The US thrift banking industry reported $1.82bn in total profits for Q110, while foreclosures among these institutions continue to rise, according to the Office of Thrift Supervision
Thrift banks focus on taking deposits and originating home mortgages, with at least 65% of lending dedicated to the latter. These institutions are usually smaller than retail and commercial banks and tend to be community-centric. The OTS regulates 758 institutions.
As of Q110, there were $448bn in total originated mortgages. However, only $22.66bn of this (non-accrual mortgages) was originated in the first quarter, down from $28.3bn a year ago.
The $1.82bn in industry gains in Q110 grew from $442m in Q409 and marks the third-straight profitable quarter. A year ago, the thrift banking industry reported $1.62bn in losses.
But foreclosures among these institutions are on the way back up. The OTS reported more than $12bn worth of foreclosures in Q110, up from $10.8bn at the end of 2009. From Q209 to Q309, the amount of foreclosures did drop from $16.2bn to $15.4bn, but in 2010, the total is climbing again.
To combat the losses, the industry kept the amount of loan loss provisions elevated in Q110, adding $2.71bn in total.
“The substantial additions to loan loss reserves have bolstered the industry’s reserve levels to at, or near, record levels,” according to the OTS.
Despite the rising foreclosure numbers and loan loss provisions, however, more than 97.2% of the industry reported being above the “well-capitalized” regulatory standards.
Write to Jon Prior