Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, March 27, 1990                   TAG: 9003272029
SECTION: BUSINESS                    PAGE: B4   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

S&LS LOST $19.17 BILLION IN '89

Analysts said the erosion would continue this year, although at a slower pace.

The fourth-quarter loss totaled $6.5 billion, up from $4.97 billion in the July-September period and pushed the yearly total to a third consecutive record deficit.

The red ink was $13.4 billion in 1988 and $7.8 billion in 1987.

James Freund, acting chief economist of the Office of Thrift Supervision, said most of the losses were suffered by institutions that have either been taken over by the government or are scheduled to be taken over under the S&L bailout law passed by Congress in August.

"OTS is carrying out [the bailout law] mandate of weeding out the insolvent and unsalvageable institutions that are compiling the big losses, and transferring them to the RTC's control for eventual sale or liquidation," Freund said.

The Resolution Trust Corp., responsible for the bailout legislation for disposing of the failed institutions, has gotten rid of 52 S&Ls and announced plans recently to close or sell another 140 by the end of June.

The RTC has been criticized for not acting quickly enough in disposing of the troubled S&Ls. Freund said that failure to shut down the institutions cost the government $2.6 billion in the fourth quarter - an average of $29 million a day.

However, Freund said "the industry would be smaller and the losses would be smaller" by this time next year.

"Despite smaller losses, they're still losses," said Bert Ely, an Alexandria, Va., financial institutions analyst.

Ely said he saw a "continuing and disturbing trend . . . and that is a decline in the number [of S&Ls] making money."

The office of thrift supervision reported that 1,818 thrifts not under government control at year's end reported net earnings of $1.3 billion in the fourth quarter. That, Ely said, is 88 fewer than the number of profitable institutions reported in the third quarter.

The other 779 S&Ls not under government control lost $3.4 billion, bringing to $2.1 billion the total fourth-quarter loss for all non-conservatorship thrifts.

The 281 thrifts in conservatorship, or under government control, at year's end lost $4.4 billion, the OTS said, and the 84 other institutions transferred to the RTC since Jan. 1 lost $1.8 billion in the last three months of 1989.

Another 120 thrifts targeted for transfer to the RTC had losses of $324 million.

The thrift industry posted net losses in 33 states, net gains in 15 and no change in two states during the last quarter. The biggest losses occurred in Texas, $1.5 billion, and in Arizona, $1.4 billion.