Banking Industry Sets New Record, Earning $105.3 Billion in 2002

PALM BEACH GARDENS, Fla., May 12, 2003 - The U.S. banking industry set a new record for profits, earning $105.3 billion in 2002 and surpassing its previous record of $87.5 billion set 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.

Institutions reporting the largest year-over-year increase in earnings include:

Institution	Headquarters	Weiss Safety Rating	Net Income ($Mil)
			2002	2001	Change	% Change
Wachovia Bank NA1	Charlotte, N.C.	C+	3,489	1,635	1,854	113.4
Bank of America, NA	Charlotte, N.C.	B-	8,216	6,664	1,552	23.3
US Bank NA	Cincinnati, Ohio	B-	3,246	1,802	1,444	80.2
Citibank NA	New York, N.Y.	B-	6,356	5,270	1,086	20.6
Washington Mutual Bk FA	Stockton, Calif.	C+	3,449	2,410	1,039	43.1

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

Low interest rates were identified as the driving force behind the banking industry's record earnings. Banks benefited from low rates through more profitable net interest margins, higher values for their bond holdings, and increased consumer demand for mortgage loans, home equity loans, credit card loans, and other consumer borrowing.

"With interest rates hovering at record lows, loan demand from consumers has more than made up for the drop in commercial lending related to the weak economy," said David Lackey, president of Weiss Ratings, Inc.

During 2002, the banking industry saw a 9.7 percent rise in home mortgage lending, a 39.1 percent rise in home equity loans, and a 9.7 percent increase in consumer loans, according to Weiss. At the same time, commercial and industrial lending for the year fell by 5.3 percent.

Year Closes with Signs of Turnaround in Nonperforming Loans

Nonperforming loans at banks and thrifts reached $68.9 billion at year-end 2002, representing a 10.2 percent increase over the $62.5 billion in nonperforming loans reported at the end of 2001. This was well below the 28.1 percent and 26.6 percent increases seen in 2001 and 2000, respectively. Furthermore, the year-end number actually represented a slight $21 million decrease in nonperforming loans during the fourth quarter, the first quarterly decline since 1999.

"Although still rising at a significant rate, the trend in nonperforming loans last year was a definite improvement," added Mr. Lackey. "Banks will eventually have to face the music and clean up their loan portfolios, though, and if that timing coincides with a shift to rising interest rates, watch out."

Institutions showing the largest year-over-year increase in nonperforming loans include:

Institution	Headquarters	Weiss Safety Rating	Nonperforming Loans ($Mil)
			2002	2001	Change	% Change
Citibank NA	New York, N.Y.	B-	8,617	5,916	2,701	45.7
J.P. Morgan Chase Bank	New York, N.Y.	C-	4,174	2,428	1,746	71.9
Bank One NA	Chicago, Ill.	C+	2,527	1,643	884	53.8
Wachovia Bank NA	Charlotte, N.C.	C+	1,998	1,543	455	29.5
Fleet NB	Providence, R.I.	C+	2,980	2,368	612	25.8

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

Institutions showing the largest year-over-year decrease in nonperforming loans include:

Institution	Headquarters	Weiss Safety Rating	Nonperforming Loans ($Mil)
			2002	2001	Change	% Change
Bank of America, NA	Charlotte, N.C.	B-	5,417	6,004	-587	-9.8
Keybank NA	Cleveland, Ohio	C	1,006	1,459	-453	-31.1
Union Bank of CA NA	San Francisco, Calif.	B	309	505	-196	-38.9
Providian NB	Tilton, N.H.	C+	324	458	-134	-29.2
Direct Mrch Credit Card	Phoeniz, Ariz.	C+	7	124	-118	-94.6

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

Weiss issues safety ratings on more than 15,000 financial institutions, including banks and thrifts, HMOs, life and health insurers, Blue Cross Blue Shield plans, property and casualty insurers, and securities brokers. Weiss also rates the risk-adjusted performance of more than 12,000 mutual funds and 9,000 stocks. Weiss Ratings is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries.

Consumers needing more information on the financial safety of a specific company can purchase a rating and summary analysis for as little as $7.95 through www.WeissRatings.com, or starting at $15 by calling 800-289-9222.

¹2002 net income represents combined earnings following the merger of Wachovia Bank and First Union. 2001 net income represents only First Union's earnings.