Washington Federal Savings and Loan Association and Jefferson Federal Savings and Loan Association, both District-based S&Ls, have agreed to merge and are expected to seek approval from federal regulators later in the week.

A formal announcement of the agreement is expected within a day or two but over the weekend officials confirmed reports that they had decided to merge.

The voluntary merger would combine the District's fourth and seventh largest S&Ls and would reduce the number of associations in the city to eight -- half the total that existed two years ago.

The surviving institution, Washington Federal, would be the third largest association in the District, with assets of more than $650 million and deposits of more than $432 million. It would operate 17 branch offices throughout the city.

Washington Federal currently has assets of $500 million and deposits of $316 million, while Jefferson had assets of about $150 million and deposits of $116 million on June 30.

Under terms of the merger agreement, James L. Harris, Washington Federal's chairman, will retain that title as chief executive officer of the combined associations. Lucian H. Vandoren, who is currently president of Jefferson, will become president and chief administrative officer.

"I think it will be a viable merger and beneficial to both sides," Harris said. "You get the economies of scale. For example, one computer can do the job of both associations."

Harris said employes of the two associations "wouldn't be materially affected" at the the outset and that attrition would likely solve any staffing problems resulting from the merger.

Earlier this year, Washington Federal agreed to a merger with the former Guardian Federal Savings and Loan Association of Silver Spring. The bank board rejected a merger application from the two, however, and approved a takeover of Guardian by Perpetual American Federal Savings and Loan Association of McLean.