A.M. Best Introduces Interactive Rating Services on U.S. Banks and Bank Holding Companies

Business Wire, Oct 2, 2006

OLDWICK, N.J. -- A.M. Best Co. today announced plans to expand its analytical coverage of the U.S. banking industry by introducing interactive rating services on U.S. banks and bank holding companies. A.M. Best's bank rating services include Bank Deposit Ratings on operating banks and Issuer Credit Ratings on banks and bank holding companies, as well as ratings on debt securities. More information can be found at www.ambest.com/banking. While this service will be available to any interested banking institution, A.M. Best's initial focus will be on U.S. banks with asset sizes ranging from approximately $100 million at the low end to approximately $40 billion at the high end, with a specific focus on the mid-sized and small banks.

Small and mid-sized U.S. banks traditionally have not received comprehensive rating coverage. This is partly due to the lower participation by the small banks in the public debt market than is the case for large banks. However, there are very compelling needs for ratings on small and mid-sized banks in the changing U.S. banking industry. A.M. Best observes that market forces coupled with regulatory initiatives are driving the U.S. banking industry toward greater transparency, as has been called for by many industry participants, including banks' customers, transaction counterparties, banking regulators and the investment community.

A.M. Best believes that a comprehensive interactive rating will enhance a small or mid-sized bank's operation by affording it greater expediency in reaching out to new deposit bases and other funding sources. Because of increasing competitive pressures, small and mid-sized banks are constantly searching for ways to improve their operations, and an interactive rating will be an indispensable part of these banks' business management tools.

Some of the highlights of A.M. Best's bank ratings include:

* Comprehensive analytical research reports on rated banks.

* Ratings will utilize the traditional credit market rating scale, based on conventional capital market standards.

* These interactive ratings will include meetings with a bank's management for a full exchange of information between A. M. Best and the rated bank.

* Ratings will include an assessment of a bank's strategy and competitive position beyond just the reported financial results of a bank.

* Ratings will be based on A. M. Best's core principles of analyzing a banking operation through various stages of the industry cycle.

* Finally, considerations of the impacts of affiliates and parent entities within a banking group are incorporated in our rating analysis.

A.M. Best Co., the long standing credit rating agency for the insurance industry, is currently the sole agency providing comprehensive interactive rating services to small and mid-sized community U.S. banks. For more information about A.M. Best's banking initiative, log onto www.ambest.com/banking, which features industry research, news and other resources for industry participants. Over the past year, A. M. Best has published a regular series of research reports and statistical studies covering many topics and issues affecting U.S. banks. A. M. Best will be making available for public comment its bank rating criteria and methodology shortly.

Following the comment period, A.M. Best will review commentary received from interested parties and subsequently post its bank rating criteria and methodology on its website. Specific questions on rating services can be directed to Khanh Vuong, Banking Group at (908) 439-2200, Ext. 5633.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.