Moving to capitalize on the success of its car-dealer finance business, First Virginia Banks Inc. plans to open an auto loan origination office in Atlanta within three months, company officials said.

The Falls Church, Va., banking company plans to open similar offices in Pennsylvania and Delaware-states where it has no presence.

After these offices are established, First Virginia said, it expects to follow up with home equity lending outlets in Atlanta and Delaware. It already has such an office in the Philadelphia area.

"We're like a stone in the water that slowly ripples outward," said Barry J. Fitzpatrick, the company's chairman and chief executive officer.

Outside of its 390-branch retail network in Virginia, Maryland, and eastern Tennessee, First Virginia has built dealer financing into a niche business. Offering a range of services from inventory financing to insurance and indirect loans to car buyers, First Virginia has booked $2.6 billion of loans, or 42% of its total portfolio.

As it expands into new states, First Virginia has differentiated itself from competitors by relying primarily on special offices to market auto finance.

R. Harold Schroeder, an analyst at Keefe, Bruyette & Woods Inc., said First Virginia's strategy runs counter to that of many banking companies, which are backing away from dealer financing because of tough competition and low margins.

"It has been a fairly volatile line of business that a lot of companies have gotten in and out of," said David M. West, of Davenport & Co. But he said First Virginia has a consistent track record that gives it an edge over many competitors.

"They have been a major player in indirect auto for a long time," Mr. West said. "They've done a remarkably good job over the years. They have people who know what they're doing."

Dealer lending responsibilities had been divvied up among First Virginia's 15 chartered banks. About 18 months ago, the company formed a subsidiary within its lead bank called First Virginia Credit Services and has been consolidating operations there.

First Virginia has auto-dealer loan production offices in its home state and in Maryland, North Carolina, South Carolina, and Tennessee. The company's efforts to bolster this business come as home equity lending, which has contributed about 18% of its loan portfolio, is under pressure due to declining interest rates and an increase in prepayments.

Meanwhile, auto finance grew by 13.4% at an annual rate in the second quarter, and loan production was at an all-time high in June. Mr. Fitzpatrick said the unit plans to continue expanding in prime markets throughout the Southeast-"as long as it keeps working."

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