Chase, Crestar, Midlantic, win upgrades from raters.

Rating agencies continued their run of upgrades in the past two weeks.

Among the banking companies upgraded are Chase Manhattan, Crestar, Midlantic, and Bank of New

For banks, it's the same old story, but a good one: The rating agencies cited stronger balance sheets and improving core profitability in making the upgrades.

Bank have been hearing similar reasons for upgrades during the past two years, and they have dug themselves out from the burden of bad loans.

No banks were downgraded during the past two weeks.

Crestar: Duff & Phelps Credit Rating Co. raised the ratings of Crestar Financial Corp. and its lead bank, Crestar Bank. The banking company's senior debt was bumped up to A-minus from BBB-plus. The subordinated debt was raised a notch to BBB from BBB-minus.

Crestar has shown continued strengthening in all performance categories, according to D&P. Capital ratios are well above average - tangible common equity was 7.35% at Sept. 30 - loan-loss reserve levels are at historical highs for this point in the economic cycle, and asset quality is solid, the ratings agency said.

Crestar posted record earnings in the first and second quarter, primarily because because credit-related expenses have fallen dramatically.

At the end of the second quarter, nonperforming assets equal $135 million, or 1.9% of loans and foreclosed real estate. A year earlier, nonperforming assets were $266 million, or 3.94% of loans and foreclosed real estate.

Crestar still faces challenges. It has recovered from serious loan problems, but it must build and maintain a consistent level of earnings in a competitive environment without incurring a lot more risk, said D&P.

Midlantic Corp.: Duff & Phelps upgraded Midlantic Corp., its second-tier holding company, Midlantic Banks Inc., and its two principal subsidiary banks, Midlantic National Bank and Continental Bank. Continental is the only unit to break through into investment-grade territory.

The senior debt of Midlantic Corp. and Midlantic Bank is BB-plus, up from BB. Continental's long-term debt was raised to BBB-minus, the lowest investment grade, from BB-plus. Midlantic National Bank is now rated BB-plus, up from BB.

Duff & Phelps said the upgrades reflect a continuing improvement in balance sheet strength and core profitability. Capital ratios have been bolstered through equity issuance, disposition of nonstrategic assets, and more recently through the retention of earnings.

Stockholders' equity equaled 7.88% of assets at Sept. 30. A year before, it was 5.48%. Problem assets have fallen sharply over the past year, though they are still high. Nonperforming assets totaled $742 million, or 8.49% of loans and other real estate owned, at Sept. 30. That's compared with $855 million, or 9.7%. three months before. The remaining bad loans will likely require a prolonged workout period and a continuation of large chargeoffs, D&P said.

Net income in the third quarter was $46.9 million, which equaled a return on assets of 1.37%.

First of America: Moody's investors Service Inc. placed the long-term debt ratings of First of America and its bank subsidiaries under review for possible upgrade.

About $150 in million of debt is affected, the rating agency said.

Moody's cited the bank's strong financial performance, as well as its success at building a strong franchise in the Midwest.

First of America's subordinated debt is rated Baa 1 and its preferred stock is rated A3. The lead bank's long-term deposits are rated A1.

Chase Manhattan: Standard & Poor's Corp. affirmed ratings on Chase Manhattan and its banking units and revised the outlook to positive from stable.

Chase Manhattan Corp.'s senior debt is rated A-minus and its subordinated debt is rated BBB-plus. The preferred stock is rated A-2. The certificates of deposit, bank notes, deposit notes, and letter-of-credit-backed issues of Chase Manhattan Bank and Chase (USA) are affirmed at A/A-1.

About $6.7 billion of debt is affected, S&P said.

The revised outlook reflects an improvement in the bank's financial condition, said S&P.

The bank has strengthened its capital base significantly in recent years, tapping equity markets three times in six years to replenish heavy losses from loan writeoffs, S&P said. The company also embarked on a program to accelerate the disposition of its troubled real estate loans after aggressively writing them down. The quality of remaining loans has been improving steadily, and reserves are adequate to cover potential losses.

Bank of New York: IBCA, the European credit rating agency, upgraded Bank of New York Co. Inc.'s long-term debt to A from A-minus and the short-term debt to A1 from A2. At the same time, subsidiary Bank of New York's long-term debt was raised to A-plus from A.

IBCA cited the Bank of New York's gradual improvement from reduced problem asset-related expenses and funding costs that declined more than the yield on earning assets.

Also, IBCA said Bank of New York has a leading position in securities and other processing.

Bank South Corp.: Bank-Watch assigned a subordinated long-term debt rating of BBB to Bank South Corp., reflecting continued improvement.

Advanta Corp.: BankWatch assigned a rating of BBB to Advanta Corp.'s $150 million in three-year senior notes.

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