Weiss Ratings of Banks and Thrifts
(from the Weiss Ratings website: www.weissratings.com)

Weiss Ratings represent a completely independent, unbiased opinion of an institution's financial safety — now, and in the future. The ratings are derived, for the most part, from quarterly financial statements filed with federal regulators. Although we seek to maintain an open line of communication with the companies being rated, we do not grant them the right to influence the ratings or stop their publication.

Weiss Ratings are assigned by our analysts based on a complex analysis of hundreds of factors that are synthesized into five indexes: capitalization, asset quality, profitability, liquidity and stability. These indexes are then used to arrive at a letter grade rating. A good rating requires consistency across all indexes. A weak score on any one index can result in a low rating, as insolvency can be caused by any one of a number of factors, such as inadequate capital, poor underwriting practices, operating losses, or the failure of an affiliated company.

The primary components of the Weiss Financial Strength Rating are as follows:

• Capitalization Index gauges capital adequacy in terms of each institution's cushion to absorb future operating losses under various potential business and economic scenarios as they may impact the company's net interest margin, securities' values, and the collectability of its loans.

• Asset Quality Index measures the quality of the company's past underwriting and investment practices based on the estimated liquidation value of the company's loan and securities portfolios.

• Profitability Index measures the soundness of the company's operations and the contribution of profits to the company's financial strength. The profitability index is a composite of five sub-factors: 1) gain or loss on operations; 2) rates of return on assets and equity; 3) management of net interest margin; 4) generation of noninterest-based revenues; and 5) overhead expense management.

• Liquidity Index values a company's ability to raise the necessary cash to satisfy creditors and honor depositor withdrawals.

• Stability Index integrates a number of sub-factors that affect consistency (or lack thereof) in maintaining financial strength over time. Sub-factors include 1) risk diversification in terms of company size and loan diversification; 2) deterioration of operations as reported in critical asset, liability, income and expense items, such as an increase in loan delinquency rates or a sharp increase in loan originations; 3) years in operation; 4) former problem areas where, despite recent improvement, the company has yet to establish a record of stable performance over a suitable period of time; and 5) relationships with holding companies and affiliates.

Weiss Ratings maintains an open-door policy to rated companies and accepts input via mail, fax, phone, or personal visits. If a company feels it has significant additional information it wants to bring to our attention which is not addressed in the quarterly financial statements, it is invited to provide that information at any time. However, we reserve the right to publish ratings expressing our opinion of a company's financial stability based exclusively on publicly available data and our own internally developed standards for safety.