The Thrift Industry is sitting squarely in the cross hairs of the current credit crunch Credit cycle vs. economic cycle. Those that made conservative loans will be well positioned for survival. As dismal as that sounds the alternative is extinction. The beneficiaries of this cycle will have delayed gratification as the competition thins and they can earn excess profits. It might not seem surprising to many, but these companies are increasing reserves for loan losses and stocks have been falling.
Lower funding rates via interest paid on deposits will slowly become more meaningful. Yield spreads will remain low for more time.