Bert Lance, the first defense witness in his federal trial for bank fraud, repeatedly denied today that he had falsified financial statements to get loans from Georgia banks.

The defense also produced its first character witness -- 81-year-old Lillian Carter, the president's mother, who told the court she thought Lance was "quite a man."

The former U.S. budget director's four hours on the stand in U.S. District Court here were interrupted for four minutes from Mrs. Carter.

Asked by Lance's attorney if she was aware of his client's reputation for "honesty, integrity and truthfulness," Mrs. Carter replied: "He has more of them than anyone I know."

Prosecutor Marvin Loewy passed up the opportunity to cross-examine Mrs. Carter. "I just want to thank her for coming in," he said.

As she left the witness stand, Mrs. Carter smiled at Lance and his attorney, Nickolas Chilivis, and said, "It didn't take long, did it?"

Lance spoke in a booming voice, smiled often when reminiscing about his early days as a Georgia banker and frequently turned to his right to address his answers directly to the jury.

His testimony sometimes took on the tone of a discourse to the jury. Lance would turn to them and say, "I think it's important for the jury to know when this took place . . ." or "maybe I ought to give the jury an example. . . ."

He and three codefendants are charged with falsifying bank records, misapplying bank funds and filing false financial statements to gain about $3 million in loans. Judge Charles A. Moye Jr. has eliminated 11 of the original 33 counts in the federal indictment, and Lance himself faces 12 counts -- two of filing false statements and 10 of misapplying bank funds.

Chilivis addressed the loan statements first. "Did you make any false statement on the July 1, 1974, financial statement?" he asked.

"Absolutely not," Lance replied firmly.

Chilivis asked if any items were false in a June 1975 statement.

"Absolutely none," Lance replied.

Chilivis then reviewed the 10 counts of misapplying bank funds, and Lance concluded the discussion of each by strongly denying the government's allegation that he made bank loans in reckless disregard for the interest of the banks.

But he acknowledged in his testimony today that he made bank loans based more on a borrower's character than on collateral.

Lance recalled the first loan he had extended as a loan officer at First National Bank in his hometown of Calhoun, Ga., to one Elsie Goforth, who put up her cow "Spot" as collateral. When the woman couldn't meet the payments, Lance said, she appeared at the bank to turn over Spot.

"I made a decision then and there that collateral is not all it's cracked up to be," Lance told the amused jurors.

The government, which is expected to begin its cross-examination of Lance Friday, alleges that he made improper loans to friends, relatives and associates in the mid-1970s when he headed the Calhoun bank and the National Bank of Georgia in Atlanta.

In his testimony today, Lance said he made the loans "to help the bank."

Part of the government's allegation is that Lance and his wife, LaBelle, used a partnership named Lancelot Co. to hide from bank examiners unpaid debts from his 1974 unsuccessful gubernatorial campaign.

But Lance testified that Lancelot was, in fact, a place to hide charitable contributions from public view.

"If you make a charitable contribution, you're not supposed to talk about it," Lance said. Besides, he added, "I didn't want anyone to perceive that anything we did in the charitable sense was to buy votes."

In the complicated transaction, Lance gave stock in the Calhoun bank to a state charity. The stock, which was equal in value to his salary as state highway director in then-Gov. Jimmy Carter's administration, was donated to the state in the name of Lancelot.

But the government alleges that the main purpose of Lancelot was as a hiding place for about $575,000 in Lance debts. The government alleges that Lance transferred the debts to Lancelot two weeks before he published his financial statement as part of his 1974 campaign for governor. The $575,000 in debts was not mentioned in that financial disclosure.

Lance told the court that the disclosure was accurate "as best as I could get it." But he said that public officials and candidates often overstate their financial worth because they don't want to be accused later of understating it.

The courtroom was jammed with friends and relatives of the defendants, including Lance's wife and the couple's four sons.

At one point Chilivis asked Lance about a $45,000 unsecured loan to his son David in September 1974, when David was 19. The government contends that this was an example of misapplication of bank funds, but Lance said, "It was a good loan."

He denied an assertion by the prosecution that he once had told a bank examiner that he lent the money to his son because he figured college students didn't have to live like "paupers." h

Lance said "pauper" is not in his vocabulary and added, "I categorically deny saying it."