Bank Earnings Growth Slows Dramatically in 2004, According to Weiss Ratings; Despite Slowdown, Industry Reports Record Profits of $123 Billion; 19.7% Decrease in Non-Performing Loans.

JUPITER, Fla. -- Following double-digit earnings growth of 14.6 percent and 20.4 percent in 2003 and 2002, respectively, the nation's banks and thrifts experienced a dramatic slowdown, reporting earnings growth of just 1.8 percent in 2004, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

Institutions driving the slowdown with the largest declines in earnings during the year were:

Weiss  Total   Net Income/Loss ($Mil)
                         Safety Assets -------------------------
Institution Headquarters Rating ($Bil) 2004    2003   $Change  %Change
----------------------------------------------------------------------
JP Morgan   Columbus,
 Chase Bk    Ohio
 NA(1)                     C-  967.4  2,178.0 5,178.0 (3,000.0) (57.9)
Washington  Stockton,
 Mutual Bk   Calif.
 FA                        B-  272.9  2,292.4 3,306.8 (1,014.4) (30.7)
Standard    Troy,
Federal Bk   Mich.
 NA                        B-   39.1    157.5   946.4   (789.0) (83.4)
Charter One Cleveland,
 Bk NA       Ohio          C-   50.9    122.4   623.2   (500.8) (80.4)
Fleet NB    Providence,
             R.I.          B-  218.7  2,224.7 2,616.0   (391.3) (15.0)
----------------------------------------------------------------------

Weiss Safety Rating: A = Excellent; B = Good; C = Fair; D = Weak; E =
Very Weak; F = Failed; U = Unrated

In reviewing the industry's performance, Weiss found that earnings slowed due to a $3.7 billion, or 32.8 percent, decline in realized capital gains, from $11.4 billion earned in 2003 to $7.6 billion in 2004. In addition, banks reported a $1.8 billion, or 1.0 percent, decline in non-interest income during this same period, from $208.2 billion to $206.4 billion.

Likewise, the industry's net interest margin continued to weaken, declining to 3.23 percent at year-end 2004 compared to a high of 3.53 percent reported in 2002.

"The nation's banks are financially sound, but margins will continue to be squeezed as interest rates rise," said Melissa Gannon, vice president of Weiss Ratings, Inc. "Fortunately, loan portfolios also continue to improve putting the industry in a good position to manage the rise in interest rates."

Industry Reports Record Profit of $123 Billion

Despite the aggregate slowdown in earnings growth, banks and thrifts reported record profits for a fourth straight year, earning $122.8 billion in 2004, compared to $120.6 billion, $105.3 billion, and $87.5 billion in 2003, 2002, and 2001, respectively.

Institutions bucking the trend and reporting the largest year-over-year increases in net income include:

Net Income/Loss ($Mil)
                         Weiss  Total   -------------------------
                         Safety Assets 4th Qtr 4th Qtr
Institution Headquarters Rating ($Bil) 2004    2003   $Change  %Change
----------------------------------------------------------------------
Bank of     Charlotte,
 America NA  N.C.          B-  771.6 10,833.8 9,145.2  1,688.6   18.5
Citibank    New York,
 NA          N.Y.          C+  694.5  9,413.0 7,919.0  1,494.0   18.9
Wells Fargo Sioux Falls,
 Bk NA       S.D.          B   366.3  5,213.0 3,729.0  1,484.0   39.8
Wells Fargo Ogden,
 Bk          Utah
 Northwest
 NA                        B-   19.3    693.0    76.3    616.7  808.2
Citibank    Las Vegas,
 Nevada NA   Nev.          C+   18.3  1,148.3   690.4    457.9   66.3
----------------------------------------------------------------------

Weiss Safety Rating: A = Excellent; B = Good; C = Fair; D = Weak; E =
Very Weak; F = Failed; U = Unrated

Nonperforming Loans Drop 19.7%

Nonperforming loans continued to decline, down $12.0 billion, or 19.7 percent, to $48.9 billion as of December 31, 2004 from $60.9 billion at year-end 2003.

Institutions showing the largest year-over-year decreases in nonperforming loans include:

Weiss  Total  Nonperforming Loans ($Mil)
                         Safety Assets --------------------------
Institution Headquarters Rating ($Bil) 2004    2003   $Change  %Change
----------------------------------------------------------------------
Citibank    New York,
 NA          N.Y.          C+  694.5  6,811.0 9,053.0 (2,242.0) (24.8)
Bank of     Charlotte,
 America NA  N.C.          B-  771.6  1,671.8 3,272.8 (1,601.0) (48.9)
Fleet NB    Providence,
             R.I.          B-  218.7    912.4 1,914.0 (1,001.6) (52.3)
Citibank    San
 (West) FSB  Francisco,
             Calif.        C+  101.9    285.5   792.0   (506.5) (63.9)
Deutsche Bk New York,
 TC          N.Y.
 Americas                  B    33.3    279.0   707.0   (428.0) (60.5)
----------------------------------------------------------------------

Weiss Safety Rating: A = Excellent; B = Good; C = Fair; D = Weak; E =
Very Weak; F = Failed; U = Unrated

Notable Upgrades and Downgrades

Among the 8,978 banks and thrifts reviewed by Weiss, 773 were upgraded and 466 were downgraded. Notable upgrades include:

--  Deutsche Bank TC Americas (New York, N.Y.)       from C+ to B

    --  Centennial Bank West (Ft. Collins, Col.)         from D to C-

    --  Citywide Banks (Aurora, Col.)                    from D to C-

    Notable downgrades include:

    --  Placer Sierra Bank (Auburn, Calif.)              from B+ to B-

    --  Union Safe Deposit (Stockton, Calif.)            from B+ to B-

    --  Tierone Bank (Lincoln, Neb.)                     from B+ to B-

The Weiss Safety Ratings are based on an analysis of a company's risk-adjusted capital, five-year historical profitability, quality of investments, liquidity, and stability. The latter category combines a series of factors including asset growth, premium growth, strength of affiliate companies, and risk diversification.

Weiss issues safety ratings on more than 15,000 financial institutions, including insurance companies and banks. Weiss also rates the risk-adjusted performance of more than 12,000 mutual funds and more than 6,000 stocks. Weiss Ratings is the only major rating agency that receives no direct or indirect compensation from the companies it rates for issuing its ratings. Revenues are derived strictly from sales of its products and custom research solutions to consumers, institutions, businesses, libraries, and governmental agencies.

Consumers needing more information on the financial safety of a specific company can purchase a rating and summary analysis for as little as $14.99 through www.WeissRatings.com, or starting at $19 by calling 800-289-9222.

Note to editors: National and state-specific tables of banks and thrifts receiving the highest and lowest Weiss Safety Ratings are available

(1) JP Morgan Chase & Co., the parent company of JP Morgan Chase Bk
NA, merged with Bank One in July 2004.