Smaller financial institutions are not immune from the difficulties that have forced some of the biggest to warn shareholders that fourth- quarter profits will fall short of expectations.

BancorpSouth Inc. of Tupelo, Miss., was one of at least seven bank and thrift companies to make such disclosures in recent days. People on Wall Street said they expected additional announcements during the holiday period, when less attention is paid to the stock market.

Those who track corporate earnings say the number of banking companies issuing profit warnings seems unusually large, though no firm records are cited.

They say the trend is striking, considering that the smaller institutions are not exposed to Asia, Latin America, or other troublesome regions that have hurt multinational and money-center banks. Five of the lower-tier holding companies reporting earnings troubles so far do business in the fast-growing markets of Florida or California.

"It doesn't seem normal for regional banks to be warning as often as they have," said Chuck Hill, director of research at First Call Corp.

Wall Street dealmakers say privately that the warnings suggest bank chief executive officers are anticipating slower growth in 1999 than many analysts are.

Most banks and thrifts that have issued profit warnings are citing a need to boost loss provisions.

"A couple of quarters ago these companies could earn their way through loan losses, but they don't seem to think they can do that any more," said a person who advises many of the biggest banks on mergers.

In addition to BancorpSouth, financial institutions that issued profit warnings recently included Colonial BancGroup of Alabama, BankAtlantic Bancorp and Admiralty Bancorp of Florida, and Silicon Valley Bancshares and Pacific Bank of California.

Though last quarter's warnings from many of the big New York banks sent financial analysts scurrying for their calculators, the reaction to this round is hushed. Even if there may be more warnings than usual, some analysts say they are too scattered, and the companies involved too small, to force them to rethink their estimates or the industry's overall prospects.

"It could be a sign the Southeast is slowing up somewhat," said Bear, Stearns & Co. banking analyst Sean J. Ryan of the warnings from banks there.

Analysts consider it a coincidence that three of the mentioned companies-BankAtlantic, Admiralty, and Colonial-do considerable business in Florida, where all have grown rapidly in the past year.

BankAtlantic of Fort Lauderdale said it would fire 17% of its employees and leave the mortgage servicing business, a reining in of expansion efforts that included buying the securities firm Ryan, Beck & Co. in June. The thrift company said it would incur an unspecified charge for 1998.

Admiralty Bancorp of Palm Beach Gardens, Fla., said last Tuesday that "certain nonrecurring charges" related to "expansion costs and reserve expenses" would cause a net loss for 1998. Admiralty went public Sept. 25 and said its loan portfolio grew 75% from June 30 to Nov. 30.

Colonial BancGroup, based in Montgomery, Ala., but with 83 branches in Florida, said it would take a $62 million charge against fourth-quarter earnings, including a $10 million increase in loan-loss provisions and an $8.8 million charge stemming from "delayed cost savings" in "certain Florida acquisitions."

Colonial bought 12 banks this year, including five in Florida that added 31 branches.

Mr. Ryan of Bear Stearns downgraded Colonial to "neutral" from "attractive" but said he still thinks the $9.1 billion bank will earn $1.12 a share next year.

His biggest gripe with Colonial, he said, is that it is loading many of next year's provision costs into the fourth quarter and calling them "nonrecurring." Many other companies are doing the same thing. "Credit losses are a cost of doing business in banking," he said.

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