WASHINGTON — The thrift industry eked out a tiny profit in the fourth quarter, $505 million, enough to bring full-year results into the black, the Office of Thrift Supervision reported on Wednesday.

Thrifts essentially broke even for 2009, earning $29 million. The agency said losses in the first two quarters were offset by better performance during the year's second half.

Though the profit was meager, it was the industry's first annual gain in three years and a significant improvement on the $15.9 billion loss in 2008.

OTS officials were cautiously optimistic about the industry's health, noting the improvement in troubled assets during the year but also citing warning signs such as a quarterly slip in profitability.

"This quarter we see some encouraging news, but the need for vigilance remains," said OTS Acting Director John Bowman. "Not until employment rises significantly and home prices recover will we be able to say with certainty that the worst of this crisis is over."

Profitability fell to a 0.22% rate in the quarter, down from 0.46% in the third quarter. Annual return on average assets rose to breakeven, from minus-1.17% a year earlier.

Troubled assets improved slightly during the quarter, to 3.25% of total assets, from 3.65% in the third quarter. Still, they were higher than a year earlier, when troubled assets stood at 2.55%.

Noncurrent one- to four-family mortgages fell to 4.99% of the total in the quarter, from 5.76% a quarter earlier, and noncurrent construction and land loans were a record 13.8%. Commercial noncurrent loans fell to 2.71%, from 3.22%.

Mortgage originations continued to slump, falling 13%, to $40.8 billion, from the third quarter. Originations of one- to four-family mortgages fell 34% last year, to $224 billion.

Though the number of problem thrifts held steady in the quarter, at 43, 20 savings and loans failed in 2009. There were 26 more troubled thrifts at Dec. 31 than the year earlier. "We certainly have not seen the last thrift failure of this crisis," Bowman said.

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