Thrift Losses Fall, But Troubled Assets Rise

June 3, 2009 No Comments »

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The U.S. thrift industry posted a loss of $47 million during the first quarter, a sharp improvement from the fourth quarter when savings and loans lost a collective $5.36 billion.

Lower loan loss provisions softened the blow for the under-stress industry as mortgage originations surged to $95.9 billion from $63.2 billion a quarter earlier (still down from $133.8 billion a year ago).

Thrifts accounted for about 20 percent of all 1-4 unit family home loan originations, down from 26 percent in the fourth quarter, but up from 19 percent a year ago.

Adjustable-rate mortgages accounted for less than one percent of loan originations, down from 11 percent a year ago.

Refinancing accounted for 55 percent of thrift originations, up from 42 percent a quarter earlier and 50 percent a year ago.

Meanwhile, delinquencies increased across the board, with troubled assets accounting for 3.35 percent of total assets, up from 2.54 percent in the fourth quarter and 2.06 percent a year earlier.

“Mortgages on 1-4 family properties comprise approximately 81 percent of the industry’s current troubled assets, with an additional 13 percent consisting of commercial real estate loans (nonresidential mortgages, multifamily complexes, and construction loans), and six percent in nonmortgage loans” the report said.

“In contrast, commercial real estate loans comprised the majority, or 68 percent, of thrift troubled assets at the end of 1990, with 1-4 family mortgages (23 percent) and nonmortgage loans (9 percent) comprising the remainder.”

So-called “problem thrifts” continue to rise, with 31 institutions holding that distinction as of the end of the first quarter, up from 26 in the linked quarter.

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