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The thrift industry is a good investment in mid-1998. There is good earnings momentum and merger and acquisition activity will continue as a way to increase profits. Merger and acquisition activity has taken place during the mid-1990s to increase the assets of thrifts. Several thrifts with large lending operations are doing well because mortgages are selling well during a time of low interest rates.

The thrift industry should be able to maintain a high level of loans with the favorable interest rate environment and the low cost of money, thus increasing profits in 1998. Consolidation in the thrift industry is also expected to continue in 1998 and for a number of years beyond. Investors will find that these stocks are timely for 1998 and for the next three to five years, as well.

Profit margins and earnings for savings and loan associations and savings banks have been squeezed in the late 1990s due to lower interest rates and a flat yield curve. However, thrifts that are high-volume lenders are in a better situation than others and the industry is timely with good earnings momentum and expected future consolidation. Investors should select stocks of well-managed thrifts, or those that are good takeover targets.

The thrift industry is doing well during 1997, and these stocks are considered timely for investors. Increased earning assets, decreased credit-related costs and lower overhead expenses have boosted profits for many firms. Many companies have expanded their market by acquiring other firms, and consolidation has occurred regularly in the industry. Federal rate increases would affect these stocks, but this is unlikely to occur in the near future.

The rapid consolidation within the the banking and thrift industries has led to few legal differences between banks and thrifts, and more thrift mergers are expected within the next three to five years. The insurance playing field for thrifts and banks has been leveled by congressional action, and the two industries are more competitive. Many thrifts have become takeover targets, and investors need to evaluate these stocks on an individual basis.

Strong demand for mortgages, driven by lower interest rates, helped two midwestern thrifts boost first-quarter earnings. Charter One Financial Inc., a $13 billion-asset Cleveland company, reported net income of $38.5 [...]