13,851      10,686       18,030      12,355      16,102

Recoveries on loans and leases
   Commercial                                   847       2,715        4,256       2,634       2,264
   Real estate                                1,224         263          374         575         413
   Personal                                   1,149         971          781         787         782
   Leases                                       761         733        1,136         529         776
                                          ----------  ----------   ----------  ----------  ----------
Total recoveries                              3,981       4,682        6,547       4,525       4,235
                                          ----------  ----------   ----------  ----------  ----------
Net loans and leases charge-offs              9,870       6,004       11,483       7,830      11,867
                                          ----------  ----------   ----------  ----------  ----------
Ending balance                           $  415,201  $  368,760   $  363,769  $  362,257  $  360,138
                                          ==========  ==========   ==========  ==========  ==========
</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
$11.7 million at June 30, 2006, compared to $8.2 million at March 31, 2006
and $9.1 million at June 30, 2005.  The increase in OREO of $3.5 million
from March 31, 2006 to June 30, 2006 is predominantly due to the OREO
acquired in the banking acquisitions.

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.

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, 2006, nonperforming loans and leases amounted to $198.0
million or 0.49% of consolidated loans and leases compared to $149.1
million or 0.42% of consolidated loans and leases at March 31, 2006, and
$131.6 million or 0.41% of consolidated loans and leases at June 30, 2005.
Approximately $42.7 million or 87% of the $48.9 million increase in
nonperforming loans from March 31, 2006 to June 30, 2006 was attributable
to the banking acquisitions.  Excluding the effect of the acquisitions,
nonperforming loans and leases would have amounted to $155.3 million or
0.43% of consolidated loans and leases at June 30, 2006.  Excluding the
acquisitions, the  pro forma ratio of nonperforming loans and leases to
consolidated loans and leases at June 30, 2006 and the actual ratio at
each quarter end throughout 2005 has remained in a fairly narrow range and
continues to be below management's expectations.  Nonaccrual loans and
leases continue to be the primary source of nonperforming loans and
leases.

<PAGE> 38
Net charge-offs amounted to $9.9 million or 0.10% of average loans and
leases in the second quarter of 2006 compared to $6.0 million or 0.07% of
average loans and leases in the first quarter of 2006 and $11.9 million or
0.15% of average loans and leases in the second quarter of 2005.  The
lower level of net charge-offs experienced throughout 2005 and the first
six months of 2006 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.  The ratio of recoveries to
charge-offs was 28.7% for the three months ended June 30, 2006 which was
closer to average historical experience.  The ratio of recoveries to
charge-offs was 35.3% for the six months ended June 30, 2006 which
continues to be above the Corporation's five year historical average ratio
of recoveries to charge-offs of 27.9%.

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.
With respect to the banking acquisitions, management expects the level of
nonperforming loans to decline slowly over the next couple of years and
expects net charge-off levels to increase modestly.

The provisions for loan and lease losses amounted to $11.0 million for the
three months ended June 30, 2006 compared to $11.0 million for the three
months ended March 31, 2006 and $13.7 million for the three months ended
June 30, 2005.  For the six months ended June 30, 2006, the provisions for
loan and lease losses amounted to $22.0 million compared to $21.9 million
for the six months ended June 30, 2005.  The allowance for loan and lease
losses as a percent of consolidated loans and leases outstanding was 1.03%
at June 30, 2006, 1.05% at March 31, 2006 and 1.12% at June 30, 2005.


                             OTHER INCOME
                             ------------
Other income or noninterest sources of revenue represented approximately
56.4% and 58.1% of the Corporation's total sources of revenues for the
three months ended June 30, 2006 and 2005, respectively.  Total other
income in the second quarter of 2006 amounted to $484.4 million compared
to $434.3 million in the same period last year, an increase of $50.1
million or 11.5%.  For the six months ended June 30, 2006 and 2005,
noninterest sources of revenue represented approximately 57.8% of the
Corporation's total sources of revenues, respectively. Total other income
for the six months ended June 30, 2006 amounted to $957.1 million compared
to $836.8 million for the six months ended June 30, 2005, an increase of
$120.3 million or 14.4%.  The increase in other income was primarily due
to growth in data processing services and wealth management services
revenue.  Other income for the three and six months ended June 30, 2005
includes significant investment securities gains as previously discussed.

Data processing services revenue (Metavante) amounted to $345.0 million in
the second quarter of 2006 compared to $282.4 million in the second
quarter of 2005, an increase of $62.6 million or 22.2%.  For the six
months ended June 30, 2006, Data processing services revenue amounted to
$688.0 million compared to $565.3 million for the six months ended June
30, 2005, an increase of $122.7 million or 21.7%.  Revenue growth
continued throughout the segment due to revenue associated with
acquisitions, higher transaction volumes in core processing activity,
payment processing and electronic banking and an increase in healthcare
eligibility and payment card production.  Revenue associated with
Metavante's acquisitions completed in 2006 and 2005 contributed a
significant portion of the revenue growth in the three and six months
ended June 30, 2006, compared to the three and six months ended June 30,
2005.  The acquisition related revenue growth includes cross sales of
acquired products to clients across the entire segment.  Metavante
estimates that total revenue growth (internal and external) for the six
months ended June 30, 2006 compared to the six months ended June 30, 2005
excluding the acquisitions ("organic revenue growth"), was approximately
8.2%.  To determine the estimated organic revenue growth rate, Metavante
adjusts its prior year revenue for the acquisitions as if they had been
consummated on January 1 of the prior year.  The linked-quarter data
processing services revenue growth will tend to be somewhat more cyclical
and seasonal in nature. Total buyout revenue, which varies from period to
period, increased $3.0 million and $1.8 million in the three and six
months ended June 30, 2006 compared to the three and six months ended June
30, 2005, respectively.

As previously reported, on January 1, 2006 the Banking segment transferred
its external item processing business, including all check-processing
client relationships, to Metavante.  As a result of the transfer, the
previously reported Other income line, Item processing, was reclassified
to Data processing services in the Consolidated Statements of Income and
prior period segment financial information for both the Banking segment
and Metavante has been adjusted for the transfer.

Management continues to expect that Metavante revenue (internal and
external) for the year ended December 31, 2006 will be at the high end of
the previously forecasted revenue projection of $1.4 billion to $1.5
billion.  Organic revenue growth rates are expected to exceed prior year
levels and segment income is expected to continue to improve.  These
expectations include the impact of all closed acquisitions and the
transfer of external item processing.

<PAGE> 39
As previously discussed, beginning with the second quarter of 2006, trust
services revenue, brokerage and investment advisor revenue and noninterest
revenue from the private banking business have been combined and reported
in the line item Wealth management in the Consolidated Statements of
Income in response to requests by users of the Corporation's financial
information.  All prior periods have been adjusted for this
reclassification.

Wealth management revenue amounted to $56.3 million in the second quarter
of 2006 compared to $48.1 million in the second quarter of 2005, an
increase of $8.2 million or 17.0%.  For the six months ended June 30,
2006, Wealth management revenue amounted to $109.1 million compared to
$95.2 million for the six months ended June 30, 2005, an increase of $13.9
million or 14.6%.  For the three and six months ended June 30, 2006,
wealth management revenue attributable to the previously reported January
3, 2006 acquisition of certain assets of First Trust Indiana and the April
1, 2006 acquisition of Gold Banc Corporation, Inc. amounted to $2.3
million and $3.4 million, respectively.  Continued success in the cross-
selling and integrated delivery initiatives, improved investment
performance and improving results in institutional sales efforts and
outsourcing activities were the primary contributors to the remaining
revenue growth over the respective periods.  Assets under management were
approximately $20.4 billion at June 30, 2006 compared to $19.8 billion at
March 31, 2006, and $18.5 billion at June 30, 2005.

Service charges on deposits amounted to $25.0 million in the second
quarter of 2006 compared to $23.7 million in the second quarter of 2005.
For the six months ended June 30, 2006, service charges on deposits
amounted to $47.6 million compared to $47.1 million for the six months
ended June 30, 2005.  The banking acquisitions contributed $2.1 million of
service charges on deposits for the three and six months ended June 30,
2006.  A portion of this source of fee income is sensitive to changes in
interest rates.  In a rising interest rate environment, customers that pay
for services by maintaining eligible deposit balances receive a higher
earnings credit which results in lower fee income. Excluding the effect of
the banking acquisitions, lower service charges on deposits associated
with commercial demand deposits accounted for the majority of the decline
in this revenue in the three and six months ended June 30, 2006 compared
to the three and six months ended June 30, 2005, respectively.

Total mortgage banking revenue was $12.3 million in the second quarter of
2006 compared with $11.2 million in the second quarter of 2005, an
increase of $1.1 million or 9.7%.  For the six months ended June 30, 2006,
total mortgage banking revenue amounted to $24.7 million compared to $19.4
million for the six months ended June 30, 2005, an increase of $5.3
million or 27.7%. For the three months ended June 30, 2006 and 2005, the
Corporation sold $0.6 billion and $0.5 billion of residential mortgage and
home equity loans to the secondary market, respectively. For the six
months ended June 30, 2006 and 2005, the Corporation sold $1.2 billion and
$0.9 billion of residential mortgage and home equity loans to the
secondary market, respectively.  As previously discussed, the Corporation
continues to sell home equity loans at origination which is partly in
response to the demand for home equity products with higher loan-to-value
characteristics.  Retained interests in the form of mortgage servicing
rights on residential mortgage loans sold amounted to $0.4 million for the
six months ended June 30, 2006 and $0.5 million for the six months ended
June 30, 2005.  At June 30, 2006 mortgage servicing rights amounted to
$2.5 million.

Net investment securities gains for the three and six months ended June
30, 2006 were not significant.  Net investment securities gains for the
three and six months ended June 30, 2005 amounted to $29.4 million and
$35.3 million, 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 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 pre-tax gain of $5.3 million.  An additional
$0.3 million was received in the second quarter of 2005.

Other income in the second  quarter of 2006 amounted to $37.4 million
compared to $31.5 million in the second quarter of 2005, an increase of
$5.9 million or 19.0%.  For the six months ended June 30, 2006, other
income amounted to $71.3 million compared to $60.3 million for the six
months ended June 30, 2005, an increase of $11.0 million or 18.2%.  Other
income for the three and six months ended June 30, 2006 includes $2.8
million of income attributable to the banking acquisitions.  The remaining
increase in other income for the three and six months ended June 30, 2006
compared to the three and six months ended June 30, 2005 was primarily due
to increases in card related fees and trading and investment fees.


                             OTHER EXPENSE
                             -------------
Total other expense for the three months ended June 30, 2006 amounted to
$544.3 million compared to $459.9 million for the three months ended June
30, 2005, an increase of $84.4 million or 18.4%.  For the six months ended
June 30, 2006, total other expense amounted to $1,049.4 million compared
to $902.8 million for the six months ended June 30, 2005, an increase of
$146.6 million or 16.2%.

<PAGE> 40
Total other expense for the three and six months ended June 30, 2006
included the operating expenses associated with Metavante's 2005 and 2006
acquisitions, the 2006 banking acquisitions and the 2006 acquisition of
certain assets of First Trust Indiana. The operating expenses of the
acquired entities have been included in the Corporation's consolidated
operating expenses from the dates the transactions were completed, which
had a significant impact on the period to period comparability of
operating expenses in 2006 compared to 2005.  Approximately $65.6 million
of the operating expense growth in the second quarter of 2006 compared to
the second quarter of 2005 and $109.6 million of the operating expense
growth in the six months ended June 30, 2006 compared to the six months
ended June 30, 2005 was attributable to the acquisitions.  In addition,
expenses for the three and six months ended June 30, 2006 include
conversion and integration expenses related to the banking acquisitions.

The Corporation estimates that its expense growth in the three and six
months ended June 30, 2006 compared to the three and six months ended June
30, 2005, excluding the effects of the acquisitions, was approximately
$18.8 million and $36.9 million, respectively, and the estimated growth
rate was approximately 4.1% over the respective comparative periods.

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, 2006, and prior four quarters were:

                            Efficiency Ratios
                            -----------------
<TABLE>
<CAPTION>
                                                       Three Months Ended
                          --------------------------------------------------------------------------
                              June 30,       March 31,     December 31, September 30,     June 30,
                                2006           2006            2005         2005            2005
                          -------------- -------------- -------------- -------------- --------------
<S>                       <C>            <C>            <C>            <C>            <C>
Consolidated Corporation          62.9 %         62.8 %         64.1 %         62.5 %         60.9 %

Consolidated Corporation
   Excluding Metavante            51.2 %         48.8 %         51.5 %         50.8 %         49.9 %
</TABLE>

The Consolidated Corporation Excluding Metavante efficiency ratio for the
remainder of 2006 is expected to decline somewhat from the second quarter
2006 and is expected to continue to decline slightly until the banking
acquisitions are fully integrated.

Salaries and employee benefits expense amounted to $307.1 million in the
second quarter of 2006 compared to $269.0 million in the second quarter of
2005, an increase of $38.1 million or 14.2%.  For the six months ended
June 30, 2006, Salaries and employee benefits expense amounted to $584.5
million compared to $514.1 million for the six months ended June 30, 2005,
an increase of $70.4 million or 13.7%.  Salaries and benefits associated
with the acquisitions previously discussed accounted for approximately
$27.5 million and $45.1 million of the increase in Salaries and employee
benefits expense in the three and six months ended June 30, 2006 compared
to the three and six months ended June 30, 2005, respectively.

For the second quarter of 2006, occupancy and equipment expense amounted
to $63.8 million compared to $50.9 million in the second quarter of 2005,
an increase of $12.9 million or 25.5%.  The acquisitions accounted for
approximately $9.7 million of the increase in occupancy and equipment
expense in the three months ended June 30, 2006 compared to the three
months ended June 30, 2005. For the six months ended June 30, 2006,
occupancy and equipment expense amounted to $121.6 million compared to
$104.2 million for the six months ended June 30, 2005, an increase of
$17.4 million or 16.7%.  The acquisitions accounted for approximately
$12.7 million of the increase in occupancy and equipment expense in the
six months ended June 30, 2006 compared to the six months ended June 30,
2005.  The remaining increase in occupancy and equipment expense for the
three and six months ended June 30, 2006 compared to the three and six
months ended June 30, 2005 was primarily attributable to the banking
segment and wealth management.

<PAGE> 41
Software expenses, processing charges, supplies and printing, professional
services and shipping and handling expenses totaled $89.1 million in the
second quarter of 2006 compared to $63.0 million in the second quarter of
2005, an increase of $26.1 million or 41.4%.  For the six months ended
June 30, 2006, software expenses, processing charges, supplies and
printing, professional services and shipping and handling expenses totaled
$175.0 million compared to $128.3 million for the six months ended June
30, 2005, an increase of $46.7 million or 36.4%.  The acquisitions
accounted for $19.6 million and $35.5 million of the expense growth for
the three and six months ended June 30, 2006 compared to the three and six
months ended June 30, 2005, respectively.  Metavante's expense growth
accounted for the majority of the remaining increase in expense for these
items in the three and six months ended June 30, 2006 compared to the
three and six months ended June 30, 2005, respectively.

Amortization of intangibles amounted to $12.0 million in the second
quarter of 2006 compared to $8.1 million in the second quarter of 2005, an
increase of $3.9 million.  For the six months ended June 30, 2006,
amortization of intangibles amounted to $20.9 million compared to $16.2
million for the six months ended June 30, 2005, an increase of $4.7
million.  The increase in amortization associated with the acquisitions
amounted to $5.1 million and $7.1 million for the three and six months
ended June 30, 2006 compared to the three and six months ended June 30,
2005, respectively.  Those increases were offset by lower amortization of
core deposit intangibles, which is based on a declining balance method and
lower amortization of Metavante's contract intangibles from previous
acquisitions.

Other expense amounted to $72.3 million in the second quarter of 2006
compared to $68.9 million in the second quarter of 2005, an increase of
$3.4 million or 4.9%.  For the six months ended June 30, 2006, other
expense amounted to $147.4 million compared to $140.1 million for the six
months ended June 30, 2005, an increase of $7.3 million or 5.2%.

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 capitalization was
$0.6 million in the second quarter of 2006 compared to net software and
conversion amortization of $5.7 million in the second quarter of 2005,
resulting in a decrease to other expense over the comparative quarters of
$6.3 million.  For the six months ended June 30, 2006, net software and
conversion amortization was $2.1 million compared to net software and
conversion amortization of $11.4 million for the six months ended June 30,
2005, resulting in a decrease to other expense over the comparative six
months of $9.3 million.

The acquisitions accounted for $3.8 million and $9.3 million of the growth
in other expense for the three and six months ended June 30, 2006 compared
to the three and six months ended June 30, 2005, respectively.  The cost
of card plastic and cost of equipment associated with Metavante's revenues
and travel and other costs associated with the conversion and integration
of the banking acquisitions accounted for the remainder of the increase in
other expense for the three and six months ended June 30, 2006 compared to
the three and six months ended June 30, 2005, respectively.


                             INCOME TAXES
                             ------------
The provision for income taxes for the three months ended June 30, 2006
amounted to $99.4 million or 32.8% of pre-tax income compared to $90.0
million or 32.9% of pre-tax income for the three months ended June 30,
2005.  For the six months ended June 30, 2006, the provision for income
taxes amounted to $193.8 million or 33.2% of pre-tax income compared to
$174.9 million or 33.4% of pre-tax income for the six months ended June
30, 2005.  During the second quarter of 2006, an income tax benefit was
recognized for the integration and realignment of Metavante subsidiaries
that resulted in a lower provision for income taxes in the consolidated
statements of income for the three and six months ended June 30, 2006.
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.


                     LIQUIDITY AND CAPITAL RESOURCES
                     -------------------------------
Shareholders' equity was $5.8 billion or 10.6% of total consolidated
assets at June 30, 2006, compared to $4.7 billion or 10.2% of total
consolidated assets at December 31, 2005, and $4.3 billion or 9.8% of
total consolidated assets at June 30, 2005.

During the second quarter of 2006, the Corporation issued 13,673,072
shares of its common stock and exchanged fully vested stock options to
purchase 119,816 of  its common stock with a total value of $603.9 million
in conjunction with the Corporation's acquisition of Gold Banc
Corporation, Inc.  Also during the second quarter of 2006, the Corporation
issued 3,069,430 shares of its common stock and exchanged fully vested
stock options to purchase 412,317 of its common stock with a total value
of $148.3 million in conjunction with the Corporation's acquisition of
Trustcorp Financial, Inc.  During the first quarter of 2006, the
Corporation issued 527,864 shares of its common stock valued at $23.2
million in conjunction with Metavante's acquisition of AdminiSource Inc.
Also during the first quarter of 2006, the Corporation issued 385,192
shares of its common stock valued at $16.9 million to fund its 2005
obligations under its retirement and employee stock ownership plans.

<PAGE> 42
On April 25, 2006, the Corporation announced that its Board of Directors
increased the quarterly cash dividend on its common stock 12.5%, from
$0.24 per share to $0.27 per share.

The Corporation has a Stock Repurchase Program under which it may
repurchase up to 12 million shares of its common stock annually.  During
the first quarter of 2006, the Corporation repurchased 1.0 million shares
at an aggregate cost of $41.8 million or an average price of $41.79 per
common share. There were no purchases under the program in the second
quarter of 2006.

In 2005, the Corporation entered into an equity distribution agreement
whereby the Corporation may offer and sell up to 3.5 million shares of its
common stock from time to time through certain designated sales agents.
However, the Corporation will not sell more than the number of shares of
its common stock necessary for the aggregate gross proceeds from such
sales to reach $150.0 million.  No sales occurred in the three or six
months ended June 30, 2006.  The aggregate gross proceeds available for
future sales was approximately $143.3 million at June 30, 2006.

At June 30, 2006, the net loss in accumulated other comprehensive income
amounted to $101.3 million, which represented a negative change in
accumulated other comprehensive income of $64.0 million since December 31,
2005.  Net accumulated other comprehensive income associated with
available for sale investment securities was a net loss of $104.3 million
at June 30, 2006, compared to a net loss of $36.3 million at December 31,
2005, resulting in a net loss of $68.0 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 $4.0 million over the six
month period.

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.  The risk-based capital and leverage ratios at
December 31, 2005 have not been adjusted for the adoption of SFAS 123(R).

                        RISK-BASED CAPITAL RATIOS
                        -------------------------
                             ($ in millions)
<TABLE>
<CAPTION>
                                      June 30, 2006                    December 31, 2005
                            ---------------------------------  ---------------------------------
                                  Amount           Ratio             Amount           Ratio
                            ---------------------------------  ---------------------------------
<S>                       <C>                <C>             <C>                <C>
 Tier 1 Capital            $           3,623           7.65 % $           3,046           7.67 %
 Tier 1 Capital
   Minimum Requirement                 1,894           4.00               1,588           4.00
                            -----------------  -------------   -----------------  -------------
 Excess                    $           1,729           3.65 % $           1,458           3.67 %
                            =================  =============   =================  =============

 Total Capital             $           5,283          11.15 % $           4,659          11.74 %
 Total Capital
   Minimum Requirement                 3,789           8.00               3,176           8.00
                            -----------------  -------------   -----------------  -------------

 Excess                    $           1,494           3.15 % $           1,483           3.74 %
                            =================  =============   =================  =============

 Risk-Adjusted Assets      $          47,361                  $          39,698
                            =================                  =================
</TABLE>

                             LEVERAGE RATIOS
                             ---------------
                             ($ in millions)
<TABLE>
<CAPTION>
                                      June 30, 2006                    December 31, 2005
                            ---------------------------------  ---------------------------------
                                  Amount           Ratio             Amount           Ratio
                            ---------------------------------  ---------------------------------
<S>                       <C>                <C>             <C>                <C>
 Tier 1 Capital            $           3,623           7.13 % $           3,046           7.08 %
 Minimum Leverage
   Requirement                 1,524 - 2,540    3.00 - 5.00       1,291 - 2,152    3.00 - 5.00
                            -----------------  -------------   -----------------  -------------
 Excess                    $   2,099 - 1,083    4.13 - 2.13 % $   1,755 -   894    4.08 - 2.08 %
                            =================  =============   =================  =============
 Adjusted Average
   Total Assets            $          50,807                  $          43,039
                            =================                  =================
</TABLE>

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.

<PAGE> 43
The Corporation's most readily available source of liquidity is its
investment portfolio.  Investment securities available for sale, which
totaled $6.6 billion at June 30, 2006, represent a highly accessible
source of liquidity.  The Corporation's portfolio of held-to-maturity
investment securities, which totaled $0.5 billion at June 30, 2006,
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 $20.8 billion in the second quarter of 2006.  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, which include foreign
(Eurodollar) 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 $8.0
billion in the second quarter of 2006.

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 2006.

The Corporation's lead bank, M&I Marshall & Ilsley Bank (the "Bank"), has
implemented a bank note program. During the second quarter of 2006, the
Bank amended the bank note program into a global bank note program which
permits it to issue  and sell up to a maximum of US$13.0 billion aggregate
principal amount (or the equivalent thereof in other currencies) at any
one time outstanding of its senior global bank notes with maturities of
seven days or more from their respective date of issue and subordinated
global bank notes with maturities more than five years from their
respective date of issue.  The notes may be fixed rate or floating rate
and the exact terms will be specified in the applicable Pricing Supplement
or the applicable Program Supplement.  This program is intended to enhance
liquidity by enabling the Bank to sell its debt instruments in global
markets in the future without the delays which would otherwise be
incurred.  Senior global bank notes outstanding at June 30, 2006 amounted
to $0.4 billion.

Other bank notes outstanding at June 30, 2006 amounted to $6.0 billion of
which $1.3 billion is subordinated and qualifies as supplementary capital
for regulatory capital purposes.  Bank notes issued during the first
quarter of 2006 amounted to $500.0 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 third quarter of 2005, the Corporation amended the shelf
registration statement originally filed with the Securities and Exchange
Commission during the second quarter of 2004 to include the equity
distribution agreement.  The amended shelf registration statement enables
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.  Approximately $1.3 billion is available for future
securities issuances.

During the fourth quarter of 2004, the Corporation filed a shelf
registration statement with the Securities and Exchange Commission
enabling 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 acquisitions by M&I, Metavante and/or other consolidated subsidiaries
of the Corporation.  At June 30, 2006, there were 3.1 million shares of
common stock available for future issuances.

<PAGE> 44
Under another shelf registration statement, 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, 2006,
Series F notes issued amounted to $250.0 million.  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,
2006, MiNotes issued amounted to $0.2 billion. Additionally, the
Corporation has a commercial paper program.  At June 30, 2006, commercial
paper outstanding amounted to $0.3 billion.

Short-term borrowings represent contractual debt obligations with
maturities of one year or less and amounted to $4.1 billion at June 30,
2006.  Long-term borrowings amounted to $10.1 billion at June 30, 2006.
The scheduled maturities of long-term borrowings including estimated
interest payments at June 30, 2006 are as follows: $3.1 billion is due in
less than one year; $2.9 billion is due in one to three years; $3.0
billion is due in three to five years; and $4.0 billion is due in more
than five years.  During the first quarter of 2006, the Corporation issued
shares of its common stock valued at $16.9 million to fund a portion of
its 2005 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, 2005.


                    OFF-BALANCE SHEET ARRANGEMENTS
                    ------------------------------
In conjunction with the acquisitions of Gold Banc Corporation, Inc. and
Trustcorp Financial, Inc., the Corporation acquired all of the common
interests in four Trusts that issued cumulative preferred capital
securities which are supported by junior subordinated deferrable interest
debentures in the amounts of $16.0 million, $30.0 million, $38.0 million
and $15.0 million, respectively and full guarantees assumed by the
Corporation.  The Corporation does not consolidate these Trusts in
accordance with United States generally accepted accounting principles.
At June 30, 2006, there have been no other substantive changes with
respect to the Corporation's off-balance sheet activities as disclosed in
the Corporation's Annual Report on Form 10-K for the year ended December
31, 2005.  See Note 8 to the Consolidated Financial Statements for an
update of the Corporation's securitization activities in the second
quarter of 2006.  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, nor 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 for the year
ended December 31, 2005, 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:

<PAGE> 45
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.

The following factors were taken into consideration in determining the
adequacy of the allowance for loan and lease losses at June 30, 2006:

     In general, the Corporation's customer base is still showing signs of
     increased business activity as evidenced by the continued loan growth in
     this quarter.

     At June 30, 2006, 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 three years were in
     these industry segments.  While most loans in these categories are still
     performing, the Corporation continues to believe these sectors present a
     higher than normal risk due to their financial and external
     characteristics.  Reduced revenues causing a declining utilization of
     the industry's capacity levels can affect collateral values and the
     amounts realized through the sale or liquidation.

     During the second quarter of 2006, the Corporation's commitments to
     Shared National Credits were approximately $3.6 billion with usage
     averaging around 47%.  Over time, 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, 2006, there were no Shared National Credit nonperforming loans.  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 vast majority of the assets acquired from
     Gold Banc Corporation, Inc. are in entirely new markets for the
     Corporation.  Included in these new markets are the Kansas City
     metropolitan area, Tulsa, Oklahoma, and Tampa, Sarasota and Bradenton,
     Florida.  Each of these regions and markets has cultural and
     environmental factors that are unique to them.

<PAGE> 46
     At June 30, 2006, nonperforming loans and leases amounted to $198.0
     million or 0.49% of consolidated loans and leases compared to $149.1
     million or 0.42% of consolidated loans and leases at March 31, 2006, and
     $131.6 million or 0.41% of consolidated loans and leases at June 30,
     2005.  Approximately $42.7 million or 87% of the $48.9 million increase
     in nonperforming loans from March 31, 2006 to June 30, 2006 was
     attributable to the banking acquisitions.  Excluding the effect of the
     acquisitions, nonperforming loans and leases would have amounted to
     $155.3 million or 0.43% of consolidated loans and leases at June 30,
     2006.  Excluding the acquisitions, the  pro forma ratio of nonperforming
     loans and leases to consolidated loans and leases at June 30, 2006 and
     the actual ratio at each quarter end throughout 2005 has remained in a
     fairly narrow range and continues to be below management's expectations.
     Nonaccrual loans and leases continue to be the primary source of
     nonperforming loans and leases.

     Net charge-offs amounted to $9.9 million or 0.10% of average loans and
     leases in the second quarter of 2006 compared to $6.0 million or 0.07%
     of average loans and leases in the first quarter of 2006 and $11.9
     million or 0.15% of average loans and leases in the second quarter of
     2005.  The lower level of net charge-offs experienced throughout 2005
     and the first six months of 2006 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.  The
     ratio of recoveries to charge-offs was 28.7% for the three months ended
     June 30, 2006 which was closer to average historical experience.  The
     ratio of recoveries to charge-offs was 35.3% for the six months ended
     June 30, 2006 which continues to be above the Corporation's five year
     historical average ratio of recoveries to charge-offs of 27.9%.

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 $415.2 million or 1.03% of loans and leases outstanding at June
30, 2006.  The allowance for loan and lease losses was $363.8 million or
1.06% of loans and leases outstanding at December 31, 2005 and $360.1
million or 1.12% of loans and leases outstanding at June 30, 2005.
Consistent with the credit quality trends noted above, the provision for
loan and lease losses amounted to $11.1 million for the three months ended
June 30, 2006 and $22.0 million for the six months ended June 30, 2006.
By comparison, the provision for loan and lease losses amounted to $13.7
million for the three months ended June 30, 2005 and $21.9 million for the
six months ended June 30, 2005. 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, 2006 and 2005,
the amount of software costs capitalized amounted to $13.7 million and
$9.9 million, respectively.  Amortization expense of software costs
amounted to $13.4 million for the three months ended June 30, 2006
compared to $15.4 million for the three months ended June 30, 2005.  For
the six months ended June 30, 2006 and 2005, the amount of software costs
capitalized amounted to $25.0 million and $18.9 million, respectively.
Amortization expense of software costs amounted to $27.6 million for the
six months ended June 30, 2006 compared to $30.3 million for the six
months ended June 30, 2005.

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.

<PAGE> 47
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, 2006 and
2005, the amount of conversion costs capitalized amounted to $3.1 million
and $2.7 million, respectively.  Amortization expense of conversion costs
amounted to $2.8 million and $2.9 million for the three months ended June
30, 2006 and 2005, respectively. For the six months ended June 30, 2006
and 2005, the amount of conversion costs capitalized amounted to $5.5
million and $5.6 million, respectively.  Amortization expense of
conversion costs amounted to $5.0 million and $5.6 million for the six
months ended June 30, 2006 and 2005, respectively.

Net unamortized costs were ($ in millions):
<TABLE>
<CAPTION>
                                           June 30,
                                  --------------------------
                                      2006          2005
                                  ------------  ------------
        <S>                      <C>           <C>
         Software                 $     152.5   $     151.6

         Conversions                     27.7          26.5
                                   -----------   -----------
            Total                 $     180.2   $     178.1
                                   ===========   ===========
</TABLE>

The Corporation has not substantively changed any aspect of 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.
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.  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.

<PAGE> 48
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 $1,028.4
million at June 30, 2006.  At June 30, 2006 the carrying amount of
retained interests amounted to $35.4 million.

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, 2006, highly rated investment securities in the amount of
$301.7 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.

In June 2006, the Financial Accounting Standards Board ("FASB") issued
FASB Interpretation No. 48, ("FIN 48"), Accounting for Uncertainty in
Income Taxes an interpretation of FASB Statement No. 109.  FIN 48
clarifies the accounting for uncertainty in income taxes recognized in
financial statements in accordance with FASB Statement No. 109, Accounting
for Income Taxes.  FIN 48 prescribes a recognition threshold and
measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax
return.  FIN 48 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure and
transition.

The provisions of FIN 48 are effective beginning January 1, 2007, with the
cumulative effect of the change in accounting principle recorded as an
adjustment to opening retained earnings.  The Corporation is currently
evaluating the financial statement impact, if any, of adopting FIN 48.


                       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 1A, Risk
Factors, of the Corporation's Annual Report on Form 10-K for the year
ended December 31, 2005 and 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.

<PAGE> 49
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following updated information should be read in conjunction with the
Corporation's Annual Report on Form 10-K for the year ended December 31,
2005.  Updated information regarding the Corporation's use of derivative
financial instruments is contained in Note 12, 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.  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,
                                2006           2006            2005         2005            2005
                          -------------- -------------- -------------- -------------- --------------
<S>                       <C>            <C>            <C>            <C>            <C>
Hypothetical Change in Interest Rate
------------------------------------
   100 basis point gradual:

      Rise in rates               (0.3)%         (0.2)%         (0.2)%         (0.1)%          0.3 %

      Decline in rates             0.3 %          0.1 %          0.0 %          0.0 %         (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.

<PAGE> 50
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, 2006, 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.  These investments
expose the Corporation to the change in equity values for the portfolio
companies.  However, fair values are difficult to determine until an
actual sale or liquidation transaction actually occurs.  At June 30, 2006,
the carrying value of total active capital markets investments amounted to
approximately $39.1 million.

As of June 30, 2006, M&I Trust Services administered $89.1 billion in
assets and directly managed a portfolio of $20.4 billion.  The Corporation
is exposed to changes in equity values due to the fact that fee income is
partially based on equity balances.  Quantification of this exposure is
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 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 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> 51
                        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, 2006        443,919    $  41.92             437,700        11,562,300

   February 1 to
 February 28, 2006       565,972       41.70             562,300        11,000,000

    March 1 to
  March 31, 2006           2,434       41.84                --          11,000,000

    April 1 to
  April 30, 2006         123,064       44.22                --          11,000,000

      May 1 to
    May 31, 2006           3,129       45.08                --          11,000,000

     June 1 to
   June 30, 2006           2,635       45.04                --          11,000,000
                     ------------   ----------   ----------------
       Total           1,141,153    $  42.07           1,000,000
                     ============   ==========   ================
</TABLE>

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

The Corporation's Share Repurchase Program was publicly reconfirmed in
April 2005 and again in April 2006.  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.


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

 (a)
     The Corporation held its Annual Meeting of Shareholders on April 25,
     2006.

 (b)
     Votes cast for the election of five directors to serve as Class I
     directors until the 2009 Annual Meeting of Shareholders are as follows:

          Director                 For            Withheld
     ---------------------     -----------      -----------
     Mark F. Furlong           190,663,322       4,510,194
     Ted D. Kellner            188,042,220       7,131,296
     Katharine C. Lyall        191,780,574       3,392,942
     Peter M. Platten, III     185,630,211       9,543,305
     James B. Wigdale          190,741,495       4,432,021

<PAGE> 52
     The continuing directors of the Corporation are as follows:

          Jon F. Chait                Malcolm M. Aslin
          Bruce E. Jacobs             Andrew N. Baur
          Dennis J. Kuester           John W. Daniels, Jr.
          Edward L. Meyer, Jr.        John A. Mellowes
          San W. Orr, Jr.             Robert J. O'Toole
          Debra S. Waller             John S. Shiely
          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, 2006 are as follows:

                              For        Against   Abstentions
                          -----------  ----------  -----------
     Ratification
        of Auditors       192,281,360   1,415,784   1,476,372


     Votes cast to approve the Company's 2006 Equity Incentive Plan are as
     follows:

                              For        Against   Abstentions   Non-Vote
                          -----------  ----------  -----------  ----------
     Ratification
        of Plan           119,283,686  38,900,515   3,647,656   33,341,659


     Votes cast for the shareholder proposal to request the Board of
     Directors of the Company to declassify the board are as follows:

                              For        Against   Abstentions   Non-Vote
                          -----------  ----------  -----------  ----------
     Request to
        declassify the
        Board of
        Directors          79,363,430  78,488,983   3,979,444   33,341,659



ITEM 6.   EXHIBITS

       Exhibit 10  -  Change of Control Agreement, dated June 19, 2006,
                      between the Corporation and Gregory A. Smith,
                      incorporated by reference to Item 1.01 of the
                      Corporation's amended Current Report on Form 8-K/A
                      filed June 19, 2006, SEC File No. 1-15403. *

       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 I - 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.

____________________________________________

*  Management contract or compensatory plan or arrangement.

<PAGE> 53
                               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, 2006

<PAGE> 54
                               EXHIBIT INDEX
                               -------------

     Exhibit Number                Description of Exhibit
     ______________     ____________________________________________

          (10)          Change of Control Agreement, dated June 19, 2006,
                        between the Corporation and Gregory A. Smith,
                        incorporated by reference to Item 1.01 of the
                        Corporation's amended Current Report on Form 8-K/A
                        filed June 19, 2006, SEC File No. 1-15403. *

          (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 I - 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.

____________________________________________

*  Management contract or compensatory plan or arrangement.