MIW Investors of Washington announced yesterday it has agreed to purchase Suburban Savings and Loan Association in Annandale for $16 million. If shareholder and regulatory approvals are granted, MIW will merge Suburban with First American Savings and Loan Association of Woodbridge, which it acquired last year.

In making the announcement at the annual meeting, MIW president William H. Savage declared, "The combined operations of Suburban and First American will strengthen MIW's ability to achieve another year of record earnings and will contribute significantly to MIW's commitment to a comprehensive approach to real estate investment and real estate banking."

The new savings institution will have combined assets of about $700 million and 28 branch offices in the metropolitan area, the Tidewater area, and Charlottesville, making it one of the largest savings institutions in the state of Virginia. The combined thrift will become a wholly owned subsidiary of MIW, a unitary savings and loan holding company that engages in real estate investment and development and financial services.

Savage announced that MIW's first quarter earnings amounted to $1.3 million (25 cents per share), up 266 percent from $354,000 (9 cents) in the same period last year. First American contributed $1.2 million to MIW's first quarter income. First American had a first quarter return on assets of 1.29 percent during 1984, compared with an industrywide average of 0.19 percent.

MIW purchased First American for $14 million, or $35 a share. The price per share of Suburban was not revealed, nor were its first quarter profits. Fourth quarter 1984 profits were $343,000. Its regulatory net worth at yearend was $12.5 million. Its current assets are $341 million.