Thrifts earned a record $2.1 billion in the second quarter, up 12% from the first quarter and 24% more than a year earlier, according to a government report released Wednesday.

"It's been a good year," said Ellen Seidman, director of the Office of Thrift Supervision, which prepared the report. She rated the industry's overall health at "more than an eight" on a zero-to-10 scale.

Lower loan-loss provisions and higher noninterest income-mostly from fees-were the primary drivers behind the record earnings, OTS said. The $2.1 billion total also reflected a one-time, $250 million deferred tax benefit recouped by California Federal Bank, San Francisco.

Single-family mortgage originations reached a record $67.7 billion in the second quarter, 15% more than in the first quarter and 78% higher than a year earlier. OTS attributed the rise to low interest rates, strong refinancing activity, a healthy economy, and low unemployment. Roughly 98% of all mortgage loans originated by thrifts in the second quarter were sold on the secondary market.

Delinquency rates for single-family, multifamily, and nonresidential mortgage loans fell. Only consumer loans, a relatively small asset category for thrifts, had a higher noncurrent rate than in the first quarter.

Capital levels reached an all-time high. Equity capital as a percentage of assets rose to 8.56%, from 8.40% in the first quarter, the previous record. Of the nation's 1,181 thrifts, 98% were well-capitalized at June 30.

Asset quality improved in the second quarter. Troubled assets fell to $6.8 billion, the lowest level since the figure was first calculated in 1990.

Though the number of thrifts regulated by the OTS declined by 14 in the second quarter, the pace of consolidation slowed. In the first six months of the year the number shrank by 34; in all of last year it fell by 120.

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