1. Copyright © 2000 Addison Wesley Longman Slide #17-1 Chapter Seventeen THRIFTS: SAVINGS AND LOANS AND CREDIT UNIONS

2. Copyright © 2000 Addison Wesley Longman Slide #17-2 Thrift Institutions Mutual Savings Banks Depositors owners of the firm Stock in the bank, not sold or issued Savings and Loan Association Created by Congress Insured deposits and scandals S&L bailout Credit Unions Ownership Membership

3. Copyright © 2000 Addison Wesley Longman Slide #17-3 Savings and Loan Industry Today Number of Institutions Types of Loans S&L Size S&L Assets S&L Liabilities and Net Worth Capital

4. Copyright © 2000 Addison Wesley Longman Slide #17-4 Decline in Number of Savings and Loan Associations

5. Copyright © 2000 Addison Wesley Longman Slide #17-5 Total Assets of Savings and Loan Associations

6. Copyright © 2000 Addison Wesley Longman Slide #17-6 Savings and Loan Assets

7. Copyright © 2000 Addison Wesley Longman Slide #17-7 Savings and Loan Size

8. Copyright © 2000 Addison Wesley Longman Slide #17-8 S&L Balance Sheet Savings and Loan Associations AssetsLiabilities Securities252,042 Loans secured by 632,256 real estate Commercial loans17,768 Loans to individuals48,851 Other loans and leases2,881 (Less reserve for loan-6,984 losses) Other real estate owned1,765 Goodwill12,688 All other assets83,530 Total assets 1,044,797 Deposits702,607 Other borrowed funds230,674 Notes and debentures2,930 All other liabilities15,197 Total liabilities951,406 Equity93,391 Total of liabilities and equity1,044,797

9. Copyright © 2000 Addison Wesley Longman Slide #17-9 The Future of the S&L Industry

10. Copyright © 2000 Addison Wesley Longman Slide #17-10 Savings and Loan’s Return on Equity

11. Copyright © 2000 Addison Wesley Longman Slide #17-11 Credit Unions Mutual Ownership Owned by depositors Common Bond Membership Defined field of membership Nonprofit, Tax-Exempt Status Lower service fee Regulation and Insurance Central Credit Unions Help with members’ credit needs Invest excess funds Hold clearing balances Provide educational services Credit Union Size Trade Associations

12. Copyright © 2000 Addison Wesley Longman Slide #17-12 Credit Union Fees vs. Bank Fees

13. Copyright © 2000 Addison Wesley Longman Slide #17-13 Number of Credit Unions, 1933-1998

14. Copyright © 2000 Addison Wesley Longman Slide #17-14 Types of Accounts Regular Share Accounts Savings accounts Receive no interest Do receive dividends Share Certificates Compatible to CDs Share Draft Accounts Pay interest Write drafts against account

15. Copyright © 2000 Addison Wesley Longman Slide #17-15 Types of Accounts Advantages Employer Support Tax Advantage Strong Trade Associations Disadvantages Common Bond Requirement