Thrifts Report $5.2B Loss in 4Q

Federally chartered thrift institutions reported a $5.2 billion loss in the fourth quarter, the biggest loss since 1988, due to $5.1 billion in loan loss provisions and $2.2 billion in loan chargeoffs, according to the Office of Thrift Supervision. "These are difficult economic times, and I expect thrifts to continue to bolster reserves appropriately for loan losses anticipated in 2008," OTS Director John Reich said. In addition to provisioning, a handful of large thrifts reported $4.1 billion in goodwill writedowns as they shuttered businesses and recognized losses on acquisitions. One institution took a $2.2 billion restructuring charge. Despite the downturn in the housing market, the thrift industry posted a $2.87 billion profit for 2007 and ended the year with $11.3 billion in loan loss reserves. Thrifts originated $143.9 billion in one- to four-family loans in the fourth quarter, down 13% from the level of the third quarter. Refinancings accounted for 48% of originations. Adjustable-rate mortgages constituted only 9% of loan production.