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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.

First quarter, 1997 thrift industry earnings and market conditions showed favorable results despite increases in short-term interest rates, although equity prices dropped in the last portion of the quarter from highs reached in February and March. The drop in equity prices is a boon for short-term investors and the continuation of mergers throughout the industry will benefit patient long-term investors, despite the high 130% to 170% of book value buyout prices.

Stock prices for the thrift industry have increased in 1996 and early 1997 with earnings gains and the expectation of takeovers. The number of savings and loan associations has decreased from 3,000 to 2,000 from the mid-1980s to the mid-1990s, and the industry is expected to shrink further in the next three to five years. Most of these stocks are good targets for takeover, but investors need to use patience when evaluating these securities.

The thrift industry will experience several takeovers from 1996 through 2001. The industry has an abundance of capital that is utilized for stock buybacks, acquisitions and dividend increases in 1996. The satisfaction level of thrift stockholders has remained high during the early 1990s. Thrift profits are also increasing.

Mergers and acquisitions mark the thrift industry, the number of thrifts has dropped from roughly 3,000 in the 1980s to roughly 2,000 in 1996. More consolidation is expected. Proposals to bring parity with banks in deposit insurance could make the segment more competitive. Investors in this segment should be prepared to wait for increased return.

Thrift industry stocks outperformed the market in 1995. ATMs and other technologies are improving efficiency, and lower interest rates will increase loan activity and earnings. Competition and merger activity will improve with a special Savings Association Insurance Fund charge, and thrifts are now stronger after the 1980's S&L crisis. Investors should choose thrift stocks with strong balance sheets for commitment.

The major activity of the thrift industry, whether savings banks or savings and loans, is mortgage lending. Federal and state regulations which have restricted thrift growth have been struck down after the savings and loan crisis. Thrifts have expanded by merging, which has also resulted in cost-cutting and streamlining measures. Although the Savings Association Insurance Fund is not in good condition, thrifts with good balance sheets may be good investments.

Court case may mean billions for expansion A U.S. Supreme Court ruling is likely to dump billions of dollars into the coffers of three New York area thrifts and send [...]

The city's largest thrifts last week reported stunning second-quarter earnings gains. Dime Bancorp, New York's largest savings and loan, reported a 26.9% jump in net income from a year earlier, [...]

Despite special charges and a loss on the sale of low-yielding assets, bank analysts said, Dime Bancorp's third-quarter earnings were satisfactory. The New York City-based thrift reported earnings of $16.9 [...]

Dime Bancorp, parent of $20 billion-asset Dime Savings Bank of New York, reported third-quarter net income of $19.5 million, down 48% due to extraordinary tax gains in the year-earlier period. [...]

Dime Bancorp struggled with margin pressure in the second quarter. But the thrift, New York's largest, still managed to report $18.1 million in earnings on the basis of strong mortgage [...]

Dime Bancorp and Marine Midland Inc. reported strong first-quarter earnings, but recent acquisitions made comparison with the year-earlier quarter difficult in both cases. Meanwhile, Lake Success, N.Y.-based Astoria Financial Corp., [...]