WASHINGTON – The nation’s thrifts eked out a $4 million profit in the second quarter as the number of troubled institutions continued to grow.
The tiny profit was the first net income since the third quarter of 2007 for the beleaguered industry and compare to a $5.4 billion loss for the second quarter last year, according to the Office of Thrift Supervision’s mid-year report issued yesterday.
That compares to a $1.2 billion mid-year net reported the day before for the nation’s 7,900 credit unions, down 42% from a $2 billion in 2008.
The OTS said the number of "problem" S&Ls rose to 40 at mid-year, up from 31 in the first quarter and 17 a year ago.
For the average thrift, loan delinquencies rose to 3.11%, from 3% for the first quarter and 2.56% a year ago. That compares to 1.58% for credit unions and mid-year and 1.44% for the first quarter.
In the second quarter 2009, thrifts accrued an estimated $500 million expense for the special assessment levied by the FDIC. This expense reduced after-tax net income by an estimated $325 million, second quarter return-on assets by approximately 12 basis points, and year-to-date ROA by six basis points.
The earnings improvement was primarily due to higher net interest margins, lower provisions for loan losses, higher fee income, and lower other-than-temporary impairment charges in the second quarter. Partially offsetting these improvements in earnings were lower gains on the sale of assets and higher non-interest expense.
This year’s data does not include the financials form several large thrifts that failed over the past 12 months, including Washington Mutual and IndyMac.
