All but 89 banks and thrifts nationwide were well prepared at midyear for the year-2000 date change, regulators reported Monday.

Bank supervisors gave "satisfactory" ratings to 99.1% of the 10,335 federally insured institutions as of June 30. Only 78 banks and thrifts were rated "needs improvement." Just 11 received an "unsatisfactory" grade.

"That's an enviable record for any industry," said Federal Deposit Insurance Corp. Chairman Donna A. Tanoue in an interview.

The industry's performance was its best since regulators began issuing grades last year, and it reflected a marked improvement over results from the prior quarter.

As of March 31, 313 banks and thrifts were judged "needs improvement," and 24 were rated "unsatisfactory."

Ms. Tanoue credited the improvement to tight supervision of laggards and aggressive compliance efforts by banks. She also predicted that the proportion of "satisfactory" banks and thrifts would continue to grow as the year progresses.

As if on cue, the Federal Reserve Board on Monday ceased enforcement actions on two banking companies, Putnam-Greene Financial Corp. in Eatonston, Ga., and Community Capital Corp. of Greenwood, S.C.

Yet the 89 subpar institutions are under enforcement actions, FDIC officials said. And Ms. Tanoue warned that the agency could lower its ratings of some banks that were graded "needs improvement."

"We've emphasized a need to downgrade the institutions that haven't met the requisite milestones," she said.

Larger institutions were more likely than small or midsize ones to have a "satisfactory" year-2000 rating at midyear.

The average asset size of institutions with "satisfactory" ratings was $630 million. By comparison, those with "needs improvement" grades averaged $152 million of assets, and ones judged "unsatisfactory" averaged $47 million of assets.

The FDIC also keeps a list of banks and thrifts that it considers at risk of failure in the following two years, but it does not release the names on the list. At present, an FDIC spokesman confirmed, not a single bank or thrift on the FDIC's failed-bank projection list is there "solely" because of perceived year-2000 problems.

June 30 was a milestone in the drive to prepare bank computers for the year-2000 date change. By midyear, financial institutions were supposed to have finished testing their repaired computer systems, integrated those systems into daily use, and tested their contingency plans, which would be employed if hardware or software failed.

Separately on Monday, the House passed year-2000 legislation that would let the Fed use all discount window loans to back its currency, not just loans collateralized with U.S. government securities. The change would help the Fed balance its assets and liabilities in the event that banks' use of the discount window grows substantially in late 1999.

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