Fitch Affirms National Consumer Cooperative Bank Ratings.

CHICAGO -- Fitch Ratings has affirmed the ratings of National Consumer Cooperative Bank (NCB) and its related subsidiaries. The Rating Outlook remains Stable. Approximately $400 million of debt and $770 million of deposits are affected by this action. A complete list of ratings is detailed at the end of this release.

NCB's ratings continue to reflect consistent operating performance, appropriate risk adjusted capitalization, experienced management team, and knowledge of the cooperative market. The ratings also take into account NCB's relatively greater reliance on capital markets financing, niche focus in cooperative lending and modest profitability measures given its member-owned status. Although NCB is a government-sponsored enterprise (GSE), its ratings do not receive much benefit from its government charter.

Operating performance has been stable over the past few years. Gain-on-sale income remains a significant proportion of operating income, which makes earnings more volatile. A decline in spreads on sold loans or reduction in loan growth would adversely affect profitability. Fitch believes increased competition in the cooperative loan market could place pressure on NCB's volume and loan growth over the near term and bears monitoring.

NCB's portfolio has performed well, due to its experience in the cooperative sector and the secured nature of the loans. In Fitch's opinion, near-term asset quality performance should be stable to improving as nonperforming loans declined to $13 million at March 31, 2006.

While the majority of NCB's funding comes from the capital markets, primarily through securitization, the company has increased its deposit funding over time, which Fitch views positively. Capital is appropriate for NCB's risk profile, but securitization residual assets represent a meaningful percentage of equity. More recently, however, the company's asset growth has outstripped its internal capital generation. Since internal capital formation is modest, Fitch will monitor capital management initiatives given the company's anticipated loan growth.

Ratings Affirmed with a Stable Outlook

National Consumer Cooperative Bank

--Long-term IDR 'A-';

--Senior unsecured debt 'A-';

--Short-term issuer 'F2';

--Commercial paper 'F2';

--Individual 'B';

--Support '5'.

NCB, FSB 

--Long-term IDR 'A-';

--Short-term issuer 'F2';

--L-T Deposit obligations 'A';

--S-T Deposit obligations 'F1';

--Individual 'B';

--Support '1'.

NCB Capital Trust I

-Trust Preferred Stock 'BBB+'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.