Banks Set Record Quarterly Profit of $29.4 Billion in First Quarter 2003, According to Weiss Ratings.Business Editors PALM BEACH GARDENS, Fla.--(BUSINESS WIRE)--Aug. 13, 2003 Nonperforming Loans Continue to Decrease Yet Remain Higher than the Previous Year The nation's 9,414 banks and thrifts reported another record-breaking Adj. 1. record-breaking - surpassing any previously established record; "a record-breaking high jump"; "record-breaking crowds" best - (superlative of `good') having the most positive qualities; "the best film of the year"; "the best solution"; "the best time for quarter, earning $29.4 billion in the first quarter of 2003, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. companies, mutual funds, and stocks. This performance surpassed the previous quarterly profit record of $27.2 billion set in the third quarter of 2002 and was a 15.8 percent improvement over the $25.4 billion profit recorded in the first quarter of 2002. Almost two out of three banks, or 61 percent, posted improved year-over-year earnings during the first quarter. Institutions showing the largest year-over-year increase in net income include:
Net Income/Loss
($Mil)
--------------------
Weiss
Safety 1st Q 1st Q
Institution Headquarters Rating 2003 2002 Change % Change
----------------------------------------------------------------------
JP Morgan Chase New York, D
Bank N.Y. 1,081 443 638 144.02
Citibank NA New York, B-
N.Y. 1,985 1,434 551 38.42
Wachovia Bank NA Charlotte, C+
N.C. 997 708 289 40.82
Wells Fargo Bank NA San B-
Francisco,
Calif. 829 551 278 50.45
Standard Federal Bk Stockton, C+
NA Calif. 347 129 218 168.99
In reviewing the industry's record profitability, Weiss noted that falling interest rates led banks to collectively record a net gain of $2.3 billion on the sale of securities during the first quarter of 2003 compared to a gain of only $681 million during the same period in 2002. Along with lowered deposit rates, this helped the industry generate an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). (ROA ROA See: Return on assets ROA See: Right of accumulation ROA See return on assets (ROA). ) of 1.38 percent during the quarter, also a record high. "The banking industry continues its impressive assent An intentional approval of known facts that are offered by another for acceptance; agreement; consent. Express assent is manifest confirmation of a position for approval. with record profits thanks to the dramatic decline in interest rates," commented David Lackey, president of Weiss Ratings, Inc. "What's even more notable, though, is the recent improvement in nonperforming loans. If this trend holds, banks should be in a good position to brace brace: see drill. (character) brace - left brace or right brace. themselves for the inevitable rise in interest rates." Nonperforming Loans Decrease for Second Consecutive Quarter Nonperforming loans at banks and thrifts decreased for a second consecutive quarter, falling 2.4 percent to $67.2 billion at March 31, 2003 from $68.9 billion at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2002.
Total Nonperforming Loans ($ in billions)
1999 $38.6
2000 $48.8
2001 $62.5
2002 $68.9
March 2003 $67.2
Institutions showing the largest year-over-year decrease in nonperforming commercial and industrial loans include:
Nonperforming
Commercial and
Industrial Loans
($Mil)
Weiss --------------------
Safety 1st Q 1st Q
Institution Headquarters Rating 2003 2002 Change % Change
----------------------------------------------------------------------
Deutsche Bk TC New York, C+
Americas N.Y. 1,147 1,561 -414 -26.52
Union Bank of CA NA San B
Francisco, 276 412 -136 -33.12
Calif.
Bank of America NA Charlotte, B-
N.C. 3,732 3,844 -112 -2.91
Keybank NA Cleveland, C
Ohio 587 682 -95 -13.86
Washington Mutual Stockton, C+
Bk Calif. 69 158 -89 -56.56
Weiss Safety Rating: A = Excellent; B = Good; C = Fair; D = Weak;
E = Very Weak; F=Failed
Commercial Real Estate Loans Could Become Area of Concern Despite the banking industry's recent stellar performance, there is concern that its commercial real estate(1) portfolio could weaken due to rising vacancy VACANCY. A place which is empty. The term is principally applied to cases where an office is not filled. 2. By the constitution of the United States, the president has the power to fill up vacancies that may happen during the recess of the senate. rates and falling rents in the real estate market. At $6.7 billion, nonperforming real estate loans currently represent 10 percent of the industry's problem loans and have increased by 8.4 percent since first quarter 2002. Institutions reporting the largest year-over-year increase in nonperforming commercial real estate loans include:
Nonperforming
Commercial and
Industrial
Loans ($Mil)
----------------
Weiss 1st 1st
Safety Q Q
Institution Headquarters Rating 2003 2002 Change % Change
----------------------------------------------------------------------
Bank One NA Chicago, Ill. C+ 314 95 219 250.53
Bank of America NA Charlotte, N.C. B- 537 354 183 51.69
Wachovia Bank NA Charlotte, N.C. C+ 209 136 73 53.68
US Bank NA Cincinnati, Ohio C+ 155 112 43 38.12
Old National Bank Evansville, Ind. B- 45 14 31 230.51
"The vast majority of the banking industry is currently healthy and well positioned to ride out the country's economic malaise malaise /mal·aise/ (mal-az´) a vague feeling of discomfort. mal·aise n. A vague feeling of bodily discomfort, as at the beginning of an illness. ," continued Mr. Lackey. "However, some banks continue to struggle, and a blow to their commercial real estate portfolios could be the thing that puts them under." Weiss issues safety ratings on more than 15,000 financial institutions, including banks and thrifts, HMOs, life and health insurers, Blue Cross Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. plans, property and casualty insurers, and securities brokers and the risk-adjusted performance of more than 12,000 mutual funds and 8,000 stocks. Consumers can purchase a rating through www.WeissRatings.com or 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. The companion release, "Washington Mutual “WaMu” redirects here. For the Washington, DC radio station, see WAMU. Washington Mutual (or WaMu; NYSE: WM) is the United States' largest savings and loan association. , Indymac Bank Indymac Bancorp, Inc. (NYSE: IMB) (Indymac®) is the holding company for Indymac Bank, F.S.B. (Indymac Bank®), the largest savings and loan in Los Angeles and the 7th largest mortgage originator in the nation. , and Fremont Fremont (frē`mŏnt). 1 City (1990 pop. 173,339), Alameda co., W Calif., on San Francisco Bay; inc. 1956. Long an agricultural center, with champagne vineyards founded (1870) by Leland Stanford, it still ships fruits and vegetables. Investment & Loan Upgraded by Weiss Ratings," is also available upon request. (1)Commercial real estate loans are loans secured by nonfarm, nonresidential Adj. 1. nonresidential - not residential; "the commercial or nonresidential areas of a town"; "community colleges are typically nonresidential" residential - used or designed for residence or limited to residences; "a residential hotel"; "a residential quarter"; "a property for the purpose of commercial development. |
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