Thrifts Post Profit, But Problem Institutions And Distressed Assets Remain High

The U.S. thrift industry continued to stabilize in the third quarter, posting profits of $1.77 billion, the Office of Thrift Supervision (OTS) reports. The third quarter was the fifth consecutive quarter of profitability after losses from the fourth quarter of 2007 through the first half of 2009.

Third-quarter profits were up from $1.49 billion in the previous quarter and from $1.24 billion in the third quarter of 2009.

However, the number of problem thrifts remained high, as did the percentage of troubled assets held by OTS-regulated banks. There were 53 problem thrifts in the third quarter -down slightly from the second quarter's total of 54 problem thrifts, but up from 43 problem thrifts a year earlier. Troubled assets represented 3.45% of assets at the end of the third quarter – up from 3.35% at the end of the previous quarter, but down from 3.65% one year earlier.

"The performance of our nation's thrift industry in the third quarter was mixed," says 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."

The overwhelming majority of thrifts – 93.1% – reported capital exceeding ‘well capitalized’ regulatory standards. Only seven thrifts were less than adequately capitalized, the OTS says.

As of the end of the third quarter, the OTS was supervising 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

SOURCE: Office of Thrift Supervision


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