Healthy S&Ls Increase Home Loans

Although the thrift industry as a whole has reduced its mortgage activity in the past few years, healthy thrifts remain vibrant forces in the market, says an analyst at a trade group.

As a group, 1,989 "well-capitalized" thrifts raised their home-loan originations by about 4% last year, says Michael Wilson, deputy director of research for the U.S. League of Savings Institutions. By contrast, the 2,342 thrifts not under government control posted a decline of 10%.

Securities Holdings

In a new study, Mr. Wilson also found that the healthier group increased holdings of mortgage securities by about 13%, against a 10% decline for thrifts not in government hands.

In addition, the healthier group raised its holdings of unsecuritized residential loans by 3%, while all thrifts in private hands reduced theirs by 9%.

"As demonstrated by the data, these healthy institutions possess the ability to grow," the study says.

"Once the weak institutions are removed from the picture, the growth will become more apparent. And that bodes well for rebuilding the business clout" of thrifts.

Mr. Wilson's universe of healthy thrifts is made up of 1,889 institutions with tangible capital of at least 3% of assets, plus another 100 thrifts that are profitable and are expected to soon achieve the 3% capital level.

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