WASHINGTON - In a report that presages bad news for credit unions, federal regulators 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 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.
