Word: ls
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Dates: during 1980-1989
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Wall Street has become enthusiastic about the industry, which consists of both S and Ls and savings banks. Prices of some S-and-L stocks have more than tripled in the past year. The big gainers include a pair of Beverly Hills thrifts: Great Western Financial Corp. (assets: $12.8 billion), whose shares have climbed 172% since May, and First Charter Financial Corp. (assets: $9.4 billion), up 233% during the same period...
While cash was flowing out of S and Ls at a steady rate last year, it is currently flowing in. Some $142 billion has gone into the new money-market accounts. In addition, some $12 billion in Individual Retirement Account funds has been deposited in the thrifts in the past six months...
...thrifts have been using their new cash to fuel the housing recovery and improve their operating results in the process. Savings and loans made $21.6 billion in mortgages during the first quarter, compared with $9.3 billion a year ago. That lending helped the S and Ls increase their net worth by an estimated $1.9 billion during the period. Says Howard Kane, deputy chief economist for the U.S. League of Savings Institutions, an industry trade group: "The thrifts are heading back to profitability, if they're not already there...
With their financial foundation a little more secure, some adventurous S and Ls are starting to branch out beyond mortgages and look for new places to put their money. Western Savings & Loan of Phoenix (assets: $2.6 billion), Arizona's largest thrift, has assembled a nationwide group of S and Ls that plans to pool its cash and pump more than $1.5 billion into commercial loans to corporate borrowers. Such lending is permitted under the 1982 Depository Institutions Act, which lets thrifts make a wide range of loans that had previously been off-limits...
...expected to yield at least 1% less on average than money-market accounts. One reason: federal regulations require that banks put aside 12% of their checking-account funds, including Super NOW money, as reserves that cannot be used to make loans. As a result, banks and S and Ls will earn less and thus pay less on Super NOW accounts than they will on money-market deposits...