Citizens Bancorp of Maryland has agreed to buy Bank of Damascus in northern Montgomery County, despite the opposition of the Damascus bank's president and two other members of its board.

The boards of both banks approved a plan to give Bank of Damascus shareholders nearly $50 million worth of stock in Citizens, the two banks announced yesterday. The agreement must be approved by shareholders of both banks and regulatory authorities.

The merger would result in a windfall for the approximately 560 Bank of Damascus stockholders who will receive Citizens Bancorp stock worth $944 for each share of Bank of Damascus. Some shareholders recently sold Bank of Damascus shares for about $250 each, said Herbert Hyatt, a member of the Bank of Damascus' board.

While he acknowledged the prospective gain for stockholders, Walter Brown, Bank of Damascus' president, said he opposed the merger at a special meeting of the bank's 11 directors Monday morning.

"I had no knowledge of any of the negotiations going on. I heard of it last Tuesday" for the first time, said Brown.

Brown said Citizens Bancorp initially contacted four members of the board about the proposed merger, and followed that with the proposal to the full board last week. Brown said he he wanted Damascus to remain a community bank and that Citizens Bancorp had made no guarantees about the future of Bank of Damascus' 83 employes.

"I've been with the bank for 37 years, and regardless of the money involved, I would not want to vote to sell out something I've been with for 37 years," Brown said. He said he was joined by two other members of the board.

Hyatt, one of the bank's largest stockholders and one of the directors initially approached by Citizens Bancorp, said Citizens discussed the general terms of the merger proposal with him and three other directors. He said he and the others did not encourage the larger bank to proceed with its offer. Hyatt was president of the Bank of Damascus for 28 years until he stepped down in 1983.

Citizens Chairman Alfred H. Smith has built the Riverdale bank into a $1.3 billion institution with 106 branches through a series of acquisitions, including the purchase of Central National Bank of Maryland a few months ago.

A spokesman for Citizens Bancorp, the holding company for Citizens Bank, said he could not comment on the bank's plans for the Damascus bank's employes.

Citizens stock was trading yesterday at about $118 per share.