The U.S. Department of Agriculture's first overhaul in 130 years will be a boon for some community banks and a bane for others.

When the agency closes 1,274 field offices, some banks' communities will lose a business, while others will gain from new regional service centers.

The closings, plus further staff reductions from a reorginazation at department headquarters, are expected to save $3.6 billion over five years - while resulting in improved customer service.

But the biggest structural change will be the vast reduction in county field offices, a fixture in many rural towns for generations.

About 152 field offices already have closed and another 1,122 are slated to be shuttered; 1,070 are county-based field offices that will transfer their functions to the department's field service centers.

The service centers will be one-stop shops for customers of the department's Farm Service Agency and Natural Resources Conservation Service.

Other entities such as the Rural Housing and Community Development Service also may join the centers.

Olin R. Jackson, executive vice president of $83 million-asset First National Bank and Trust Co., Louisville, Ga., expects a service center for his community of 2,500, which is located in a heavily agricultural region in the east central part of the state.

"We'll be able to go to one location and be able to take care of all our farm customer needs," he said. Currently, First National deals with two sets of offices in three communities, he said.

He said he expects related cuts in travel and long-distance calls to reduce the bank's expenses for administering the agency's loans by 5% to 10%.

In addition, "We're hoping to get new business by having the center located in our town," Mr. Jackson said.

Nonetheless, Georgia tops the latest list of field office closures, with 101, most likely because it "has an unusually large number of counties," Mr. Jackson said.

But because most specific closures haven't been announced, many community bankers are unsure if and how they'll be affected.

Almost two-thirds of the bankers surveyed at the American Bankers Association's Agricultural Bankers Conference in November said they were uncertain what effect the department's reorganization would have on farmers in their area, and subsequently their communities and themselves.

Because his town of 2,700, Canadian, is the only one in 900-square-mile Hemphill County, Jay Godwin hopes its field office won't be one of the 98 slated to close in Texas.

But the chairman, president, and chief executive of $44 million-asset First State Bank of Canadian can visualize the effects in towns that do lose offices. "If you take any jobs out, it's going to have an impact," Mr. Godwin said.

The government offices employ some of the higher-paid people in many small towns, he said. Loss of their jobs could directly affect loan and deposit relationships with banks, as well as hurt buying power in communities, he said.

Plus, ag bankers would have to travel farther to field offices for myriad reasons, including Farmers Home Administration guarantees and certifying conservation practices, said John Blanchfield, associate director of the ABA's ag bankers division.

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