After working for a big bank and as a banking headhunter for area institutions for three years, Richard B. Green has returned to what he knows best: small, local banks.

This month, Green was named president and chief executive of Security Bank Corp., a single-branch institution in Manassas with $37 million in assets. He helped found Sailor and Merchants Bank and Trust in Vienna and was president and chief executive from 1983 to 1987. He was also president of Farmers and Merchants State Bank in Fredericksburg in the late 1970s.

The current economic slump affecting both large and small banks makes local institutions like Security Bank, Sailor and Merchants and Farmers and Merchants more appealing to individual consumers, Green said, because they cater to independent businesses and entrepreneurs.

"I think the local banks are certainly the better performers," Green said. "They're not loaded down by real estate loans, they are service oriented. There's a much higher level of trust from the public with the locally managed banks."

But Green acknowledges that the real estate downturn does pose a threat to local banks, including his new employer. Security Bank is reeling this quarter because a $260,000 loan to a commercial developer in the area went bad. In the first nine months of this year, the bank has increased its loan loss provisions from $207,000 in 1989 to $338,827 and posted losses of $116,575.

"I like to restructure things, to fix things, and this bank needs fixing," Green said. "This bank was set up to be a small business bank, and we're still going to do that, but we've got to balance out better."

Green said he will de-emphasize real estate lending and focus on financing entrepreneurs and "mom-and-pop" businesses, a plan that has won the approval of Security Bank's directors.

"His philosophy of banking meshed with what we were thinking," said chairman John O. Gregory. "He said he would feel right at home in a small community bank."

Green has switched hats several times since leaving Sailors and Merchants in 1987. He founded Bancsearch Ltd. of Vienna, a one-man headhunting firm, but returned to traditional banking less than two years later as an executive vice president for Equitable Bancorporation.

His intended role at Equitable was to operate a small affiliate institution that Equitable was in the process of acquiring. But before that merger took place, Equitable itself was acquired by MNC Financial Inc. and the smaller deal was off.

"We never did consummate the merger that would have been Dick's job," said Charles E. Coudriet, a former executive vice president at Equitable who is now senior vice president of Maryland National Bank, MNC's largest bank.

Green stayed on at Equitable for several months, then reopened Bancsearch last spring. By then, however, profits had plummeted at area banks and scores of executives had been laid off, flooding the job market.

"The industry has got more people looking than there are jobs," Green said. "I felt it was time for me to go back to running a bank, given the market."

Enter Security Bank Corp., a four-year-old institution with 450 shareholders that prides itself on having a board of directors made up exclusively of Manassas-area residents.

Green's predecessor, J. William Garry Jr., resigned in August because of disagreements with directors over the bank's future, Gregory said. He would not elaborate on the conflict.

But he said Green, whose desire to relocate to Manassas was "a big plus" in the eyes of the directors, shared the board's opinion on what a community bank should offer.

"A lot of times you'll fill out a loan application and never see the person who ultimately approves it," Gregory said. "With {Green}, we're hoping you could come in the bank and actually see the president."

Coudriet said Green is well suited to his new job.

"That size bank is something Dick has managed before," he said. "He has the knowledge and the ability to do it."