The U.S. thrift industry reported its third consecutive quarter of profit, earning $1.82 billion during the first three months of the year.
The Office of Thrift Supervision, which largely regulates mortgage lenders, said on Monday that earnings more than quadrupled from the prior quarter, and that overall it seemed that the thrift industry is stabilizing.
However, earnings were still suppressed by the additional $2.7 billion the industry tucked away during the quarter in anticipation of more loan losses, many tied to bad mortgages.
The health of the thrift industry is improving but we cannot say the industry has fully recovered from the financial crisis, said OTS Acting Director John Bowman. Until America gets back to full employment and more families are able to pay their monthly mortgages on time, the thrift industry will continue to face significant challenges.
The first-quarter profits were the highest since the second quarter of 2007.
The amount of troubled assets also moderated. The percentage of noncurrent loans and repossessed assets fell to 3.27 percent of industry assets, from 3.29 percent in the prior quarter.
The agency said the increases in problem assets are a direct result of the continued housing market downturn and high unemployment.
Earlier on Monday the National Association of Realtors said sales of previously owned U.S. homes touched a five-month high in April, but the inventory of existing homes also jumped, putting pressure on home prices.
(Reporting by Karey Wutkowski; Editing by Richard Chang)