WASHINGTON - Thrifts that have recently completed initial public offerings will have a better chance of winning approval to buy their stock back, according to internal Office of Thrift Supervision memos.

Last week the agency sent a pair of memos to its five regional offices. One discloses that, on a case-by-case basis, the OTS is more likely to override its new limits on stock repurchases.

The second specifies that mutual thrifts that want to go public must do a better job of explaining how they will use the proceeds from the offering.

The OTS requires thrifts to apply for special permission if they want to buy back any stock in the first year after an IPO or more than 5% in the second and third year after the deal. The Federal Deposit Insurance Corp. bars savings banks from buying back any stock in the first year, but allows unlimited buybacks after that upon notification.

Regulators limited buybacks over concerns that they would prop up share prices, mostly benefiting insiders who bought large percentages of the stock in past deals.

The new OTS policy won praise from the thrift industry and investors. "It is a win-win situation, said Kip A. Weissman, a partner at Silver, Freedman & Taff, a Washington-based law firm.

"The companies win by having increased investment opportunities and perhaps increased stock control opportunities, the investors win by increased stock prices, and the regulators win by an alleviation," of the pressure for thrifts to spend their excess capital on riskier investments, Mr. Weissman said.

Wall Street also praised the move.

"It is a step in the right direction," said Nick Adams, portfolio manager of the First Financial Fund, a closed-end mutual fund that invests in small banks and thrifts. He would prefer that thrifts be allowed to buy back as much stock as they want.

The OTS said thrifts going public must submit to their regional regulator descriptions of their plans for spending the money they would raise in a stock conversion. "Business plans are to address, in detail, how the capital acquired through the conversion will be utilized," the memo said.

In the past, the agency has allowed well-capitalized institutions to give vague reasons for their need to raise millions of dollars in stock offerings. Many of the deals enriched insiders.

Asked why the OTS had approved past deals with such sparse descriptions, John F. Downey, director of supervision, said, "I don't think we were asleep at the switch, but I don't think we placed enough attention on it." Mr. Downey signed the two memos.

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