Two dozen new branches of Crestar Bank will open their doors today in former offices of Perpetual Savings Bank, adding Perpetual to the growing list of Washington-banks-that-used-to-be.

National Bank of Washington, Madison National Bank, First Annapolis Savings Bank and now Perpetual have failed, and more than a dozen other local financial institutions have been merged out of existence in the last few years by a wave of consolidation that is transforming the banking industry.

The failed banks all fell victim to the collapse of the local commercial real estate market, but the realignment of the banking business began before real estate went bad.

Real estate losses and the recession are merely forcing mergers that might otherwise have occurred anyway, said local banking experts, who predicted more mergers and probably more failures in the next few months.

"There's no question that more consolidation is likely," said Tony Davis, who tracks banks for Wheat, First Securities Inc. in Richmond. "The rate is going to depend on how much confidence the banks and their regulators and investors have in the trajectory" of the economic recovery.

"The next few weeks are going to give us a much clearer picture" of the future of Washington banking, when the local banks issue their year-end financial reports for 1991, Davis said.

"The industry has been on a path of consolidation" since states began allowing interstate banking in the mid-1980s, said Pat Clancy, president of the Washington Area Bankers Association, which today has half as many banks as members as in the early 1980s. Clancy also is president of Signet Bank N.A., the Washington outpost of Richmond-based Signet Banking Corp., one of many out-of-town financial institutions that have moved into the area by acquiring local banks.

The bank merger trend stalled two years ago when the commercial real estate problems began to show up, Clancy said. Potential buyers weren't willing to invest in a local bank when they couldn't determine how bad its real estate problems were going to be.

"Now that the banks have demonstrated an ability over the last 18 months to get a handle on the size of the problem and begun to identify the solution," the pace of consolidation probably will pick up, he said. "As they feel more comfortable with the asset quality, I would expect merger and acquisition activity to increase in 1992."

For a decade, Maryland, Virginia and D.C. banks have been combining into bigger, stronger holding companies doing business in all three jurisdictions.

Most of the mergers have been what banking experts call "in-market consolidation," in which competing banks combine their operations, eliminating duplication and improving their efficiency. Such mergers created regional institutions like Crestar and Signet, and led Riggs National Corp. to acquire deposits and branches of National Bank of Washington after NBW failed in 1990.

More in-market consolidation can be expected, creating stronger local banks, said banking experts like Davis of Wheat, First Securities, because the banks that are now for sale are more attractive to other local institutions than to outsiders.

In Search of a Knight Perpetual was one of the grand old granite-etched names of Washington banking, for decades the preeminent savings and loan in the local area, the lender that provided mortgages for generations of home buyers. Government officials had hoped Perpetual might live up to its name and be purchased as an ongoing business by some out-of-town financial institution that wanted to get into the Washington market by acting as a white knight for the distressed grand dame.

Perpetual had a reputation, a network of more than 50 branches in the District, Maryland and Virginia and a well-respected mortgage-lending operation. But no one was interested in acquiring the institution, even after the federal government spent $400 million to pay off depositors whose money had been lost on bad real estate loans.

After publicly proclaiming its interest in Perpetual, Mellon Bank of Pittsburgh did not bid aggressively enough to acquire it and get into the Washington market.

The only other institution to express an interest was First Maryland Bancorp, the company that owns First National Bank of Maryland, which considered buying Perpetual's Maryland branches but also dropped out.

Three other major local financial institutions are known to be for sale.

First American Bankshares Inc. is on the block because of its entanglement with the scandal-plagued Bank of Credit and Commerce International. Federal regulators discovered last year that First American was secretly owned by BCCI, not by the group of Middle Eastern investors who claimed to have bought the bank 10 years ago. The Federal Reserve Board has demanded that First American be sold and is forcing BCCI to put up several hundred million dollars to cover losses First American has suffered on bad real estate loans.

Also for sale are John Hanson Savings Bank in Prince George's County and TrustBank in Arlington. Both are being operated under control of federal savings and loan regulators. They will be auctioned off by the Resolution Trust Corp. -- the S&L cleanup agency -- in much the same way that Perpetual was sold Friday. John Hanson and TrustBank are big enough that RTC officials have been hoping to sell them pretty much intact, but the outcome of the Perpetual sale may not bode well for Hanson and TrustBank.

Because they've been caught up in bad commercial real estate investments for years, TrustBank and John Hanson have distinctly different reputations than Perpetual and there is little likelihood that either institution would be acquired by anyone who wants to preserve it as an ongoing business, federal officials and local banking experts said. But with more than $1 billion apiece in deposits, both are big enough that other institutions might be interested in acquiring their customers in a block.

That is basically what happened to Perpetual. Crestar paid the federal government $7.8 million for the right to acquire Perpetual's $2.6 billion in deposits and 22 branches. Accounts in the other branches will be shifted to nearby Crestar offices. The money paid represents a premium for deposits, which are carried as liabilities -- not assets -- on a bank's balance sheet.

Perpetual's failure is estimated to cost American taxpayers more than $400 million -- money that will be used to make up for Perpetual's loan losses and make whole all of the thrift's depositor accounts up to the $100,000 federal insurance limit per account.

Regulators typically receive deposit premiums of 0.5 percent to 1 percent. Crestar's premium of 0.3 percent on deposits reflects a weak market for area banks and thrifts, analysts said. Regulators said, however, they were pleased with the bid.

Perpetual depositors, meanwhile, don't have to keep their money in Crestar; they can take it out any time they want. But Crestar is counting on keeping many of them, although it will not keep paying the high interest rates that Perpetual had been paying as it struggled to survive.

Even if many Perpetual customers defect, in purely defensive terms Crestar has accomplished another goal: buying the Perpetual branches kept them out of the hands of competitors.

Strengthening its competitive position in the local marketplace is clearly Crestar's goal, said executives of other local banks, who will not talk for attribution about their competitors.

'In-Market Consolidation' Once it was widely expected that failed banks such as Perpetual, John Hanson and TrustBank would be sold to outfits like Mellon that wanted to break into the Washington market. The opportunity to acquire a major position here still is expected to attract aggressive bidding for the First American banks, which boast what some bankers think is the strongest three-jurisidiction franchise in the Washington area. But in the last year, federal regulators have learned that -- as in the case of Crestar and Perpetual -- it is more often the banks already here that are the buyers when some institution comes up for sale.

The advantages of "in-market consolidation" mean Perpetual was worth more to Crestar than to Mellon. For Mellon, buying Perpetual would have required setting up an entire banking operation, with a full management structure, check-clearing and mortgage-processing operations and a computer system. Crestar, on the other hand, could handle all those tasks with its existing infrastructure, eliminating the need for several hundred people.

The trend is nationwide. In New York, Chemical Banking Corp. and Manufacturers Hanover Trust Co. merged last week and are projecting cost savings of hundreds of millions of dollars. California's two biggest banks, BankAmerica Corp. of San Francisco and Security Pacific Corp. of Los Angeles, plan to merge later this year for the same reason.

Layoffs are an inevitable part of bank consolidation. Nationwide, more than 60,000 banking jobs have been eliminated in the last five years and at least that many more layoffs are expected in the next five years.

The 700-plus Perpetual workers expected to lose their jobs will join hundreds of employees from National Bank of Washington and Madison National Bank who were fired when those banks failed.

Few local layoffs are expected as the result of the Jan. 1 merger of C&S/Sovran Corp. and NCNB Corp. to create NationsBank Corp. The local C&S/Sovran operations remain intact, but several thousand jobs eventually are expected to be eliminated as the banks consolidate the functions at their main offices in Atlanta, Virginia and Charlotte, N.C.

Even with the NationsBank merger and Crestar's purchase of Perpetual, Washington's banking business is not nearly so concentrated as in some other cities, said Kenneth Thomas, a Miami banking consultant. While in some cities this size one-third or more of deposits are in a single bank, no institution in Washington has more than about one-sixth of the market, Thomas said.

Which institution here is the largest depends on how the market is measured. Riggs National Bank is the biggest bank based in the District of Columbia. First American claims to be the biggest in the Washington metropolitan area. Maryland National Corp. -- parent of Maryland National Bank in Baltimore and American Security Bank in Washington -- is the biggest in the combined D.C.-Maryland-Virginia market. NationsBank claims to be the biggest bank with branch operations in the three jurisdictions.

And as Riggs Chairman Joe L. Allbritton points out, the giant money-center banks all have offices here and compete aggressively for the business of the biggest local companies such as Mobil Corp., Marriott Corp. and MCI Communications Corp.

"We've seen a period of very heated competition from the mid-'80s until 1990," said bankers association president Clancy. Competition slowed somewhat when the savings and loans pulled out of financing commercial real estate projects in the late 1980s and when banks began to retreat from that business a short time later.

Except for the commercial real estate loans -- which none of the banks want to touch -- competition is picking up again, Clancy added. "For good solid commercial loans, there is plenty of money available" -- which means plenty of competition, he said. And there is "fairly heated competition for both retail deposits and retail lending," he said, which is what the ordinary depositor is most concerned about.

Clancy said he expects more in-market mergers will create bigger and more competitive local banks in the next few years and will weed out the banks not strong enough to keep up.

"The weak institutions are going to go by the wayside and the stronger will survive," he said. "With mergers they will become more efficient, providing customers with more and better services, probably at a lower cost."

MARYLAND BRANCHES Cabin John 7941 Tuckerman Lane Potomac District Heights 6244 Marlboro Pike District Heights Leisure World 3876 International Way Silver Spring Potomac 9812 Falls Rd. Potomac PG Plaza 3600 East-West Highway Hyattsville Silver Spring 8700 Georgia Ave. Silver Spring Waldorf 4817-B Festival Way Waldorf Wheaton Wheaton Plaza S/C Wheaton

VIRGINIA BRANCHES McLean 1449-A Chain Bridge Rd. McLean Reston-South Lakes 1180 South Lakes Dr. Reston West Springfield 6216 Rolling Rd. Springfield DISTRICT BRANCHES Adams Morgan 1800 Columbia Rd. NW Anacostia 1340 Good Hope Rd. SE Capitol Hill 300 Pennsylvania Ave. SE Cleveland Park 3435 Connecticut Ave. NW Connecticut and L 1111 Connecticut Ave. NW Connecticut and Nebraska 5000 Connecticut Ave. NW Dupont Circle 1369 Connecticut Ave. NW 11th and E 445 11th St. NW L'Enfant 965 L'Enfant Plaza N SW Riggs Park Riggs Road and S. Dakota Avenue NE Spring Valley 4900 Massachusetts Ave. NW *Perpetual branches not on this list were closed last week. Source: Resolution Trust Corp.