OTS Reports Improvement In Q1, But Problem Thrifts Grow

S. thrift industry reported a loss of $47 million in the first quarter of 2009, the sector's best performance since 2007, according to the [link=http://www.ots.treas.gov/?p=IndustryPerformance][u]Office of Thrift Supervision[/u][/link] (OTS). Although signifying a rebound for thrifts, the first quarter also saw the number of troubled assets rise, and the regulator says the percentage of ‘problem thrifts’ is growing. ‘We are seeing encouraging signs in the performance of the thrift industry," says Acting Director John E. Bowman. "Although it's too early to say we've hit bottom or that the industry's troubles are behind us, fundamentals such as solid capital, strong levels of loan loss reserves and improving operating income give the industry a solid platform for the future." During the quarter, 74% of thrifts were profitable, up from 65% in the fourth quarter of 2008. The improved profitability reflected lower loan-loss provisions of $5.8 billion in the quarter, down from $9.3 billion in the previous quarter, the OTS says. Although loan loss provisions declined, they remained elevated and were the fifth highest on record. The number of problem thrifts – those with composite examination ratings of 4 or 5 – was 31, up from 26 in the previous quarter. At the end of the first quarter of 2009, the OTS supervised 801 thrifts with assets of $1.23 trillion, as well as 463 holding company enterprises with about $5 trillion in U.S. domiciled consolidated assets. SOUR


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