Uslico Corp., a local life insurance holding company, announced yesterday that it has agreed to acquire all of International Bank of Washington -- which had been part owner of Uslico -- in a complicated transaction that will total $186 million.

Under the transaction, which is expected to be completed before the end of the year, Uslico will exchange its own shares for the remaining outstanding shares of International Bank.

Only two days ago, Uslico bought 38 percent of International Bank's shares for $57.3 million.

Under the stock swap announced yesterday, Uslico now will pay about $129 million (with the exchange worth $15.15 per International Bank share) for the remainder of the company.

International Bank shareholders will receive 0.637 shares of Uslico Corp. common stock for each of their shares in the tax-free reorganzation.

"We will be 100 percent owners of International Bank if the transaction is completed," said Leslie Schultz, Uslico chairman and president.

"We will continue to operate International Bank, but not necessarily as it is. It has not been profitable in some of its operations," he said, indicating Uslico may sell some of the operations of the bank, which is a diversified holding company with investments in light industrials, overseas banking, real estate and insurance.

Among the operations reportedly targeted for divestiture are the bank's light industrial units, including Globe Industries Inc., which manufactures and controls material for automobiles, and Kliklock Corp., which makes packaging machines.

However, Schultz told Dow Jones News Service, there are "some very valuable pieces of that operation International Bank ," including its 11-story office building a block from the White House at 1701 Pennsylvania Ave. NW.

Schultz said that George Olmstead, the 84-year-old chairman and chief executive of International Bank, "will retire at the end of the year."

The acquisition of International Bank continues the rapid growth of this once obscure life insurance company, which is a holding company for United Services Life Insurance Co. with seven life insurance subsidiaries, a registered investment adviser and a registered broker/dealer.

Uslico has assets of $1.2 billion and has $18 billion in life insurance in force.

Under the merger, Uslico's assets would increase by another $200 million.

Last year, Uslico earned $31.9 million on revenue of $215.4 million. International Bank, on the other hand, lost $8.8 million on revenue of $4.3 million.

The bank blamed the red ink on large losses in its property/casualty group and on an industrywide price war.