The depressed housing market slammed U.S. thrifts again during the second quarter, according to the Office of Thrift Supervision. They didn’t lose as much money as they did in the fourth quarter, but they were still in the red by $5.4 billion, setting aside $14 billion in loan loss provisions.
Troubled assets soared to 2.68 percent from 0.95 percent in second-quarter 2007, the highest level since the early 1990s. But the OTS report notes that the “composition of thrift troubled assets is currently much different than in the early 1990s when the ratio reached 3.8 percent at the end of 1990. Mortgages on 1-4 family properties comprise approximately 81 percent of the industry’s current troubled assets, with an additional 13 percent consisting of commercial real estate loans.” In 1990 commercial real estate loans accounted for 68 percent of trouble assets; at that time 1-4 family mortgages represented 23 percent and non-mortgage loans nine percent.
Thrifts remained well capitalized at the end of June: “Over 98 percent of the industry exceeded well-capitalized standards and seven thrifts were less than adequately capitalized, according to the report. Still, equity capital slipped to 8.66 percent from 10.8 percent of assets on a year-over-year basis. And the number of troubled thrifts rose to 17 from 10 in mid-2007.