WASHINGTON – America’s thrifts posted a small profit last year after two years of losses, evidence the industry may be stabilizing amid the economic recovery.

But the industry also saw significant consolidation as several large thrifts were combined with their parent banks. As a result, the amount of new mortgage loans originated by thrifts dropped last year.

The Office of Thrift Supervision said Wednesday that savings and loans earned $29 million in 2009, after reporting net losses of $15.9 billion in 2008 and $649 million in 2007.

That is the industry’s first annual profit since 2006, though it pales in comparison to the $15.8 billion profits earned that year.

John Bowman, acting director of the OTS, said the industry still faces many challenges. Twenty thrifts failed last year and that number is expected to increase this year, Bowman said, as unemployment remains high and home prices low.

Three large thrifts — one owned by Merrill Lynch and two owned by Wells Fargo — were consolidated with their bank owners in 2009.

That, along with last year’s failures, has caused the thrift industry’s assets to drop sharply.

New mortgage lending by thrifts, also known as savings and loans, also fell. Thrifts extended $254 billion in new mortgage loans in 2009, a drop of 37 percent from the previous year.

That’s significantly below the $553 billion in mortgage loans provided by thrifts at the peak of the housing boom in 2006.

But excluding the three large thrifts that were consolidated, new mortgage loans rose in 2009 to $166.6 billion, from $126.8 billion the previous year.

The report comes a day after the Federal Deposit Insurance Corp. said the number of troubled U.S. banks — including thrifts — jumped to more than 700 as the industry recorded a small profit.

The number of bank failures will likely top last year’s 140, FDIC Chairman Sheila Bair said Tuesday. Twenty banks, two of them thrifts, have collapsed so far this year.

Overall, lending by all banks and thrifts fell by 7.5 percent in 2009, the FDIC said, the sharpest drop since 1942. That reflects a shrinking of credit that many economists worry will slow the economic recovery.

Thrifts earned $505 million in the fourth quarter, the second profitable quarter in a row.