<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the quarterly period ended SEPTEMBER 30, 1996
--------------------
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to
------------------ ---------------------
Commission file number 0-24528
FIRST ALLIANCE/PREMIER BANCSHARES, INC.
- ------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
GEORGIA 58-1793778
- ------------------------------- --------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
950 E. PACES FERRY ROAD, ATLANTA, GA 30326
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(404) 814-3090
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
First Alliance Bancorp, Inc.; 63 Barrett Parkway, Marietta, Georgia 30066
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if
Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
------------- -----------
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
2,351,529 SHARES OF COMMON STOCK, $1 PAR VALUE AS OF NOVEMBER 1, 1996.
- -------------------------------------------------------------------------------
Transitional Small Business Disclosure Format (check one):
Yes No X
------- -------
<PAGE>
First Alliance/Premier Bancshares, Inc.
Quarterly Report on Form 10-QSB
For the Quarter Ended September 30, 1996
Index Page No.
----- --------
PART I. Financial Information
Item 1. Consolidated Financial Statements
(Unaudited)
(a) Consolidated Balance Sheet
(unaudited) at September 30, 1996 3
(b) Consolidated Statements of Income
(unaudited) for the three months and
nine months ended September 30, 1996 and 1995 4 - 5
(c) Consolidated Statements of Cash
Flows (unaudited) for the nine
months ended September 30, 1996 and 1995 6 - 7
(d) Notes to Consolidated Financial Statements
Statements (unaudited) 8
Item 2. Management's Discussion and Analysis or
Plan of Operation 9 - 17
PART II. Other Information
Item 1. Legal Proceedings 18
Item 2. Changes in Securities 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Submission of Matters to a Vote of
Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 19
(Signatures on Page 20)
2
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FIRST ALLIANCE/PREMIER BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
As of September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and due from banks $ 10,523,821
Interest-bearing deposits in banks 11,214,411
Federal funds sold 12,500,000
Securities available for sale, at fair value 33,661,298
Loans held for sale 17,413,423
Loans net of unearned income 175,945,068
Less allowance for loan losses 2,291,290
------------
Loans, net 173,653,778
------------
Premises and equipment, net 6,214,318
Goodwill and other intangibles 2,326,202
Foreclosed assets 309,007
Other assets 5,238,373
------------
$273,054,631
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 26,837,449
Interest-bearing demand 35,737,846
Savings and money market 31,933,696
Time, $100,000 and over 31,037,272
Other time 92,907,720
------------
Total deposits 218,453,983
Securities sold under agreements to repurchase 8,495,789
Federal Home Loan Bank advances 4,625,000
Other borrowings 15,344,816
Accrued expenses and other liabilities 2,789,509
------------
Total liabilities 249,709,097
------------
Minority interest in subsidiary 12,041
------------
STOCKHOLDERS' EQUITY:
Common stock, par value $1; 20,000,000
shares authorized; 2,351,529 issued and outstanding 2,351,529
Capital surplus 20,429,252
Retained earnings 956,721
Unrealized loss on securities (404,009)
------------
Total stockholders' equity 23,333,493
------------
$273,054,631
============
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
FIRST ALLIANCE/PREMIER BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For Three and Nine Months Ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
-------------------------- ------------------------
1996 1995 1996 1995
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $4,648,900 $3,890,964 $14,441,321 $ 9,648,915
Interest on investment securities:
Taxable 498,500 659,396 1,708,004 1,774,200
Non-taxable 11,254 2,816 16,869 8,447
Interest on deposits in banks 133,973 91,896 338,750 109,010
Interest on short-term investments 93,085 45,473 361,453 377,977
---------- ---------- ----------- -----------
Total interest income 5,385,712 4,690,545 16,866,397 11,918,549
---------- ---------- ----------- -----------
Interest expense:
Interest on deposits 2,176,467 1,611,291 6,204,671 4,116,420
Interest on Federal Home Loan Bank
advances 83,763 231,322 326,477 416,757
Interest on short-term borrowings 432,012 575,238 1,394,251 944,522
Interest on long-term debt 73,493 74,896 214,451 122,396
---------- ---------- ----------- -----------
Total interest expense 2,765,735 2,492,747 8,139,850 5,600,095
---------- ---------- ----------- -----------
Net interest income 2,619,977 2,197,798 8,726,547 6,318,454
Provision for loan losses 132,487 97,410 463,791 252,540
---------- ---------- ----------- -----------
Net interest income after
provision for loan losses 2,487,490 2,100,388 8,262,756 6,065,914
---------- ---------- ----------- -----------
Noninterest income:
Service charges on deposit accounts 225,433 235,184 719,908 650,868
Other charges, commissions, and fees 344,787 275,274 969,444 647,004
Security transactions, net - 8,975 135,295 13,884
Gain on sale of mortgage loans held for sale 1,150,934 481,299 2,960,025 1,595,404
Gain on sale of other loans 81,491 - 156,081 -
Mortgage loan fees 1,091,899 1,512,771 3,208,475 2,570,543
Other operating income 23,260 24,629 88,102 79,744
---------- ---------- ----------- -----------
Total noninterest income 2,917,804 2,538,132 8,237,330 5,557,447
---------- ---------- ----------- -----------
Noninterest expense:
Salaries and employee benefits 2,881,693 2,163,845 8,621,412 5,378,156
Occupancy expense, net 345,120 280,178 928,853 662,079
Equipment expense 287,684 177,902 798,886 470,738
Foreclosed asset expense, net 21,982 4,350 27,160 21,750
Directors expenses 72,876 45,784 222,820 130,029
Deposit insurance premiums 236,557 12,744 291,865 157,314
Legal expenses 81,794 34,986 133,739 155,435
Collection attorney expense 24,326 42,534 67,370 127,345
Merger related expenses 216,071 - 449,943 -
Goodwill and other intangible amortization 49,672 50,347 141,339 78,925
Other losses 6,463 1,641 61,155 8,276
Other operating expenses 977,182 940,535 2,556,914 2,080,071
---------- ---------- ----------- -----------
Total noninterest expense 5,201,420 3,754,846 14,301,456 9,270,118
---------- ---------- ----------- -----------
</TABLE>
4
<PAGE>
FIRST ALLIANCE/PREMIER BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For Three and Nine Months Ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
--------------------- --------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income before taxes and minority interest
in net income of subsidiary 203,874 883,674 2,198,630 2,353,243
Income tax provision (benefit) 96,933 218,570 650,515 633,194
---------- ---------- ---------- ----------
Income before minority interest in net
income of subsidiary 106,941 665,104 1,548,115 1,720,049
Minority interest in net income of subsidiary 4,274 3,311 10,273 11,357
---------- ---------- ---------- ----------
Net income $ 102,667 $ 661,793 $1,537,842 $1,708,692
========== ========== ========== ==========
Net income per share of common stock $0.04 $0.28 $ 0.65 $0.73
========== ========== ========== ==========
Dividends per share of common stock $ - $ - $ 0.50 $ -
========== ========== ========== ==========
Average shares outstanding 2,351,529 2,351,529 2,351,529 2,351,529
========== ========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
FIRST ALLIANCE/PREMIER BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income before minority interest in net income of subsidiary $ 1,548,115 $ 1,720,049
Adjustments to reconcile net income before minority interest in net ------------- -------------
income of subsidiary to net cash provided by operating activities:
Depreciation and amortization 733,428 409,724
Provision for loan losses 463,791 252,540
Gain on sale of premises and equipment -- (2,500)
Gain on sales of securities available for sale (135,295) (13,884)
Gain on sale of mortgage loans held for sale (2,960,025) (1,595,404)
Net proceeds (originations) of mortgage loans held for sale 11,626,915 (12,246,296)
Other prepaids, deferrals and accruals, net (1,981,056) 607,402
------------- -------------
Total adjustments 7,747,758 (12,588,418)
------------- -------------
Net cash provided by (used in) operating activities 9,295,873 (10,868,369)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of securities available for sale ($4,480,156) ($20,901,700)
Proceeds from maturities of securities available for sale 2,981,369 3,045,448
Proceeds from sales of securities available for sale 12,977,750 7,976,040
Purchase of securities held for investment -- (6,590,781)
Proceeds from maturities of securities held for investment -- 1,908,111
Proceeds from sales of securities held for investment -- 3,660,438
Net increase in interest-bearing deposits in banks (1,266,592) (9,408,692)
(Increase) decrease in federal funds sold, net (9,970,000) 15,780,000
Increase in loans, net (42,859,312) 1,119,904
Purchase of premises and equipment (1,161,752) (592,772)
Proceeds from sale of premises and equipment -- 2,500
Investment in subsidiaries -- (5,922,871)
Net cash acquired in business combination -- 706,430
------------- -------------
Net cash used in investing activities ($43,778,693) (9,217,945)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in deposits, net 40,000,624 6,115,452
Increase (decrease) in repurchase agreements 8,228,859 (7,927,523)
Decrease in borrowings from FHLB, net (6,500,000) (559,990)
Net proceeds from long-term debt 1,000,000 3,000,000
Net (decrease) increase in other borrowings (6,129,649) 19,783,933
Issuance of stock -- 4,021,905
Cash dividends paid (1,123,845) (58,025)
Minority interest dividends paid (14,986) --
------------- -------------
Net cash provided by financing activities 35,461,003 24,375,752
------------- -------------
Net increase in cash and due from banks 978,183 4,289,438
Cash and due from banks, beginning of period 9,545,638 5,944,087
------------- -------------
Cash and due from banks, end of period $ 10,523,821 $ 10,233,525
============= =============
</TABLE>
6
<PAGE>
FIRST ALLIANCE/PREMIER BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
1996 1995
---------- ------------
<S> <C> <C>
Cash paid during the period for:
Interest $8,400,467 $ 5,288,081
Income taxes $1,069,094 $ 1,018,480
NONCASH TRANSACTIONS:
Unrealized losses on securities available for sale $ 791,271 $ 637,561
Principal balances on loans transferred to other real estate $ 20,000 $ 262,400
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
BUSINESS COMBINATIONS
Cash $ -- $ 706,430
Securities available for sale -- 1,563,926
Loans held for sale -- 7,829,133
Loans -- 37,517,520
Premises and equipment -- 1,401,710
Goodwill -- 2,547,828
Other assets -- 1,240,845
Deposits -- (31,031,023)
Advances from Federal Home Loan Bank -- (13,184,990)
Other borrowings -- (1,986,063)
Other liabilities -- (682,445)
---------- ------------
Net assets acquired $ -- $ 5,922,871
========== ============
</TABLE>
See Notes to Consolidated Financial Statements
7
<PAGE>
FIRST ALLIANCE/PREMIER BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The consolidated financial information included herein is unaudited;
however, such information reflects all adjustments (consisting solely
of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of results for the interim
periods.
The results of operations for the three-month and nine-month periods
ended September 30, 1996 are not necessarily indicative of the results
to be expected for the full year.
Note 2. On August 31, 1996, First Alliance Bancorp, Inc. merged with Premier
Bancshares, Inc. which was accounted for as a pooling of interests.
The Company issued 746,530 shares of its common stock in exchange for
all of the issued and outstanding shares of Premier Bancshares, Inc.
No cash was paid in the transaction. All financial information has
been restated to reflect the combined operations of First Alliance
Bancorp, Inc. and Premier Bancshares Inc. The following table reflects
the results of operations by separate corporation as of the merger
date:
<TABLE>
<CAPTION>
First Alliance Premier
(amounts in thousands) Bancorp, Inc. Bancshares, Inc. Adjustments Consolidated
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income $9,783 $5,296 ($111) $14,968
Interest expense 3,975 3,327 (76) 7,226
--------------------------------------------------------------------------
Net interest income 5,808 1,969 (35) 7,742
Provision for loan losses 284 136 -- 420
Noninterest income 1,017 6,411 (52) 7,376
Noninterest expense 4,223 8,129 (52) 12,300
--------------------------------------------------------------------------
Income before income taxes and minority
interest in net income of subsidiary 2,318 115 (35) 2,398
Income tax provision 808 -- -- 808
--------------------------------------------------------------------------
Income before minority interest in
net income of subsidiary 1,510 115 (35) 1,590
Minority interest in net income of subsidiary 9 -- -- 9
--------------------------------------------------------------------------
Net Income $1,501 $115 ($35) $1,581
==========================================================================
</TABLE>
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
BACKGROUND
First Alliance/Premier Bancshares, Inc. (the "Company"), formerly known as First
Alliance Bancorp Inc., was incorporated in 1988 under the laws of Georgia and
the regulations of the Bank Holding Company Act of 1956. The Company's major
subsidiary, First Alliance Bank (the "Bank"), is a commercial bank which opened
for business in 1984. On August 31, 1996, the Company acquired, through a
pooling of interests, a Thrift Holding Company named Premier Bancshares, Inc.
("Premier"). Premier owned two subsidiaries. The first was Premier Lending
Corporation ("Lending") which engages in the business of residential mortgage,
construction and commercial finance loan originations. The other subsidiary
was Premier Bank, FSB ("Thrift") a savings and loan. Additionally, the Company
owns a consumer finance company named Alliance Finance ("Finance"). For more
in-depth background on all of the above companies, the reader is referred to the
Registration Statement on Form S-4 filed with the Securities and Exchange
Commission in July, 1996 SEC# 333-07993.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity management involves the matching of the cash flow requirements of
customers who may be either depositors desiring to withdraw funds or borrowers
needing assurance that sufficient funds will be available to meet their credit
needs and the ability of the Bank to meet those needs. The Company seeks to
meet liquidity requirements primarily through management of short-term
investments (principally Federal Funds sold), monthly amortizing loans,
repayment of single payment loans, periodic repayments of mortgage backed
securities and draws upon guaranteed lines of credit. In addition, at September
30, 1996, the Bank and the Thrift had $9,000,000 in
9
<PAGE>
approved Federal Funds lines with correspondent banks which could provide funds
on an immediate basis if the need arose. Also, the Bank has access to
various Certificate of Deposit ("CD") networks which would allow it to raise
deposits from credit unions and other small banks for varying time periods at
rates comparable to the short-term U.S. Government Bond rate curve. These
deposits are not brokered and no fee outside of the market rate is paid.
Additionally, the Bank and the Thrift are members of the Federal Home Loan
Bank system. At September 30, 1996, they had the ability to borrow approximately
$20 million by pledging qualifying loans and securities as collateral.
The liquidity and capital resources of the Company and the two banks are
monitored on a periodic basis by federal regulatory authorities. In addition,
the Company and the banks perform liquidity analyses in the same manner as the
federal regulatory agencies. As of September 30, 1996, the various liquidity
ratios were considered adequate by regulatory definitions. In management's
opinion, the Company and the banks maintained liquidity that was adequate to
meet their respective needs.
The Company and the banks continue to be well-capitalized by both industry
and regulatory definitions. At September 30, 1996, the Company's capital ratios
were as follows:
<TABLE>
<CAPTION>
Minimum Regulatory
Requirement to be
Well-Capitalized
------------------
<S> <C> <C>
Leverage Capital Ratio 8.01% 5.00%
Risk Based Capital Ratios:
Tier #1 Capital 10.65% 6.00%
Total Capital 11.79% 10.00%
</TABLE>
Management is not aware of any current recommendations of the regulatory
authorities which, if they were implemented, would have a material effect on the
Company's liquidity, capital resources or operations.
10
<PAGE>
The Company regularly evaluates business combination opportunities and
conducts due diligence activities in connection with possible business
combinations. As a result, business combination discussions and, in some cases,
negotiations take place, and future business combinations involving cash, debt
or equity securities may be expected. Any future business combination or series
of business combinations that the Company might undertake may be material, in
terms of assets acquired or liabilities assumed, to the Company's financial
condition.
ASSET/LIABILITY MANAGEMENT
At September 30, 1996, the Company, utilizing a "static gap" view of
interest sensitivity, was positioned in an asset-sensitive position (4.62%) at
six months and a slightly liability-sensitive position (5.76%) at one year.
This "static gap" view of interest sensitivity at a point in time looks at the
volumes of assets and liabilities that will mature or reprice within varying
time periods. Such a view does not necessarily indicate the impact of general
interest rate movements on the net interest margin since the repricing of
various categories of assets and liabilities is subject to competitive pressures
and the needs of the Company's customers. It is also probable that actual
repricing may happen at different times than estimated and at different rates
than anticipated.
Management also utilizes a forecasting model for the bank which
attempts to project the Bank's net interest margin in various rising, flat and
falling interest rate scenarios. The model assumes that the Bank makes no
material change in the composition, maturity or interest sensitivity of its
earning assets and liabilities as a result of a change in interest rate cycles.
The model projects that in the next 12 months, the Bank will earn approximately
5.00% more net interest income in a 200 basis point rising rate environment and
approximately 4.00% less in a 200 basis point falling rate environment.
However, management will act to change the Company's asset or liability
composition and interest sensitivity in response to a definitive change
11
<PAGE>
in the direction of interest rates. Specifically, the Company actively manages
the mix of asset and liability maturities to control the effects of changes in
the general level of interest rates on net interest income. Except for its
effect on the general level of interest rates, inflation does not have a
material impact on the Company due to the rate variability and short-term
maturities of its earning assets.
12
<PAGE>
CHANGES IN FINANCIAL CONDITION
Total assets increased $35,543,000 since December 31, 1995. Non-earning
cash and due from banks increased $978,000 from year end 1995. This change is
representative of normal daily fluctuations in cash and check clearings.
Interest-bearing deposits in the Bank and Thrift increased $1,267,000 to a
balance of $11,214,000 at September 30, 1996. This balance is primarily excess
funds that are held at the Federal Home Loan Bank and accrue interest at a rate
approximately equal to the Federal Funds rate. Federal Funds sold increased
$9,970,000 from year end 1995. The increase in Federal Funds is the result of
seasonal deposits placed in the Bank by a local municipality. Securities
available for sale decreased $12,134,939. In first quarter 1996, First Alliance
sold approximately $10,000,000 in securities from the Available for Sale
portfolio. These sales represented the termination of an arbitrage transaction
made up of these assets and various floating rate deposits and borrowings. In
addition to the $10,000,000 securities sale, the securities portfolio had net
maturities and cash flow of $2,135,000. Loans held for sale decreased
$8,667,000 from year end 1995 to September 30, 1996. These loans represent
first mortgage loans which have been originated by Lending and have been sold to
third party investors and are waiting on funding from the investor. This balance
fluctuates based on time of month, new loan volumes and length of investor
closing periods.
Portfolio loans grew $42,865,000 from year end 1995. Construction loans
increased $19,471,000, other loans secured by real estate increased $7,462,000,
commercial loans increased $11,597,000 and consumer loans increased $2,575,000.
The reason for these increases was the addition of four experienced real estate
and commercial loan officers in the Bank. In addition, loan officers at Lending
generate loans that are specifically underwritten by the Bank. In prior periods,
these loans were sold to third party financial institutions as the Thrift, due
to its size, was unable to fund them.
13
<PAGE>
Total deposits grew $40,000,000 from year end 1995. Non-interest bearing
demand was down $2,458,000. Interest-bearing demand was up $10,418,000
primarily due to a seasonal increase in the balances of a local municipal
depositor. Money market accounts increased $7,265,000, primarily in commercial
money market accounts. Other time, increased $24,742,000 as both the Bank and
the Thrift aggressively marketed for deposits in several key submarkets in the
Company's market area. Federal Home Loan Bank advances were down $6,500,000 due
to the previously mentioned sale of securities involved in an arbitrage funded
primarily by Federal Home Loan Bank advances. Retail repurchase agreements
increased $7,187,000 as the Bank received a $6,000,000 repurchase agreement from
a corporate customer in first quarter 1996. It is anticipated that this balance
will remain in the Bank for the foreseeable future. Other borrowings decreased
$4,084,000 due primarily to the Bank and Thrift increasing their purchases of
the mortgage loans held for sale and funding those purchases with increases in
other time deposits.
NON-PERFORMING ASSETS
Non-performing loans were $672,000 and other real estate owned was $309,000
at September 30, 1996. There was no material change from year end. Management
believes that the loan loss allowance is adequate at September 30, 1996. Year-
to-date 1996 had net recoveries of $26,000.
14
<PAGE>
RESULTS OF OPERATIONS
Net income for the third quarter of 1996 was $103,000 as compared to
$662,000 for the third quarter of 1995. Year-to-date net income for 1996 was
$1,538,000 versus $1,709,000 in 1995. Included in third quarter 1996 earnings
were merger, conversion, severance and related expenses of $487,000. In
addition, Premier Bank, FSB, paid a SAIF Insurance Assessment of $202,000.
Excluding these unusual items, net income would have been $659,000 in the third
quarter of 1996. Year-to-date, net income for 1996 included merger, severance
and SAIF assessment expense of $953,000. Excluding these unusual items,
earnings for the nine months of 1996 would have been $2,337,000 or an increase
of $628,000 over the same period in 1995. Earnings per share for the third
quarter of 1996 were $.04 per share versus $.28 per share in 1995. Excluding the
quarter's unusual items, the per share income was the same in both periods. On a
year-to-date basis, earnings per share in 1996 were $.65 versus $.73 for the
same period in 1995. Excluding the year-to-date unusual items, earnings per
share in 1996 were $.99, an increase over the same period in 1995 of $.26.
NET INTEREST INCOME
Net interest income increased $422,000 in third quarter 1996 versus third
quarter 1995. As the level of interest rates has remained fairly similar in both
quarters, the primary reason for the increased income was an increase of
$48,765,000 in earning assets. The change in the net interest margin year-to-
date versus the same period in 1995 was $2,408,000. This increase was also due
to the above-mentioned increase in earning assets together with a full nine
months of income related to the Thrift which was purchased by Premier Bancshares
on May 1, 1995. The impact of the extra four months in 1996 is approximately
$850,000.
PROVISION FOR LOAN LOSS
The provision for loan losses was $133,000 in third quarter 1996 versus
$97,000 in third quarter 1995. The increase in the provision was due solely to
growth in outstanding loans.
15
<PAGE>
Non-performing loans decreased between the two periods. Net recoveries were
similar in both periods. The year-to-date 1996 loan loss provision was $404,000
versus $252,000 for the same period in 1995.
NON-INTEREST INCOME
Non-interest income increased $380,000 for third quarter 1996 and
$2,680,000 for year-to-date 1996 over the same periods in 1995. The increase in
the quarter was due to increases in mortgage originations and sales of mortgages
of $249,000, an increase in commercial finance maintenance fees of $65,000 and
gains on sales of SBA loans of $81,000. The increase in the year-to-date income
in 1996 versus 1995 was due to increases in mortgage originations and sales of
mortgages of $2,002,000, an increase in commercial finance fees of $398,000 and
an increase in sales of SBA loans of $156,000.
NON-INTEREST EXPENSE
Non-interest expense increased $1,447,000 in third quarter 1996 and
$5,031,000 for year-to-date 1996 over the same period in 1995. The increase in
the quarter was due to merger, conversion, severance and an FDIC special deposit
assessment of $705,000. Salaries, commissions and employee benefits were up
$718,000 due to three additional loan officers in the Bank, severance pay of
$100,000 and the addition of a new branch in the Thrift. Additionally, there
was an increase of $438,000 in Lending due to an increase in commissions on the
mortgage origination and sale fees and additional support staff. Occupancy and
equipment expenses were up $175,000. This increase was the result of a new
branch in the Thrift and an additional loan origination office in Lending. The
year-to-date increase in non-interest expense of $5,031,000 was the result of
merger, conversion, severance and FDIC special assessment of $954,000. In
addition, there were nine months of expense for the Thrift in 1996 versus five
months of expense in 1995. An estimate of that expense is $870,000. Salary and
commission expense in Lending increased $2,956,000 due to increased sales volume
and an additional origination office and staff.
16
<PAGE>
INCOME TAXES
Consolidated income taxes decreased $122,000 in third quarter 1996 versus
third quarter 1995. The effective tax rate was substantially higher in 1996 due
to the non-deductibility of merger related expenses. The two year-to-date
effective tax rates were 29.6% and 26.9%, respectively.
17
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending proceedings to which the Company is a
party or of which any of its properties are subject; nor are there
material proceedings known to the Company contemplated by any
governmental authority; nor are there material proceedings known to
the Company, pending or contemplated, in which any director, officer
or affiliate or any principal security holder of the Company, or any
associate of any of the foregoing, is a party or has an interest
adverse to the Company.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS ON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS.
(a) On August 15, 1996, the Company held a special meeting of
shareholders for the following purposes: (a) to consider and vote
on an amendment to the Company's Articles of Incorporation to
increase the number of authorized shares of its common stock from
2,000,000 to 20,000,000; and (b) to consider and vote on an
amendment to the Company's Articles of Incorporation to authorize
the issuance of 2,000,000 shares of preferred stock with such
designations, relative rights and preferences as may be approved
from time to time by the Company's Board of Directors.
The proposal described in (a) above was adopted with 1,194,489
shares voted in favor, 6,230 shares voted against, and 1,360
shares abstained from voting.
The proposal described in (b) above was adopted with 1,183,437
shares voted in favor, 16,621 shares voted against, and 2,021
shares abstained from voting.
ITEM 5. OTHER INFORMATION.
None
18
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
2. Merger Agreement dated January 30, 1996, as amended April
29, 1996, between First Alliance Bancorp, Inc. And Premier
Bancshares, Inc. (Incorporated herein by reference to the
Registration Statement on Form S-4 (Registration No. 333-
07993) filed by First Alliance Bancorp, Inc. with respect to
the merger.)
3.1. Articles of Incorporation of First Alliance Bancorp, Inc.,
as amended through August 31, 1996.
3.2. Bylaws of First Alliance Bancorp, Inc., as amended through
August 31, 1996.
27. Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on September 16, 1996 (a)
to report its merger with Premier Bancshares, Inc. In response to
Item 2 and (b) to provide the required financial information by
incorporation by reference in response to Item 7. The date of the
event reported was August 31, 1996.
(Signatures on page 20)
19
<PAGE>
SIGNATURES
In accordance with requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FIRST ALLIANCE/PREMIER BANCSHARES, INC.
BY:
-------------------------------
Frank H. Roach
Chief Financial Officer
(Principal Financial and
Accounting Officer)
20
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF MERGER
OF
PREMIER BANCSHARES, INC.
WITH
FIRST ALLIANCE BANCORP, INC.
(to be known as First Alliance/Premier Bancshares, Inc.)
Pursuant to the provisions of Section 14-2-1105 of the Georgia Business
Corporation Code, First Alliance Bancorp, Inc., a corporation organized and
existing under the laws of the State of Georgia ("First Alliance") hereby
executes the following Certificate of Merger:
1. Pursuant to an Agreement and Plan of Reorganization, dated as of
January 30, 1996, as amended on April 29, 1996 (as so amended, the "Agreement"),
at the effective time set forth in Section 7 of this Certificate of Merger,
Premier Bancshares, Inc., a corporation organized and existing under the laws of
the State of Georgia ("Premier") will merge with and into First Alliance (the
"Merger").
2. First Alliance will be the surviving corporation resulting from the
Merger (the "Surviving Corporation") and will operate under the name:
"First Alliance/Premier Bancshares, Inc."
3. First Alliance hereby amends Article 1 of its Articles of Incorporation
by deleting Article 1 in its entirety and inserting in lieu thereof a new
Article 1 as follows:
"The name of the Corporation is First Alliance/Premier Bancshares, Inc."
4. The executed Agreement is on file at the principal place of business of
First Alliance located at 63 Barrett Parkway, N.E., Marietta, Georgia 30066 and
at the principal place of business of Premier located at 2180 Atlanta Plaza, 950
East Ferry Road, Atlanta, Georgia 30326. A copy of the Agreement will be
furnished by either First Alliance or Premier, on request and without cost, to
the shareholders of First Alliance and Premier.
5. The Merger was duly approved by the shareholders of Premier at a
special meeting of Premier shareholders held on August 15, 1996.
6. The undersigned hereby certifies that the Surviving Corporation will
deliver the request for publication of a notice relating to the filing of this
Certificate of Merger, together with payment therefor, as required by Section
14-2-1105.1(b) of the Georgia Business Corporation Code.
7. The Merger shall be effective at 5:00 p.m. on August 31, 1996.
<PAGE>
IN WITNESS WHEREOF, the Surviving Corporation has caused this Certificate
of Merger to be executed in its name by its duly authorized officers as of the
30th day of August, 1996.
- ----
ATTEST: FIRST ALLIANCE BANCORP, INC.
(to be known as First Alliance/Premier
Bancshares, Inc.)
/s/ Frank H. Roach
- -------------------------------
Frank H. Roach
Assistant Secretary By:/s/ J. Edward Mulkey, Jr.
-------------------------
J. Edward Mulkey, Jr.
[CORPORATE SEAL] President
-2-
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
FIRST ALLIANCE BANCORP, INC.
1.
The name of the Corporation is First Alliance Bancorp, Inc., and its
registered office is located in Marietta, Georgia.
2.
The Corporation hereby amends Article 5 of its Articles of Incorporation
(the "Articles") by deleting Article 5 in its entirety and inserting in lieu
thereof a new Article 5 as follows:
"5.
(a) The Corporation shall have the authority to issue twenty
million (20,000,000) shares of common stock (the "Common Stock"),
$1.00 par value, and two million (2,000,000) shares of preferred stock
(the "Preferred Stock").
(b) The Board of Directors of the Corporation is authorized,
subject to limitations prescribed by law and the provisions of this
Article, to provide for the issuance of the shares of Preferred Stock
in series, and by filing a certificate pursuant to the applicable law
of the State of Georgia to establish from time to time the number of
shares to be included in each such series, and to fix the designation,
powers, preferences, and relative rights of the shares of each such
series and the qualifications, or restrictions thereof. The authority
of the Board of Directors with respect to each series shall include,
but not be limited to, determination of the following:
(i) The number of shares constituting that series and the
distinctive designation of that series;
(ii) The dividend rate on the shares of that series,
whether dividends shall be cumulative, and, if so,
from which date or dates, and the relative rights of
priority, if any, of payments of dividends on shares
of that series;
<PAGE>
(iii) Whether that series shall have voting rights, in
addition to the voting rights provided by law, and,
if so, the terms of such voting rights;
(iv) Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such
conversion, including provisions for adjustment of
the conversion rate in such events as the Board of
Directors shall determine;
(v) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of
such redemption, including the date or dates upon or
after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount
may vary under different conditions and at different
redemption rates;
(vi) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and,
if so, the terms and amount of such sinking fund;
(vii) The rights of the shares of that series in the event
of voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, and the relative
rights of priority, if any, of payment of shares of
that series; and
(viii) Any other relative rights, preferences and
limitations of that series."
3.
The amendment to Article 5 was duly approved by the shareholders on August
15, 1996 in accordance with the provisions of Code Section 14-2-1003 of the
Georgia Business Corporation Code.
[Signatures Appear on the Following Page]
-2-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment
to be signed by its duly authorized officers, this 15th day of August, 1996.
FIRST ALLIANCE BANCORP, INC.
By:/s/ J. Edward Mulkey, Jr.
----------------------------------
J. Edward Mulkey, Jr.
President
ATTEST:
/s/ Frank H. Roach
- ---------------------------
Frank H. Roach
Assistant Secretary
[CORPORATE SEAL]
-3-
<PAGE>
ARTICLES OF AMENDMENT
TO
THE ARTICLES OF INCORPORATION
OF
FIRST ALLIANCE BANCORP, INC.
1. The name of the corporation is First Alliance Bancorp, Inc.
2. The Articles of Incorporation of First Alliance Bancorp, Inc. are
hereby amended by deleting Article 5 thereof in its entirety and substituting
therefor the following:
"5.
"The aggregate number of shares which the Corporation shall have
authority to issue is 2,000,000, all of which shall be common
shares of $1.00 par value per share."
All other provisions of the Articles of Incorporation shall remain in full force
and effect.
3. The foregoing amendment was approved by the Board of Directors of the
corporation, without shareholder action, on March 12, 1996. Shareholder
approval was not required pursuant to the provisions of Section 14-2-1002(5) of
the Georgia Business Corporation Code.
IN WITNESS WHEREOF, the corporation has caused these Articles of Amendment
to be executed by its duly authorized officer this 3rd day of May, 1996.
FIRST ALLIANCE BANCORP, INC.
By: /s/ J. Edward Mulkey, Jr.
---------------------------
J. Edward Mulkey, Jr.
President and Chief
Executive Officer
<PAGE>
ARTICLES OF AMENDMENT
TO
THE ARTICLES OF INCORPORATION
OF
COMMEX FINANCIAL CORPORATION
1. The name of the corporation is Commex Financial Corporation. The
Corporation was incorporated on April 22, 1988.
2. The Articles of Incorporation of Commex Financial Corporation are
amended by deleting Article 5 thereof in its entirety and substituting therefor
the following:
"The aggregate number of shares which the Corporation shall have
authority to issue is 2,000,000, all of which shall be common shares
of $5.00 par value per share."
All other provisions of the Articles of Incorporation shall remain in full force
and effect.
3. The foregoing amendment was adopted by resolution of the Board of
Directors of the corporation at a meeting held on May 21, 1991 and was duly
approved by the shareholders of the corporation on June 18, 1991 in accordance
with the provisions of Section 14-2-1003 of the Georgia Business Corporation
Code.
IN WITNESS WHEREOF, the corporation has caused these Articles of Amendment
to be executed by its duly authorized officers this 15th day of January, 1992.
COMMEX FINANCIAL CORPORATION
By: /s/ Clyde A. McArthur
---------------------------------
Clyde A. McArthur
Vice President and Chief
Financial Officer
[CORPORATE SEAL]
ATTEST:
By: /s/ Priscilla Gamwell
----------------------
Priscilla Gamwell
Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO
THE ARTICLES OF INCORPORATION
OF
COMMEX FINANCIAL CORPORATION
1. The name of the corporation is Commex Financial Corporation. The
Corporation was incorporated on April 22, 1988.
2. The Articles of Incorporation of Commex Financial Corporation are
amended by deleting Article 1 thereof in its entirety and substituting therefor
the following:
"The name of the corporation is First Alliance Bancorp, Inc."
All other provisions of the Articles of Incorporation shall remain in full force
and effect.
3. The foregoing amendment was adopted by resolution of the Board of
Directors of the corporation at a meeting held on May 21, 1991. Pursuant to
Section 14-2-1002(6) of the Georgia Business Corporation Code, shareholder
approval was not required to adopt this amendment.
IN WITNESS WHEREOF, the corporation has caused these Articles of Amendment
to be executed by its duly authorized officers this 15th day of January, 1992.
COMMEX FINANCIAL CORPORATION
By: /s/ Clyde A. McArthur
---------------------------------
Clyde A. McArthur
Vice President and Chief
Financial Officer
[CORPORATE SEAL]
ATTEST:
By: /s/ Priscilla Gamwell
----------------------
Priscilla Gamwell
Secretary
<PAGE>
ARTICLES OF INCORPORATION
OF
COMMEX FINANCIAL CORPORATION
1.
The name of the Corporation is COMMEX FINANCIAL CORPORATION.
2.
The Corporation is organized pursuant to the Georgia Business
Corporation Code.
3.
The Corporation shall have perpetual duration.
4.
The purposes for which the Corporation is organized are to conduct any
businesses and engage in any activities not specifically prohibited to
corporations for profit under the laws of the State of Georgia, and the
Corporation shall have all powers necessary to conduct such businesses and
engage in such activities, including, but not limited to, the powers enumerated
in the Georgia Business Corporation Code or any amendment thereto.
5.
The aggregate number of shares which the Corporation shall have
authority to issue is 1,000,000, all of which shall be common shares of $5.00
par value per share.
6.
Shares of the Corporation may be issued by the Corporation for such
consideration, not less than the par value thereof, as shall be fixed from time
to time by the Board of Directors.
7.
No shareholders shall have any preemptive right to subscribe for or to
purchase any shares or other securities issued by the Corporation.
8.
Subject to the provisions of Section 14-2-91 of the Georgia Business
Corporation Code, the Board of Directors shall have the power to distribute a
portion of the assets of the Corporation, in cash or in property, to holders of
shares of the Corporation out of the capital surplus of the Corporation.
<PAGE>
9.
The initial Board of Directors of the Corporation shall consist of the
following members, whose names and addresses are:
Henry P. Bradford Charles E. Holmes
3701 Frey Lake Road NW 4960 Burnt Hickory Road
Kennesaw, GA 30144 Kennesaw, GA 30144
James L. Coxwell James L. Newsome
P. O. Box 692 3830 Stylesboro Road NW
Acworth, GA 30101 Kennesaw, GA 30144
Robert E. Flournoy, III J. O. Stephenson
356 Redwood Drive 2060 Pine Hill Circle
Marietta, GA 30101 Kennesaw, GA 30144
Jams E. Freeman E. W. Teague
483 Kingswood Drive 4640 Due West Road
Marietta, GA 30064 Kennesaw, GA 30144
10.
The Corporation shall have the full power to purchase and otherwise
acquire, and dispose of, its own shares and securities granted by the laws of
the State of Georgia and shall have the right to purchase its share out of its
unreserved and unrestricted capital surplus available therefor as well as out of
its unreserved and unrestricted earned surplus available therefor.
11.
The address of the initial registered office of the Corporation shall be
located at 2760 Cobb Parkway, Kennesaw, Cobb County, Georgia 30144, Attention:
Mr. Robert E. Flournoy, III, registered agent of the Corporation.
12.
The Corporation shall not commence business until it shall have received
not less than $500 in payment for the issuance of its shares.
13.
The name and address of the Incorporator is Robert E. Flournoy, III, 236
Washington Avenue, Marietta, Georgia 30061.
-2-
<PAGE>
14.
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for a breach of duty or
care or other duty as a director, provided that this elimination of liability
shall not eliminate or limit the liability of a director (i) for an
appropriation, in violation of his duties, of any business opportunity of the
Corporation; (ii) for acts of omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) for the types of
liability set forth in Section 14-2-154 of the Georgia Business Corporation Code
or (iv) for any transaction from which the director derived an improper personal
benefit.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation this 30th day of March, 1988.
/s/ Robert E. Flournoy, III
-----------------------------------
Incorporator
-3-
<PAGE>
BYLAWS
OF
FIRST ALLIANCE/PREMIER BANCSHARES, INC.
INDEX
PAGE
ARTICLE ONE - OFFICES....................................................... 1
ARTICLE TWO - SHAREHOLDERS' MEETINGS........................................ 1
2.1 Annual Meeting................................................... 1
2.2 Special Meetings................................................. 1
2.3 Place............................................................ 1
2.4 Notice........................................................... 1
2.5 Quorum........................................................... 2
2.6 Proxies; Required Vote........................................... 2
2.7 Presiding Officer and Secretary.................................. 2
2.8 Shareholder List................................................. 2
2.9 Action in Lieu of Meeting........................................ 2
ARTICLE THREE - DIRECTORS................................................... 3
3.1 Management....................................................... 3
3.2 Number of Directors.............................................. 3
3.3 Vacancies........................................................ 3
3.4 Election of Directors............................................ 3
3.5 Removal.......................................................... 3
3.6 Resignation...................................................... 3
3.7 Compensation..................................................... 4
3.8 Honorary and Advisory Directors.................................. 4
ARTICLE FOUR - COMMITTEES................................................... 4
4.1 Executive Committee.............................................. 4
4.2 Other Committees................................................. 5
4.3 Removal.......................................................... 5
ARTICLE FIVE - MEETINGS OF THE BOARD OF DIRECTORS........................... 5
5.1 Time and Place................................................... 5
5.2 Regular Meetings................................................. 5
5.3 Special Meetings................................................. 5
5.4 Content and Waiver of Notice..................................... 6
5.5 Quorum; Participation by Telephone............................... 6
5.6 Action in Lieu of Meeting........................................ 6
5.7 Interested Directors and Officers................................ 6
1
<PAGE>
ARTICLE SIX - OFFICERS, AGENTS AND EMPLOYEES................................. 7
6.1 General Provisions................................................ 7
6.2 Powers and Duties of the Chairman of the Board and the President.. 7
6.3 Powers and Duties of Vice Presidents.............................. 8
6.4 Powers and Duties of the Secretary................................ 8
6.5 Powers and Duties of the Treasurer................................ 8
6.6 Appointment, Powers and Duties of Assistant Secretaries........... 8
6.7 Appointment, Powers and Duties of Assistant Treasurers............ 8
6.8 Delegation of Duties.............................................. 9
ARTICLE SEVEN - CAPITAL STOCK................................................ 9
7.1 Certificates...................................................... 9
7.2 Shareholder List.................................................. 10
7.3 Transfer of Shares................................................ 10
7.4 Record Dates...................................................... 10
7.5 Registered Owner.................................................. 10
7.6 Transfer Agent and Registrars..................................... 10
7.7 Lost Certificates................................................. 10
7.8 Fractional Shares or Scrip........................................ 11
ARTICLE EIGHT - BOOKS AND RECORDS; SEAL; ANNUAL STATEMENTS................... 11
8.1 Inspection of Books and Records................................... 11
8.2 Seal.............................................................. 12
8.3 Annual Statements................................................. 12
ARTICLE NINE - INDEMNIFICATION............................................... 12
9.1 Authority to Indemnify............................................ 12
9.2 Mandatory Indemnification......................................... 12
9.3 Advancement for Expenses.......................................... 13
9.4 Court-ordered Indemnification and Advances for Expenses........... 13
9.5 Determination of Indemnification.................................. 13
9.6 Authorization of Indemnification.................................. 13
9.7 Other Rights...................................................... 14
9.8 Insurance......................................................... 14
9.9 Continuation of Expenses.......................................... 14
ARTICLE TEN - NOTICES: WAIVERS OF NOTICE.................................... 14
10.1 Notices........................................................... 14
10.2 Waivers of Notice................................................. 15
-ii-
<PAGE>
ARTICLE ELEVEN - EMERGENCY POWERS............................................ 15
11.1 Bylaws............................................................ 15
11.2 Lines of Succession............................................... 15
11.3 Head Office....................................................... 15
11.4 Period of Effectiveness........................................... 15
11.5 Notices........................................................... 15
11.6 Officers as Directors Pro Tempore................................. 15
11.7 Liability of Officers, Directors and Agents....................... 16
ARTICLE TWELVE - CHECKS, NOTES, DRAFTS, ETC.................................. 16
ARTICLE THIRTEEN - AMENDMENTS................................................ 16
-iii-
<PAGE>
BYLAWS
OF
FIRST ALLIANCE/PREMIER BANCSHARES, INC.
ARTICLE ONE
OFFICES
The corporation shall at all times maintain its principal office in
Marietta, Georgia, its registered office in the State of Georgia and its
registered agent at that address, but it may have other offices located within
or outside the State of Georgia as the Board of Directors may determine.
ARTICLE TWO
SHAREHOLDERS' MEETINGS
2.1 Annual Meeting. A meeting of shareholders of the corporation shall be
--------------
held annually, within six (6) months after the end of each fiscal year of the
corporation. The annual meeting shall be held at such time and place and on
such date as the Directors shall determine from time to time and as shall be
specified in the notice of the meeting.
2.2 Special Meetings. Special meetings of the shareholders may be called
----------------
at any time by the corporation's Board of Directors, its President, and by the
corporation upon the written request of any one or more shareholders owning an
aggregate of not less than 25% of the outstanding capital stock of the
corporation. Special meetings shall be held at such a time and place and on
such date as shall be specified in the notice of the meeting.
2.3 Place. Annual or special meetings of shareholders may be held within
-----
or without the State of Georgia.
2.4 Notice. Notice of annual or special shareholders meetings stating the
------
place, day and hour of the meeting shall be given in writing not less than 10
nor more than 50 days before the date of the meeting, either mailed to the last
known address or personally given to each shareholder. Notice of any special
meeting of shareholders shall state the purpose or purposes for which the
meeting is called. The notice of any meeting at which amendments to or
restatements of the articles of incorporation, a merger or share exchange of the
corporation, or the disposition of corporate assets requiring shareholder
approval are to be considered shall state such purpose, and shall further comply
with all requirements of law. Notice of a meeting may be waived by an
instrument in writing executed before or after the meeting. The waiver need not
specify the purpose of the meeting or the business transacted, unless one of the
purposes of the meeting concerns an action specified in Section 14-2-706 of the
Georgia Business Corporation Code (or any successor thereto) that would entitle
the shareholder to dissent therefrom, in which event the waiver shall comply
with the further requirements of Section 14-2-706 concerning such waivers.
Attendance at such meeting in person or by proxy shall constitute a waiver of
notice thereof.
<PAGE>
2.5 Quorum. At all meetings of shareholders, the presence, in person or
------
by proxy, of a majority of the shares outstanding and entitled to vote shall
constitute a quorum for the transaction of business, and no resolution shall be
passed or business transacted without the favorable vote of the holders of a
majority of the shares represented at the meeting and entitled to vote. The
shareholders at a meeting at which a quorum is once present may continue to
transact business at the meeting or at any adjournment thereof, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum. If a meeting
cannot be organized for lack of a quorum, those shareholders present may adjourn
the meeting to such time and place as they determine. Notice of any adjourned
meeting need only be given by announcement at the meeting at which the
adjournment is taken.
2.6 Proxies; Required Vote. At every meeting of the shareholders,
----------------------
including meetings of shareholders for the election of Directors, any
shareholder having the right to vote shall be entitled to vote in person or by
proxy, but no proxy shall be voted after eleven months from its date, unless
said proxy provides for a longer period. Unless otherwise specified in the
corporation's Articles of Incorporation, each shareholder shall have one vote
for each share of stock having voting power registered in his or her name on the
books of the corporation. If a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall represent the act of the shareholders, except as otherwise
provided by law, the Articles of Incorporation or these Bylaws.
2.7 Presiding Officer and Secretary. At every meeting of shareholders,
-------------------------------
the Chairman or the President, or, if such officers shall not be present, then
the person appointed by one of them, shall preside. The presiding officer shall
appoint such persons as he or she deems necessary to assist with the meeting.
The Secretary or an Assistant Secretary, or if such officers shall not be
present, the appointee of the presiding officer of the meeting, shall act as
secretary of the meeting.
2.8 Shareholder List. The officer or agent having charge of the stock
----------------
transfer books of the corporation shall produce for inspection of any
shareholder at, and continuously during, every meeting of the shareholders, a
complete alphabetical list of shareholders showing the address and share
holdings of each shareholder. If the record of shareholders readily shows such
information, it may be produced in lieu of such a list.
2.9 Action in Lieu of Meeting. Any action to be taken at a meeting of the
-------------------------
shareholders of the corporation, or any action that may be taken at a meeting of
the shareholders may be taken without a meeting, if a consent in writing setting
forth the action to be taken shall be signed by those persons who would be
entitled to vote at a meeting those shares having voting power to cast not less
than the minimum number (or numbers, in the case of voting by class) of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote were present and voted.
-2-
<PAGE>
ARTICLE THREE
DIRECTORS
3.1 Management. Subject to these Bylaws, or any lawful agreement
----------
between the shareholders, the full and entire management of the affairs and
business of the corporation shall be vested in the Board of Directors, which
shall have and may exercise all of the powers that may be exercised or performed
by the corporation.
3.2 Number of Directors. The Board of Directors shall consist of not
-------------------
less than four (4) nor more than eighteen (18) members. The number of directors
may be fixed or changed from time to time, within the minimum and maximum set
forth above, by the shareholders or the Board of Directors.
3.3 Vacancies. The Directors may fill the position of any Director
---------
that becomes vacant prior to the expiration of such Director's term, even though
acting through less than a quorum of Directors or by the sole remaining
Director, or may fill any directorship created by reason of an increase in the
number of directors. Any such appointment by the Directors shall continue until
the expiration of the term of the Director whose position has become vacant.
3.4 Election of Directors. Except as provided in Section 3.3, the
---------------------
directors shall be elected by the affirmative vote of a majority of the shares
represented and entitled to vote at the corporation's annual meeting of
shareholders. Each director shall serve until the election and qualification of
his or her successor or until his or her earlier resignation, death or removal
from office.
3.5 Removal. Any Director may be removed from office at a meeting
-------
with respect to which notice of such purpose is given (a) without cause, only
upon the affirmative vote of the holders of at least two-thirds (66-2/3%) of the
issued and outstanding shares of the corporation, and (b) with cause, only upon
the affirmative vote of the holders of a majority of the issued and outstanding
shares of the corporation. The term "cause" shall mean (i) the adjudication of
such director as incompetent by a court having jurisdiction in the matter, (ii)
the conviction of such director of a felony, (iii) the failure of such director
to accept office either in writing or by attendance at no less than one of the
first two meetings of the Board of Directors following his or her election or
(iv) the failure of such director to attend regular meetings of the Board of
Directors for six consecutive meetings without having been excused by the Board
of Directors.
3.6 Resignation. Any Director may resign at any time either orally
-----------
at any meeting of the Board of Directors or by so advising the Chairman of the
Board or the President or by giving written notice to the corporation. A
Director who resigns may postpone the effectiveness of his or her resignation to
a future date or upon the occurrence of a future event specified in a written
tender of resignation. If no time of effectiveness is specified therein, a
resignation shall be effective upon tender. A vacancy shall be deemed to exist
at the time a resignation is tendered, and the Board of Directors or the
shareholders may, then or thereafter, elect a successor to take office when the
resignation by its terms becomes effective.
-3-
<PAGE>
3.7 Compensation. Directors may be allowed such compensation for
------------
their services as Directors as may from time to time be fixed by resolution of
the Board of Directors.
3.8 Honorary and Advisory Directors. When a Director of the
-------------------------------
corporation retires under the retirement policies of the corporation as
established from time to time by the Board of Directors, such Director
automatically shall become an Honorary Director of the corporation following his
or her retirement. The Board of Directors of the corporation also may appoint
any individual an Honorary Director, Director Emeritus or member of any advisory
board established by the Board of Directors. Any individual automatically
becoming an Honorary Director or appointed an Honorary Director, Director
Emeritus or member of an advisory board as provided by this Section 3.8 may be
compensated as provided in Section 3.7, but such individual may not vote at any
meeting of the Board of Directors or be counted in determining a quorum as
provided in Section 5.5 and shall not have any responsibility or be subject to
any liability imposed upon a Director or otherwise be deemed a Director.
ARTICLE FOUR
COMMITTEES
4.1 Executive Committee. (a) The Board of Directors may, by
-------------------
resolution adopted by a majority of the entire Board, designate an Executive
Committee consisting of one or more Directors. Each Executive Committee member
shall hold office until the first meeting of the Board of Directors after the
annual meeting of shareholders and until the member's successor is duly elected
and qualified, or until the member's death, resignation or removal, or until the
member shall cease to be a Director.
(b) During the intervals between the meetings of the Board of
Directors, the Executive Committee may exercise all the authority of the Board
of Directors; provided, however, that the Executive Committee shall not have the
power to amend or repeal any resolution of the Board of Directors that by its
terms shall not be subject to amendment or repeal by the Executive committee,
and the Executive Committee shall not have the authority of the Board of
Directors in reference to (i) the amendment of the Articles of Incorporation or
Bylaws of the corporation; (ii) the adoption of a plan of merger or
consolidation; (iii) the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the corporation; or (iv) a
voluntary dissolution of the corporation or the revocation of any such voluntary
dissolution.
(c) The Executive Committee shall meet from time to time on call
of the Chairman of the Board or the President or of any two or more members of
the Executive committee. Meetings of the Executive Committee may be held at such
place or places, within or without the State of Georgia, as the Executive
Committee shall determine or as may be specified or fixed in the respective
notices or waivers of such meetings. The Executive Committee may fix its own
rules of procedure, including provision for notice of its meetings. It shall
keep a record of its proceedings and shall report these proceedings to the Board
of Directors at the meeting thereof held next after such proceedings have been
taken, and all such proceedings shall be subject to revision or alteration by
the Board of Directors except to the extent that action shall
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have been taken pursuant to or in reliance upon express authority of the Board
of Directors prior to any such revision or alteration.
(d) The Executive Committee shall act by majority vote of its
members.
(e) Members of the Executive Committee may participate in
committee proceedings via conference telephone or similar communications
equipment by means of which all persons participating in the proceedings can
hear each other, and such participation shall constitute presence in person at
such proceedings.
(f) The Board of Directors, by resolution adopted in accordance
with paragraph (a) of this section, may designate one or more Directors as
alternate members of the Executive Committee who may act in the place and stead
of any absent member or members at any meeting of said committee.
4.2 Other Committees. The Board of Directors, by resolution adopted
----------------
by a majority of the entire Board, may designate one or more additional
committees, each committee to consist of one or more of the Directors of the
corporation, which shall have such name or names and shall have and may exercise
such powers of the Board of Directors, except the powers denied to the Executive
Committee, as may be determined from time to time by the Board of Directors.
Such committees shall provide for their own rules of procedure, subject to the
same restrictions thereon as provided above for the Executive committee.
4.3 Removal. The Board of Directors shall have the power to remove
-------
any member of any committee at any time, with or without cause, and to fill
vacancies on and to dissolve any such committee.
ARTICLE FIVE
MEETINGS OF THE BOARD OF DIRECTORS
5.1 Time and Place. Meetings of the Board of Directors may be held
--------------
at any place either within or without the State of Georgia.
5.2 Regular Meetings. Regular meetings of the Board of Directors may
----------------
be held without notice at such time and place, within or without the State of
Georgia, as shall be determined by the Board of Directors from time to time.
5.3 Special Meetings. Special meetings of the Board of Directors may
----------------
be called by the Chairman of the Board or the President on not less than one
day's notice by mail, telegram, facsimile, cablegram, personal delivery or
telephone to each Director, and shall be called by the Chairman of the Board or
the President in like manner and on like notice on the written request of any
two or more Directors. Any such special meeting shall be held at such time and
place, within or without the State of Georgia, as shall be stated in the notice
of the meeting.
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5.4 Content and Waiver of Notice. No notice of any meeting of the
----------------------------
Board of Directors shall be required to state the purposes thereof. Notice of
any meeting may be waived by an instrument in writing executed before or after
the meeting. Attendance in person at any such meeting shall constitute a waiver
of notice thereof unless the director at the beginning of the meeting (or
promptly upon his or her arrival) objects to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to action
taken at the meeting.
5.5 Quorum; Participation by Telephone. At all meetings of the Board
----------------------------------
of Directors, the presence of a majority of the authorized number of Directors
shall be necessary and sufficient to constitute a quorum for the transaction of
business. Directors may participate in any meeting via conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting by means of such
communications equipment shall constitute the presence in person at such
meeting. Except as may be otherwise specifically provided by law, the Articles
of Incorporation or these Bylaws, all resolutions adopted and all business
transacted by the Board of Directors shall require the affirmative vote of a
majority of the Directors present at the meeting. In the absence of a quorum, a
majority of the Directors present at any meeting may adjourn the meeting from
time to time until a quorum is present. Notice of any adjourned meeting need
only be given by announcement at the meeting at which the adjournment is taken.
5.6 Action in Lieu of Meeting. Any action required or permitted to
-------------------------
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the case may be, and
such written consent is filed with the minutes of the proceedings of the Board
of Directors and upon compliance with any further requirements of law pertaining
to such consents.
5.7 Interested Directors and Officers. An interested Director or
---------------------------------
officer is one who is a party to a contract or transaction with the corporation
or who is an officer or Director of, or has a financial interest in, another
corporation, partnership or association which is a party to a contract or
transaction with the corporation. Contracts and transactions between the
corporation and one or more interested Directors or officers shall not be void
or voidable solely because of the involvement or vote of such interested persons
as long as (a) the contract or transaction is approved in good faith by the
Board of Directors or an appropriate committee thereof by the affirmative vote
of a majority of disinterested Directors, even if the disinterested Directors be
less than a quorum, at a meeting of the Board or committee at which the material
facts as to the interested person or persons and the contract or transaction are
disclosed or known to the Board or committee prior to the vote; (b) the contract
or transaction is approved in good faith by the shareholders after the material
facts as to the interested person or persons and the contract or transaction
have been disclosed to them; or (c) the contract or transaction is fair as to
the corporation as of the time it is authorized, approved or ratified by the
Board, committee or shareholders. Interested Directors may be counted in
determining the presence of a quorum at a meeting of the Board or committee
which authorizes the contract or transaction.
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ARTICLE SIX
OFFICERS, AGENTS AND EMPLOYEES
6.1 General Provisions. The officers of the corporation shall be a
------------------
President, a Secretary and a Treasurer, and may include a Chairman of the Board,
one or more Vice Presidents, one or more Assistant Secretaries and one or more
Assistant Treasurers. The officers shall be elected by the Board of Directors
at the first meeting of the Board of Directors after the annual meeting of the
shareholders in each year or shall be appointed as provided in these Bylaws.
The Board of Directors may elect other officers, agents and employees, who shall
have such authority and perform such duties as may be prescribed by the Board of
Directors. All officers shall hold office until the meeting of the Board of
Directors following the next annual meeting of the shareholders after their
election or appointment and until their successors shall have been duly elected
or appointed and shall have qualified. Any two or more offices may be held by
the same person. Any officer, agent or employee of the corporation may be
removed by the Board of Directors with or without cause. Removal without cause
shall be without prejudice to such person's contractual rights, if any, but the
election or appointment of any person as an officer, agent or employee of the
corporation shall not of itself create contractual rights. The compensation of
officers, agents and employees elected by the Board of Directors shall be fixed
by the Board of Directors or by a committee thereof, and this power may also be
delegated to any officer, agent or employee as to persons under his or her
direction or control. The Board of Directors may require any officer, agent or
employee to give security for the faithful performance of his or her duties.
6.2 Powers and Duties of the Chairman of the Board and the President.
----------------------------------------------------------------
The powers and duties of the Chairman of the Board and the President, subject to
the supervision and control of the Board of Directors, shall be those usually
appertaining to their respective offices and whatever other powers and duties
are prescribed by these Bylaws or by the Board of Directors.
(a) The Chairman of the Board shall preside at all meetings of
---------------------
the Board of Directors and at all meetings of the shareholders. The Chairman of
the Board shall perform such other duties as the Board of Directors may from
time to time direct, but shall not participate in any major policy-making
functions of the corporation other than in his or her capacity as a director.
The President shall act as Chairman of the Board of Directors unless another
director is elected Chairman.
(b) The President shall, unless otherwise provided by the Board
---------
of Directors, be the chief executive officer of the corporation. The President
shall have general charge of the business and affairs of the corporation and
shall be obligated to keep the Board of Directors fully advised thereof. The
President shall employ and discharge employees and agents of the corporation,
except such as shall be elected by the Board of Directors, and he or she may
delegate these powers. The President shall have such powers and perform such
duties as generally pertain to the office of the President, as well as such
further powers and duties as may be prescribed by the Board of Directors. The
President may vote the shares or other securities of any other domestic or
foreign corporation of any type or kind which may at any time be owned by the
corporation, may execute any shareholders' or other consents in respect thereof
and may,
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in his or her discretion, delegate such powers by executing proxies on behalf of
the corporation. The Board of Directors, by resolution from time to time, may
confer like powers upon any other person or persons.
6.3 Powers and Duties of Vice Presidents. Each Vice President shall
------------------------------------
have such powers and perform such duties as the Board of Directors or the
President may prescribe and shall perform such other duties as may be prescribed
by these Bylaws. In the absence or inability to act of the President, unless the
Board of Directors shall otherwise provide, the Vice President who has served in
that capacity for the longest time and who shall be present and able to act,
shall perform all duties and may exercise any of the powers of the President.
The performance of any such duty by a Vice President shall be conclusive
evidence of his or her power to act.
6.4 Powers and Duties of the Secretary. The Secretary shall have
----------------------------------
charge of the minutes of all proceedings of the shareholders and of the Board of
Directors and shall keep the minutes of all their meetings at which he or she is
present. Except as otherwise provided by these Bylaws, the Secretary shall
attend to the furnishing of all notices to shareholders and Directors. He or
she shall have charge of the seal of the corporation, shall attend to its use on
all documents the execution of which on behalf of the corporation under its seal
is duly authorized and shall attest the same by his or her signature whenever
required. The Secretary shall have charge of the record of shareholders of the
corporation, of all written requests by shareholders that notices be mailed to
them at an address other than their addresses on the record of shareholders, and
of such other books and papers as the Board of Directors may direct. Subject to
the control of the Board of Directors, the Secretary shall have all such powers
and duties as generally are incident to the position of Secretary or as may be
assigned to the Secretary by the President or the Board of Directors.
6.5 Powers and Duties of the Treasurer. The Treasurer shall have
----------------------------------
charge of all funds and securities of the corporation, shall endorse the same
for deposit or collection when necessary and deposit the same to the credit of
the corporation in such banks or depositaries as the Board of Directors may
authorize. The Treasurer may endorse all commercial documents requiring
endorsements for or on behalf of the corporation and may sign all receipts for
or on behalf of the corporation and may sign all receipts and vouchers for
payments made to the corporation. The Treasurer shall have all such powers and
duties as generally are incident to the position of Treasurer or as may be
assigned to the Treasurer by the President or by the Board of Directors.
6.6 Appointment, Powers and Duties of Assistant Secretaries.
-------------------------------------------------------
Assistant Secretaries may be appointed by the President or elected by the Board
of Directors. In the absence or inability of the Secretary to act, any
Assistant Secretary may perform all the duties and exercise all the powers of
the Secretary. The performance of any such duty shall be conclusive evidence of
the Assistant Secretary's power to act. An Assistant Secretary shall also
perform such other duties as the Secretary or the Board of Directors may assign
to him or her.
6.7 Appointment, Powers and Duties of Assistant Treasurers.
------------------------------------------------------
Assistant Treasurers may be appointed by the President or elected by the Board
of Directors. In the absence or inability of the Treasurer to act, an Assistant
Treasurer may perform all the duties and exercise
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all the powers of the Treasurer. The performance of any such duty shall be
conclusive evidence of the Assistant Treasurer's power to act. An Assistant
Treasurer shall also perform such other duties as the Treasurer or the Board of
Directors may assign to him or her.
6.8 Delegation of Duties. In case of the absence of any officer of
--------------------
the corporation, or for any other reason that the Board of Directors may deem
sufficient, the Board of Directors (or in the case of Assistant Secretaries or
Assistant Treasurers only, the President) may confer for the time being the
powers and duties, or any of them, of such officer upon any other officer or
elect or appoint any new officer to fill a vacancy created by death,
resignation, retirement or termination of any officer. In the latter event,
such new officer shall serve until the next annual election of officers.
ARTICLE SEVEN
CAPITAL STOCK
7.1 Certificates. (a) The interest of each shareholder shall be
------------
evidenced by a certificate or certificates representing shares of the
corporation which shall be in such form as the Board of Directors may from time
to time adopt and shall be numbered and shall be entered in the books of the
corporation as they are issued. Each certificate representing shares shall set
forth upon the face thereof the following:
(i) the name of this corporation;
(ii) that the corporation is organized under the laws of the
State of Georgia;
(iii) the name or names of the person or persons to whom the
certificate is issued;
(iv) the number and class of shares, and the designation of
the series, if any, which the certificate represents; and
(v) if any shares represented by the certificate are
nonvoting shares, a statement or notation to that effect; and, if the
shares represented by the certificate are subordinate to shares of any
other class or series with respect to dividends or amounts payable on
liquidation, the certificate shall further set forth on either the
face or back thereof a clear and concise statement to that effect.
(b) Each certificate shall be signed by the President or a Vice
President and the Secretary or an Assistant Secretary and may be sealed with the
seal of the corporation or a facsimile thereof. If a certificate is
countersigned by a transfer agent or registered by a registrar, other than the
corporation itself or an employee of the corporation, the signature of any such
officer of the corporation may be a facsimile. In case any officer or officers
who shall have signed, or whose facsimile signature or signatures shall have
been used on, any such certificate or certificates shall cease to be such
officer or officers of the corporation, whether because of
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death, resignation or otherwise, before such certificate or certificates shall
have been delivered by the corporation, such certificate or certificates may
nevertheless be delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signatures shall have been used
thereon had not ceased to be such officer or officers.
7.2 Shareholder List. The corporation shall keep or cause to be kept a
----------------
record of the shareholders of the corporation which readily shows, in
alphabetical order or by alphabetical index, and by classes or series of stock,
if any, the names of the shareholders entitled to vote, with the address of and
the number of shares held by each.
7.3 Transfer of Shares. Transfers of stock shall be made on the books of
------------------
the corporation only by the person named in the certificate, or by power of
attorney lawfully constituted in writing, and upon surrender of the certificate,
or in the case of a certificate alleged to have been lost, stolen or destroyed,
upon compliance with the provisions of Section 7.7 of these Bylaws.
7.4 Record Dates. (a) For the purpose of determining shareholders
------------
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any dividend, or in order
to make a determination of shareholders for any other proper purpose, the Board
of Directors may provide that the stock transfer books shall be closed for a
stated period, which period may not exceed 70 days. If the stock transfer books
shall be closed for the purpose of determining shareholders entitled to notice
of or to vote at a meeting of shareholders, such books shall be closed for at
least ten days immediately preceding such meeting.
(b) In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders, such date to be not more than 70 days and, in
case of a meeting of shareholders, not less than ten days, prior to the date on
which the particular action requiring such determination of shareholders is to
be taken.
7.5 Registered Owner. The corporation shall be entitled to treat the
----------------
holder of record of any share of stock of the corporation as the person entitled
to vote such share, to receive any dividend or other distribution with respect
to such share and for all other purposes, and accordingly shall not be bound to
recognize any equitable or other claim or interest in such share on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by law.
7.6 Transfer Agent and Registrars. The Board of Directors may appoint one
-----------------------------
or more transfer agents and one or more registrars and may require each stock
certificate to bear the signature or signatures of a transfer agent or a
registrar or both.
7.7 Lost Certificates. Any person claiming a certificate of stock to be
-----------------
lost, stolen or destroyed shall make an affidavit or affirmation of that fact in
such manner as the Board of Directors may require and, if the Board so requires,
shall give the corporation a bond of indemnity in form and amount and with one
or more sureties satisfactory to the Board of
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Directors, whereupon an appropriate new certificate may be issued in lieu of the
certificate alleged to have been lost, stolen or destroyed.
7.8 Fractional Shares or Scrip. The corporation may, when and if
--------------------------
authorized so to do by its Board of Directors, issue certificates for fractional
shares or scrip in order to effect share transfers, share distributions or
reclassifications, mergers, consolidations or reorganizations. Holders of
fractional shares shall be entitled, in proportion to their fractional holdings,
to exercise voting rights, receive dividends and participate in any of the
assets of the corporation in the event of liquidation. Holders of scrip shall
not, unless expressly authorized by the Board of Directors, be entitled to
exercise any rights of a shareholder of the corporation, including voting
rights, dividend rights or the right to participate in any assets of the
corporation in the event of liquidation. In lieu of issuing fractional shares
or scrip, the corporation may pay in cash the fair value of fractional interests
as determined by the Board of Directors; and the Board of Directors may adopt
resolutions regarding rights with respect to fractional shares or scrip as it
may deem appropriate, including without limitation the right for persons
entitled to receive fractional shares to sell such fractional shares or purchase
such additional fractional shares as may be needed to acquire one full share, or
sell such fractional shares or scrip for the account of such persons.
ARTICLE EIGHT
BOOKS AND RECORDS; SEAL; ANNUAL STATEMENTS
8.1 Inspection of Books and Records. (a) Any person who shall have been a
-------------------------------
shareholder of record for at least six months immediately preceding his or her
demand or who shall be the holder of record of, or authorized in writing by the
holders of record of, at least two percent (2%) of the outstanding shares of any
class or series of the corporation, upon written demand stating the purpose
thereof, shall have the right to examine in person or by agent or attorney, at
any reasonable time or times, for any proper purpose, the corporation's books
and records of account and minutes and records of shareholders and to make
extracts therefrom.
(b) A shareholder may inspect and copy the records described in the
immediately preceding paragraph only if (i) his or her demand is made in good
faith and for a proper purpose that is reasonably relevant to his or her
legitimate interest as a shareholder; (ii) the shareholder describes with
reasonable particularity his or her purpose and the records he or she desires to
inspect; (iii) the records are directly connected with the stated purpose; and
(iv) the records are to be used only for that purpose.
(c) If the Secretary or a majority of the corporation's Board of
Directors or Executive Committee members find that the request is proper, the
Secretary shall promptly notify the shareholder of the time and place at which
the inspection may be conducted.
(d) If such request is found by the Secretary, the Board of Directors
or the Executive Committee to be improper, the Secretary shall so notify the
requesting shareholder on or prior to the date on which the shareholder
requested to conduct the inspection. The Secretary shall specify in such notice
the basis for the rejection of the shareholder's request.
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(e) The Secretary, the Board of Directors and the Executive Committee
shall at all times be entitled to rely on the corporate records in making any
determination hereunder.
8.2 Seal. The corporate seal shall be in such form as the Board of
----
Directors may from time to time determine. In the event it is inconvenient to
use such a seal at any time, the signature of the corporation followed by the
word "Seal" enclosed in parentheses or scroll shall be deemed the seal of the
corporation.
8.3 Annual Statements. Not later than four months after the close of each
-----------------
fiscal year, and in any case prior to the next annual meeting of shareholders,
the corporation shall prepare:
(a) A balance sheet showing in reasonable detail the financial
condition of the corporation as of the close of its fiscal year; and
(b) A profit and loss statement showing the results of its operations
during its fiscal year. Upon written request, the corporation promptly
shall mail to any shareholder of record a copy of its most recent balance
sheet and profit and loss statement.
ARTICLE NINE
INDEMNIFICATION
9.1 Authority to Indemnify. The corporation may indemnify or obligate
----------------------
itself to indemnify an individual made a party to a proceeding because he or she
is or was a Director, officer, employee or agent of the corporation (or was
serving at the request of the corporation as a director, officer or employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise) for reasonable expenses, judgments, fines, penalties and amounts
paid in settlement (including attorneys' fees), incurred in connection with the
proceeding if the individual acted in manner he or she believed in good faith to
be in or not opposed to the best interests of the corporation and, in the case
of any criminal proceeding, he or she had no reasonable cause to believe his or
her conduct was unlawful. The termination of a proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo contendere or its equivalent
---------------
is not, of itself, determinative that the director, officer, employee or agent
did not meet the standard of conduct set forth above. Indemnification permitted
under this section in connection with a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred in connection with the
proceeding.
9.2 Mandatory Indemnification. To the extent that a Director, officer,
-------------------------
employee or agent of the corporation has been successful, on the merits or
otherwise, in the defense of any proceeding to which he or she was a party, or
in defense of any claim, issue or matter therein, because he or she is or was a
Director, officer, employee or agent of the corporation, the corporation shall
indemnify the Director, employee or agent against reasonable expenses incurred
by him or her in connection therewith.
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9.3 Advancement for Expenses. The corporation shall pay for or reimburse
------------------------
the reasonable expenses incurred by a Director, officer, employee or agent of
the corporation who is a party to a proceeding in advance of final disposition
of the proceeding if (a) he or she furnishes the corporation written affirmation
of his or her good faith belief that he or she has met the standard of conduct
set forth in Section 9.1 of this Article, and (b) he or she furnishes the
corporation a written undertaking, executed personally or on his or her behalf,
to repay any advances if it is ultimately determined that he or she is not
entitled to indemnification. The undertaking required by this section must be
an unlimited general obligation but need not be secured and may be accepted
without reference to financial ability to make repayment.
9.4 Court-ordered Indemnification and Advances for Expenses. A Director,
-------------------------------------------------------
officer, employee or agent of the corporation who is a party to a proceeding may
apply for indemnification or advances for expenses to the court conducting the
proceeding or to another court of competent jurisdiction.
9.5 Determination of Indemnification. Except as provided in Section 9.2
--------------------------------
and except as may be ordered by the a court, the corporation may not indemnify a
Director, officer, employee or agent under Section 9.1 unless authorized
thereunder and a determination has been made in the specific case that
indemnification of the Director, officer, employee or agent is permissible in
the circumstances because he or she has met the standard of conduct set forth in
Section 9.1. The determination shall be made:
(a) By the Board of Directors by majority vote of a quorum consisting
of Directors not at the time parties to the proceedings;
(b) If a quorum cannot be obtained, by majority vote of a committee
duly designated by the Board of Directors (in which designation Directors
who are parties may participate), consisting solely of two or more
Directors not at the time parties to the proceeding;
(c) By special legal counsel:
(i) Selected by the Board of Directors or its committee in
the manner prescribed in paragraph (a) or (b) of this section; or
(ii) If a quorum of the Board of Directors cannot be
obtained and a committee cannot be designated, selected by majority
vote of the full Board of Directors (in which selection Directors who
are parties may participate); or
(d) By the shareholders, but shares owned by or voted under the
control of Directors who are at the time parties to the proceeding may not
be voted on the determination.
9.6 Authorization of Indemnification. Authorization of indemnification or
--------------------------------
an obligation to indemnify and evaluation as the reasonableness of expenses
shall be made in the same manner as the determination that indemnification is
permissible, except that if the
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determination is made by special legal counsel, authorization of indemnification
and evaluation as to reasonableness of expenses shall be made by those entitled
under subsection (c) of Section 9.5 to select counsel.
9.7 Other Rights. The indemnification and advancement of expenses
------------
provided by or granted pursuant to this Article Nine shall not be deemed
exclusive of any other rights, in respect of indemnification or otherwise, to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, resolution, agreement or contract either specifically or in
general terms approved by the affirmative vote of the holders of a majority of
the shares entitled to vote thereon taken at a meeting, the notice of which
specified that such bylaw, resolution or agreement would be placed before the
shareholders, both as to action by a Director, trustee, officer, employee or
agent in his or her official capacity and as to action in another capacity while
holding such office or position; except that no such other rights, in respect to
indemnification or otherwise, may be provided or granted to a Director, trustee,
officer, employee or agent pursuant to this Section 9.7 by the corporation for
liability for (a) any appropriation, in violation of his or her duties, of any
business opportunity of the corporation; (b) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (c) the
types of liability set forth in Section 14-2-832 of the Georgia Business
Corporation Code dealing with illegal or unauthorized distributions of corporate
assets, whether as dividends or in liquidation of the corporation or otherwise;
or (d) any transaction from which the director derived an improper material
tangible personal benefit.
9.8 Insurance. The corporation may purchase and maintain insurance on
---------
behalf of an individual who is or was a Director, officer, employee or agent of
the corporation or who, while a Director, officer, employee or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against liability asserted against or incurred by him or her in that
capacity or arising from his or her status as a director, officer, employee, or
agent whether or not the corporation would have power to indemnify him or her
against the same liability under this Article Nine.
9.9 Continuation of Expenses. The indemnification and advancement of
------------------------
expenses provided by or granted pursuant to this Article Nine shall continue as
to a person who has ceased to be a Director, trustee, officer, employee or agent
and shall inure to the benefit of the heirs, executors and administrators of
such a person.
ARTICLE TEN
NOTICES: WAIVERS OF NOTICE
10.1 Notices. Except as otherwise specifically provided in these Bylaws,
-------
whenever under the provisions of these Bylaws notice is required to be given to
any shareholder, Director or officer, it shall not necessarily be construed to
mean personal notice, but such notice may be given by personal notice,
facsimile, telegram or cablegram, or by mail by depositing the same in the post
office or letter box in a postage prepaid sealed envelope, addressed to such
shareholder,
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Director or officer at such address as appears on the books of the corporation,
and such notice shall be deemed to be given at the time when the same shall be
thus sent or mailed.
10.2 Waivers of Notice. Except as otherwise provided in these Bylaws,
-----------------
when any notice is required to be given by law, by the Articles of Incorporation
or by these Bylaws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. In the case of a shareholder, such waiver of notice may
be signed by the shareholder's attorney or proxy duly appointed in writing.
ARTICLE ELEVEN
EMERGENCY POWERS
11.1 Bylaws. The Board of Directors may adopt emergency bylaws, subject to
------
repeal or change by action of the shareholders, which shall, notwithstanding any
provision of law, the Articles of Incorporation or these Bylaws, be operative
during any emergency in the conduct of the business of the corporation resulting
from an attack on the United States or on a locality in which the corporation
conducts its business or customarily holds meetings of its Board of Directors or
its shareholders, or during any nuclear or atomic disaster, or during the
existence of any catastrophe or other similar emergency condition, as a result
of which a quorum of the Board of Directors or a standing committee thereof
cannot readily be convened for action. The emergency bylaws may make any
provision that may be practical and necessary for the circumstances of the
emergency.
11.2 Lines of Succession. The Board of Directors, either before or during
-------------------
any such emergency, may provide, and from time to time may modify, lines of
succession in the event that during such an emergency any or all officers or
agents of the corporation shall for any reason be rendered incapable of
discharging their duties.
11.3 Head Office. The Board of Directors, either before or during any such
-----------
emergency, may (effective during the emergency) change the head office or
designate several alternative head offices or regional offices, or authorize the
officers to do so.
11.4 Period of Effectiveness. To the extent not inconsistent with any
-----------------------
emergency bylaws so adopted, these Bylaws shall remain in effect during any such
emergency and upon its termination, the emergency bylaws shall cease to be
operative.
11.5 Notices. Unless otherwise provided in emergency bylaws, notice of any
-------
meeting of the Board of Directors during any such emergency may be given only to
such of the Directors as it may be feasible to reach at the time, and by such
means as may be feasible at the time, including publication, radio or
television.
11.6 Officers as Directors Pro Tempore. To the extent required to
---------------------------------
constitute a quorum at any meeting of the Board of Directors during any such
emergency, the officers of the corporation who are present shall, unless
otherwise provided in emergency bylaws, be deemed, in order of rank and within
the same rank in order of seniority, Directors for such meeting.
-15-
<PAGE>
11.7 Liability of Officers, Directors and Agents. No officer, Director,
-------------------------------------------
agent or employee acting in accordance with any emergency bylaw shall be liable
except for willful misconduct. No officer, Director, agent or employee shall be
liable for any action taken by him or her in good faith in such an emergency in
furtherance of the ordinary business affairs of the corporation even though not
authorized by the bylaws then in effect.
ARTICLE TWELVE
CHECKS, NOTES, DRAFTS, ETC.
Checks, notes, drafts, acceptances, bills of exchange and other orders or
obligations for the payment of money shall be signed by such officer or officers
or person or persons as the Board of Directors by resolution shall from time to
time designate.
ARTICLE THIRTEEN
AMENDMENTS
The Bylaws of the corporation may be altered or amended and new bylaws may
be adopted by the shareholders at any annual or special meeting of the
shareholders or by the Board of Directors at any regular or special meeting of
the Board of Directors; provided, however, that, if such action is to be taken
at a meeting of the shareholders, notice of the general nature of the proposed
change in the Bylaws shall be given in the notice of meeting. The shareholders
may provide by resolution that any Bylaw provision repealed, amended, adopted,
or altered by them may not be repealed, amended, adopted or altered by the Board
of Directors. Except as otherwise provided in the Articles of Incorporation,
action by the shareholders with respect to Bylaws shall be taken by an
affirmative vote of a majority of all shares entitled to elect Directors, and
action by the Board of Directors with respect to Bylaws shall be taken by an
affirmative vote of a majority of all Directors then holding office.
16
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