WASHINGTON-Even as the yield curve continued to flatten, the thrift industry continued to post record earnings and equity capital for the second quarter of 2005, according to the Office of Thrift Supervision. The number of thrifts stood at 870 as of June 30, with assets of $1.39 trillion, an increase of 17% for the year. In comparison, NCUA reported 8,871 federally insured credit unions with $669.7 billion in assets, an increase of 3.5%, at mid-year. Net income for thrifts reached a record -for the third quarter in a row-$4.03 billion, up 1% from the previous quarter and 20% from the same period last year. Profitability, as measured by return on average assets (ROA), declined to 1.18% from 1.22% in the prior quarter. Federally insured credit unions reported 0.93% ROA annualized. The industry's capital position remains robust at 9.34% of assets, well above the minimum requirements, with nearly all thrifts exceeding well-capitalized standards. Asset quality remained solid, as noncurrent loan rates (loans over 89 days past due or in nonaccrual status) improved for all loan types, falling to a record low of 0.37% of assets. OTS also supervised 483 U.S.-domiciled holding company enterprises at quarter-end, with consolidated assets of approximately $7.0 trillion.

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