WASHINGTON - In her first public comments on the failure of Superior Bank, Office of Thrift Supervision Director Ellen Seidman on Thursday defended her agency's performance, lamented the "sniping" by other regulators, and assured reporters that the $2.3 billion-asset thrift was an anomaly in the $965 billion industry.

Her remarks during a news conference following the agency's quarterly report on the industry's financial condition, overshadowed the announcement that federally chartered savings banks reported a record-high net income of $2.51 billion in the second quarter.

"Superior is a very small part of an industry that is doing quite well," Ms. Seidman said.

In early July, the OTS shuttered the Hinsdale, Ill. thrift, and the Federal Deposit Insurance Corp. took it over. The failure is expected to cost the Savings Association Insurance Fund more than $500 million. The OTS came under sharp criticism for waiting too long to close the thrift despite signs of trouble, and the FDIC complained one of its employees had been barred by the OTS from participating in an exam two years ago.

The OTS later admitted that it had denied a request by the FDIC to send in an examiner, but Ms. Seidman argued Thursday that granting permission would not have saved the thrift. "I absolutely do not believe that the fact that they did not have one examiner on site in January 1999 made a material difference in the course of the institution."

The FDIC was present on all exams from January 2000 onward, and it always had access to all of the data the OTS collected, Ms. Seidman said.

"We were working together from that time forward," she said. "They were with us. It is unfortunate that we have had this kind of sniping. It is unhealthy for the financial services community and for the regulatory community."

Ms. Seidman said that she expects relations between the agencies to improve with the recent swearing-in of Texas banker Don Powell as the FDIC chairman. "I have had one long conversation with Don Powell, and he has no intention of continuing in this vein. We have to be working together."

Responding to claims that the OTS had waited too long to shut down Superior, Ms. Seidman said that institutions with subprime lending portfolios like Superior's are particularly troublesome to regulators because of the difficulty of valuing their assets.

Superior made subprime loans and then securitized and sold them, often retaining the riskiest portion of the securitization - called residuals - on its own books. An optimistic valuation of the assets can cause an institution on the brink, such as Superior, to appear to be in better condition than it actually is.

The OTS had been concerned about the institution for some time, and examiners were "getting behind the reported values" of the institution's residuals, but they were confronted with a management that was "fighting back hard" against the agency's criticisms and claiming that outside observers, such as debt rating agencies, considered the thrift safe and well run, she said.

Regulators need to finalize a proposed rule that would set capital requirements for subprime residuals, Ms. Seidman said. She said that the banking and thrift agencies are making progress, but gave no timetable.

Ms. Seidman will likely face tough questions from the Senate Banking Committee on Tuesday, when a hearing on the failure of Superior has been scheduled.

The quarterly numbers presented in the briefing backed up Ms. Seidman's claim that the thrift industry as a whole is healthy. The industry's second-quarter profits rose 23% from a year earlier, to a record $2.51 billion.

Additionally, the industry's return on assets improved to 1.05%, up from 0.92% a year earlier. Return on equity increased to 12.95%, from 12.01% a year earlier, and net interest margins improved to 2.82%, from 2.65%

The number of thrifts on the OTS "problem" list - those with Camels ratings of 4 or 5 - increased by 3, to 17. Those troubled institutions represent 1.2% of all thrifts and hold 0.6% of the industry's assets.

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