January 22, 2003

PALM BEACH GARDENS, Fla. - Nonperforming loans at the nation's 9,414 banks and thrifts reached $68.9 billion at September 30, 2002, representing a 16.8 percent increase over the $58.9 billion in nonperforming loans reported one year prior, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks. From a historical perspective, this is the highest dollar amount of nonperforming loans in the banking industry since 1992 when the figure reached $79.2 billion following the savings and loan (S&L) crisis.

Driving the increase in nonperforming loans, troubled commercial loans surged 22.7 percent over the last year to $33.8 billion at the end of the third quarter. Meanwhile, nonperforming residential mortgage loans climbed 13.4 percent to $13.8 billion during the same period.

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

Institution	Headquarters	Weiss Safety Rating	Nonperforming Loans ($Mil)
			Sept. 30,    2002	Sept. 30,    2001	Change	% Change
Citibank NA	New York, N.Y.	B-	8,380	5,236	3,144	60.05
J.P. Morgan Chase Bank	New York, N.Y.	C-	4,065	1,825	2,240	122.74
Bank One NA	Chicago, Ill.	C+	2,512	1,326	1,186	89.47
Fleet NB	Providence, R.I.	C+	3,136	2,190	946	43.20
Deutsche Bk TC Americas	New York, N.Y.	C	1,577	900	677	75.22

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

"The go-go lending days of the late '90s are coming back to haunt many banks," commented David Lackey, president of Weiss Ratings, Inc. "As nonperforming loans continue their steady rise, it's only a matter of time before higher charge-off levels take their toll on bank stability."

Bank Charge-offs on Record Pace

The rising nonperforming loan levels fueled a 36.9 percent jump in loan charge-offs during the first three quarters of 2002 compared to the same period a year ago. That put charge-offs for the nine-month period at $34.8 billion compared to the $25.4 billion charged off a year earlier. The industry is now on pace to shatter its record charge-off level of $37.7 billion set in 1991 following the S&L crisis.

Institutions showing the largest year-over-year increase in net charge-offs include:

Institution	Headquarters	Weiss Safety Rating	Net Charge-offs ($Mil)
			Sept. 30,    2002	Sept. 30,    2001	Change	% Change
Citibank NA	New York, N.Y.	B-	4,810	1,405	3,405	242.4
J.P. Morgan Chase Bank	New York, N.Y.	C-	1,646	543	1,103	203.1
Fleet NB	Providence, R.I.	C+	1,717	917	800	87.2
Providian NB	Tilton, N.H.	C+	1,795	1,027	768	74.9
Bank One NA	Chicago, Ill.	C+	1,182	655	527	80.5

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

Vulnerable institutions (those rated D+ and lower) reporting the largest year-over-year increase in net charge-offs include:

Institution	Headquarters	Weiss Safety Rating	Net Charge-offs ($Mil)
			Sept. 30,    2002	Sept. 30,    2001	Change	% Change
Discover Bank	Greenwood, Del.	D+	900	710	190	26.8
Providian Bank	Salt Lake City, Utah	D	126	72	54	74.2
Southern Pacific Bank	Los Angeles, Calif.	E-	72	45	27	60.7
Fremont Investment & Loan	Anaheim, Calif.	D	34	10	24	246.6
BSB B&TC	Binghamton, N.Y.	D+	36	16	19	120.3

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

"All indicators point to an industry headed for tough times, especially for smaller banks that are already financially weak," cautioned Mr. Lackey. "The beneficial effect of falling interest rates will eventually play out, leaving nothing left to compensate for the industry's poor asset quality and rising loan defaults."

Strong Interest Rate Margin Sustains Industry Earnings

The banking industry's annualized net interest margin narrowed to 3.56 percent at the end of the third quarter compared to 3.33 percent a year earlier. Despite the deterioration, the relatively high margin boosted the industry's earnings to $27.2 billion in the third quarter of 2002, a 22.5 percent increase over the third quarter of 2001 and the second highest quarterly net income on record.

Notable Upgrades and Downgrades

In evaluating the nation's 9,414 commercial banks, savings banks, and S&L, Weiss Ratings issued the following notable upgrades:

Bank of Hawaii	Honolulu, Hawaii	from B+ to A-
ING Bank FSB	Wilmington, Del.	from D+ to C-
Lehman Brothers Bank FSB	Wilmington, Del.	from D+ to C-

Notable downgrades include:

Deutsche Bank TC Americas	New York, N.Y.	from B- to C
Citizens Bank Rhode Island	Providence, RI	from B- to C+
First Bank	St. Louis, Mo.	from B- to C+

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 11,000 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.

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