Just when it appeared that stability had finally taken hold in the area's thrift industry, Meritor Financial Group of Philadelphia announced plans to sell its Washington subsidiary, Meritor Savings Bank. That decision will undoubtedly result in a reshuffling of deposits and market share in metropolitan Washington, but depositors at least won't be hurt as they were in the Maryland savings and loan crisis two years ago.

The decision to sell Meritor is no reflection of its competitive performance in the Washington market. Nor is it based on factors that have precipitated the downfall of so many federally insured thrifts across the country. Indeed, the plan to sell the Arlington-based savings bank is something of a paradox.

Meritor Savings Bank is one of the stronger thrifts in the area. "We were right on line with our goal to break even in 1988," said Carl Modecki, president of the local thrift institution.

Meritor Financial -- formerly PSFS of Philadelphia -- acquired the District's Capital City Federal Savings and Loan Association and Northern Virginia Savings and Loan Association in 1985 and folded the troubled thrifts into a new institution, Meritor Savings Bank. Meritor subsequently acquired four more branches in metropolitan Washington, increasing assets to more than $800 million and making it one of the area's biggest savings banks.

Ironically, Meritor Savings became a casualty of too-rapid growth not in its own market but at the parent company in Philadelphia.

Meritor Financial Group announced several weeks ago that it expected to sell some subsidiary operations, including retail branches outside the Philadelphia area. The company explained that a planned restructuring would probably result in the sale of more than $1 billion in assets.

At first there was no indication that the Washington area branches would be sold. But three weeks ago, officials in Philadelphia obviously decided that selling those branches would result in greater value than maintaining them as operating units. Meritor Savings Bank's 20 branches, after all, are in one of the nation's top 10 markets and could fetch some very attractive prices.

The plan to restructure was prompted by problems associated with rapid growth and a $380 million loss reported by the parent company in the third quarter.

"They've got to trim at the edges," a local thrift executive said. "They've really got to cut back."

Meritor Financial's decision to restructure by raising additional capital and trimming assets to about $19 billion is symptomatic of the corporate soul-searching taking place in much of the financial services industry. Major banks and brokerage firms also are trimming assets and laying off employes.

But it is the thrift industry, many experts believe, that is likely to feel the larger impact of rapid transition from traditional savings and lending activities to full-service financial operations.

Less than five years ago, the nation's thrifts were mired in the industry's worst earnings crisis in nearly 40 years. But the industry found itself victimized then by high savings rates and low yields on fixed-rate, long-term mortgages.

Given additional powers in the shakeout that followed, many thrift institutions expanded rapidly, only to discover to their chagrin that they had gone too far afield.

Incompetence, crooked management and downturns in regional economies have toppled a fair number of savings institutions in the second round of shock waves to hit the industry in this decade.

Thus, trimming at the edges -- as Meritor Financial has decided to do -- may not be enough for some thrifts, according to several experts.

In fact, Arnold G. Danielson, president of Danielson Associates Inc., a Rockville financial services industry consulting firm, has raised serious questions about the thrift industry's ability to survive.

"With true capital of less than 2 percent of assets, an unsympathetic Congress, money costs much higher than the competition, and being no longer a vital cog in the financing of the housing industry, a good case can be made that the thrift industry has serious survival problems," said Danielson in a recent edition of The Journal of Commercial Bank Lending.

"The healthy and those with good market franchises will be acquired {but} most of the rest will be closed or candidates for closing," he predicted.

All that will be left of the industry in 10 years that is distinguishable from commercial banks, Danielson continued, will be credit unions and a handful of large thrifts that successfully make the transition to mortgage banking companies.

Meritor Financial apparently believes now is the time to prepare for the next shakeout predicted by Danielson. It's ironic and unfortunate that it has to sacrifice a good market franchise in the process.