Bank Profits Hit New Record, Earning $121 Billion in 2003, According to Weiss Ratings; Nonperforming loans decrease 11.5%; Deposits jump 7%.

JUPITER, Fla. -- Profits at the nation's banks and thrifts hit a new record, earning $120.6 billion in 2003, a 14.5 percent increase over the previous record of $105.3 billion set in 2002, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

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

Net Income/Loss ($000)
                                 Weiss  ---------------------
                                 Safety 4th Q 4th Q
Institution      Headquarters    Rating  2003  2002  $ Change % Change
----------------------------------------------------------------------
JP Morgan Chase  New York, N.Y.
 Bank                               D   5,178 1,213    3,965    326.9
Citibank NA      New York, N.Y.     C+  7,919 6,356    1,563     24.6
Wells Fargo Bank San Francisco,
 NA               Calif.            B-  3,729 2,627    1,102     41.9
Citibank (West)  San Francisco,
 FSB              Calif.            C   1,175   103    1,072  1,046.1
Bank of America  Charlotte, N.C.
 NA                                 B-  9,145 8,216      929     11.3
----------------------------------------------------------------------

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

Despite soaring profitability, the industry's net interest margin weakened, declining to 3.29 percent at year-end 2003 compared to 3.53 percent at the end of 2002, indicating that the industry is earning less on its revenue-generating assets--primarily loans. In addition, results on other types of banking business such as trust services, securities trading, and insurance sales continued to improve as the industry's net non-interest margin increased to -0.83 from as low as -1.37 in 1998.

"Following several quarters of strong profits and an increasing reliance on non-lending business, the industry is well positioned to absorb the imminent rise in interest rates," said Melissa Gannon, vice president of Weiss Ratings, Inc.

Nonperforming Loans Decline 11.5%, While Deposits Jump 7%

Nonperforming loans declined $7.9 billion, or 11.5 percent, to $60.9 billion as of December 31, 2003 from a record high of $68.9 billion at year-end 2002. Likewise, the industry reported a decline in net loan charge-offs, which fell to $49.1 billion, a decrease of 9.5 percent compared to the $54.3 billion charged off in 2002.

Meanwhile, deposits rose to $6 billion at year-end 2003, a 6.9 percent increase, from the $5.6 billion reported in 2002. Institutions reporting the largest year-over-year increases in deposits include:

Deposits ($Mil)
                                 Weiss  ---------------------
                                 Safety 4th Q 4th Q
Institution      Headquarters    Rating  2003  2002  $ Change % Change
----------------------------------------------------------------------
Wells Fargo Bank San Francisco,
 NA               Calif.            B-    158    87       72     82.2
Wachovia Bank NA Charlotte, N.C.    B-    212   184       27     14.8
Bank of America  Charlotte, N.C.
 NA                                 B-    382   355       27      7.6
Comerica Bank    Detroit, Mich.     B-     41    21       20     96.8
JP Morgan Chase  New York, N.Y.
 Bank                               D     190   172       18     10.7
----------------------------------------------------------------------

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

"While increasing deposits is a healthy trend, it's notable that it has slowed down compared to recent years. This may indicate that consumers are seeking other investments that return more money than the abysmal rates paid by savings accounts and CDs," added Gannon.

Notable Upgrades and Downgrades

Among the 8,255 banks and thrifts reviewed by Weiss, 901 were upgraded and 550 were downgraded. Notable upgrades include:

--  Total Bank (Miami, Fla.)                    from E- to D
--  Bessemer Trust Co. NA (New York, N.Y.)      from B to A-
--  Seattle Savings Bank (Seattle, Wash.)       from B to A-

Notable downgrades include:

--  Doral Bank (San Juan, P.R.)                 from B to C
--  Florida Community Bank (Immokalee, Fla.)    from C to D
--  Foundation Bank (Cincinnati, Ohio)          from B- to D+

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 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.