Alexandria National Bank, Arlington Trust Co. and Clarendon Bank and Trust were merged yesterday, creating a new financial institution called First American bank.

The merger is the first stage in a plan to consolidate and coordinate the banking operations in the Washington market of Financial General Bankshares Inc., which intends to change its name to First American Bankshares.

With assets of $700 million and 43 offices, First American is the largest bank in the Virginia suburbs.

Top jobs in the merged banks were filled by executives of the three firms. H. Paul Mount of Arlington Trust became chairman: Milton L. Drewer, Jr., of Clarendon became president and chief executive and E. Guy Ridgely of Alexandria, vice chairman.

Headquarters of the new bank will be in the Clarendon bank's building on Chain Bridge Road in McLean.

For personal banking customers, the most important effect of the merger will be the availability of additional branches, a spokesman said when the merger plans were announced last August.

For corporate customers, the major change will be an increase in the bank's lending limits, allowing it to make substantially larger business loans.

The higher lending limit "is vital in providing the kind of financial support needed by Virginia's new corporate residents," said J. William Middendorf, president of Financial General. He said the merger was meant to create "one of the dominant forces in northern Virginia."

A study that led to the merger was started last year shortly after a group headed by Middendorf gained control of Financial General. The company's management now is fighting a bid for control by a group including former U.S. budget director Bert Lance and four Arab investors.

With the merger of the three Virginia banks complete and the corporate name change on the agenda for the company's annual meeting next month, the next steps in the consolidation are expected to be the renaming of some other Financial General banks and the launching of a corporate marketing campaign for the "family of banks."

Union First National of Washington and American Bank of Maryland are the other members of the Financial General System, which includes 11 banks in D.C. Maryland and Virginia.