A lot has changed since Carleton E. Stewart took over as the chairman of American Security Bank's board four years ago.

For one thing, the bank has grown tremendously, doubling its assets. Further, American Security's corporate banking division is 10 times as large as it was four years ago.

American Security is heavily into international banking and the bank has developed a glossy and apparently successful advertising program. Before Stewart's tenure the bank seldom advertised, and now it's advertising budget is on the order of $750,000.

And Stewart has dramatically altered the management team at American Security, bringing in ahlf of the 16-member executive group that runs the bank's operations.

Although that description of Stewart's tenure makes American Security's prospects look rosy, Stewart, like many banking executives, has fears about the state of his industry.

Finance companies of various descriptions have succeeded in getting a larger share of the personal loan market. Banks are losing business to mortgage companies. Stewart notes. "In short," he told a company seminar recently, "commercial banks must struggle to retain a share of the consumer market."

Add to all that similar changes in the corporate banking side, such as borrowers shifting to commercial paper markets, the growth of commercial finance company lending and other similar trends, and the picture Stewart paints is of an industry beset by changes in an enviroment that bankers have failed to adjust to.

"The response of commercial banks to the changing nature of the financial services industry has been ineffective," Stewart told his American Security colleagues.

The problem rest in the hands of the nation's banking lobby, which Stewart says has a hard time agreeing on anything, and in the hands of the government which has been examining banks right and left.

The answer, Stewart said in an interview yesterday, lies in the fact that financial institutions will slowly, almost in an evolutionary way, merge into one kind.

In addition, banks are going to be forced to use "de-intermediation" or the use of non-bank intermediaries and the general public as handlers of loans as quickly as they are secured: In other words, not retaining the loan on the bank's balance sheet, but still handling the consumer's money while receiving a service charge for the ultimate grantor of the loan.

But even as Stewart outlines what he sees as the somewhat precarious plight of the banking industry, his record of American Security appears notable. Among his accomplishments Stewart and a competitor at Riggs National Bank, President Daniel Callahan, are largely credited with leading Washington banking into the international arena.

In fact, international deposits at American Security have jumped by 133 percent since 1976 when Stewart took over here.

Such a transition for American Security is hardly surprising, since Stewart came here from Citicorp's London office and has served that bank in Tokyo and other Asian cities. His office wall is lined with pictures of heads of states a reflection of about 20 years abroad.

He was asked to return to Citicorp's New York headquarters in 1976 and he and his wife decided that life in New York did not suit their needs. They decided they wanted to live in either San Francisco or Washington, and through Walter Wriston, Citicorp's chairman, Stewart's availability was brought to the attention of American Security.

But when Stewart came to Washington he was surprised at the city he found, "It was new to me to be in a place where everything we do hits the paper and hits Capitol Hill," Stewart said. "We must be more saintly than a saint.

"Until a decade ago, Washington was run like a Southern town both in its attitude and its system," Stewart said. "Now Washington is more sophisticated and outgoing. But it still has remnants of that southern town mentality in terms of what is expected of people and who belongs to which clubs."

And the bank he found, although long an extremely successful venture, needed a bit of an image change and a modernization of its bookkeeping.

For example, although American Security reports loan charge writeoffs of 16 percent for the period from 1973 to 1978, below the equivalent national figure of 40 percent, the banks, through better management has cut that rate to .06 percent in 1978.

As to the future, Stewart promises the bank will increase its branches from the current figure of 32 by about three a year for the remaining six years of his tenure.

Although he says he will retire in six years when he becomes 65, Stewart, who in 1978 earned a total of $194,549 according to a proxy statement, has outlined to his American Security colleagues a long-term growth program.

He says he would like to buy a bank of about $1 billion to $2 billion in assets, about the same size as American Security, which now has assets of $2.3 billion, but Stewart doubts whether federal antitrust officials are about to endorse such an action.

In the end, the growth of American Security depends on its ability to develop a management style and set of efficient business practices that mirror the changes in the coming decade. "For our own survival, we have to have a realistic scenario for the future," he said.