SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) : October 28, 1997
FLAG Financial Corporation
(Exact name of registrant as specified in its charter)
Georgia 0-24532 58-2094179
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(State of Incorporation) (Commission File (IRS Employer
Number) Identification
Number)
101 North Greenwood St., P.O. Box 3007
LaGrange, Georgia 30240
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including are code: (706) 845-5000
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Item 5. Other Events
On October 28, 1997, the Registrant entered into an Agreement and Plan
of Merger (the "Merger Agreement") with Middle Georgia Bankshares, Inc. ("Middle
Georgia"), pursuant to which Middle Georgia agreed to merge with and into the
Registrant. Attached hereto as Exhibit 99 is the press release regarding the
announcement of the merger.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits. The following exhibit is filed as part of this report:
99 Press release, dated September 28, 1997, issued by the Registrant.
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EXHIBIT INDEX
Exhibit
Number Description
99 Press release, dated October 28, 1997
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: October 28, 1997
FLAG Financial Corporation
/s/ Ellison C. Rudd
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By Ellison C. Rudd,
Chief Financial Officer
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FOR IMMEDIATE RELEASE
For further information contact:
FLAG Financial Corporation-John S. Holle (706/845-5005)
Middle Georgia Bankshares, Inc.-J. Daniel Speight, Jr. (912/268-2056)
FLAG FINANCIAL CORPORATION AND MIDDLE GEORGIA BANKSHARES, INC.
ANNOUNCE COMBINATION
(October 28, 1997) FLAG Financial Corporation, parent company of First Federal
Savings Bank of LaGrange, Georgia, and Middle Georgia Bankshares, Inc. (MGB),
parent company of Citizens Bank, Vienna, Georgia, today announced the execution
of a definitive agreement to combine their two operations by means of a tax-free
merger. The transaction will be accounted for as a pooling of interests.
The proposed combination is subject to final due diligence, regulatory approval
and approval by the shareholders of both corporations. The combination is
projected to be completed at the end of the first quarter of 1998. Under the
terms of the proposed agreement, shareholders of MGB will receive 15.75 shares
of FLAG Financial Corporation common stock for each share of MGB. Total
outstanding shares of FLAG Financial Corporation will increase from
approximately 2,037,000 to approximately 3,049,300 at closing.
John S. Holle, Chairman and Chief Executive Officer of FLAG Financial
Corporation, commented: "This combination represents the joining together of two
extremely competent and complementary organizations. Over the past several
years, FLAG has been aggressively restructuring its balance sheet by increasing
its commercial and consumer lending and decreasing its reliance on traditional
one-to-four-family mortgages. The ability to combine our operations with those
of a first-quality commercial banking organization like MGB, particularly given
their traditional emphasis on high earnings multiples, technology and
specialized lending opportunities, is a unique opportunity for FLAG."
Dan Speight, Chief Executive Officer of MGB, stated: "This combination will
provide the management team of the combined organization with an outstanding
holding company that will create an innovative vision for the future. John Holle
and I have worked together on a number of committees and boards over time. We
share a common view of the importance of customer service, community involvement
and the people we work with. We plan to grow in size and profitability by
emphasizing the local touch and creating an atmosphere of support from the
holding company to our respective banks. Our shared vision should be an
attractive alternative to other similarly situated financial institutions. We
are excited at the prospect of being able to work together to enhance value for
our shareholders."
Under the terms of the proposed combination, the Board of Directors of FLAG will
be restructured to include five members of the existing Board of Directors of
FLAG and two members of the existing Board of Directors of MGB. John S. Holle
will be Chairman of the Board of the resulting organization, and Dan Speight
will become President and Chief Executive Officer of FLAG. Mr. Holle continued,
"In banking today, there are few assets as valuable as human capital. We are not
only increasing our size by fifty percent, but we are dramatically increasing
our management depth and breadth by integrating Dan Speight and members of his
team into the Holding Company structure. This is a true merger of peers, one in
which we believe the whole will greatly exceed the sum of the parts."
FLAG Financial Corporation, which is based in LaGrange along the I-85 corridor
in west central Georgia, had assets at September 30, 1997 of $238,463,000,
deposits of $177,639,000, loans of $160,131,000 and net income for the quarter
of $502,000. First Federal Savings Bank of LaGrange has five offices, all of
which are located in LaGrange, Troup County, Georgia. Middle Georgia Bankshares,
Inc., based in Unadilla, Georgia along the I-75 corridor just south of Macon,
Georgia, had assets at September 30, 1997 of $119,948,000, deposits of
$104,488,000, loans of $86,597,000 and net income for the quarter of $320,000.
Citizens Bank has offices in Vienna, Unadilla, Pinehurst, Byromville and, as of
June 6, 1997, Montezuma, Georgia. Citizens Bank anticipates opening an office in
Oglethorpe, Georgia, by year end. The Montezuma and Oglethorpe offices were
acquired from Wachovia Bank. In addition to their full-service banking offices,
First Federal has a full-service mortgage operation, which includes a mortgage
production office in Columbus, Georgia, operating as Piedmont Mortgage Services,
and Citizens Bank has a consumer lending office. On a combined pro forma basis
at September 30, 1997, the organization would have had total assets of
$358,411,000, deposits of $282,127,000 and loans of $246,728,000. Both financial
institutions are recipients of The Quality Service Award given by Community
Bankers Association of Georgia, in recognition of outstanding service provided
to customers and the community.
Mr. Speight, commenting on the operational strength of the combined
organization, noted: "The combined organization will have greater financial
strength and depth than either bank could achieve independently in the short
term. This combination will allow us to expand our product lines and our
geographic scope. Though both institutions are oriented to the major interstate
corridors through central Georgia, each lending market has differing strengths,
providing greater asset diversification for the combined organization. Our goal
is to be able to put this greater financial strength to work to build a great
community-based banking organization."
Shares of FLAG trade on the NASDAQ National Market System under the symbol
"FLAG."
