WASHINGTON -- The thrift industry's profits dropped 46% to $1.3 billion in the first quarter from a year ago, the Federal Deposit Insurance Corp. reported Wednesday.

Thrift earnings, off $365 million from the fourth quarter, were dragged down by losses reported by three large institutions. Restructurings by California Federal Bank, Glendale Federal Bank and First Federal of Michigan, drained $547 million from the industry's bottom line.

"Contributions to earnings from lower loan-loss provisions, reduced overhead expense, and higher net interest income were negated" by these big thrifts' losses, the FDIC said.

Profitability at thrifts with less than $5 billion in assets was virtually unchanged from fourth quarter 1993.

Assets held by thrifts dipped below $1 trillion for the first time since 1983, falling to $997 billion. The number of thrifts also slipped, falling to 2,240 from 2,262 at yearend 1993.

Mergers with commercial banks is the primary force behind the industry's consolidation, according to the FDIC.

Mortgage-Backed Securities Rise

Total real estate loans held by thrifts fell $12 billion in the first quarter to $583 billion. Mortgage-backed securities, however, were on the rise in the first quarter, growing $7 billion to $206 billion. They now make up 21% of all thrift assets.

The FDIC's danger list for thrifts shrank to 118 institutions with $89 billion in assets, down from 255 thrifts with $167 billion in assets at year end. Troubled assets held by thrifts declined to 1.96% of total assets in the first quarter from 2.1% in the previous quarter.

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