PALM BEACH GARDENS, Fla., April 22, 2002 - The U.S. banking industry's net loan charge-offs grew by an alarming 55 percent in 2001, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds and stocks. At year-end, loan charge-offs, the loss banks take when borrowers default, jumped to a record $38.8 billion, an increase of $13.7 billion over the $25.1 billion charged off in 2000. Moreover, charge-offs in 2001 surpassed the previous record of $37.7 billion set 10 years ago during the 1991 S&L crisis.

This surge in net charge-offs was fairly widespread, with 4,146 banks and thrifts, or 43.1 percent of the industry, registering an increase. Institutions showing the largest year-over-year jump include:

		Weiss Safety Rating	Net Loan Charge-offs ($Mil)
			2001	2000	Change	% Chg.
US Bank NA	Cincinnati, Ohio	B-	1,678	196	1,482	756.10%
Bank of America NA	Charlotte, N.C.	B-	3,495	2,016	1,479	73.36%
Citibank NA	New York, N.Y.	B-	2,700	1,555	1,145	73.63%
PNC Bank NA	Pittsburgh, Pa.	B	945	133	812	610.53%
Bank One NA	Chicago, Ill.	C	1,167	374	793	212.03%

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

"If most banks would bite the bullet and recognize most of their nonperforming loans, we wouldn't be nearly as concerned," commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings. "However, nonperforming loans also rose sharply, implying still another round of large charge-offs in 2002."

Nonperforming Loans Climb Even Further

Nonperforming loans at banks and thrifts jumped 28.1 percent in 2001, to $62.5 billion from $48.8 billion in 2000. This exceeds the 26.6 percent rise experienced in 2000, following a relatively small 2.9 percent increase in 1999. As a result, nonperforming loans accounted for 9.43 percent of the industry's capital and reserves at year-end, the highest level in eight years, as illustrated below:

Industry Posts Record Profits, Although Inflated by Sales of Securities

Despite a sizable increase in provisions for future loan losses, banks and thrifts posted a record profit of $87.5 billion in 2001, up 6.8 percent from the $81.9 billion profit in 2000. In analyzing the industry's record profitability, however, Weiss noted that profits were inflated by $5.1 billion in nonrecurring gains from the sale of securities. Excluding these securities transactions, industry profits amounted to $82.4 billion, a 1.7 percent decline from the adjusted $83.8 billion recorded in the previous year. Institutions showing the largest year-to-year increase in net income before securities gains included:

		Weiss Safety Rating	Net Income/Loss ($Mil) before Securities Gains
			2001	2000	Change	% Chg.
Bank One NA	Chicago, Ill.	C	1,341	-204	1,545	n.m.
Wells Fargo Bank NA	San Francisco, Calif.	B-	2,615	1,597	1,018	63.7%
Washington Mutual Bk, FA	Stockton, Calif.	C+	2,373	1,691	682	40.3%
Citibank NA	New York, N.Y.	B-	5,014	4,413	601	13.6%
Chase Manhattan Bk USA NA	Newark, Del.	C	854	269	585	217.5%

"Banks are fortunate that this past year's interest rate drops allowed them to mitigate their earnings shortfall through the sale of securities. Plus, mortgage lenders were able to book generous fee revenues from the wave of new and refinanced mortgages," continued Dr. Weiss. "With interest rates now at rock bottom, however, don't expect these two factors to prop up the industry again in 2002."

Notable Upgrades and Downgrades

In evaluating the nation's 9,612 commercial banks, savings banks, and savings and loans, Weiss Ratings recently issued the following notable upgrades:

Capital One Bank	Glen Allen, Va.	from D+ to C-
Household Bank SB NA	Las Vegas, Nev.	from C+ to B-
First Midwest Bank	Buffalo Grove, Ill.	from C+ to B-

Notable downgrades include:

Allfirst Bank	Baltimore, Md.	from B to C-
Firstmerit Bank NA	Akron, Ohio	from B- to C+
Key Bank USA NA	Cleveland, Ohio	from B- to C

Consumers looking for a detailed analysis of their own bank or thrift can purchase Weiss Ratings' comprehensive Rating Analysis Report for $45 through the Weiss Ratings website (www.WeissRatings.com/Products/BANK_rar.asp) or by calling 800-289-9222. Containing the most comprehensive analysis Weiss publishes on an individual financial institution, each report includes an in-depth explanation of the company's Weiss Safety Rating and the factors contributing to (or detracting from) its financial stability.

The analysis is laid out in several easy-to-understand graphs, tables, and descriptions comparing each financial area to the industry as a whole. It shows whether or not the company has an adequate financial cushion to fall back on in times of trouble and covers key statistics pertaining to its current operations.