Merrill Lynch’s federal savings bank was the most profitable depository institution in the U.S. among banks and thrifts with at least half their assets in mortgages and mortgage securities, according to call report data analyzed by Inside Mortgage Profitability. The Merrill unit had been the most profitable mortgage-focused institution for all of 2003, but slipped to second in the first quarter of this year. A substantial chunk of the institution’s income is from trust services and…