UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _____ to ______
Commission file number 0-24532
FLAG FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2094179
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(State of incorporation) (I.R.S. Employer Identification No.)
P.O. Box 3007
LaGrange, Georgia 30241
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(Address of principal executive offices) (Zip Code)
\
(706) 845-5000
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(Telephone Number)
Indicate by check mark whether the registrant has (1) filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 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 XX NO
Common stock, par value $1 per share: 6,561,879 shares
Outstanding as of May 10, 1999
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Table of Contents
Page
PART I Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at March 31, 1999 and
December 31, 1998............................................. 3
Consolidated Statements of Earnings for the Three Months
Ended March 31, 1999 and 1998................................. 4
Consolidated Statements of Comprehensive Income for the
Three Months Ended March 31, 1999 and 1998.................... 5
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1999 and 1998................................. 6
Notes to Consolidated Financial Statements...................... 7
Item 2. Management's Discussion and Analysis of Financial Condition
And Results of Operations..................................... 9
PART II Other Information
Item 1. Legal Proceedings................................................ 13
Item 2. Changes in Securities............................................ 13
Item 3. Defaults Upon Senior Securities.................................. 13
Item 4. Submission of Matters to a Vote of Security Holders.............. 13
Item 5. Other Information................................................ 13
Item 6. Exhibits and Reports on Form 8-K................................. 13
2
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
- -------------------------------------------------------------------------------
MARCH 31, DECEMBER 31,
1999 1998
------------------------------
ASSETS (UNAUDITED)
Cash and cash equivalents..................... $ 19,137,543 $ 48,576,090
Interest-bearing deposits..................... 1,039,343 1,695,167
Investment securities held-to-maturity........ 4,107,312 4,234,998
Investment securities available-for-sale...... 67,528,055 72,291,309
Investment securities trading................. 323,829 -
Other investments............................. 7,267,442 6,382,443
Mortgage loans held for sale.................. 2,835,752 5,941,739
Loans, net.................................... 395,074,267 377,359,122
Premises and equipment, net................... 14,339,538 14,887,215
Other assets.................................. 19,860,688 19,413,502
----------- -----------
Total assets................... $ 531,513,769 $ 550,781,585
=========== ===========
LIABILITIES
Non interest-bearing deposits................. $ 44,954,870 $ 55,744,640
Interest-bearing deposits..................... 376,663,530 391,053,685
Other borrowed money.......................... 1,080,088 -
Federal funds purchased....................... 3,000,000 -
Advances from Federal Home Loan Bank.......... 47,351,642 48,398,478
Other liabilities............................. 9,868,359 7,720,125
------------ ------------
Total liabilities............. 482,918,489 502,916,928
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock (10,000,000 shares
authorized: none issued and outstanding) $ - $ -
Common stock ($1 parv value, 20,000,000 shares
authorized, 6,561,879 and 6,560,004 shares
issued and outstanding................... 6,561,879 6,560,004
Additional paid-in capital.................... 10,499,506 10,487,618
Retained earnings............................. 29,542,423 28,886,607
Accumulated other comprehensive income........ 1,991,472 1,930,428
------------ ------------
Total stockholders' equity.......... 48,595,280 47,864,657
------------ ------------
Total liabilities and
stockholders' equity.............. $ 531,513,769 $ 550,781,585
============ =============
See Accompanying Notes to Consolidated Financial Statements
3
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings
- --------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31,
---------
1999 1998
---- ----
Interest Income (UNAUDITED)
Interest and fees on loans................ $ 9,626,474 9,075,373
Interest on securities.................... 1,116,103 1,610,682
Interest on time deposits and Federal
funds sold........................... 233,996 66,754
---------- ----------
Total interest income.................... 10,976,573 10,752,809
---------- ----------
Interest Expense
Interest on deposits...................... 4,451,960 4,556,507
Other..................................... 667,403 765,143
---------- ----------
Total interest expense.............. 5,119,363 5,321,650
---------- ----------
Net interest income before
provision for loan losses....... 5,857,210 5,431,159
Provision for Loan Losses 345,000 252,000
---------- ----------
Net interest income after
provision for loan losses......... 5,512,210 5,179,159
---------- ----------
Other Income
Fees and service charges.................. 1,204,945 1,253,152
Gain on sale of investment securities..... 109,296 74,367
Unrealized gain on trading securities..... 317,361 -
Gain on sale of loans..................... 141,606 446,186
Gain on sale of real estate-net........... 12,500 17,737
Other income.............................. 320,480 696,809
---------- ----------
Total other income.................. 2,106,188 2,488,251
---------- ----------
Other Expenses
Salaries and employee benefits............ 3,096,037 2,548,713
Occupancy ................................ 710,908 1,044,736
Other operating........................... 2,283,627 1,940,466
---------- ----------
Total other expenses................ 6,090,572 5,533,915
---------- ----------
Earnings before provision for
income taxes........................ 1,527,826 2,133,495
Provision for income taxes................ 477,088 653,833
---------- ----------
Net earnings ...................... $ 1,050,738 1,479,662
========== ==========
Basic earnings per share.................. $0.16 $0.23
Diluted earnings per share................ $0.16 $0.23
See Accompanying Notes to Consolidated Financial Statements
4
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three months ended
March 31,
1999 1998
---------- ----------
<S> <C> <C>
Net earnings .................................................................. $1,050,738 $1,479,662
Other comprehensive income, net of tax:
Unrealized gains (losses) on investment securities available-for-sale:
Unrealized gains (losses) arising during the period, net
of tax of $ 78,947 and $ 108,538, respectively ...................... 128,808 177,089
Less: Reclassification adjustment for gains included
in net earnings, net of tax of $41,532 and
$28,259 respectively 67,764 46,108
---------- ----------
Other comprehensive income .................................................... 61,044 130,981
---------- ----------
Comprehensive income .......................................................... $1,111,782 $1,610,643
========== ==========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
5
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
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<TABLE>
<CAPTION>
March 31,
---------
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings .............................................. $ 1,050,738 $ 1,479,662
Adjustment to reconcile net earnings to net
cash provided by operating activities:
Depreciation, amortization and accretion .......... 617,816 522,743
Provision for loan losses ......................... 345,000 252,000
Gain on sale of investment securities
available-for-sale ............................ (109,296) (74,367)
Gain on sales of loans ............................ (141,606) (446,186)
Gain on other real estate ......................... (12,500) (17,737)
Change in:
Mortgage loans held for sale ............... 3,247,593 (1,799,695)
Other ...................................... 2,503,601 9,664,739
------------ ------------
Net cash provided by operating activities 7,501,346 9,581,159
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net change in interest-bearing deposits ................... 655,824 (496,182)
Proceeds from sales and maturities of investment securities
available-for-sale .................................... 11,876,846 21,537,660
Proceeds from maturities of investment securities
held-to-maturity ..................................... 123,967 56,024
Proceeds from sale of other investments ................... 1,801,822 0
Purchases of other investments ............................ (2,686,821) (323,300)
Purchases of investment securities available-for-sale ..... (6,920,465) (22,724,807)
Net change in loans ....................................... (18,060,145) (14,993,086)
Proceeds from sale of premises and equipment .............. 21,520 0
Purchases of premises and equipment ....................... (40,999) (1,438,805)
Purchases of cash surrender value life insurance .......... (88,114) (49,894)
------------ -------------
Net cash provided by (used in) investing activities (13,316,565) (18,432,390)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits .................................... (25,179,925) 7,435,174
Change in federal funds purchased ......................... 3,000,000 (170,000)
Proceeds from FHLB advances ............................... 0 5,000,000
Payments of FHLB advances ................................. (1,046,836) (4,181,392)
Proceeds from exercise of stock options ................... 12,553 -
Cash dividends paid ....................................... (409,120) (292,020)
------------ ------------
Net cash provided by (used in) financing activities (23,623.328) 7,791,762
------------ ------------
Net change in cash and cash equivalents ........... (29,438,547) (1,059,469)
Cash and cash equivalents at beginning of period ........... 48,576,090 29,072,230
------------ ------------
Cash and cash equivalents at end of period ..................$ 19,137,543 28,012,761
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
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The accompanying consolidated financial statements have not been audited. The
results of operations are not necessarily indicative of the results of
operations for the full year or any other interim periods.
The accounting principles followed by FLAG Financial Corporation ("FLAG") and
its bank subsidiaries and the methods of applying these principles conform with
generally accepted accounting principles and with general practices within the
banking industry. Certain principles, which significantly affect the
determination of financial position, results of operations, and cash flows are
summarized below and in FLAG's annual report on Form 10-K for the year ended
December 31, 1998.
Note 1. Basis of Presentation
The consolidated financial statements include the accounts of FLAG and its
wholly-owned subsidiaries, First Flag Bank (LaGrange) and Citizens Bank
(Vienna). All significant intercompany accounts and transactions have been
eliminated in consolidation. Certain items in prior period's financial
statements have been reclassified to conform to the current financial statement
presentation.
The consolidated financial information furnished herein represents all
adjustments that are, in the opinion of management, necessary to present a fair
statement of the results of operations, and financial position for the periods
covered herein and are normal and recurring in nature. For further information,
refer to the consolidated financial statements and footnotes included in FLAG's
annual report on Form 10-K for the year ended December 31, 1998.
Note 2. Business Combinations
On February 23, 1999, FLAG announced the signing of a letter of intent to merge
with First Hogansville Bankshares, Inc. ("FHB"), a $31 million asset bank
holding company based in Hogansville, Georgia. The merger agreement provides,
among other things, for the merger of FHB with and into FLAG and the exchange of
each share of FHB common stock for 6.08 shares of FLAG common stock. Total
outstanding shares of FLAG will increase by approximately 575,000 additional
shares at closing.
On March 31, 1999, FLAG announced the execution of a definitivew agreement to
merge with Abbeville Capital Corporation ("Abbeville"), a $58 million asset bank
holding company based in Abbeville, South Carolina. The merger agreement
provides, among other thing, for the merger of Abbeville with and into a
wholly-oowned subsidiary of FLAG and the exchange of each share of Abbeville
common stock for 3.48 shares of FLAG common stock. Total outstanding shares of
FLAG will increase by approximately 826,000 additional shares at closing.
On September 30, 1998, FLAG entered into an agreement to assume deposits
totaling approximately $9 million and to purchase certain assets totaling
approximately $60,000 of a branch banking facility of First Georgia Bank in
Blackshear, Georgia. The transaction was completed on April 30, 1999.
On May 7, 1999, FLAG announced the execution of a definitive agreement to merge
with Thomaston Federal Savings Bank ("TFSB"), a $53 million asset thrift based
in Thomaston, Georgia. The merger agreement provides, among other things, for
the merger of TFSB with and into a wholly-owned subsidiary of FLAG and the
exchange of each share of TFSB common stock for 1.7275 shares of FLAG common
stock. Total outstanding shares of FLAG will increase by approximately 1.1
million additional shares at closing.
7
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
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Note 3. Earnings Per Share
Net earnings per common share are based on the weighted average number of common
shares outstanding during each period. The calculation of basic and diluted
earnings per share is as follows:
March 31,
---------
1999 1998
--------- ---------
Basic earnings per share:
Net earnings .............................. 1,050,736 1,479,662
Weighted Average Common shares
Outstanding ........................... 6,560,754 6,532,739
Per share amount .......................... 0.16 0.23
Diluted earnings per share:
Net earnings .............................. 1,050,736 1,479,662
Effect of dilutive securities -
stock options * ....................... - 34,787
Diluted earnings per share ................ 0.16 0.23
* Stock options were anti-dilutive as of 3/31/99
Note 4. Recently Issued Accounting Standards
In 1998, the financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments
and Hedging Activities". SFAS No. 133 establishes accounting and reporting
standards for hedging activities and for derivative instruments including
derivative instruments embedded in other contracts. It requires the fair value
recognition of derivatives as assets or liabilities in the financial statements.
SFAS No. 133 is effective for all fiscal quarters in fiscal years beginning
after June 15, 1999, but initial application of the statement must be made as of
the beginning of the quarter. At the date of initial application, an entity may
transfer any held-to-maturity security into the available-for-sale or trading
categories without calling into question the entity's intent to hold other
securities to maturity in the future. FLAG believes the adoption of SFAS No. 133
will not have a material impact on its financial position, results of operations
or liquidity.
8
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
- --------------------------------------------------------------------------------
Results of Operations
Quarters ended March 31, 1999 and 1998
Overview
Net earnings for the quarter ended March 31, 1999 decreased $429,000 or 29
percent compared to first quarter 1998. Net earnings per common share decreased
30 percent for the first quarter of 1999 and are $0.16 compared to $0.23 in the
first quarter of 1998. Net interest income increased 8 percent for the quarter
ended March 31, 1999 over the same period of 1998 to $5.9 million. Non-interest
income decreased 15 percent for the first quarter of 1999 compared to the same
period of 1998 and non-interest expense increased 10 percent for the first
quarter of 1999 compared to 1998.
Net Interest Income
Net interest income for the quarter ended March 31, 1999 increased $426,000
compared to the first quarter of 1998. This increase resulted from a $224,000 or
2 percent increase in interest income and a $202,000 or 4 percent decrease in
interest expense. The increase in net interest income reflects the company's
continuing focus on balance sheet management.
Non-Interest Income and Expense
Non-interest income for the first three months of 1999 decreased $ 382,000 or 15
percent compared to the first quarter of 1998. Other income in the first quarter
of 1998 included a one time fee of $530,000 that FLAG received for its
assistance in originating, finding participants and selling an R&D loan.
Excluding this one time loan fee in the first quarter 1998, non-interest income
increased $153,000 due primarily to securities gains and other fee income.
Non-interest expense increased $ 557,000 or 10 percent in the first quarter of
1999 compared to the same period in 1998. Salaries and employee benefits
increased $ 547,000, a 21 % increase over first quarter 1998. The increase was
primarily due to additional staffing requirements, the use of temporary
employees for special projects and the improvement of our employee benefit
package. The benefits currently offered are, in the opinion of management,
necessary to effectively compete in hiring and maintaining a quality staff.
Management also believes consolidation efficiencies will be realized from its
mergers and reduce the need for some personnel.
9
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
- --------------------------------------------------------------------------------
Income Taxes
Income tax expense for the first three months was $ 477,000 in 1999 compared to
$ 654,000 in 1998. The effective tax rate for the first three months ended March
31, 1998 and 1997 was 31 percent.
Provision and Allowance for Possible Loan and Lease Losses
The adequacy of the allowance for loan and lease losses is determined through
management's informed judgment concerning the amount of risk inherent in FLAG's
loan and lease portfolios. This judgment is based on such factors as the change
in levels of non-performing and past due loans and leases, historical loan loss
experience, borrowers' financial condition, concentration of loans to specific
borrowers and industries, estimated values of underlying collateral, and current
and prospective economic conditions. The allowance for loan and lease at March
31, 1999 was $5.6 million compared to $5.8 million at December 31, 1998. The
ratio of the allowance for loan losses to outstanding loans at March 31, 1999
was 1.44 percent, compared to 1.43 percent at December 31, 1998.
Non-Performing Assets and Past Due Loans
Non-performing assets, comprised of real estate owned, non-accrual loans and
loans for which payments are more than 90 days past due, totaled $9.3 million at
March 31, 1999 compared to $10.1 million at December 31, 1998. Non-performing
assets as a percentage of total loans and real estate owned at March 31, 1999
and December 31, 1998 were 2.34 percent and 2.68 percent respectively.
FLAG has a loan review function that continually monitors selected accruing
loans for which general economic conditions or changes within a particular
industry could cause the borrowers financial difficulties. The loan review
function also identifies loans with high degrees of credit or other risks. The
focus of loan review as well as FLAG management is to maintain a low level of
non-performing assets and return current non-performing assets to earning
status.
Management is unaware of any known trends, events or uncertainties that will
have or that are reasonably likely to have a material effect on FLAG's
liquidity, capital resources or operations.
10
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
- --------------------------------------------------------------------------------
Financial Condition
Overview
Total assets were $531.5 million at March 31, 1999, a decrease of $19.3 million
or 3.5 percent from December 31, 1998.
Assets and Funding
At March 31, 1999 earning assets totaled $478 million, an increase of more than
$10.2 million from December 31, 1998. The mix of interest earning assets
remained relatively the same in the first three months of 1999. Loans were at 83
percent of earning assets and investment securities were 15 percent of earning
assets at March 31, 1999.
At March 31, 1999, interest-bearing deposits decreased $14.4 million compared to
December 1998. Non-interest bearing deposits decreased $10.8 million in the
first three months of 1999 and totaled $45 million at March 31, 1999. Federal
Home Loan Bank advances decreased $1 million in the first quarter of 1999 and
totaled $47.4 million at March 31, 1999. At March 31, 1999, deposits represented
88 percent of FLAG's interest-bearing liabilities and Federal Home Loan Bank
advances represented 11 percent.
Liquidity and Capital Resources
Net cash provided by operations totaled $7,500,000 for the quarter ended March
31, 1999. Net cash used by investing activities totaling $13,317,000 consisted
of $9,607,000 in investment securities purchases, an $18,060,000 net increase in
loans outstanding, and an $88,000 increase in cash surrender value of life
insurance, offset by cash flows of $13,803,000 of proceeds from sale and
maturities of investment securities plus a $656,000 increase in interest-bearing
deposits. Net cash used in financing activities consisted largely of $25,180,000
decrease in deposits and $1,047,000 decrease in Federal Home Loan Bank advances
offset by a $3,000,000 increase in federal funds purchased.
Total stockholders' equity at March 31, 1999, was 9.14 percent of total assets
compared to 8.69 percent at December 31, 1998. The slight increase is attributed
to a $19 million decrease in total assets since December 31, 1998.
11
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
- --------------------------------------------------------------------------------
At March 31, 1999, FLAG and its banks were in compliance with various regulatory
capital requirements administered by Federal and state banking agencies. The
following is a table representing FLAG's consolidated Tier-1, tangible capital,
and risk-based capital
March 31, 1999
--------------
Actual Required Excess
Amount % Amount % Amount %
------ - ------ - ------ -
Tier 1 capital ....... $44,159 8.29% $21,298 4.00% $22,861 4.29%
Tangible capital ..... $44,159 8.29% $ 7,786 1.50% $36,173 6.79%
Risk-based capital ... $50,840 12.50% $32,557 8.00% $18,283 4.50%
Year 2000
FLAG and its subsidiaries have been working on Year 2000 for several years. A
Steering Committee of member bank executives and directors reviews the progress
of various task forces within the operating divisions on a monthly basis.
Testing of the core operating system and of critical dates as defined by the
FFIEC has been completed. Interface testing with critical vendor services
relating to customer sensitive issues like accruals, item processing, ATM file
support, statement processing, telephone and internet banking will be completed
no later than June 30, 1999.
Hardware testing has been completed and necessary changes in equipment have been
addressed. The business resumption contingency planning process includes four
phases: 1) establishing organizational planning guidelines, 2) completing a
business impact analysis, 3) developing the business resumption contingency plan
and 4) validation of viability, will be completed on schedule by June 30, 1999.
FLAG cloaely monitors the Year 2000 readiness of the pending merger partners.
The merger partners expected to meet critical date testing and compliance
according to schedule.
FLAG's customer awareness program will intensify during the second and third
quarters to include suggestions and reminders for customer preparation, as well
as disclosure of the individual banks' actions for preparation and readiness for
the new millennium.
12
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
- --------------------------------------------------------------------------------
PART II.
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders
(a) The 1999 Annual Meeting of Shareholders was held on April 21, 1999.
(b) Election of directors
The shareholders voted 4,383,764.516 shares in the affirmative and
110,186 shares were withheld from the authority to vote for the
election of Patti S. Davis, Fred A Durand, III, James W. Johnson and J.
Preston Martin as a class of directors, each to serve a three year term
as a director of the Company.
(c) Amending the Company's 1994 Employees Stock Incentive Plan
The shareholders voted 3,062,033.249 shares in the affirmative and
356,522.735 shares in the negative, with 20,683.532 shares abstaining
for the amendment of the 1994 Employee Stock Incentive Plan.
(d) Ratifying the appointment of Porter Dadle Moore, LLP, as independent
accountants of the Company for the fiscal year ending December 31, 1999
The shareholders voted 4,472,454.212 shares in the affirmative, 6,500
in the negative, with 17,996.304 shares abstaining for the ratification
and appointment of Porter Keadle Moore LLP as independent accountants
of the Company for the fiscal year ending December 31, 1999
Item 5. Other Information - None
Pursuant to Rule 14a-4(c)(1) promulgated under the Securities Exchange
Act of 1934, as amended, shareholders desiring to present a proposal
for consideration at the Company's 2000 Annual Meeting of Shareholders
must notify the Company in writing at its principal office at 101 N.
Greenwood Street, LaGrange, Georgia 30241 of the contents of such
proposal no later than February 15, 2000. Failure to timely submit
such a proposal will enable the proxies appointed by management to
exercise their discretionary voting authority when the proposal is
raised at the Annual Meeting of Shareholders without any discussion of
the matter in the proxy statement.
Item 6. Exhibits and Reports on Form 8-K
Report on Form 8-K filed during first quarter 1999
A Current Report on Form 8-K filed January 8, 1999 regarding
consummation of merger with Empire Bank Corp. on December 11, 1998.
A Current Report on Form 8-K filed January 11, 1999 regarding
consummation of merger between Citizens Bank and The Brown Bank on
December 31, 1998.
A Current Report on Form 8-K filed March 2, 1999 regarding execution
of Letter of Intent to merge First Hogansville Bankshares, Inc. with
FLAG Financial Corporation.
A Current Report on Form 8-K filed March 18, 1999 regarding execution
of Letter of Intent to acquire Thomaston Federsl Savings Bank.
Report on Form 8-K filed since Quarter End 1999 to Present
A Current Report on Form 8-K filed April 7, 1999 regarding execution
of an Agreement and Plan of Merger with Abbeville Capital Corporation,
parent company of The Bank of Abbeville, located in Abbeville, South
Carolina.
A Current Report on Form 8-K filed May 10, 1999 regarding execution of
an Agreement and Plan of Merger with Thomaston Federal Savings Bank,
located in Thomaston, Georgia.
13
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
FLAG Financial Corporation
By:/s/ Patti S. Davis
---------------------
Patti S. Davis
(Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 17,138
<INT-BEARING-DEPOSITS> 1,039
<FED-FUNDS-SOLD> 2,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 74,795
<INVESTMENTS-CARRYING> 4,107
<INVESTMENTS-MARKET> 324
<LOANS> 395,074
<ALLOWANCE> 5,600
<TOTAL-ASSETS> 531,514
<DEPOSITS> 376,664
<SHORT-TERM> 44,955
<LIABILITIES-OTHER> 9,868
<LONG-TERM> 1,080
0
0
<COMMON> 6,562
<OTHER-SE> 42,033
<TOTAL-LIABILITIES-AND-EQUITY> 531,514
<INTEREST-LOAN> 9,626
<INTEREST-INVEST> 1,116
<INTEREST-OTHER> 234
<INTEREST-TOTAL> 10,977
<INTEREST-DEPOSIT> 4,452
<INTEREST-EXPENSE> 5,119
<INTEREST-INCOME-NET> 5,857
<LOAN-LOSSES> 345
<SECURITIES-GAINS> 109
<EXPENSE-OTHER> 6,091
<INCOME-PRETAX> 1,528
<INCOME-PRE-EXTRAORDINARY> 1,051
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,051
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
<YIELD-ACTUAL> 9.28
<LOANS-NON> 6,773
<LOANS-PAST> 751
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,600
<CHARGE-OFFS> 128
<RECOVERIES> 11
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 5,600
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 5,600
</TABLE>
