Earlier this spring, the stock of Security National Bank of Washington was quoted in The Washington Post at $29 to $35 a share in the over-the-counter market.

Although Security stock has not often been an active issue and has not been in daily tables or the Washington Business listing of 100 top regional stocks, it was listed in a Sunday table provided by the National Association of Securities Dealers, which provides all OTC stock quotes to newspapers.

Without explanation several weeks ago, Security Bank disappeared from the Sunday D.C. securities table. A telephone call to NASD, the Washington-based, national self-regulatory organization for the OTC marketplace, elicited a plausible explanation that there no longer was a "market-maker" for Security National stock -- that is, an investment firm that stood willing and able to buy and sell at least some of the D.C. bank's stock.

The immediate implication of this report was that a local stock broker had been making a market in Security National stock but had stopped rather suddenly. In fact, several local firms had made a market in Security stock. Why, after years of weekly quotations, did these market-makers pull out?The bank is doing well.

As of today, there is no clear answer to the mystery. But, as often happens in the business community, the important developments are taking place behind the scenes, and you can't rely on public information to guide you in your investment decisions.

The sudden absence of a weekly stock quote in the case of Security National or any other company should be taken as a surface hint that something is happening. Moreover, a missing stock listing raises some questions about the reliability of OTC quotations, particularly for low-volume, local and regional issues not included in NASD's nationwide automated quotations system. Companies such as Woodward & Lothrop, Riggs National Bank and BDM International are on the NASDAQ system and could not disappear overnight, for example.

As for Security National, discussions with business persons and investors here for the D.C. Bankers Association convention last week provided some clues. In particular, the development that apparently led to an absence of stock quotations for Security was purchase of a modest but significant block of shares in the institution by Washington restaurant owner Ulysses "Blackie" Auger for a reported price of $72 a share, a major premium over the most recently quoted price to the public.

This reported transaction was never recorded in OTC volume or price quotations and apparently never will be because it was a private, off-market, deal. Thus, if you're counting on the newspaper listings as a reliable indicator of all stock values day-by-day or week-by-week, forget it.

As for an investment firm acting as market-maker, it is easy to get cold feet about guaranteeing the availability of a stock when the price doubles in a private transaction, adding a dimension of volatility that obliterates traditional yardsticks for pricing.

Public dissemination of more accurate information about such stocks is needed if the OTC market is to retain respect, especially since local brokers will still trade Security stock even if they won't make regular market quotations.

The story of what is happening to Security remains to be told. Apparently, talks among principal owners of the bank's stock and some outsiders have taken place. One large D.C. bank may try to acquire the smaller institution. A merger of Security and another medium-sized D.C. bank is possible, as an effort to avoid a takeover by the larger bank.

Stocks of numerous D.C. banks may be sold at prices unrelated to recent market levels but at high premiums, reflecting the attraction of smaller institutions and their branch offices at a time when regional banking may be two years (or less) away.

Even as Riggs of Washington looks at Baltimore for possible business operations, banks in Baltimore, Richmond, Norfolk and other cities are studying the D.C. market in anticipation of what may be a test of limited, interstate banking. Outside firms would move into the District either by acquiring an existing bank or setting up new offices on their own.

So stay tuned for more of the story about local banks such as Security National, but not in NASD stock tables.

The larger story, one that dominated the D.C. bankers' convention, is the fate of all small or medium-sized banks, including Security. Most of the nation's more than 14,000 commercial banks have deposits of less than $100 million and more than half of the 17 D.C. banks are in this category.

Executives of these banks say they want to remain independent but many concede it may not be possible at a time when their future competitors for financial services are such giants as American Express or Merrill Lynch.

Former American Bankers Association President C. C. Hope, vice chairman of First Union National Bank of Charlotte, N.C., told the meeting that the banking industry throughout the nation is divided about the future, with the large majority of smaller banks fearful about a new era of interstate financial competition and with large banks anxious for development of regional markets to compete with nonbanking firms that want to share the banks' traditional business base.

And yet, Hope noted, virtually all of the bankers say regional banking is inevitable regardless of their reservations.

The consensus of Washington-area bankers and business leaders last week was that small banks which develop a special market and provide unmatched services to specialized customer groups, will have little trouble surviving and thriving in a world of impersonal, financial giants.

Second only to worries about the future of smaller commercial banks here was concern about the vitality of the savings and loan industry. There is no joy in the banking community that S&Ls are suffering massive outflows of savings capital, that S&Ls can't make mortgage loans without money to lend, that savings institution losses point to substantial shortcomings in the current structure and regulation of all financial institutions.

Economist Alan Greenspan, a private forecaster and consultant but also a key adviser to President Reagan, emphasized in an address to the D.C. bankers that while catastrophe may have just been avoided by what he said is a recent interest-rate peak, the S&L industry will still have a difficult time for the rest of this year.

It "seems unlikely" that interest rates will move down fast enough to help the savings and loans this year, he said. Six-month Treasury bill rates would have to fall three or four percentage points from current levels to 11 percent or less to provide savings institutions with relief from their current problem of long-term loans that provide low rates of interest return coupled with the high cost of attracting funds.

S&Ls suffered losses of more that $1 billion in the first four months of 1981, and Greenspan said losses for the year would be about $5 billion, even with the turnabout in interest rates. A continuation of rates at the recent high levels could lead to S&L losses of up to $8 billion in 1982, he added.

Now, however, there is a "running chance" that the savings and loan crisis can be resolved without serious trouble although the recent months have provided "a very important warning signal" about the need to restructure financial institution regulations and organization, Greenspan said. "The next time we may not be as lucky."

In answer to a question, Greenspan said he did not think long-term interest rates would fall as low as 11 percent before the end of 1982 or early in 1983.

But the former chairman of the Council of Economic Advisers under President Ford said that as long-term rates fall, many corporations that recently have resorted to short-term financing will move again to longer maturity issues. This will ease some of the pressure in the short-term money and credit markets and help to bring down short-term rates as well.