Thrift Institutions

The overall health of the thrift industry in New York remained strong during 2001. Total assets of all State-chartered savings banks at year-end 2001 increased over 18% from the prior year to $75.5 billion. The decline in economic conditions was reflected in the average return on assets ("ROA") for these institutions, which was slightly lower in 2001 as compared to the previous year. The slowdown in economic activity was evident in a reduction in the net interest margin, which was partially offset by an increase in non-interest income. These statewide results were not uniform across all size groupings of banks. The medium and large sized savings banks show a decline in ROA during 2001, while the smallest sized savings banks actually show a rise in ROA.

Despite the slowing economy, asset quality through 2001 continued its improving trend that began in 1992. The average ratio of noncurrent loans for savings banks was nine basis points lower than year-end 2000 and was at the lowest level in approximately twelve years. The noncurrent ratios for savings banks' largest loan category, real estate loans, experienced a six basis point improvement.

Capital ratios for all State-chartered savings banks as a whole declined at year-end 2001, primarily due to the significant rise in their asset base. The leverage capital, tier one risk-based capital, and total risk-based capital ratios for all State-chartered savings banks stood at 9.5%, 16.0% and 17.0%, respectively, compared to the previous year-end levels of 10.5%, 17.9% and 19.0%. All State-chartered savings banks met the guidelines for classification as being "well-capitalized" with the exception of one institution, which was "adequately capitalized." At year-end 2001, there were 33 savings banks in New York with state charters.

The credit union segment of the thrift industry remained vibrant in 2001. The 38 State-chartered credit unions increased their total assets during the year by 11.3%, or approximately $300 million, to an aggregate of over $2.9 billion. This growth was funded primarily by increased member shares and was directed into cash and equivalent instruments (25%), new securities investments (52%), and additional loans to members (16%). Credit union membership increased by more than 15 thousand, rising to almost 565,000 individuals at year-end.