Thrifts, which have been moving away from being portfolio lenders and toward consumer banking in fits and starts since the 1980s, are continuing steadily in that direction, but the road is proving to be a rocky one.

Thomas O'Donnell, a Salomon Smith Barney thrift analyst, said thrifts faced a lot of risk as their transition continued. "If it doesn't pay off, I think that the consequences can be pretty costly and the changeover is not an easy thing to do, especially at this point in time," Mr. O'Donnell said.

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