The chief executive officer of Richmond's United Virginia Bankshares Inc. predicted not long ago that there will be a "major shoot-out" among financial institutions during the next 10 years as they try to dominate the Washington-Baltimore corridor that includes Northern Virginia.

Barely a month after UVB's Richard G. Tilghman made that prediction, the Federal Reserve Board last week approved his company's application to acquire Washington's NS&T Bankshares Inc., clearing the way for the first interstate bank merger in the Washington area.

In approving the application, the Fed noted that the Washington banking market is "unconcentrated" under Justice Department guidelines. Thus it is unlikely that Justice will challenge the transaction, which becomes effective Dec. 30.

The Fed also approved an application last week from Bank of Virginia in Richmond to acquire Union Trust Bancorp of Baltimore. That merger is expected to be consummated in January.

The shoot-out has begun.

Fairly soon, Sovran Financial Corp. of Norfolk is expected to obtain approval of its applications to take over D.C. National Bancorp and Suburban Bancorp of Bethesda. In the meantime, there is no reason to doubt that the Fed will approve UVB's plan to acquire Bank of Bethesda Corp. in another interstate merger.

At the moment, Sovran, which has assets of nearly $9 billion, is the biggest bank company between Pennsylvania and North Carolina. Taking control of Suburban and Bank of Bethesda Corp. would give it assets in excess of $12 billion. But UVB, Virginia's second-largest banking company ($6.7 billion in assets), has made it clear in outlining its interstate-banking strategy that it is prepared for a showdown with Sovran.

What's more, there is every indication that Virginia's regional banking powers are stockpiling ammunition for a shoot-out with other competitors in the Middle Atlantic region. Just as North Carolina's banking giants are looking north toward Virginia, D.C., and Maryland to further their aggressive expansion plans, so, too, are Virginia's big banks preparing for a showdown with their competitors in North Carolina.

Besides preparing for what inevitably will be a shoot-out in the Washington-Baltimore corridor among mid-Atlantic banking giants, the big Virginia institutions obviously are contemplating a turf war in North Carolina.

"North Carolina may be a logical second phase of our interstate strategy because we already conduct a great deal of business there," said Tilghman.

For the time being, however, the skirmishes for dominance will likely be confined to two separate markets. So far, the District and seven states in a so-called Southeastern Region have adopted reciprocal interstate banking laws. For example, a Virginia bank company may acquire a company in North Carolina as long as Virginia extends the same privilege to North Carolina bank companies.

Nearly 20 interstate merger agreements have been announced in a 13-state Southeast Region, but until now those agreements have been between banks in two distinct areas -- Maryland, D.C. and Virginia in the Mid-atlantic, and North Carolina, Georgia and Florida in the Southeast. That's certain to change.

For the time being, at least, Virginia's leading bank companies are vying for pieces of what Tilghman described as the Washington region's "dynamic" market. Just last week, Dominion Bankshares Corp. of Roanoke, Virginia's third-largest banking organization, joined the battle for market share with an agreement take over State National Bank of Maryland, a relatively small ($176 million in assets) but strategically situated institution in Rockville.

These aggressive moves by Virginia's leading bank holding companies reflect Tilghman's belief that the lucrative Baltimore-Washington corridor is "a natural extension of our current market."

"We believe the first banks to effectively serve this entire market will emerge as the dominant institutions in the region," Tilghman told a group of financial analysts in Richmond recently. "We fully intend to attain such dominance. Our mission is to emerge as the dominant commercial bank" in the Washington-Baltimore corridor.

As the first bank company to reach merger agreements with institutions in the District and Maryland, UVB believes it is in a commanding position to capitalize on the competitive advantages of combining three banks across state lines. Last week's approval of its application to take over NS&T gives it a slight edge in banking's version of The Gunfight at the OK Corral.

One of the more fascinating aspects of this shoot-out for market dominance is the apparent reluctance of the larger D.C. and Maryland banks to take on the gunslingers from the other side of the Potomac.