WASHINGTON – In a report that presages bad news for credit unions, federal regulators yesterday said the nation’s savings and loans lost a record $5.2 billion in the fourth quarter as the housing market tanked.
The massive loss by the thrifts was the first for the industry since the third quarter of 1996.
The report by the Office of Thrift Supervision portends similar news for credit unions, which are expected to report one of their worst quarters ever when NCUA issues fourth quarter data later this month.
The fourth quarter losses compare to $657 million in net income for the third quarter of 2007 and $3.14 billion in net income for four quarter of 2006.
As was the case with many credit unions, thrifts moved billions of dollars into loan loss reserves in the fourth quarter, erasing any net income in many cases.
As a result, the return-on-assets for S&Ls plunged to negative 1.38% for the quarter, down from a positive 0.17% for the third quarter, and positive 0.89% for the fourth quarter of 2006.
For the full year, the nation’s S&Ls saw their net income plunge to $2.87 billion, from $15.85 billion in 2006.
