Magazine article American Banker

Assets at the Top 25 Thrifts Grew 8.5% Last Year

Magazine article American Banker

Assets at the Top 25 Thrifts Grew 8.5% Last Year

Article excerpt

Apparently contradicting the image of a beleaguered industry, the nation's 25 largest thrifts boosted their assets by 8.5% in 1995 over the previous year. Adjusted for mergers, the top 25 had assets of $387.6 billion on Dec. 31, 1995, according to an American Banker survey.

Deposits were also up at the top 25, totaling $249.7 billion - an increase of 4.6% over the previous year.

Analyst Charlotte Chamberlain of Wedbush Morgan Securities, Los Angeles, said both numbers show that the industry is "tamping down the growth because their primary product, namely single-family mortgages, has proved to have severely shrinking net interest margins."

Ms. Chamberlain said the increase in deposits was roughly equal to interest credited to depositor accounts and reflected only marginal acquisitions of new deposits. Similarly, the real growth in assets was closer to 3% or 4% after accounting for the interest-driven gain in liabilities, Ms. Chamberlain said.

Sam Lyons, senior vice president for mortgage banking at Great Western Bank, Chatsworth, Calif., said assets grew at thrifts because of a strong consumer preference for adjustable rate home loans in the first half of 1995.

Although adjustables started gaining ground in 1994 as interest rates rose, they did not peak in popularity until early 1995, Mr. Lyons said. In January 1995, 59% of all home loans were adjustables, according to government figures.

Reflecting the push toward consumer loans, which are more profitable than home loans, the top 25 increased their holdings of home equity loans by 37% to $5. …

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