Apparently contradicting the image of a beleaguered industry, the nation's 25 largest thrifts boosted their assets by 8.5% in 1995 over the previous year. Adjusted for mergers, the top 25 had assets of $387.6 billion on Dec. 31, 1995, according to an American Banker survey.

Deposits were also up at the top 25, totaling $249.7 billion - an increase of 4.6% over the previous year.

Analyst Charlotte Chamberlain of Wedbush Morgan Securities, Los Angeles, said both numbers show that the industry is "tamping down the growth because their primary product, namely single-family mortgages, has proved to have severely shrinking net interest margins."

Ms. Chamberlain said the increase in deposits was roughly equal to interest credited to depositor accounts and reflected only marginal acquisitions of new deposits. Similarly, the real growth in assets was closer to 3% or 4% after accounting for the interest-driven gain in liabilities, Ms. Chamberlain said.

Sam Lyons, senior vice president for mortgage banking at Great Western Bank, Chatsworth, Calif., said assets grew at thrifts because of a strong consumer preference for adjustable rate home loans in the first half of 1995.

Although adjustables started gaining ground in 1994 as interest rates rose, they did not peak in popularity until early 1995, Mr. Lyons said. In January 1995, 59% of all home loans were adjustables, according to government figures.

Reflecting the push toward consumer loans, which are more profitable than home loans, the top 25 increased their holdings of home equity loans by 37% to $5.9 billion in 1995. Mortgage investments, by contrast, increased only 8.7% to $193.6 billion. These numbers are not adjusted for acquisitions.

As in previous years, the top 25 thrifts gained on the smaller ones. By the end of 1995, they held 37.8% of all the industry's assets, up from 35.4% the previous year. In 1993, the top 25 held 33.1% of all thrift assets.

Here again, Mr. Lyons said strong demand for adjustables likely played a role. "The top companies are ARM lenders, and therefore accumulated more assets than the rest, who tend to be smaller, more mortgage banking-like," he said.

By and large, small thrifts cannot compete with the large ones on the marketing and pricing of adjustables. That, along with the growing dominance of mortgage bankers and fixed-rate loans, has led many small thrifts to focus on making fixed-rate loans for sale to Fannie Mae and Freddie Mac.

Still, the nation's 300 largest thrifts increased their assets as well in 1995. Assets were up 4%, to $795.6 billion in 1995. For the industry as a whole, assets increased 1.7% in 1995 to $1.03 billion.

Deposits at all thrifts increased a scant 0.6% to $741.89 billion by the end of 1995. At the 300 largest thrifts, deposits totaled $551.03 billion, a 2.5% increase over 1994.

The number of thrifts continued its almost decade-long slide, falling 5.7% in 1995.

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