Quarterly Profits at U.S. Thrifts Climb 12.4% : Finance: S&Ls; earned $1.18 billion in the period, but the number of problem thrifts also rose.

The nation’s 1,512 savings and loan institutions boosted their profits by 12.4% in the first three months of 1995, extending their recovery of the last five years.

The Office of Thrift Supervision reported Thursday that the industry earned $1.18 billion during the quarter, up from $1.05 billion in the final three months of 1994. More than 90% of the thrifts were profitable.

But the report said the number of problem institutions rose to 57 during the January-March period, from 53 in the fourth quarter of 1994. It was the first upswing since 1990.

“The recovery of the industry is not complete,” warned OTS acting director Jonathan Fiechter, explaining that “the progress thrift managers have made could be undermined if the proposed insurance premium differential is not resolved.”

Thrifts face paying higher premiums than banks to insure their deposits because of earlier problems. The industry was mired in losses during the 1980s as thrifts were forced to pay high rates for deposits and stuck with low-rate mortgages negotiated years before.

“Unless thrifts are allowed to operate on a competitive basis, the progress made thus far in the recovery could be jeopardized,” Fiechter said. “Much of the remaining work depends on regulators and legislators.”