National Bank of Washington plans to add millions of dollars in the next month to its fund that protects against loan losses, according to a Securities and Exchange Commission filing that revealed the depths of the problems facing the bank and its parent firm.

The filing this week raised questions about whether NBW could continue operating if the cash shortage at Washington Bancorporation (WBC), NBW's parent, is not resolved promptly.

"The continued viability of the company will depend on its ability to liquidate its assets. ... It is not clear that such a liquidation is feasible," the filing said.

Three weeks ago, WBC defaulted on more than $25 million it had issued to customers in the form of commercial paper, or short-term debt. The company has been trying ever since to resolve its cash shortage and reimburse its creditors.

The company revealed in the filing of its amended first-quarter report with the SEC that it expects a "substantial net loss" from operations for the second quarter and that it intends to make a "very substantial extraordinary addition" to its reserves against loan losses.

The company also said it expects continued loan losses "as a result of anticipated continuing softness in certain sectors in the local real estate market." Troubled loans increased by $41 million in the first quarter of 1990.

The filing revealed that WBC is in default on $19.2 million in long-term obligations to an unidentified insurance company. "Management is currently seeking, but has not yet obtained, waiver of such non- compliance," the filing stated.

In addition, the filing said that the lack of cash in the parent firm may soon force the sale of assets, which could lead to further deterioration in the company's financial condition. WBC said it already had sold $5 million in securities and may continue to dispose of other investment securities in the second quarter.

"Such sales, should they occur, are anticipated to result in additional losses," the filing said.

WBC has been negotiating a plan that would allow former District banker John Mason and other unidentified investors to bail out the company by providing it with cash in exchange for the rights to buy a large block of the company's stock, according to sources close to the negotiations.

WBC Chairman John M. Toups would not confirm specific talks earlier this week, but he said that negotiations "with interested parties" are continuing. He said he did not know when a deal might be finalized.

The actual amount of the additions to the bank's reserve for loan losses will be determined after a special review of the bank's loan portfolio by federal regulators, the filing stated.

The filing detailed several NBW transactions that already had gone sour, although it did not identify the borrowers. During the first quarter, the bank restructured the terms of a $13.5 million commercial real estate loan. The bank said that the property securing the loan is in suburban Maryland and is 70 percent leased.

In April 1990, NBW also placed $11.9 million in loans to a local real estate developer on nonaccrual status, which means the bank expects problems with repayment. "Though not technically past due, these loans were deemed nonaccrual as a result of the borrower's experiencing cash flow problems," the filing stated.

Analysts familiar with the company's loan portfolio said the reserve against loan losses may need a boost of more than $70 million. If the quality of the bank's assets declines by even half that amount, it would be difficult for NBW to continue to meet federal regulatory requirements for capital -- the amount of cash that must be freely available as a further protection against defaults.

An investment banking firm that has extensively reviewed WBC's financial condition said yesterday that "anyone hoping to save this company will have to have very, very deep pockets." The firm, which asked not to be identified, said it would take more than $150 million to make WBC and its banks competitive again.

In the filing, WBC also confirmed that it is the subject of SEC inquiries into the sale of its commercial paper and said it had borrowed $140 million from the Federal Reserve Bank of Richmond. The company said it is cooperating with the SEC probe.

WBC stock closed yesterday at $3.75 a share, down 25 cents.