Top executives of Richmond's First & Merchants Corp., Virginia's fifth-largest bank holding company, provided red-carpet treatment for financial analysts here last week, hoping to whet the appetite of Washington's investment community.

Based on the company's performance in recent years and the outlook for banking in the region, its stock has gained strength as a quality issue, F&M officials asserted.

F&M has come a long way in the past five years, having "established a pattern of good earnings growth and high levels of profitability and asset quality," according to Chairman C. Coleman McGehee.

Despite its Richmond base, F&M isn't exactly an unfamiliar name in the Washington area. In July 1981, it completed the largest acquisition in its history -- National Bank of Fairfax -- increasing the number of Northern Virginia branches from 16 to 29.

F&M has an asset base of $2.7 billion, 146 offices in Virginia and 31 bank-related offices in six states. Its assets have grown at an annual rate of 5 1/2 percent over the past five years.

McGehee and F&M President Randolph McElroy cited an impressive litany of performance measures, which, they emphasize, "distinguishes us from other banks" in the state.

F&M's high level of earnings -- 18 1/2 percent on equity for this year's third quarter -- ranks second in the state, for example. Moreover, McGehee and McElroy reported that the company had only 0.23 percent net charge-offs to outstanding loans for the recent nine months, the best among Virginia banks; that nonperforming assets totaled 0.85 percent; and that foreign loans were $12 million of a loan base of $1.7 billion.

Meanwhile, income before securities transactions in the third quarter totaled $7.3 million ($1.10 a share), compared with $6 million (88 cents) in the comparable period in 1981.

Although F&M has bank-related activities in six states, its growth is supported primarily by Virginia's relatively stable economy. In remarks at a luncheon presentation here last week, McGehee reviewed several factors that contributed to F&M's five-year growth record.

Indicators of economic performance show that Virginia's growth rate between 1970 and 1980 exceeded those of Maryland, the District and the nation as a whole.

Population growth in two of F&M's key markets -- metropolitan Richmond and the Tidewater area--also exceeded the rate in metropolitan Washington and Baltimore.

Virginia claims the highest industrial diversification in the South. Its top three industries represent only 29 percent of total industrial employment, compared with 37 percent in Maryland and only 2 percent in the District.

"We conclude that Virginia's economic climate will continue favorable and offers excellent growth potential for F&M," McGehee remarked.

Although F&M is discussing merger possibilities with three banks (none in this area), McGehee and McElroy maintain that they are more interested in improving earnings and the quality of services and products than they are in geographic expansion.

Why, then, did F&M executives think it necessary to host a luncheon for selected guests from Washington's financial community in a swank Georgetown private club?

What attraction does metropolitan Washington hold for F&M beyond its Northern Virginia operations?

McGehee very carefully avoided disclosure of his company's plans for this region but clearly indicated that significant opportunities for growth exist here despite the relative strength of Virginia's economy.

F&M places strong emphasis, for example, on research showing that the District, Northern Virginia and suburban Maryland have more companies with annual revenues of $3 million or more than does the entire state of Virginia.

Given this, "There's no question about the fact that we are interested in this area, and you'll probably be hearing from us in this area," McGehee said.

Indeed, F&M already has pulled off a coup of sorts by being selected by the D.C. government to manage a $30 million retirement fund.

With that kind of entree into the market, F&M appears to be positioning itself for anticipated changes in interstate banking laws. But whether interstate banking occurs or not, F&M's objective is to be "a high earner with good quality earnings," McElroy remarked.

In any event, F&M has "identified partners we would like to be associated with in other states" if interstate banking is approved, McElroy disclosed.

But he added that interstate banking isn't the "be-all, end-all," because F&M can achieve its objectives without it.

It's obvious from F&M's recent moves that metropolitan Washington will figure prominently in those objectives.