United Virginia Bankshares Inc. said yesterday that its president, Douglas H. Ludeman, violated the company's rules on insider trading and conflicts of interest by personally buying $124,000 of stock in three Maryland bank holding companies at a time when UVB was purchasing shares in two of the same banks.

The purchases by Ludeman, UVB's chief operating officer, were made after UVB announced last March that it was interested in acquiring a Maryland bank holding company as part of an ambitious plan for regional expansion.

After an investigation by an outside lawyer, a committee of UVB's board of directors found "that it could not be concluded that Mr. Ludeman did not violate federal law" relating to insider stock trading, the Richmond-based UVB said in a statement filed with the Securities and Exchange Commission.

At a July 22 meeting of the board of directors that was not made public until yesterday, Ludeman was ordered to sell the stock back to UVB at the price he paid for it and, according to the statement, he "promptly" did so. The board then "confirmed its continuing support of and confidence in Mr. Ludeman . . . " the statement said.

Joseph A. Jennings, chairman of UVB's board, said last night in an interview that Ludeman will continue at the bank at full salary with no change in his duties or responsibilities. He declined to speculate what action the bank would take if the SEC determines that Ludeman violated federal laws.

Federal insider-trading rules prohibit top company officials from using their "insider" knowledge of their company's activities to profit from the sale or purchase of securities. Insider-trading violations have been a prime target of the SEC in recent years, and the agency has brought criminal charges against some violators.

"We presume that this is over and, unless the SEC initiates something else, we're through," said Jennings.

Jennings also said the board had agreed not to identify the Maryland banks in which Ludeman and UVB had purchased shares. But he noted that the company has publicly expressed its interest in acquiring a Maryland bank as a complement to its recent attempts to gain control of the District-based NS&T bank.

Reached at his home last night, Ludeman said that "at the time that he bought the stock I was not aware of any violation -- otherwise I would not have purchased the shares. I had some general advice that it was not a violation ."

Ludeman declined to say who gave him that advice. "I have nothing further to say," he said in response to all other questions.

UVB is Virginia's second-largest bank, with $6.56 billion in assets and a blue-ribbon corporate board.

As part of its ambitious plans, UVB announced March 29 that it had agreed to buy a controlling interest in Washington's NS&T for $119 million in the first interstate banking merger in the area. Approval of that acquisition is awaiting passage of interstate banking legislation by the D.C. City Council.

At the time of the acquisition, Jennings also announced UVB's interest in buying a Maryland bank. "That has been a consistent and a public position of the bank," Jennings said yesterday.

According to yesterday's filing with the SEC, Ludeman purchased the shares in the three unidentified Maryland banks in April, or shortly after the NS&T acquisition. The board's audit committee learned "through internal audit procedures" that Ludeman had bought stock in two bank holding companies that UVB was also purchasing shares in as part of its plans for an acquisition.

The board then appointed a special counsel from a New York law firm to investigate Ludeman's purchases. Based on the special counsel's findings, the audit committee concluded that Ludeman "violated UVB's standards of conduct prohibiting personal use of confidential company information, conflicts of interest and the appearance of impropriety."