Thrift Originations Fall 49% in 3Q

Federally regulated thrifts -- excluding the failed Washington Mutual and IndyMac -- originated $66 billion in one- to four-family loans in the third quarter, a 49% decline from the same period last year, according to new figures released by the Office of Thrift Supervision. Meanwhile, the nation's remaining 800 or so thrifts set aside $7.9 billion for loan loss reserves in the quarter, reporting a $4 billion loss. In the second quarter the industry lost $1.7 billion. The failures of IndyMac and WaMu reduced thrift industry assets by more than 20%, but did not improve earnings or loan performance trends of the surviving 818 thrifts, OTS officials said. WaMu was purchased by JPMorgan Chase, a bank. IndyMac is in the process of being auctioned off by the government. Non current construction and land loans (90 days or more past) jumped from 6.5% in the second quarter to 7.8% in the third quarter, while charge-offs nearly doubled to 1.23%. Thrifts charged off $546.3 billion in construction loans in the third quarter. Meanwhile, non-current single-family loans rose 11 basis point to 3.39% in the third quarter and charge offs fell 10 bp to 0.24%. But OTS officials warned that one quarter is not a trend. Thrifts charged off $2.8 billion in 1-4 family loans in the third quarter. In the second quarter, OTS-regulated thrifts, including WaMu and IndyMac, originated $107 billion in single family loans and reported a $5 billion loss after setting aside $14 billion in loan loss reserves.