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

DATE: FRIDAY, June 18, 1993                   TAG: 9306180144
SECTION: BUSINESS                    PAGE: A-9   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

PROFITS AT THRIFTS SET RECORD

Profits at the nation's savings institutions soared to a record $1.76 billion in the first quarter but a troubling core of about 75 money-losing institutions remains, the government said Thursday.

Earnings by 1,802 private-sector S&Ls - those that have not failed and been seized by the government - were up 14 percent from the same period a year ago, the Office of Thrift Supervision said.

The agency said Virginia thrifts reported a loss of $21.1 million for the quarter, compared with earnings of $12.9 million a year earlier.

It was the ninth consecutive profitable quarter and the best three-month showing since 1984 when the government began collecting profit-and-loss data quarterly.

Jonathan L. Fiechter, acting director of the office, attributed the performance to the continuing wide spread between the interest rates S&Ls pay on deposits and liabilities and the rates they earn on mortgages and investments.

Also, the level of troubled loans and other assets dropped to $117 billion from $127 billion at the end of December and $202 billion a year ago.

The S&L industry's lobby group, the Savings and Community Bankers of America, proclaimed, "The industry's return to capital strength and stability is undeniable."

Failures have slowed to a trickle. There were only three during January-March, compared with 59 for all of last year and 146 for all of 1991.

However, one in 10 S&Ls - 183 - remained on the agency's list of problem institutions, and Fiechter said roughly 75 of those were not earning profits on their basic business of taking deposits and lending to borrowers.

"There is a remaining core of institutions . . . that have not been able to turn their operations around so they are profitable," he said.

These S&Ls, he said, are in danger of failure if they cannot find merger partners. The wide interest-rate spread already has begun to narrow, he warned.

A year ago, there were 2,064 S&Ls. Fifteen years ago there were 4,048. The industry held $735 billion in assets at the end of March, compared with a peak of $1.35 trillion in 1988.

by CNB