The moment of truth for Winfield M. Kelly Jr.'s banking career came in the summer of 1993. Suburban Bancshares, a Greenbelt-based bank holding company of which Kelly had become chairman only a few months before, was saddled with $2 million in bad loans, and federal regulators were already shopping its assets to potential buyers. Kelly had one day to do something to save the bank.

Kelly, an ex-politician and a successful businessman, put all his persuasive skills to work.

"Fellas, we need to raise $600,000 today," he told the 10 assembled board members.

Before they left the room, he had 10 checks for $60,000 each.

Six years later, Suburban Bancshares is the comeback kid of local banks. Its merger with Columbia Bancorp in Columbia, announced earlier this month, is a testament to its return to health. Suburban has gone from a troubled institution hemorrhaging $100,000 a month to a stable bank that will have about $700 million in assets after the $34 million merger deal.

For Kelly, it's a vindication of six years of hard work during which he put his own money and reputation on the line. His rewards, moreover, go beyond the emotional: Kelly owns 583,580 shares, more than 5 percent of Suburban. What's more, 300,000 of his shares were bought at 10 cents each as part of his employment incentive agreement in 1993, giving him a paper profit of $870,000 on those shares when the Columbia deal closes.

Kelly, a former Prince George's County executive and Maryland secretary of state, and now chief executive of Dimensions Health Corp. in Largo, is the undisputed maestro who orchestrated the comeback.

What was his strategy? In his own words, hard work.

Kelly was first offered Suburban's chairmanship in late 1992 by board members Vincent D. Palumbo and Frank Lucente Jr., but turned them down because "they had so many problems," he said. In 1990, the bank had lost more than $5.5 million. "Maryland was doing okay, but Virginia was just a disaster," said Kelly, referring to the holding company's two banks, Suburban Bank of Virginia and Suburban Bank of Maryland, which had merged under Suburban Bancshares in 1991.

Kelly, who had quit as secretary of state and shelved a gubernatorial bid to take over Dimensions, reconsidered only after Albert W. Turner, a local real estate mogul, agreed to invest $500,000 in the ailing bank. (Turner now owns more than 8 percent of Suburban.) He'd take the position only if he had "absolute control," Kelly told the board.

Kelly's first task was to raise nearly $6 million in capital for the ailing bank. He invested $200,000 of his own money and garnered the rest from directors, friends and business associates.

Lew Sosnowik, a bank securities analyst and broker for Bethesda-based Koonce Securities Inc., said many local banks in the early 1990s simply shut down. "This particular bank wasn't immune from the real estate collapse as Realtors and developers gave up," he said. Many other local banks, including the National Bank of Washington, Perpetual Savings Bank, Trustbank Savings and Madison National Bank, folded at the time, Sosnowik said. "What was unusual here was that when Mr. Kelly came in, the bank was skating toward demise, but he almost single-handedly recapitalized it."

The task wasn't easy: The bank was still struggling with a bloated leadership of two chairmen and two boards left over from the merger, and many people simply didn't fit in the organization, Kelly said. Over the next few months, the bank underwent a "total reorganization," with old board members resigning left and right. Kelly brought in his own people, including veteran banker Marlin K. Husted, who came on as vice chairman. As a combination, Kelly and Husted were well known in Prince George's County, and their reputation rubbed off on the bank, said the current president and chief operating officer, Stephen A. Horvath.

"That team raised the morale of the bank," said Lucente, chairman of real estate and investment company Lucente Enterprises Inc. in Oxon Hill.

Suburban's financial recovery took place in stages. The first milestone came in July 1993, when Suburban launched its public offering, raising more than $5.5 million that, combined with the last-minute $600,000 from the board members, saved the bank.

Those investors didn't flock to the stock on their own. "I made a zillion phone calls, almost like a political campaign," said Kelly, who drew on his extensive political and business networks to raise most of the funds.

He said he typically worked from 4 a.m. to midnight to manage his position at Suburban and as president and chief executive of Dimensions.

The second milestone came in 1995, when Suburban Bancshares sold Suburban Bank of Virginia's assets and its good loans to a Northern Virginia bank. The remaining $2 million of bad loans transferred to Suburban Bank of Maryland, and William R. Johnson, then president and chief executive, set to work cleaning up its loan portfolio and restructuring the bad loans.

While Kelly called the shots, he didn't run the entire show. "I was able to work with really talented people," communicating with a team of lawyers, accountants, board members, and others who executed his plan. While many board members left to deal with the fluctuations in their own businesses, a core group of board members -- including Joseph E. Burnett, Harold J. Koch, Sibyl S. Malatras, and Husted -- all deserve credit for executing the sale of the troubled Virginia bank and restructuring the bad loans, Lucente said.

By the time Horvath, a 28-year veteran D.C.-area banker, replaced the retiring Johnson in late 1996, the bank was on solid ground again. "When I was brought in, my job was growing the bank," he said. The bank's total assets increased from $175.7 million in 1997 to $238.6 million in 1998.

Horvath said the merger with Columbia will allow shareholders to benefit from the economies that come with size. He said $1 billion of money-earning assets is necessary to see significant returns. The new Columbia Bank, as the merged bank will be known, will have about $700 million in assets.

The merger is expected to be completed early next year. The new bank will have 22 branches in Maryland, from Prince George's and Montgomery counties to the Baltimore vicinity, where Columbia has a presence. "Both of these banks will be bringing their individual strengths to the other," cross-selling their products, and offering greater loan amounts, up to $9 million, analyst Sosnowik said.

A Look at . . .

Suburban Bancshares Inc.

Headquarters: Greenbelt

Assets: $222.6 million (as of June 30)

Net income: $1.43 million in 1998

President: Stephen A. Horvath

Chairman and CEO: Winfield M. Kelly Jr.

Ticker Symbol: SBNK

Branches: Bethesda, Capitol Heights, Clinton, Greenbelt, Oxon Hill, Rockville, White Flint, Beltsville