Too many banks and savings and loan associations are a burden on the financial services industry in today's volatile economy, the chairman of Suburban Bancorp in Bethesda said yesterday in critical remarks aimed at regulatory agencies.

The root of the problem, suggested Chairman Robert F. Tardio, lies in the liberal policies of regulators in the 1960s and '70s, which placed little or no restraints on the increase in banks and S&Ls.

"Ease of entry in this business is phenomenal," Tardio told Suburban stockholders at their annual meeting yesterday.

In the previous two decades, Tardio recalled, "All one had to do was to hang a sign out and people, for whatever reason, entered your door and gave you some deposits. And it was reasonably easy to employ those deposits."

Tardio observed that unprecedented competition from nonbank financial institutions and the "volatile economy" are causing failures among banks and S&Ls.

"There are--no question about it in my judgment and that of those people in this industry--too many banks and too many S&Ls," Tardio said.

Although he noted that it's difficult to operate in the current economy, Tardio said Suburban recorded a 12.9 percent increase in earnings for the first quarter.

Net income after securities losses increased to $4.5 million (96 cents a share) from $4 million (85 cents) in the comparable period last year.

Tardio noted however, that the bank's earnings resulted in large measure from "lending money to ourselves."

In effect, he said, the bank is a major purchaser of government debt obligations. "We should be lending money to people," he said. "Unfortunately, we're lending money to our own government and continuing to subsidize the federal debt and roll it over."

Tardio was sharply critical of current government policy aimed at assisting failing financial institutions, implying that the marketplace should dictate the fate of those institutions.

"I would suggest to you," he said, "that public benefit and public policy is not really served, and you and I, the consuming public, are not really the beneficiaries of a massive taxpayer bailout of thousands of small, inefficient, and in many cases, poorly managed financial institutions.

"I would submit to you that the answer is not to subsidize inefficiency any longer but to permit mergers across state lines by all types of financial institutions . . . so that the resulting institutions are the result of mergers of strength and not mergers of weakness with weakness," Tardio said.

He predicted that strong institutions will survive but that the public "needs and demands highly capitalized institutions" to provide necessary services.

Suburban is "more than adequately positioned and capitalized" to take advantage of growth opportunities, Tardio assured shareholders after promising that the company will end the year with assets in excess of $2 billion, making it the third area bank to reach that plateau.

Suburban's assets of $1.66 billion ranks it 157th among the nation's top 200 banking institutions. It ranks 154th in deposits but 25th in return on assets.

In a comparison of performances in key categories by selected national banks with assets of $1 billion to $2 billion and 16 regional banks, Suburban outperformed most, president G.J. Manderfield advised stockholders in a review of 1981 operations yesterday.

In other matters before stockholders, Tardio said he anticipates that Suburban will begin issuing bank cards from a Delaware subsidiary around Oct. 1.