Banks in south Georgia are feeling the effects of this winter's disastrous cotton harvest.

ABC Bancorp, a $700 million-asset holding company for eight Georgia banks and one in Alabama, announced last week that it would set aside up to $1.3 million against loan losses related to farm troubles. The company said the provision will cause its quarterly earnings to fall below market expectations.

And others are scared the same could happen to them.

"We don't know the full outcome yet, but I expect last year's crop problems will affect our earnings this year," said Jack F. Tuck, president of Bank of Terrell in Dawson.

Torrential rains this winter made fields too muddy for the heavy machines used at harvest time. The rains caused farmers to abandon about 10,000 acres of cotton and lessened the value of what was eventually harvested.

The devastation struck when expectations were highest. Since a boll weevil attack in the mid-1980s, Georgia cotton yield had been recovering- from 342,000 pounds in 1989 to 2.1 million in 1996. It was expected to hit 2.2 million last year, the most since 1918.

Instead the total was only 1.9 million, and yield of the most valuable "prime" cotton was even further below forecast.

Foul weather has cost cotton farmers $150 million in lost revenue, according the Georgia Department of Agriculture. Weather-related damage was so bad that last month the U.S. Department of Agriculture declared 119 of the 159 counties in the state as agricultural disaster areas.

"This planting season has been a negative for everyone in the community, farmers and nonfarmers alike," said James D. Minix, president and chief executive officer of Colony Bankcorp, Fitzgerald. "Everyone is going to have to tighten their belt this coming year because of it."

W. Edwin Lane Jr., executive vice president and chief financial officer of ABC, said the loss provisions will drop his company's earnings to between 11 and 15 cents per share this quarter. Kathryn H. Bissette, bank analyst with Sterne, Agee & Leach Inc. of Atlanta, had projected 27 cents.

Ms. Bissette said her firm had seen no other loan-loss announcements relating to the weather. However, Georgia bankers say they are on alert.

Mr. Minix said that one of Colony's six banks will not renew 10% of its farm operation loans this year, due to the farms' poor performance in 1997.

Even bankers who do not expect problems are double-checking their books.

"We have done a good bit of work looking at our portfolio," said R.B. Burnette, president and chief executive officer of PAB BankShares, Valdosta. "The weather has certainly affected the cotton crop, but we feel pretty sure that we are O.K."

Not all are so confident. Mr. Tuck said he is afraid of what another poor year would do to his farm customers.

"I don't expect we will have to increase our loan-loss reserve right now, but some of our producers' equity has been cut substantially," he said. "Another short year this year and a lot of people will be in serious trouble."

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