Newspaper article THE JOURNAL RECORD

U.S. Thrifts Record First Quarter Profit

Newspaper article THE JOURNAL RECORD

U.S. Thrifts Record First Quarter Profit

Article excerpt

WASHINGTON (AP) _ The nation's 2,283 privately run savings and loans posted their first quarterly profit in four years during the first three months of this year, but the level of bad loans continued to rise, the government said Wednesday. The industry _ excluding more than 100 failed thrifts under the control of the goverment _ earned $627 million in the first quarter, compared with a $373 million loss in the same period a year earlier and a $1.49 billion loss in the fourth quarter, the Office of Thrift Supervision said. Eighty-five percent of the institutions made money in the January-March period. It was the industry's first quarterly profit since the first quarter of 1987. Thrift Office Director Timothy Ryan attributed the improvement primarily to the seizure of the worst thrifts by the S& L bailout agency, the Resolution Trust Corp. It has taken over more than 600 since 1989. Also, since late last year, the interest rates thrifts pay on deposits have dropped sharply while the rate they earn on mortgages and other investments has fallen only modestly. Ryan, however, noted a troublesome increase in real estate loans on which borrowers have fallen behind. Figures in the report also showed that private-sector thrifts were receiving $799 million in government assistance, the result of government bailouts con- cluded in 1988 and earlier, before the creation of the RTC. That would more than account for the $627 million profit reported by the industry. "We are not here to declare victory," Ryan cautioned. "We need several more quarters before we can discern a trend." Of the thrifts still under private ownership at the end of March, 164 were in such poor shape that they were expected to fail sometime this year. An additional 378 were classified as& troubled by either losses, low capital levels, or both. There were 1,036 thrifts in the healthiest classification and 705 in a group that was not as healthy but still expected to survive. …
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