Marshall & Ilsley (NYSE: MI) reported a bigger loss for the first quarter compared to the same quarter a year ago, making it the 10th consecutive quarterly loss for the company. But the bank has navigated through troubled waters and is showing signs of renewed strength. That's what I'm focusing on. Let's take a comprehensive view of the happenings in the quarter before reaching a truly Foolish conclusion.

The quarter in detail
Despite a decline in provision for loans and lease losses, M&I's net loss widened to $142 million for the quarter, slightly higher than the first quarter of 2010. This was primarily because of a decline in the company's revenues. Net interest income for the quarter declined by almost 14% to $352.1 million while non-interest revenues dropped by 16% to $186.5 million, compared to the year-ago period. And although provisions to cover bad loans decreased to $418.8 million from $458.1 million a year ago, it's still a sizable amount.

Loans and leases also reduced 16% to $36.4 billion while average deposits were down by 10% to $37.9 billion, compared to the corresponding quarter of 2010. But the quarter witnessed some significant steps up, which tend to compensate for the gloomy depiction, if not offset it.

The positives
Much like regional banks such as BankAtlantic Bancorp (NYSE: BBX) and US Bancorp (NYSE: USB), M&I also saw an improvement in its credit quality -- and a considerable one. Nonperforming loans decreased 19% while stage delinquencies reduced 17%, compared to the first quarter of 2010. M&I seems to have been focusing on credit issues since it has been aggressively selling its problem assets while trimming its construction and development exposure to a great extent. Total C&D reduced to $2.6 billion from $5.1 billion in the corresponding quarter of 2010. It has been able to reduce its exposure in the risky Arizona region by 81% since the fourth quarter of 2007.

The Foolish bottom line
Improving credit quality is definitely an encouraging signal for M&I and as CEO Mark Furlong puts it, the "results reflect the continued stabilization" of the company, which agreed in December to an acquisition offer from Bank of Montreal (NYSE: BMO).

Despite these improvements, successive losses and declining loans and deposits make me wary of this company from an investment standpoint. What say you, Fools?