Deposit Drain Slows During October at Nation’s Thrifts

The nation’s savings and loans lost $5.6 billion in deposits in October, lower than the $8.7 billion outflow in September, the government said Wednesday.

The federal Office of Thrift Supervision said that brings the total outflow for 1989 through October to $59.2 billion, leaving the industry with $949.3 billion in total deposits.

The agency also said the October numbers show that the industry continued to shrink in size to meet new, tougher federal capital standards that took effect Dec. 7, albeit at a slower pace than before. By shrinking, institutions raise the percentage that their capital--their cushion against financial losses--makes up of their overall assets.

Regulators also said the total assets of the savings and loan industry were virtually unchanged in October, compared to a $15.2-billion decline in September. The amount in thrifts not in conservatorship--being run under supervision of regulators--rose by $800 million, but the OTS noted that the reason was mostly because of “the activity of one large West Coast institution.”

Regulators refused to identify the West Coast thrift, and industry sources said they were baffled as well.

Major California thrifts said it does not refer to them. One speculation was that the asset numbers may have been influenced by the Oct. 13 acquisition by Toronto-based Royal Trustco Ltd. of Pacific Savings Bank, a Coast Mesa thrift that was previously operated under the supervision of regulators. That thrift, now called Pacific First Bank, had about $1 billion in assets in October.

Economists and analysts said that because the government continues to put sick thrifts into conservatorship and is selling off problems ones, it is difficult to draw conclusions using the agency’s month-to-month figures. They added that figures for November and December are likely to show significant shrinkage of assets by the industry because thrifts made a number of moves just before the new capital requirements went into effect.