Banks Earn $60 Billion During First Half of 2003, According to Weiss Ratings Nonperforming Loans Continue to Decline.

Business Editors

JUPITER, Fla.--(BUSINESS WIRE)--Dec. 16, 2003

The nation's banks and thrifts earned $59.5 billion during the first half of 2003, representing a $6.5 billion, or 12.2 percent, jump over the $53 billion earned during the first half of 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 showing the largest year-over-year increases in net income include:

                                     Net Income/Loss ($Mil)
                              Weiss  ----------------------
                              Safety  2nd Q   2nd Q       $       %
Institution    Headquarters   Rating   2003    2002    Change   Change
----------------------------------------------------------------------
JP Morgan        New York,
 Chase Bank       N.Y.           D    2,679   1,479    1,200      81.1

National City    Indianapolis,
 Bank Indiana     Ind.           C+     788     389      399     102.6

Wells Fargo      San
 Bank NA          Francisco,
                  Calif.         B-   1,650   1,261      389      30.8

Standard
 Federal Bank    Troy,
 NA               Mich.          C+     603     277      326     117.7

Fleet National   Providence,
 Bank             R.I.           C+   1,193     876      317      36.2
----------------------------------------------------------------------

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

A strengthening securities market fueled profits as the industry's net gain on the sale of securities surged 221.3 percent, from $1.6 billion during the first half of 2002 to $5.3 billion during the same period in 2003. In addition, banks reported a 92.6 percent rise in the net gain on the sale of loans, which increased from $3.5 billion during the first six months of 2002 to $6.8 billion during the same period in 2003. The industry continued to enjoy the favorable interest rate environment, posting a $2.2 billion, or 1.6 percent, increase in net interest income, which increased from $138.1 billion during the first half of 2002 to $140.3 billion during the same period in 2003.

"High margins resulting from falling interest rates during the past few years have already put the industry in a strong position," stated Melissa Gannon, vice president of Weiss Ratings, Inc. "Now, with the stock market recovering, banks are enjoying additional gains through the sale of investments."

Nonperforming Loans Decline Further

Nonperforming loans at banks and thrifts declined further in the second quarter, falling $972 million, or 1.5 percent, to $64.8 billion at June 30, 2003 from $65.8 billion at June 30, 2002. Despite the improvement in problem loans, commercial real estate loans, which continue to represent 10 percent of all nonperforming loans, climbed $543 million, or 9 percent, from $6 billion at second quarter 2002 to $6.5 billion at second quarter 2003.

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

                                      Nonperforming Loans
                                             ($Mil)
                              Weiss   ----------------------
                              Safety  2nd Q   2nd Q     $        %
Institution     Headquarters  Rating   2003    2002   Change   Change
----------------------------------------------------------------------
Fleet National    Providence,
 Bank              R.I.          C+   2,461   3,302    (841)    (25.5)

Bank of America   Charlotte,
 NA                N.C.          B-   4,363   5,035    (672)    (13.3)

Chase Manhattan   Newark,
 Bank USA NA       Del.          C-     312     609    (297)    (48.8)

Deutsche Bank     New York,
 TC Americas       N.Y.          C+   1,334   1,585    (251)    (15.8)

Citibank South    Sioux Falls,
 Dakota NA         S.D.          C+     521     704    (183)    (26.0)

----------------------------------------------------------------------

Notable Upgrades and Downgrades

Among the 9,272 banks and thrifts reviewed by Weiss, 882 were upgraded and 579 were downgraded. Notable upgrades include:

-- Citizens Bank of PA (Pennsylvania, Penn.) from D+ to C-

-- Providian National Bank (Tilton, N.H.) from C+ to B-

-- New York Community Bank (New York, N.Y.) from B+ to A-

Notable downgrades include:

-- Provident Bank (Cincinnati, Ohio) from C- to D+

-- Commerce Bank NA (Cherry Hill, N.J.) from B- to C+

-- Riggs Bank, NA (McLean, Vir.) from B- to C+

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, banks, and brokerage firms. Weiss also rates the risk-adjusted performance of more than 12,000 mutual funds and more than 8,000 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.

Consumers can purchase a rating for as little as $7.95 through www.WeissRatings.com, or starting at $15 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