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, 2000
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
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(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: 8,275,405 shares
Outstanding as of May 5, 2000
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
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Table of Contents
Page
PART I Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at March 31, 2000 and
December 31, 1999.............................................3
Consolidated Statements of Earnings for the Three Months
Ended March 31, 2000 and 1999.................................4
Consolidated Statements of Comprehensive Income for the
Three Months Ended March 31, 2000 and 1999....................5
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2000 and 1999.................................6
Notes to Consolidated Financial Statements......................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.....................................9
Item 3. Quantitative and Qualitative Disclosures About Market Risk.......12
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..............14
Item 5. Other Information................................................15
Item 6. Exhibits and Reports on Form 8-K................................ 15
2
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
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<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------------------------------
Assets (UNAUDITED)
- ------
<S> <C> <C>
Cash and due from banks .................................... $ 16,519,853 $ 26,633,628
Federal funds sold ......................................... -- 450,000
---------- ----------
Total cash and cash equivalents ........................ 16,519,853 27,083,628
---------- ----------
Interest-bearing deposits .................................. 2,083,202 2,791,688
Investment securities held-to-maturity ..................... 16,110,640 16,243,837
Investment securities available-for-sale ................... 70,063,405 73,311,398
Other investments .......................................... 6,032,261 6,091,761
Mortgage loans held for sale ............................... 3,778,489 3,483,833
Loans, net ................................................. 422,635,884 419,079,161
Premises and equipment, net ................................ 17,973,606 18,391,527
Other assets ............................................... 21,175,776 21,392,436
---------- ----------
Total assets ................................ $ 576,373,116 $ 587,869,269
============= =============
Liabilities
- -----------
Non interest-bearing deposits .............................. $ 53,287,448 $ 58,512,630
Interest-bearing deposits .................................. 425,332,970 425,474,502
Federal funds purchased .................................... 12,810,000 15,320,000
Advances from Federal Home Loan Bank ....................... 24,610,361 27,172,889
Other liabilities .......................................... 7,830,075 8,192,353
--------- ---------
Total liabilities ........................... 523,870,854 534,672,374
----------- -----------
Stockholders' Equity
- --------------------
Preferred stock (10,000,000 shares authorized, none
issued and outstanding) ............................... -- --
Common stock ($1 par value, 20,000,000 shares authorized;
8,275,405 and 8,272,815 shares issued in 2000 and 1999,
respectively).......................................... 8,275,405 8,272,815
Additional paid-in capital ................................. 11,348,106 11,341,701
Retained earnings .......................................... 34,937,429 34,754,397
Accumulated other comprehensive income (loss) .............. (1,653,209) (1,119,987)
Less: Treasury stock ....................................... (405,469) (52,031)
-------- -------
Total stockholders' equity .................. 52,502,262 53,196,895
---------- ----------
Total liabilities and stockholders' equity... $ 576,373,116 $ 587,869,269
============= =============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings
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<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
--------------------------
<S> <C> <C>
Interest Income
Interest and fees on loans ................................. $10,320,866 $10,737,526
Interest on securities ..................................... 1,445,283 1,425,691
Interest on federal funds sold and interest-bearing deposits 112,522 316,078
------- -------
Total interest income ................................ 11,878,671 12,479,295
---------- ----------
Interest Expense
Interest on deposits ....................................... 4,668,100 5,204,581
Interest on borrowings ..................................... 527,923 670,642
------- -------
Total interest expense................................ 5,196,023 5,875,223
--------- ---------
Net interest income before provision for loan losses.. 6,682,648 6,604,072
Provision for Loan Losses.......................................... 593,070 362,000
------- -------
Net interest income after provision for loan losses .. 6,089,578 6,242,072
Other Income
Fees and service charges ................................... 1,280,249 1,298,674
Gain on available-for-sale securities....................... 41,997 109,296
Gain on trading securities ................................. -- 317,361
Gain on sale of loans....................................... 194,813 481,679
Gain on sale of real estate - net .......................... 5,103 12,500
Other income................................................ 395,365 415,141
------- -------
Total other income 1,917,527 2,634,651
--------- ---------
Other Expenses
Salaries and employee benefits ............................. 3,809,917 3,684,597
Occupancy .................................................. 1,075,903 902,446
Other operating............................................. 2,297,295 2,546,363
--------- ---------
Total other expenses.................................. 7,183,115 7,133,406
--------- ---------
Earnings before provision for
income taxes ...................................... 823,990 1,743,317
Provision for income taxes ................................. 147,584 551,567
------- -------
Net earnings ......................................... $ 676,406 $ 1,191,750
=========== ===========
Basic earnings per share ................................... $ 0.08 $ 0.14
Diluted earnings per share ................................. $ 0.08 $ 0.14
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
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<TABLE>
<CAPTION>
(UNAUDITED)
Three Months Ended
March 31,
2000 1999
------------------------
<S> <C> <C>
Net earnings ............................................... $ 676,406 $1,191,750
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 $310,855 and $177,077, respectively (507,184) 288,915
Less: Reclassification adjustment for gains
included in net earnings, net of tax of $15,959
and $41,532, respectively ........................ 26,038 67,764
Gains on trading securities included in net earnings,
net of tax of $120,597 ........................... -- 196,764
------- -------
Other comprehensive income (loss) .......................... (533,222) 24,387
------- ------
Comprehensive income ....................................... $ 143,184 $1,216,137
========== ==========
</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>
(UNAUDITED)
March 31,
2000 1999
---------------------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings .............................................. $ 676,406 $ 1,191,750
Adjustment to reconcile net earnings to net
cash provided by operating activities:
Depreciation, amortization and accretion .......... 784,363 685,094
Provision for loan losses ......................... 593,070 362,000
Gain on sale of investment securities
available-for-sale ............................ (41,997) (109,296)
Gain on trading securities ........................ -- (317,361)
Gain on sales of loans ............................ (194,813) (481,679)
Gain on sale of other real estate ................. (5,103) (12,500)
Change in:
Mortgage loans held for sale .................. (99,843) 3,794,543
Trading securities ............................ -- 323,829
Other ......................................... 76,203 514,596
------ --------
Net cash provided by operating activities 1,788,286 5,950,976
--------- ---------
Cash flows from investing activities:
Net change in interest-bearing deposits ................... 708,486 (1,780,588)
Proceeds from sales and maturities of investment
securities available-for-sale ......................... 2,491,805 12,819,147
Proceeds from maturities of investment securities
held-to-maturity ..................................... 130,764 2,763,337
Proceeds from sale of other investments ................... -- 1,801,822
Purchases of other investments ............................ -- (2,686,821)
Purchases of investment securities available-for-sale ..... -- (9,920,169)
Net change in loans ....................................... (4,149,793) (16,778,875)
Proceeds from sale of ORE ................................. 110,305 21,520
Proceeds from sale of premises and equipment .............. 21,520 --
Purchases of premises and equipment ....................... (336,547) (43,475)
Purchases of cash surrender value life insurance .......... (46,792) (88,114)
------- -------
Net cash used in investing activities ... (1,070,252) (13,892,216)
---------- -----------
Cash flows from financing activities:
Net change in deposits .................................... (5,366,714) (23,088,981)
Net change in federal funds purchased ..................... (2,510,000) 3,000,000
Proceeds from FHLB advances ............................... 5,500,000 --
Payments of FHLB advances ................................. (8,062,528) (1,046,836)
Purchase of treasury stock ................................ (353,438) --
Proceeds from exercise of stock options .................. 8,995 49,363
Repayment of note payable ................................. (4,750) (4,750)
Cash dividends paid ....................................... (493,374) (496,748)
-------- --------
Net cash provided by financing activities (11,281,809) (21,587,952)
----------- -----------
Net change in cash and cash equivalents .. (10,563,775) (29,529,192)
Cash and cash equivalents at beginning of period.......... 27,083,628 53,316,886
---------- ----------
Cash and cash equivalents at end of period ................ $ 16,519,853 $ 23,787,694
============ ============
</TABLE>
See Accompanying 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, 1999.
Note 1. Basis of Presentation
The consolidated financial statements include the accounts of FLAG and its
wholly owned subsidiaries, First Flag Bank (LaGrange, Georgia), Citizens Bank
(Vienna, Georgia), and Thomaston Federal Savings Bank (Thomaston, Georgia). 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, 1999.
Note 2. Business Combinations
On September 30, 1999, First Hogansville Bankshares, Inc., parent company of The
Citizens Bank, in Hogansville, Troup County, Georgia merged into FLAG. FLAG
issued approximately 575,000 shares to the First Hogansville shareholders. The
merger was accounted for as a pooling of interests. First Hogansville
Bankshares, Inc., was the sole shareholder of The Citizens Bank, a state bank
organized under the laws of the State of Georgia. As a result of the merger of
First Hogansville Bankshares, Inc., with FLAG, The Citizens Bank became a
wholly-owned subsidiary of FLAG. On February 11, 2000, The Citizens Bank merged
into FLAG's subsidiary, First Flag Bank, and is now known as First Flag
Bank-Hogansville and operates as a branch office of First Flag Bank.
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:
Three Months Ended
March 31,
2000 1999
-----------------------
Basic earnings per share:
Net earnings ............................... $ 676,406 $1,191,750
Weighted average common shares
outstanding ........................... 8,239,888 8,238,197
Per share amount .......................... $ 0.08 $ 0.14
Diluted earnings per share:
Net earnings .................. ........... $ 676,406 $1,191,750
Effect of dilutive securities -
stock options * ...................... -- --
Diluted earnings per share ................ $ 0.08 $ 0.14
* Stock options were anti-dilutive as of 3/31/00 and 12/31/99
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. SFAS No. 133 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, 2000, 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, 2000 and 1999
Overview
Net earnings for the quarter ended March 31, 2000 decreased $515,000 or 43
percent compared to the first quarter 1999. Net earnings per common share
decreased 43 percent for the first quarter of 2000 and are $0.08 compared to
$0.14 in the first quarter of 1999. Net interest income increased 1 percent for
the quarter ended March 31, 2000 over the same period of 1999 to $6.7 million.
Non-interest income decreased 27 percent for the first quarter of 2000 compared
to the same period of 1999 and non-interest expense increased 1 percent for the
first quarter of 2000 compared to 1999.
Net Interest Income
Net interest income for the quarter ended March 31, 2000 increased $78,000
compared to the first quarter of 1999. This increase resulted from a $679,000 or
12 percent decrease in interest expense partially offset by a $601,000 or 5
percent decrease in interest income.
Non-Interest Income and Expense
Non-interest income for the first quarter of 2000 decreased $717,000 or 27
percent compared to the first quarter of 1999. This decrease was due in part to
a decrease in gain on sale of available-for-sale securities of $67,000 during
the first quarter of 2000 over the same period of 1999, as well as a decrease in
gain on trading securities of $317,000 during the first quarter of 2000 over the
same period of 1999. Gain on sale of loans for the first quarter of 2000
decreased 59 percent or $287,000 compared to the comparable period 1999.
Non-interest expense increased $50,000 or 1 percent in the first quarter of 2000
compared to the same period in 1999. Salaries and employee benefits increased
$125,000, a 3 percent increase over the first quarter of 1999. The increase was
primarily due to additional staffing requirements through the use of temporary
employees for special projects. Management also believes consolidation
efficiencies will continue to be realized, further reducing 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 quarter of 2000 was $147,000 compared to
$551,000 for the first quarter of 1999. The effective tax rate for the quarter
ended March 31, 2000 was 18 percent and for the quarter ended March 31, 1999 was
32 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 losses at
March 31, 2000 was $7.4 million compared to $7.0 million at December 31, 1999.
The ratio of the allowance for loan losses to net outstanding loans at March 31,
2000 and December 31, 1999 was 1.75 percent and 1.67 percent, respectively.
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 $16.1 million
at March 31, 2000 compared to $15.8 million at December 31, 1999. Non-performing
assets as a percentage of net loans at March 31, 2000 and December 31, 1999 were
3.81 percent and 3.78 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.
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 $576.4 million at March 31, 2000, a decrease of $11.5 million
or 2 percent from December 31, 1999.
Assets and Funding
At March 31, 2000 earning assets totaled $520.7 million, a decrease of $298,000
from December 31, 1999. Loans were at 81 percent of earning assets and
investment securities were 17 percent of earning assets at March 31, 2000.
At March 31, 2000, interest-bearing deposits decreased $141,000 compared to
December 31, 1999. Non-interest bearing deposits decreased $5.2 million in the
first quarter of 2000 and totaled $53.3 million at March 31, 2000. Federal Home
Loan Bank advances decreased $2.6 million in the first quarter of 2000 and
totaled $24.6 million at March 31, 2000. At March 31, 2000, deposits represented
92 percent of FLAG's interest-bearing liabilities and Federal Home Loan Bank
advances represented 5 percent.
Liquidity and Capital Resources
Net cash provided by operating activities totaled $1.8 million for the quarter
ended March 31, 2000. Net cash used by investing activities totaling $1.1
million consisted of a $4.1 million net decrease in loans outstanding, and
$337,000 in purchases of premises and equipment partially offset by cash flows
of $2.6 million of proceeds from sale and maturities of investment securities.
Net cash used in financing activities consisted largely of a $5.4 million
decrease in deposits, a $2.6 million net decrease in Federal Home Loan Bank
advances and a $2.5 million decrease in federal funds purchased.
Total stockholders' equity at March 31, 2000, was 9.11 percent of total assets
compared to 9.05 percent at December 31, 1999. The decrease in stockholders'
equity from December 31, 1999 to March 31, 2000 is largely attributable to a
$533,000 increase in the loss in "Accumulated Other Comprehensive Income" from
unrealized losses on available-for-sale securities.
11
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
- --------------------------------------------------------------------------------
At March 31, 2000, 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 Capital, Tangible
Capital, and Risk-Based Capital:
March 31, 2000
- ----------------------------------------------------------------------------
Actual Required Excess
Amount % Amount % Amount %
- ----------------------------------------------------------------------------
Tier 1 Capital $ 51,480 8.85% $ 23,279 4.00% $ 28,201 4.85%
Tangible Capital $ 51,480 8.85% $ 8,730 1.50% $ 42,750 7.35%
Risk-Based Capital $ 57,164 12.57% $ 36,379 8.00% $ 20,785 4.57%
Year 2000
FLAG did not experience any material disruptions in its operations as a result
of the "Year 2000" problem. In addition, FLAG is not aware that any of their
suppliers or customers has experienced any material disruptions in their
operations or activities. FLAG does not expect to encounter any such problems in
the foreseeable future, although we continue to monitor our computer operations
for signs of such problems.
It is possible, however, that if Year 2000 problems are incurred by FLAG's
customers, such problems could have a negative impact on future operations and
financial performance, although we have not identified any such problems among
our customers or suppliers. Furthermore, the Year 2000 problem may impact other
entities with which FLAG transacts business and FLAG cannot predict the effect
of the Year 2000 problem on such entities or resulting effects on FLAG.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Quantitative and Qualitative disclosures about market risk were included in
FLAG's 1999 10-K. There have been no significant changes in FLAG's interest rate
sensitivity as monitored by its Asset/Liability Management Committee for the
quarter ended March 31, 2000.
12
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
PART II.
Item 1. Legal Proceedings
FLAG and the Banks are periodically involved as plaintiff or defendant
in various legal actions in the ordinary course of its business.
As previously reported, First Flag Bank is a named defendant in a suit
filed in December 1998 in Superior Court of the State of California for
the County of Los Angeles. The plaintiffs leased ATM machines from
First Flag Bank and other defendants. Another named defendant arranged
the leases and agreed to manage the ATMs and leases on behalf of the
plaintiffs. The plaintiffs allege that this defendant has breached his
contract with the plaintiffs. First Flag Bank leased the plaintiffs ten
ATMs having an original value of approximately $20,000 each. The
plaintiffs allege, among other things, that First Flag Bank and the
other lessor defendants are liable for fraud, restitution, recission
and negligent misrepresentation. The parties currently are exploring
settlement. If the parties do not reach a settlement, First Flag Bank
intends to vigorously defend the claims and pursue counterclaims
against the plaintiffs.
As previously reported, First Flag Bank purchased certain warehouse
loans of Gulf Properties Financial Services, Inc., a residential
mortgage broker. The loans that Gulf Properties sold to First Flag Bank
were fraudulent. Gulf Properties filed Chapter 11 bankruptcy on
December 30, 1998. First Flag Bank is serving on the creditors'
committee and is assisting in the liquidation of assets, which will be
distributed on a pro rata basis among the creditors. First Flag Bank is
also pursuing a claim under its fidelity bond regarding this matter.
The perpetrators of the fraud have pled guilty to criminal charges and
have been sentenced to prison. First Flag Bank obtained a restitution
order as part of the criminal sentence. First Flag Bank's exposure as a
result of the fraud is approximately $3 million, a significant portion
of which may be covered by the Bank's fidelity bond. Several other
banks also purchased fraudulent loans from Gulf Properties and the
total amount of exposure of all banks is approximately $32 million. The
assets of Gulf Properties are being liquidated in bankruptcy and
distributed to creditors on a pro rata basis
As previously reported, Tad Moore Golf, Inc. is a borrower of First
Flag Bank. An investor in Tad Moore Golf, Inc., who is also a lender to
Tad Moore Golf, Inc., has sued First Flag Bank in Southern District
Court in New York alleging that First Flag Bank fraudulently induced
the investor into allegedly subordinating his loan to the loan of First
Flag Bank. The investor is also a borrower of First Flag Bank. The
plaintiff is claiming $1.6 million in consequential damages and $10
million in punitive damages. First Flag Bank has succeeded in having
the venue of this matter transferred from New York to United States
District Court in Newnan, Georgia. The Bank intends to vigorously
defend this claim and pursue counterclaims against the investor.
Item 2. Changes in Securities - None
Item 3. Defaults upon Senior Securities - None
13
<PAGE>
FLAG FINANCIAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Item 4. Submission of Matters to a Vote of Security Holders
(a) The 2000 Annual Meeting of Shareholders was held on April 19, 2000.
(b) Election of Directors
The following directors will serve until the 2001 Annual Meeting of
Shareholders: Dr. A. Glenn Bailey, John R. Hines, Jr., Kelly R. Linch
and J. Daniel Speight, Jr. The following directors will serve until
the 2002 Annual Meeting of Shareholders: Robert G. Cochran, Patti S.
Davis, Fred A Durand, III, James W. Johnson and J. Preston Martin.
The following are the results of the votes cast by shareholders
present at the 2000 Annual Meeting of Shareholders, by proxy or in
person, for the proposal to elect the following directors to serve
until the 2003 Annual Meeting of Shareholders:
For Withhold
--- --------
H. Speer Burdette, III 6,356,577.702 66,536.018
John S. Holle 6,351,115.702 71,998.018
John W. Stewart, Jr. 6,356,577.702 66,536.018
Robert W. Walters 6,356,577.702 66,536.018
(c) Ratifying the appointment of Porter Keadle Moore LLP, as independent
accountants of the Company for the fiscal year ending December 31,
2000.
The shareholders voted 6,367,124.352 shares in the affirmative,
17,578.000 shares in the negative, with 38,411.368 shares abstaining
for the ratification and appointment of Porter Keadle Moore LLP as
independent accountants for the Company for the fiscal year ending
December 31, 2000.
14
<PAGE>
Item 5. Other Information
Pursuant to Rule 14a-14(c)(1) promulgated under the Securities
Exchange Act of 1934, as amended, shareholders desiring to present a
proposal for consideration at the Company's 2001 Annual Meeting of
Shareholders must notify the Company in writing to the Secretary of
the Company, at Eagle's Landing, 235 Corporate Center Drive,
Stockbridge, Georgia 30281 of the contents of such proposal no later
than December 15, 2000 to be included in the 2001 Proxy Materials. A
shareholder must notify the Company before January 15, 2001 of a
proposal for the 2001 Annual Meeting that the shareholder intends to
present other than by inclusion in the Company's proxy material. If
the Company does not receive such notice prior to January 15, 2001,
proxies solicited by the management of the Company will confer
discretionary authority upon the management of the Company to vote
upon any such matter.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K filed during the First Quarter 2000
The Company has not made any Form 8-K filings.
Reports on Form 8-K filed since Quarter End 2000 to Present
The Company has not made any Form 8-K filings.
15
<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
May 15, 2000 By: /s/ Thomas L. Redding
-------------------------
Thomas L. Redding
(Chief Financial Officer)
16
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 16,520
<INT-BEARING-DEPOSITS> 2,083
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 70,063
<INVESTMENTS-CARRYING> 16,111
<INVESTMENTS-MARKET> 6,032
<LOANS> 433,870
<ALLOWANCE> 7,456
<TOTAL-ASSETS> 576,373
<DEPOSITS> 478,620
<SHORT-TERM> 37,420
<LIABILITIES-OTHER> 7,830
<LONG-TERM> 0
0
0
<COMMON> 8,275
<OTHER-SE> 44,227
<TOTAL-LIABILITIES-AND-EQUITY> 576,373
<INTEREST-LOAN> 10,321
<INTEREST-INVEST> 1,445
<INTEREST-OTHER> 113
<INTEREST-TOTAL> 11,879
<INTEREST-DEPOSIT> 4,668
<INTEREST-EXPENSE> 5,196
<INTEREST-INCOME-NET> 6,683
<LOAN-LOSSES> 593
<SECURITIES-GAINS> 42
<EXPENSE-OTHER> 7,183
<INCOME-PRETAX> 824
<INCOME-PRE-EXTRAORDINARY> 824
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 676
<EPS-BASIC> 0.08
<EPS-DILUTED> 0.08
<YIELD-ACTUAL> 5.15
<LOANS-NON> 13,609
<LOANS-PAST> 1,368
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 2,622
<ALLOWANCE-OPEN> 7,017
<CHARGE-OFFS> 256
<RECOVERIES> 102
<ALLOWANCE-CLOSE> 7,456
<ALLOWANCE-DOMESTIC> 7,456
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 7,456
</TABLE>
