Earle Palmer Brown Associates Inc., the area's largest advertising agency, announced yesterday that it has reached a preliminary agreement to buy Lawler Ballard Advertising, a Norfolk agency.

This announcement comes only weeks after Bethesda-based EPB's first West Coast acquisition fell through because the two firms represented competing fast-food clients.

Lawler Ballard employs 120 people in offices in Norfolk, Richmond, Birmingham, Nashville and Kalamazoo, Mich., all of which will become EPB offices on Jan. 1. Its concentration in the Southeast was especially attractive to EPB President Jeb Brown, who said he first approached Don Ballard, that firm's chief executive, this summer.

EPB has annual billings of about $350 million and has 500 employees at eight offices from New York to Fort Lauderdale, Fla. The firm has made a series of acquisitions since its first in 1984, but the purchase of Lawler, which has about $75 million in annual billings, is its biggest, Brown said.

"They represent Sovran {Bank}, who has just merged recently with C&S in Atlanta, so they were looking for a base in Atlanta, which we have," Brown said.

Although EPB represents American Security Bank locally, Brown said that's not a conflict because American Security's troubled parent company, MNC Financial Inc., is reorganizing and may cut advertising.

Brown said that after the failure of the California acquisition, he has been cautious. "It's a letter of intent," he said. "It's an engagement, not a marriage."