Thrift Institutions

The thrift industry in New York demonstrated a continuation of its strong performance in 2002. As of December 31, 2002, there were 30 New York State-chartered savings banks with assets totaling $81.5 billion, an increase of 8% over the prior year. Aggregate net income totaled $1.3 billion for the twelve months of 2002. The average return on assets for all 30 savings banks during 2002 was 1.01%. This represents a 36 basis point improvement over the average results for all savings banks in operation for the full year 2001.

After four years of decline in net interest income as a percentage of average assets, 2002 showed a rise of 23 basis points. While each of the asset-sized groups showed improving return on assets (ROA) over 2001, the improvement was greatest for the largest savings banks with assets over $1 billion, up 37 basis points. The small savings banks with assets under $300 million and the medium-sized savings banks with assets between $300 million and $1 billion had improvements of 13 and 11 basis points, respectively.

In addition, the medium sized savings banks exhibited a little more volatility in that very large increases in overhead expenses were offset by equally large increases in net interest income, and all of their net improvement was due to higher levels of non-interest income. There were no savings banks recording a net loss during 2002.

Statewide, asset quality continued to be strong. Total non-current loans registered a slight increase of 7 basis points to 0.79% of total loans by year-end 2002. The non-current levels for the savings bank's largest loan category - real estate loans - experienced a similar trend, up 11 basis points over year-end 2001. An improvement was, however, noted in the level of non-current commercial and industrial loans that were down 29 basis points from year-end 2001.

Capital levels were generally in line with year-end 2001. By year-end, they showed an average equity capital ratio of 10.18%, an average leverage ratio of 9.32%, an average tier one risk based capital to risk-weighted asset ratio of 16.34%, and an average total risk based capital to risk-weighted asset ratio of 17.23%. Using the federal rules on what constitutes undercapitalized, adequately capitalized, and well-capitalized financial institutions, all of the savings banks were well capitalized as of December 31, 2002.

The credit union segment of the thrift industry remained strong in 2002. The 37 State-chartered credit unions increased their total assets during the year by 10%, or approximately $297 million, to an aggregate of over $3.2 billion. This growth was funded primarily by increased member shares and was directed into cash and equivalent instruments (28%), new securities investments (19%), and additional loans to members (4%). Credit union membership totaled 551,000 members at year-end, a decline of 2% from the prior year, primarily as a result of one credit union's charter conversion during the year.