Two and a half years after being given the job of turning around United National Bank of Washington, Joseph L. Aston Sr. has been given the chairman's seat.

Aston, acting chairman since his predecessor, Samuel Foggie, left the bank in December, joined United National as president and chief executive in February 1988. United National, minority-owned from its founding in 1964 until James Madison Ltd. acquired it in 1986, lost $770,000 in 1987 and $1 million in 1988. Six months ago, the bank recorded its first profitable year since 1986.

Aston blamed United National's problems on "the poor quality of the bank's car loan portfolio" and said it had not adequately researched the credit records and financial standings of its borrowers.

Outside observers were more blunt. "At the time of the JML takeover, United National Bank had a loan portfolio that was not only anemic but somewhat malignant," said bank stock trader Lew Sosnowik of Koonce Securities in Rockville.

Since Aston became president and chief executive, the bank has hired a new senior vice president for lending, launched a campaign to recover its faulty loans and overhauled its lending criteria. "We just {started to} look at people the way a good, prudent bank should," Aston said.

The result: a $212,000 profit last year and earnings of $43,000 during the first quarter of 1990. Second-quarter results are not available yet, Aston said.

Sosnowik cautioned that United National is not completely out of the woods, noting that the limited voting stock of its holding company still hovers around $4, down from a high of $11 in 1987. "The real challenge facing {Aston} will be coordinating the general philosophy of the bank with the needs and desires of the holding company," Sosnowik said. "He is trying to show the holding company that his bank can be a productive member of this group."

Other James Madison subsidiaries include Madison National Bank of Washington, Madison National Bank of Virginia and Madison Bank of Maryland. Only United National focuses on minority businesses and individuals as its client base.

Aston, 53, is a member of the District Association of Urban Bankers, the National Bankers Association and the Washington Area Bankers Association.

He came to United National, a five-branch institution with $90 million in assets, from New World National Bank of Pittsburgh, where he was president and chief executive from 1987 to 1988. Before that he held the same title at Harbor Bank of Baltimore.

Aston said he left New World, a one-branch, $22 million, minority-owned bank, when it was bought by a non-minority institution that did not intend to remain geared to the black community. He said United National's 1986 merger agreement with James Madison ensures a continued focus on minority banking.

"It was very important to me that the bank was minority-operated and also that the purpose was still to focus on the minority business community," Aston said. Six of United National's eight board members are black, as are 98 percent of its employees.

"The bank is very important to the community, {in part} because we serve as a role model to a lot of kids," he said. "{We show them} that they can aspire to something within the community."