December 6 2010 (Chris Moore)
Banks and mortgage lenders have garnered most of the attention during the housing crisis, but America’s Thrift and Loans have seen their share hard times as well. In a report released by the Office of Thrift Supervision (OTS) on Friday, the thrift industry posted profits of $1.77 billion, marking the fifth consecutive quarter of profitability after losses from the fourth quarter of 2007 through the first half of 2009.
Third quarter 2010 profits were up from $1.49 billion in the previous quarter and from $1.24 billion in the third quarter of 2009.
Thrifts differ from banks in that they are required by law to have at least 65 percent of their lending in mortgages and other consumer loans. That has made them especially vulnerable to the housing slump and high unemployment.
By comparison, banks earned $14.5 billion in the July-September period, a hefty increase from $2 billion in the third quarter of 2009, the FDIC said.
The number of “problem” thrifts remained high at 53, compared with 54 three months earlier. That’s a result of continued pressures from soured loans, high unemployment and weakness in the housing and commercial real estate markets.
“The performance of our nation’s thrift industry in the third quarter was mixed,” observed OTS Acting Director John E. Bowman. “The industry’s profitability was encouraging, but other indicators reminded us that economic stresses – particularly from unemployment – continued to take a toll.”
Troubled assets (noncurrent loans and repossessed assets) were 3.45 percent of assets at the end of the third quarter, up from 3.35 percent at the end of the previous quarter, but down from 3.65 percent one year earlier.
At the end of the third quarter, the OTS supervised 741 thrift institutions with assets of $927.9 billion, as well as 436 holding company enterprises with approximately $4.2 trillion in U.S. domiciled consolidated assets. At the end of the previous quarter, the OTS supervised 753 thrift institutions with assets of $931.1 billion.
Tags: OTS, thrift and loans, profitability, problem thrifts, troubled assets, thrift industry, mortgages, consumer loans, housing slump