S&L PROFITS BEST IN 14 YEARS

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

DATE: FRIDAY, March 12, 1993                   TAG: 9303120171
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium
S&L PROFITS BEST IN 14 YEARS
Savings-and-loan profits surged to $5.1 billion last year, breaking a 14-year-old record and prompting regulators to predict thrift failures would slow to a trickle this year.
The government's seizure of 59 insolvent S&Ls last year and low interest rates on deposits propelled the industry to better its previous earnings record of $3.9 billion, set in 1978, the Office of Thrift Supervision said Thursday.
Profits were more than double the $1.8 billion earned in 1991, although the totals for both 1992 and 1991 did not include losses at failed S&Ls operating under government control.
Privately owned savings and loans in Virginia earned $17.7 million in last year's fourth quarter, down from $19.7 million in 1991's last quarter, the agency said.
Through the first nine months of 1992, losses at S&Ls controlled by the Resolution Trust Corp. amounted to $1.7 billion. The fourth-quarter figures are due later this week.
Jonathan L. Fiechter, acting director of the agency, predicted about 30 additional failures this year, compared with 737 between 1989 and 1992.
"We are close to a trickle," he said.
Treasury Secretary Lloyd Bentsen is expected to ask Congress Tuesday for the money to protect depositors in those institutions plus the 83 S&Ls under RTC control.
The RTC, after spending $88 billion on S&L failures, has been without spending authority since last April. Bentsen has pledged the administration would seek more money. A department spokesman said a decision on how much to ask for has not been made. Estimates of the need range from the RTC's $25 billion to a projection of $50 billion from the Congressional Budget Office.
Although the number of expected failures has dwindled, several large institutions in California are listed by private analysts as among the shakiest in the country.
All told, 200 S&Ls out of a total of 1,855 were listed as troubled by the thrift office at the end of 1992, down from 336 a year ago and 446 two years ago.
Economist Edward J. Kane of Boston College said regulators appear to be understating the number of potential failures, which he put at 50 to 100. He said the gap between the interest rates thrifts pay on deposits and charge on loans is so wide that all but moribund institutions should be earning profits. Yet 157 lost money in the fourth quarter.
In the final three months of 1992, earnings totaled $1.12 billion, down slightly from $1.24 billion in the third quarter, but much higher than $753 million in the fourth quarter a year earlier.

by Archana Subramaniam by CNB