Among thrifts with $300 million or more in home loans in their portfolios, those on the East and West Coasts are still much worse off than their counterparts in the interior.

Of the 25 thrifts with the highest percentage of nonperforming loans in their portfolios at the end of the first quarter, only three were not on one of the coasts. Ten were in California, and 10 were in the tristate area of New York, New Jersey, and Connecticut.

Dime Savings Bank of N.Y.

Economists and analysts ascribed the concentration of the nation's nonperformers in these areas to the continuing economic doldrums faced by the two coasts.

"I'm not surprised," said David Berson, chief economist with the Federal National Mortgage Association. "It's certainly true that the economies of the Northeast, Mid-Atlantic, and California are performing far worse than the rest of the country."

Maintaining its top spot on the American Banker list of thrifts with the worst level of nonperformers, the Dime Savings Bank of New York posted a huge 11.78%.

"I think the Dime will heal, it's just a question of how long it takes," said Peter Treadway, an analyst with Smith, Barney, Shearson Inc. in New York.

Other thrifts at the top of the list included United California Savings Bank in Anaheim, Calif., which posted a 9.28% rate of nonperforming loans and Magnolia Federal Bank for Savings, Hattiesburg, Miss., with 8.69%. Experts said the problems on the coasts really got bad in 1988 and 1989.

"By 1989, the bi-coastal funk had started," Mr. Treadway said. "The [October 1987] stock market crash was the beginning."

Fannie Mae's Mr. Berson said the crash, and the accompanying devaluation in asset prices was the beginning of the Northeast's troubles. He believes the coasts have turned the corner but have yet to recover fully.

California is worse off because the recession didn't start there until later and the state's economy my is so dependent on defense and technology spending, Mr. Berson said.

Up to 3 Years for a Turnaround

Mr. Berson and other economists believe that the worst is over for the two regions but say it may take up to three years before the regions' economies build up a full head of steam.

Banks are still paying for the foolishness of their late 1980s lending policies, said Mr. Treadway. But he, too, believes things are getting better.

"Banks make a lot of stupid loans and the really stupid ones go bad fast, and then the rate slows down," he said.

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