Inside the Citizens Bank of Maryland in Silver Spring, Stephen Wyatt Gregory was holding eight hostages at gunpoint; outside in the darkness, were seven SWAT team members. It was a waiting game.

According to Lt. Allen B. Wilson, the SWAT team never fired a shot. "Several opportunities came up when we could have shot him, but what was the point? You never take any aggressive action unless it's absolutely necessary."

Wilson, the other members of his team and Sgt. Douglas L. McFee, who negotiated with Gregory that February night, were honored last week at the Awards Program for Montgomery County Police and Firefighters for their herozm during the 6 1/2-hour or-deal.

Even after the hostages had been safely released, SWAT did not go in immediately. "There was no reason for us to go in when the guy was barricaded in, with no one else there," said Wilson. "We were prepared to stay there all night - even to the next day."

Wilson said McFee "did a hell of a job" in negotiating for the release of the hostages, but the SWAT team already had decided that it would not meet some of Gregory's demands. For instance, Gregory said he would lay down his weapson only after McFee and Gregory's mother met him at the front door of the bank. The SWAT team refused to agree.

"Uh uh, no way," said Wilson. "I would not have allowed that. I would not have let him jeopardize himself and Gregory's mother. You never gice (the person holding hostages) another person or put him in a position to get another."

Instead, when Gregory put down his two rifles, for the first time that night, at the front of the bank, "we charged into the bank," said Wilson. "Gregory got to the guns at the same time and we had to wrestle the guns away from him. If we didn't think we had a damn good chance of getting there at the same time as he did, we wouldn't have done it."

The seven SWAT team members nonored for their role in the release and Gregory's surrender were SWAT leader Wilson and the following officers: Cpl. Louis P. Ciamillo, Cpl. Richard H. Fried, Cpl. William S. Isaacs Jr., Cpl. Jerald Reed, Pvt. John A. Malinowski and Pvt. Peter J. Picariello.

Other award winners this year include two Bronze Medal winners - Kenith A. Taylor, a member of the Wheaton Volunteer Rescue Squad, and Montgomery County Polic Pfc. Ernest M. Williams.

Taylor was off-duty one night last December, driving north on the Baltimore Washington Parkway, when he saw a station wagon in a southbound lane go out of control, hit a bridge and overturn. Taylor left his car, ran to the burning vehicle and pulled two of the three occupants out of the car before a flash of fire forced him away. He later administered first aid to the two survivors.

Williams, off-duty from his Silver Spring post, was driving on Georgia Avenue, on his way home one night last May, when he saw a fire in the the second story of the Silver Spring Medical Building.

Williams found a plumbing truck in the building parking lot, removed the truck ladder the propped it against the building. He climbed to the second floor, spotted three people trapped inside by smoke and flames, broke the window, climbed inside the smoke-filled room and helped them to safety. He then returned to make sure no one else was trapped inside.

Three other honorable mention winners were Sgt. Marshall Smith, a paramedic and volunteer of the Laytonsville Fire Department, and Montgomery County Police Cpl. Charles E. Lake and Cpl. Charles Shawen Jr.

Smith was an on-duty medic enroute to Suburban Hospital last June with a trauma patient when his medical unit was struck by a car and overturned. His partner, paramedic Jim Nicewarner, was killed, and Smith, although trapped and in great pain, refused help until he could brief the rescuers about the condition of the trauma patient in the medical unit.

Lake received his award for notifying neighbors at 11:30 one night last September that a man had forced his way into the home of a waoman and her three children who lived down the block from Lake's Wheaton home. Lake - unarmed - ran to the neighbor's house, went in, struggled with the intruder, subdued and arrested him.

Shawen was honored for talking to a person on the 14th floor balcony of an apartment who was threatening to jump and coaxing him to come off the balcony.