U.S. Savings and Loan Industry on Rebound / Says Ohio Executive

By Paschal, Jan | THE JOURNAL RECORD, September 18, 1986 | Go to article overview

U.S. Savings and Loan Industry on Rebound / Says Ohio Executive


Paschal, Jan, THE JOURNAL RECORD


The nation's savings and loan industry is rebounding from the crisis years of 1981 and 1982, according to Tom Siemers, an Ohio thrift executive and an active member of the U.S. League of Savings Institutions.

The outlook is good, Siemers said, despite reports that a number of the nation's thrifts are technically insolvent. The reported earlier this week that the Federal Savings and LoanInsurance Corp., which insures deposits in savings and loan associations, is allowing a number of the troubled thrifts to remain open because it lacks the money to close them.

However, Congress' preoccupation with the federal tax-overhaul bill probably rules out any hope of a vote on a proposed $3 billion federally funded corporation to raise more insurance funds for theFederal Savings and Loan Insurance Corp., Siemers said Wednesday in an Oklahoma City interview.

"This year, the savings and loan industry has made more money in the first seven months than it did all last year," said Siemers, president of Franklin Savings and Loan Co., a Cincinnati thrift with $155 million in total assets.

And 1985 was the industry's second most profitable year, ranking second only to 1978, according to Michael Wilson, assistant director of research for the U.S. League of Savings Institutions, a Chicago-based trade group for 3,249 federally insured thrifts.

The industry's after-tax net income for 1985 was $3.83 billion - more than three times the industry's 1984 after-tax income of $1.1 billion - according to research by the Federal Home Loan Bank Board and the U.S. League of Savings Institutions.

"The level of interest rates has come way down to where a lot of these old mortgages that we still had are back to market rates," Siemers said.

That's a welcome change, Siemers said, from the panic of 1981 and 1982, when the savings and loan industry had negative after-tax income for both years.

"The industry lost a lot of money," Siemers said. "1980 and 1981 lasted longer than we thought it would. It seemed like forever."

The savings and loan industry hit rock bottom in 1981, when savings institutions reported negative after-tax income of $4.63 billion.

In 1982, the red ink was not quite so deep. Negative after-tax income that year was $4.27 billion for the entire industry.

"1981 and 1982 were devastating years," Wilson said. "It took almost until the first quarter of 1985 to return to normal."

The culprit behind the 1981 crisis was federal deregulation of interest rates on savings and time deposits.

"They deregulated the savings and certificates side about the time that interest rates went to 20 percent," Siemers said.

"Our income was fixed at interest rates of 5 to 7 percent on 30-year mortgages while we were having to pay 15 to 16 percent to keep our deposits."

"It put a terrible strain on reserves," Siemers said.

If most savings and loan associations had not been sound and well-managed in previous years, they would not have weathered the deregulation crisis, Siemers said.

New products - like adjustable-rate mortgages and five-year certificates - have helped the savings and loan industry recover, Siemers and Wilson said. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

U.S. Savings and Loan Industry on Rebound / Says Ohio Executive
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.