WASHINGTON -- Adams National Ban is hunting for good loans at failed community banks.

The $72 million-asset bank snapped up $6.6 million in loans July 12 from failed City National Bank for 96.2 cents on the dollar.

The deal follows last year's acquisition of Metropolitan Bank, another failed local institution. In that deal, Adams picked up $9.1 million in loans and $24.3 million in deposits.

|Not Taking Advantage'

"People are not taking advantage of small bank closings," said Barbara D. Blum, chairwoman and chief executive of Adams National, which is owned by women.

"It is very hard to get good loans in this market," she said. "If you can cherry-pick loans ... then you are further ahead."

Ms. Blum said the bank acquired about half of City National's loan portfolio, which included small business and real estate loans.

"By and large, what we picked up were good performing loans," she said. "We for sure got a good deal."

Failures Not Unusual

City National's $22.2 million in deposits were acquired by Crestar Bank for $614,000.

The one-office bank had $24.5 million in assets, and was closed by federal bank regulators on June 25.

Such failures are not uncommon in Washington, where institutions are still suffering from the region's real estate bust. Collectively, the city's banks eked out a mere $511,000 profit in 1992 following a $454 million loss the prior year.

Adams National earned $633,000 in 1992, after a $1.4 million loss in 1991. The Washington-based bank earned $255,000 for the first six months this year and had a return on average assets of 0.72%.

Bankers have had a hard time finding borrowers who are good credit risks. Commercial and industrial loans at all Washington banks plunged in the first quarter by 25.3%, according to the Federal Deposit insurance Corp.

To compound problems, many banks are still working out bad real estate credits. According to the FDIC, 19.55% of Washington real estate loans in the first quarter were troubled.

Ms. Blum said growth will continue to be slow, but the bank will keep looking for more acquisitions.

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