American Security Bank plans to launch a discount brokerage service this summer and to set up a separate institutional money management subsidiary.
Both new ventures are part of efforts to diversify into new financial services, Chairman W. Jarvis Moody told shareholders yesterday at the annual meeting of American Security Corp., the holding company that owns the bank.
The discount brokerage service, to be headed by Executive Vice President Douglas Ledwith, will be similar to those offered by several Washington-area banks and savings associations, but the money management operation will be unique, bank officials said.
To be called ASB Capital Management, the subsidiary will manage investments for pension funds, corporations and other institutional investors. The bank's trust department now offers similar services, but will be moved into the subsidiary when it begins operations this July. Michael B. Miller will become president of the subsidiary.
The discount brokerage, scheduled to begin operation next month, "will allow us to offer a broader range of investment products and is well-suited to our strategy of developing innovative and fee generating services," he added.
In other developments, Moody warned that "the lagging effects of the recession lead us to anticipate an increase in loan losses in 1983." He noted that American Security's loan losses jumped from $700,000 to $3.8 million last year, but the write-offs have amounted to only 0.13 percent for the past five years--"a record we believe may be unmatched among large U.S. banking companies."