Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, September 12, 1995 TAG: 9509120090
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The Office of Thrift Supervision said Monday that the industry earned $1.35 billion in the April-June quarter, compared to $1.16 billion in the first three months of 1995 and $1.24 billion in the second quarter last year.
OTS acting Director Jonathan Fiechter said the boost in profits underscores the basic soundness of S&Ls in the aftermath of the massive five-year cleanup of the industry.
But he said the recovery could be jeopardized if Congress fails to approve soon a plan to shore up the fund that insures S&L deposits. The Clinton administration has proposed a plan to capitalize the fund fully by Jan. 1.
Thrifts face paying higher premiums than banks to insure their deposits because of the earlier crisis.
Robert Davis of America's Community Bankers, which represents savings banks, said rescuing the insurance fund is vital. ``It would be a tragedy if the temporary strength in thrift earnings distracted policy-makers from the urgency of resolving'' the fund problem, he said.
In the second quarter, the OTS said, 95 percent of the 1,478 thrifts in regulates were well-capitalized and the number of troubled S&Ls dwindled to 53 from 57 in the first quarter.
Troubled assets fell to $9.9 billion, or 1.27 percent of total assets, down from 1.34 percent.
In recent years, recovering S&Ls have raised net income by converting long-term loans to adjustable rate mortgages to cope with interest-rate swings.
Thrifts had less than 21 percent of their assets in fixed-rate loans as of June 30, down from 23.3 percent in 1990 and from 67 percent in 1980.
by CNB