John H. Dorland, president and chief executive officer of Suburban Bankshares, has apparently pulled the ailing institution out of the fire.

Eight months after he joined the Lake Worth, Fla.-based bank as an outside consultant, he has found a merger partner.

"We have been able to stabilize a good company that had some problems," Mr. Dorland said. "The biggest challenge was convincing everybody that the opportunities were there."

This month, Suburban's board of directors signed a definitive agreement to merge with Boca Raton-based 1st United Bancorp in a stock swap.

The agreement is subject to regulatory and shareholder approval and other contingencies.

Warren S. Orlando, 1st United's president and chief executive, said the merger would result in a "strong, healthy, and profitable community bank."

Although 1st United is the smaller of the two banks, with $124 million in assets, compared with Suburban's $164 million, it will be the surviving entity.

Combined, the banks will have about $290 million in assets, $24 million in capital, and 12 branches when the deal is completed next spring.

Earlier Deal Canceled

The merger comes two months after a deal between Suburban and Command Credit Corp., a Long Island, N.Y.-based issuer of secured credit cards, was scrapped.

It would have contributed $4 million of the $5.3 million Suburban needs to comply with a Federal Deposit Insurance Corp. order to raise capital.

At Sept. 30, Suburban met its Tier 1 risk-based ratio, but was "undercapitalized" in terms of its total risk-based ratio and leverage ratio.

Suburban's problems stem largely from bad commercial and real estate loans, and lax internal controls.

"It was a typical bank that had been hit very hard by the changing economy here," said Mr. Dorland, a West Point graduate and Vietnam veteran who compares bank turnarounds to going to war.

Nonperformers Decline

December 1992, nonperforming assets totaled $14 million.

Mr. Dorland has since whittled them down to $12 million at Sept. 30, or 7.31% of assets.

Suburban also had been battered in the press, and some customers even withdrew their money from the bank.

"We had to go out there and convince people that this thing could be saved," he said.

"The biggest question everybody had was, |Does the swamp have a bottom?'

|We Have Made the Turn'

"Is there somebody that can look in and say, |Yes it does'?"

Mr. Dorland said that when he took charge, the bank was already making progress toward recovery, but it needed a leader who could persuade the regulators and customers to give them time to work out the problems.

"We have made the turn," Mr. Dorland said.

"The bank has made money every quarter this year," he said. "The capital ratios have improved, the OREO [other real estate owned] and the classified assets are all coming down."

Bank Is Profitable

Although the bank is making money - about $250,000 for the first nine months of the year -the parent company lost $148,000 at Sept. 30, compared with a $3.3 million loss a year ago.

Mr. Dorland said the negotiations with 1st United began in October.

He said more than a dozen other institutions were kicking the tires. He expects the deal to be completed early next year.

"We still have to continue forward," he said.

"I never relax until it's over. You never can tell."

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