FIRST STERLING BANKS INC, DEF 14A, 1998-04-21

FIRST STERLING BANKS INC
DEF 14A, 1998-04-21
COMMERCIAL BANKS, NEC

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<PAGE>
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
FIRST STERLING BANKS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction applies:

------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

------------------------------------------------------------------------
(5) Total fee paid:

------------------------------------------------------------------------

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

------------------------------------------------------------------------
(3) Filing Party:

------------------------------------------------------------------------
(4) Date Filed:

------------------------------------------------------------------------

<PAGE>

FIRST STERLING BANKS, INC.
1200 Barrett Parkway
Kennesaw, Georgia 30144
Telephone: (770) 499-2265

Facsimile: (770) 499-7229

April 20, 1998

To the Shareholders of
First Sterling Banks, Inc.

The Annual Meeting of Shareholders of First Sterling Banks, Inc. will be held at
the Crowne Plaza Ravinia Hotel, 4355 Ashford Dunwoody Road, Atlanta, Georgia, in
the Oakwood Room B, on Wednesday, May 20, 1998, at 10:00 a.m. local time.

Although the business session will begin at 10:00 a.m., our directors, officers,
attorneys and auditors will be available to meet and have coffee with you
starting at 9:30 a.m. to discuss all aspects of the Company and to answer any
questions you may have, and they will remain after the meeting as well if there
are further questions.

The items of business scheduled for vote at the meeting are explained in the
accompanying Proxy Statement. Even if you are planning to attend the Annual
Meeting, please complete the enclosed proxy card and return it to us in the
enclosed, self-addressed, stamped envelope. If you attend the Annual Meeting,
you may revoke your Proxy and vote in person.

We look forward to seeing you on May 20, and thank you for being a shareholder.

Sincerely,

/s/ Edward C. Milligan

Edward C. Milligan
Chairman of the Board of Directors
and Chief Executive Officer

<PAGE>

FIRST STERLING BANKS, INC.
1200 Barrett Parkway
Kennesaw, Georgia 30144

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of First
Sterling Banks, Inc. will be held at the Crowne Plaza Ravinia Hotel, 4355
Ashford Dunwoody Road, Atlanta, Georgia, in the Oakwood Room B at 10:00 a.m.,
local time, on May 20, 1998, for the following purposes:

1. Elect Class I Directors. To elect two (2) Class I directors to
serve for three-year terms expiring at the 2001 Annual Meeting
of Shareholders or until their successors are duly elected and
qualified.

2. 1997 Incentive Stock Option Plan. To approve the 1997
Incentive Stock Option Plan.

3. Other Business. To transact such other business as may
properly come before the Annual Meeting or any adjournments
thereof.

Only shareholders of record at the close of business on April 20, 1998,
will be entitled to receive notice of and vote at the Annual Meeting or any
adjournments thereof.

The Annual Meeting may be adjourned from time to time without notice
other than announcement at the Annual Meeting, and any business for which notice
of the Annual Meeting is hereby given may be transacted at a reconvened meeting
following such adjournment.

By Order of the Board of Directors,

/s/ Edward C. Milligan

Edward C. Milligan
Chairman of the Board of Directors
and Chief Executive Officer

Enclosures

April 21, 1998

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING IN PERSON, PLEASE VOTE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED BUSINESS REPLY
ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON.

<PAGE>

TABLE OF CONTENTS

Page

<S> <C>
INTRODUCTION......................................................................................................1
General ................................................................................................1
Record Date, Solicitation and Revocability of Proxies....................................................1
Votes Required...........................................................................................2

PROPOSAL ONE - ELECTION OF CLASS I DIRECTORS OF THE COMPANY.......................................................2
Board of Directors.......................................................................................3
Board Committees and Attendance..........................................................................4
Executive Committee .....................................................................................5
Directors Stock Option Committees........................................................................5
Audit Committee..........................................................................................5
Compensation Committee...................................................................................5
Reports required by Section 16(a) of the Securities Exchange Act of 1934 (the "Act").....................6
Certain Transactions.....................................................................................6
Officers ................................................................................................7

EXECUTIVE COMPENSATION............................................................................................8
Cash Compensation Table..................................................................................8
Stock Options............................................................................................9

AGREEMENTS WITH EXECUTIVES.......................................................................................10
Company and Westside Bank...............................................................................10
Eastside Bank...........................................................................................11

DIRECTOR COMPENSATION............................................................................................12
Westside Bank...........................................................................................12
Eastside Bank...........................................................................................13
Company ...............................................................................................13

SECURITY OWNERSHIP OF MANAGEMENT.................................................................................14

PROPOSAL TWO - APPROVAL OF THE 1997 INCENTIVE STOCK OPTION PLAN..................................................14
Recommendation of the Board of Directors................................................................17

MISCELLANEOUS....................................................................................................18
Relationship with Independent Public Accountants.................................................................18

Solicitation of Proxies.................................................................................18
1999 Annual Meeting - Shareholder Proposals.............................................................18
1997 Annual Report on Form 10-KSB.......................................................................18

APPENDIX A

1997 Incentive Stock Option Plan.......................................................................A-1

</TABLE>

<PAGE>

FIRST STERLING BANKS, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 20, 1998

INTRODUCTION

General

This Proxy Statement ("Proxy Statement") is being furnished to the
shareholders of First Sterling Banks, Inc., a corporation organized and existing
under the laws of the State of Georgia (hereinafter referred to as the
"Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company from holders of the outstanding shares of the common
stock of the Company ("Common Stock"), for use at the Annual Meeting of
Shareholders of the Company to be held at 10:00 a.m., local time on May 20,
1998, and at any adjournments thereof ("Annual Meeting").

At the Annual Meeting, the shareholders of the Company will be asked
to: (1) elect two (2) Class I directors each to serve for a three-year term, or
until his successor is duly elected and qualified; (2) approve the First
Sterling Banks, Inc. 1997 Incentive Stock Option Plan (the "1997 Plan"); and (3)
transact such other business as may properly come before the Annual Meeting or
any adjournments thereof.

This Proxy Statement is dated April 21, 1998, and is first being mailed
to the shareholders of the Company on or about April 21, 1998. The 1997 Annual
Report to Shareholders of the Company accompanies this Proxy Statement.

The principal executive offices of the Company are located at 1200
Barrett Parkway, Kennesaw, Georgia 30144, and the telephone number of the
Company at such address is (770) 499-2265.

Record Date, Solicitation and Revocability of Proxies

The Board of Directors of the Company has fixed the close of business
on April 20, 1998, as the record date ("Record Date") for determination of the
Company's shareholders entitled to notice of and to vote at the Annual Meeting.
At the close of business on such date, there were 2,627,630 shares of Common
Stock issued and outstanding and held by approximately 921 shareholders of
record. Holders of Common Stock are entitled to one vote on each matter
considered and voted upon at the Annual Meeting for each share of Common Stock
held of record at the close of business on the Record Date.

Shares of Common Stock represented by properly executed proxies, if
such proxies are received in time and not revoked, will be voted at the Annual
Meeting in accordance with any instructions indicated in such proxies. IF NO
INSTRUCTIONS ARE INDICATED, SUCH SHARES OF COMMON STOCK WILL BE VOTED FOR THE
ELECTION OF THE NOMINATED DIRECTORS, FOR APPROVAL OF THE 1997 INCENTIVE STOCK
OPTION PLAN AND IN THE DISCRETION OF THE PROXY HOLDER AS TO ANY OTHER MATTER
WHICH MAY

<PAGE>

PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS THEREOF.

A shareholder who has given a proxy may revoke it at any time prior
to its exercise at the Annual Meeting by (i) giving written notice of
revocation to the Company, (ii) properly submitting to the Company a duly
executed proxy bearing a later date, or (iii) appearing in person at the
Annual Meeting and voting in person. All written notices or revocation and
other communications with respect to revocation of proxies should be
addressed as follows: First Sterling Banks, Inc., P.O. Box 2147, Marietta,
Georgia 30061, Attention: Ms. Barbara J. Bond.

VOTES REQUIRES

The affirmative vote of the holders of a plurality of the shares of
Common Stock represented at the Annual Meeting at which a quorum is present
is necessary to elect the two (2) nomineed for Class I membership on the
Board of Directors; and the affirmative vote of a majority of the shares of
Common Stock represented at the Annual Meeting at which a quorum is present
is necessary to approve the 1997 Incentive Stock Option Plan. The presence,
in person or by proxy, of a majority of the outstanding shares of Common
Stock is necessary to constitute a quorum at the Annual Meeting.

PROPOSAL ONE - ELECTION OF CLASS I DIRECTORS OF THE COMPANY

At the Annual Meeting two (2) Class I directors shall be elected
each to serve for a three-year term of office or until his successor is duly
elected and qualified.

The Company's Articles of Incorporation divides the Board of
Directors of the Company into three classes, Class I, Class II and Class III,
each of which is as nearly equal in number as possible. The directors in each
class will hold office for staggered terms of three (3) years each, after the
initial terms of one (1) year, two (2) years and three (3) years
respectively. The term of the Class I directors expires at the 1998 Annual
Meeting. The Board of Directors has set the number of the Class I directors
at two (2). The Board of Directors has nominated the following persons for
Class I membership on the Board, and unanimously recommends a vote "FOR" the
election of these persons: Harry L Hudson, Jr. and Edward C. Milligan.
Messrs. Milligan and Hudson are currently serving as Class I directors.

All shares of Common Stock represented by valid proxies received
pursuant to this solicitation and not revoked before they are exercised, will
be voted in the manner specified therein. If no specification is made, the
proxies will be voted for the election of the two (2) Class I nominees listed
above. In the event that any nominee is unable to serve, the persons
designated as proxies will cast votes for such other persons as they may
select. The affirmative vote of the holders of a plurality of the shares of
Common Stock represented at the Annual Meeting at which a quorum is present
is required for the election of the nominees listed above.

<PAGE>

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
TWO (2) NOMINEES LISTED ABOVE.

Board of Directors

The following table sets forth the name of each current director and
each nominee for Class I director of the Company; a description of his position
and offices with the Company (other than as a director) and with The Westside
Bank & Trust Company ("Westside Bank") and The Eastside Bank & Trust Company
("Eastside Bank"), if any; a brief description of his principal occupation and
business experience during the past five years and certain other information,
including his age as of March 31, 1998 and the number of shares of Common Stock
beneficially owned by him as of March 31, 1998, and the percentage of the total
shares of Common Stock outstanding on such date which such beneficial ownership
represents. The table also sets forth the class of each director. The terms of
the Class I directors expire at the 1998 Annual Meeting; the term of the Class
II director expires in 1999 and the terms of the Class III directors expire in
2000.

Name, Year First Elected Common Stock
to Board of Company, Position with the Company and Principal Beneficially
and Class Age Occupation During the Past Five Years Owned(1)
- ------------------------------- --- ---------------------------------------------- -------------
<S> <C> <C> <C>
The Honorable P. Harris Hines 54 Justice Hines has served as Chairman of the 17,896(2)
(1994) Board of Directors of Westside Bank since 0.68%
April 1992. From January 1, 1983 until July 26,
1995, Justice Hines served as Judge of the
Class III Superior Court of Cobb County, Georgia. Since
July 26, 1995, Justice Hines has served as a
Justice of the Supreme Court of the State of
Georgia.

Harry L. Hudson, Jr. 54 Mr. Hudson is an agent for the State Farm 42,300(3)
(1996) Insurance Company. Mr. Hudson has been 1.60%
associated with State Farm since January 1,
1970, and he has served as Agent, Agency
Class I Manager and Agency Field Executive. Mr.
Nominee Hudson is currently serving as Chairman of the
Board of Directors of Eastside Bank, an office
he has held since February, 1993. He has been
a member of the Board of Eastside Bank since
its organization in 1990.

Edward C. Milligan 53 Mr. Milligan is Chairman of the Board of 111,320(4)
(1994) Directors, President and Chief Executive Officer 4.12%
of the Company and has served as President and
Chief Executive Officer of Westside Bank since
Class I its organization in 1990. Mr. Milligan has
Nominee served as a Director of Eastside Bank since
August, 1996.

</TABLE>

<PAGE>

Name, Year First Elected Common Stock
to Board of Company, Position with the Company and Principal Beneficially
and Class Age Occupation During the Past Five Years Owned(1)
- -------------------------------- --- ----------------------------------------------- --------------
<S> <C> <C> <C>
John S. Thibadeau, Jr. 50 Since 1973, Mr. Thibadeau has been President 20,000(5)
(1996) of Deauton Corporation, a real estate 0.76%
construction and development firm. As a
licensed real estate broker, Mr. Thibadeau is an
Class III officer and principal in Thibadeau-Burton Realty
and serves as Vice President of University Inn
Operating Co. , a hotel/motel management firm.
He served as Chairman of the Board of Directors
of Eastside Bank from its organization until
February 1, 1991, and has been a member of the
Board of Eastside Bank since its organization in
1990.

Benjamin H. Wofford, M.D. 59 Dr. Wofford served as Chairman of the Board of 66,058(6)
(1994) Directors of Westside Bank from its 2.50%
organization until April 1991. Prior to his
retirement in 1997, Dr. Wofford, since 1970,
Class II had been a physician
specializing in plastic and
cosmetic surgery in Marietta,
Georgia.

</TABLE>

Notes to Table

(1) The information shown above is based upon information forwarded to the
Company by the named persons. For the purposes of this table, the term
"beneficial ownership" is used as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended ("1934 Act"). Under
applicable SEC rules the number of outstanding shares of common stock
used in the computation of the "Percent of Class" includes currently
exercisable stock options owned by the shareholder.

(2) Includes 12,300 shares of Common Stock obtainable upon the exercise of
options.

(3) Includes 10,000 shares of Common Stock obtainable upon the exercise of
options and 20,000 shares held as joint tenant with spouse.

(4) Includes 73,360 shares of Common Stock obtainable upon the exercise of
the options and 1,230 shares held by Mr. Milligan's minor children.

(5) Includes 10,000 shares of Common Stock obtainable upon the exercise of
options.

(6) Includes 12,300 shares of Common Stock obtainable upon the exercise of
options and 12,300 shares held as joint tenant with spouse.

Board Committees and Attendance

The business and affairs of the Company are under the direction of the
Company's Board of Directors.

<PAGE>

During 1997, the Company's Board of Directors held six (6) regular
meetings, and all of the Company's directors attended at least 75% fo the
aggregate meetings of the Company's Board of Directors and the committees
thereof on which they sat.

The Board of Directors of the Company has established an Executive
Committee and two Directors Stock Option Committees. In 1997, two additional
committees were formed--an Audit Committee and a Compensation Committee.

EXECUTIVE COMMITTEE

The Executive Committee is authorized to act o behalf of the Board
of Directors on all matters that may arise between regular meetings of the
Board of Directors upon which the Board of Directors would be authorized to
act. The Executive Committee is authorized to nominate members to the
Company's Board of Directors and to the various Board committees of the
Company. The current members of the Executive Committee are: P. Harris Hines,
Harry L. Hudson, Jr., Edward C. Milligan, John S. Thibadeau, Jr., and
Benjamin H. Wofford. During 1997, the Executive Committee did not meet.

DIRECTORS STOCK OPTION COMMITTEES

A directors stock option committee composed of Edward C. Milligan,
Harry L. Hudson, Jr. and John S. Thibadeau, Jr. has been appointed to
administer the 1995 Directors Stock Option Plan under which options have been
granted to the directors of Westside Bank other than Mr. Milligan. A
directors stock option committee composed of Edward C. Milligan, P. Harris
Hines and Benjamin H. Wofford has been appointed to administer the 1997
Directors Stock Option Plan under which options have been granted to the
directors of Eastside Bank other than Mr. Milligan and Mr. Ernest L. Horn.
Each Committee has authority to interpret its respective plan, make grants
and determine terms and conditions of grants within the context of the Plan.
During 1997, Directors Stock Option Committees did not meet.

AUDIT COMMITTEE

The primary functions of the Company's Audit Committee are to see
that an ajdit program is in place to protect the assets of the Company,
assure that adequate internal controls exist, and recommend the independent
auditors for appointment by the Board of Directors. The current members of
the Audit Committee are: P. Harris Hines, Harry L. Hudson, Jr., John S.
Thibadeau, Jr., and Benjamin H. Wofford. During 1997, the Audit Committee
held one meeting.

COMPENSATION COMMITTEE

The primary functions of the Compensation Committee are to evaluate
and administer the compensation of the Company's Chief Executive Officer and
other executive officers and to review the general compensation programs of
the Company. The current members of the Compensation Committee are: P. Harris
Hines, Harry L. Hudson, Jr., John S. Thibadeau, Jr. and Benjamin H. Wofford.
During 1997, the Compensation Committee held one meeting.

<PAGE>

Reports required by Section 16(a) of the Securities Exchange Act of 1934 (the
"Act")

The Securities and Exchange Commission ("SEC") has adopted certain
rules and forms under Section 16 of the Act relating to reports concerning stock
ownership and transactions by directors, officers, and stockholders who directly
or indirectly are the beneficial owners of more than ten percent of any class of
any equity security which is registered pursuant to Section 12 of the Act
("Principal Shareholders") (these persons are collectively referred to as
"Insiders").

The rules require that any director, officer or Principal Shareholder
of a company whose securities are registered under the Act (an "Issuer") file a
Form 3, which is an initial statement of beneficial ownership of equity
securities, a Form 4 to report any changes in beneficial ownership and a Form 5
within forty-five (45) days after the end of the Issuer's fiscal year to report
any securities transactions during the fiscal year that have not previously been
reported on a Form 3 or Form 4.

Any Issuer under the amended rules is required to disclose any known
late filings or failures to file by an Insider of any of the reports required by
Section 16(a) of the Act. An Issuer does not have any obligation to research or
make inquiry regarding delinquent filings, and it may rely on a written
representation from the Insider that no Form 5 filing is required.

Based on a review of Forms 3, 4 and 5 and amendments thereto and
certain written representations which have been furnished to the Company for its
fiscal year ended December 31, 1997, there were no persons who were subject to
Section 16 of the Act who failed to file on a timely basis reports required by
Section 16(a) of the Act for such fiscal year except as follows: Harry L.
Hudson, Jr. and John S. Thibadeau, Jr. failed to file Forms 4 upon the receipt
by each of options to purchase 10,000 shares of Common Stock in May, 1997.
Edward C. Milligan failed to file a Form 5 reporting the acquisition of 282.032
shares for his account in the Company's 401(k) Plan and 10.2896 shares for his
children pursuant to the Company's dividend reinvestment plan. P. Harris Hines,
Harry L. Hudson, Jr. and Benjamin H. Wofford failed to file Forms 5 reporting
the acquisition of 46.8908, 270.6544 and 378.3134 shares respectively pursuant
to the Company's dividend reinvestment plan.

Certain Transactions

During 1997, Westside Bank and Eastside Bank had outstanding loans
directly to or indirectly accruing to the benefit of certain of the then
directors, nominees for director, and executive officers of the Company, and
their related interests. These loans were made in the ordinary course of
business and were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
others. In the opinion of the Company's management, such loans do not involve
more than normal risks of collectibility or present other unfavorable features.
In the future, both banks expect to have banking transactions in the ordinary
course of business with the Company's directors, executive officers and their
related interests.

<PAGE>

Officers

The officers of the Company and the executive officers of Westside Bank
and Eastside Bank are as follows:

Name Company Westside Bank Eastside Bank
- ------------------- ------------------ -------------------------- -----------------------------
<S> <C> <C> <C>
Edward C. Milligan Chairman of Board/ President/Chief Executive
President/Chief Officer
Executive Officer

Barbara J. Bond Secretary/Treasurer Executive Vice President/
Secretary

Michael J. Henderson Executive Vice President

Christopher H. President/Chief Executive Officer
Burnett

Fredrick D. Jones Senior Vice President/
Secretary

</TABLE>

The table set forth below shows for each officer of the Company (a) the
person's name, (b) his or her age at March 31, 1998, (c) the year he or she was
first elected as an officer of the Company, and (d) his or her present positions
with the Company and his or her other business experience for the past five
years.

First
Year
Name Age Elected Business Experience
- ------------------- --- ------- -----------------------------------------------------
<S> <C> <C> <C>
Edward C. Milligan 53 1994 Mr. Milligan serves as the Chairman of the Board of
Directors of the Company and as President and Chief
Executive Officer of the Company and Westside
Bank.(1)

Barbara J. Bond 49 1994 Ms. Bond serves as Secretary/Treasurer/Chief
Financial Officer of the Company. She serves as
Executive Vice President, Chief Financial Officer and
Senior Operations Officer of Westside Bank and has
served in such capacities since the organization of the
bank. Ms. Bond has served as Secretary of Westside
Bank since September 18, 1991.

</TABLE>

Note to Table

(1) See "Board of Directors" above for a description of Mr. Milligan's prior
business experience.

<PAGE>

EXECUTIVE COMPENSATION

Cash Compensation Table

No compensation was paid or provided by the Company to its officers in
1997. The cash compensation which has been paid, accrued or awarded by Westside
Bank for services rendered in all capacities during the fiscal year ended
December 31, 1997 to the chief executive officer of the Company and to the
executive officers of its subsidiary, Westside Bank, on December 31, 1997, whose
compensation exceeded $100,000.00 are as follows:

SUMMARY COMPENSATION TABLE

ANNUAL LONG-TERM
COMPENSATION COMPENSATION
AWARDS
---------------------------- -----------
SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL YEAR SALARY BONUS OPTIONS COMPENSATION
POSITION ($) ($) (#) ($)
- --------------------- ---- ----------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Edward C. Milligan 1997 131,672.00 46,200.00 34,000(2) 68,318.00(1)
President of the
Company; 1996 122,136.00 42,000.00 --- 7,882.00(1)
President/CEO
Westside Bank 1995 117,425.00 34,800.00 14,760(2) 5,348.00(1)
- ------------------------------------------------------------------------------------------------------------------------

Barbara J. Bond 1997 77,750.00 18,565.00 --- 14,174.00(3)
Secretary/CFO of the
Company and
Westside Bank; 1996 73,583.00 17,390.00 --- 2,637.00(3)
Executive Vice
President 1995 70,750.00 14,300.00 11,070(2) 2,423.00(3)
Westside Bank
- ------------------------------------------------------------------------------------------------------------------------

Michael Henderson 1997 88,095.00 20,093.00 --- 18,988.00(4)
Executive Vice 1996 81,500.00 19,270.00 --- 8,445.00(4)
President
Westside Bank 1995 78,333.00 15,800.00 11,070(2) 8,150.00(4)
- ------------------------------------------------------------------------------------------------------------------------

</TABLE>

Notes to Table

(1) Amounts contributed by Westside Bank during 1995, 1996 and 1997 to Mr.
Milligan's account in Westside Bank's 401(k) Plan were $2,348.46,
$2,382.00 and $7,125.00 respectively. Mr. Milligan was paid $3,000 in
1995, $5,500 in 1996, and $2,400 in 1997 as fees for his services as a
director of Westside Bank. Mr. Milligan was paid $2,000 in 1997 for his
services as a director of Eastside Bank and $7,800 for his services as
a director of the Company. Westside Bank accrued $48,383 as a liability
for the account of Mr. Milligan pursuant to a Deferred Compensation
Plan.

(2) Adjusted for 2 for 1 stock split on March 30, 1998.

8
<PAGE>

(3) Amounts contributed by Westside Bank during 1995, 1996 and 1997 to Ms.
Bond's account in Westside Bank's 401(k) Plan were $2,423.00, $2,637.00
and $4,281.30 respectively. Westside Bank accrued $9,893 as a liability
for the account of Ms. Bond pursuant to a Deferred Compensation Plan.

(4) Amounts contributed by Westside Bank during 1995, 1996 and 1997 to Mr.
Henderson's account in Westside Bank's 401(k) Plan were $2,150.00,
$2,445.00 and $3,808.13 respectively. Westside Bank accrued $9,180 as a
liability for the account of Mr. Henderson pursuant to a Deferred
Compensation Plan. Mr. Henderson was paid $6,000 in each year as an
automobile allowance.

Stock Options

The following table sets forth information in regard to incentive stock
options granted to executive officers in 1997 whose compensation exceeded
$100,000:

OPTION GRANTS IN LAST FISCAL YEAR

[Individual Grants]

Number of Percent of
securities total options
underlying granted to Exercise or
options employees in base price Expiration
Name granted (#) fiscal year ($/Sh) Date
- ------------------- ------------- --------------- ------------ -----------
<S> <C> <C> <C> <C>
Edward C. Milligan 34,000(1) 50% 9.25(1) 9/23/2007

</TABLE>

Note to Table

(1) Adjusted for 2 for 1 stock split on March 30, 1998. The options are
vested and exercisable upon continuous employment with the Company
and/or any subsidiary thereof as follows: 10,800 are immediately
exercisable; 10,800 of the shares commencing on September 24, 1998;
10,800 of the shares commencing on September 24, 1999; and the
remaining shares commencing on September 24, 2000. The options are
immediately vested upon any change in control of the Company as defined
in Mr. Milligan's Incentive Stock Option Agreement.

The following table sets forth information in regard to exercise of
stock options and the fiscal year-end value of unexercised options for each of
the named executives:

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES

Number of
securities Value of
underlying unexercised
unexercised in-the-money
Number of options at options at
Shares FY-end (#) FY-end ($)
Acquired on exercisable/ exercisable/
NAME Exercise (#) Value Realized ($) unexercisable unexercisable
- --------------------- ------------ ------------------ ------------- ----------------
<S> <C> <C> <C> <C>
Edward C. Milligan - 0 - - 0 - 50,160/23,200 $324,014/$63,800
Barbara J. Bond - 0 - - 0 - 29,520(1) $220,736(1)
Michael J. - 0 - - 0 - 29,520(1) $220,736(1)
Henderson

</TABLE>

<PAGE>

Note to Table

(1) All options owned by Ms. Bond and Mr. Henderson are exercisable.

AGREEMENTS WITH EXECUTIVES

Company and Westside Bank

The Company and Westside Bank have jointly entered into an
employment agreement with Edward C. Milligan dated August 16, 1995 whereby Mr.
Milligan is employed as the president and chief executive officer of both the
Company and Westside Bank. The term of the agreement is a continuing term of two
years which is automatically extended each day for an additional day so that the
remaining term shall continue to be two years; but either party may by written
notice to the other party fix the term to a finite term of two years without
further automatic extension commencing with the date of such notice.

Mr. Milligan's initial base salary was $116,000 per annum. The base
salary may be increased from time to time by the boards of directors of the
Company and Westside Bank. Mr. Milligan is also entitled to such customary
fringe benefits, vacation and sick leave as are consistent with the normal
practices and established policies of the Company and Westside Bank and to
incentives and discretionary bonuses as may be authorized, declared and paid by
the Board of Directors to key management employees. Mr. Milligan shall be
entitled to participate in any plan relating to incentive and deferred
compensation, stock options, stock purchase, pension, thrift, profit sharing,
group life insurance, medical coverage, disability coverage, education, or other
retirement or employee benefits that the Company or Westside Bank adopts for the
benefit of its executive employees and for employees generally, subject to the
eligibility rules of such plans. Mr. Milligan shall continue to be provided an
automobile of a make and model appropriate to his status and he shall be
reimbursed reasonable expenses for dues and capital assessments for country and
dining club memberships.

In the event that Mr. Milligan's employment is involuntarily terminated
prior to a "change in control," as defined in the employment agreement and
discussed generally below, Mr. Milligan shall be paid his base salary and fringe
benefits up through the date of termination. In addition, in full settlement of
all claims which he may have against the Company and Westside Bank for
contractual damages for breach of the employment agreement, he shall be paid at
least the following amounts: a lump sum amount equal to one (1) times the annual
base salary paid to him over the previous twelve (12) month period, plus a lump
sum amount equal to one (1) times the annual incentive cash bonus paid to him
over the previous twelve (12) month period.

After a change in control has occurred, in the event that Mr. Milligan
is terminated "without cause," he shall be paid his base salary and fringe
benefits up through the date of termination. In addition, in full settlement of
all claims which Mr. Milligan shall have against the Company and Westside Bank
for contractual damages for breach of the employment agreement, he shall be paid
the following amounts: a lump sum equal to two (2) times the annual base salary
paid to him over the previous twelve (12) month period, plus a lump sum amount
equal to two (2) times the annual incentive cash bonus paid to him over the
twelve (12) month period.

10
<PAGE>

In addition, in both cases he shall be entitled to participate for
the shorter of a period of twelve (12) months or twenty-four (24) months
respectively, from the date of such termination of until such time as the
officer is employed by another employer in all welfare benefit plans,
practices policies and programs at least as favorable as the most favorable
of such plan, practices, policies and programs in effect at any time during
the ninety (90) day period preceding his termination; provided, that in the
event the officer is employed by another employer before the end of such time
period and the new employer does not provide the same level of welfare
benefits that the officer is entitled to under the employment agreement, then
the Company and Westside Bank shall provide such supplemental benefits as
necessary to ensure that the officer has the same level of welfare benefit
coverage.

After a change in control, if Mr. Milligan voluntarily terminates
his employment for good reason (as defined in the employment agreement which
includes among other things an adverse change in his status, title, position
or responsibilities) he shall be entitled to receive his base compensation,
incentive bonus and fringe benefits and participate in all welfare benefit
plans up through the date of termination. In addition, he shall receive the
following amounts: a lump sum amount equal to two (2) times the annual base
salary paid to the officer over the previous twelve (12) month period, plus a
lump sum amount equal to two (2) times the annual incentive cash bonus paid
to the officer over the previous twelve (12) month period.

A "change in control" includes: the acquisition by certain persons
of beneficial ownership within the meaning of Rule 13e-2 promulgated under
the 1934 Act of 20% or mroe of the voting power of the Company's outstanding
voting stock; a change in one-third (1/3) of the Company's board membership
unless approved by tw0-thirds (2/3) of the Company's board; or a merger,
consolidation, reorganization, complete liquidation of dissolution involving
the Company or an agreement fo the sale or other disposition of all or
substantially all of the assets of the Company to any person (other than a
transfer to a subsidiary).

EASTSIDE BANK

Eastside Bank has bntered into an employment agreement with
Christopher H. Burnett dated January 5, 1998, whereby Mr. Burnett is employed
as the president and chief executive officer of Eastside Bank. The term of
the agreement is a continuing term of one year which is automatically
extended each day for an additional day so that the remaining term shall
continue to be one year; but either party may by written notice to the other
party fix the term to a finite term of one year without further automatic
extension commencing with the date of such notice.

Mr. Burnett's initial base salary was $110,000 per annum. The base
salary may be increased from time to time by the board of directors of
Eastside Bank. Mr. Burnett is also entitled to such customary fringe
benefits, vacation and sick leave as are consistent with the normal practices
and established policies of Eastside Bank and to incentives and discretionary
bonuses as may be authorized, declared and paid by the Board of Directors to
key management employees. Mr. burnett shall be entitled to participate in any
plan relating to incentive and deferred compensation, stock options, stock
purchase, pension, thrift, profit sharing, group life insurance, medical
coverage, disability coverage, education, or other retirement or employee
benefits that the Eastside Bank adopts for the benefit of its executive
employees and for employees generally, subject to the eligibility rules of
such plans. Mr. Burneet shall be paid an automobile allowance of $600.00 per
month.

11
<PAGE>

In the event that Mr. Burnett's employment is involuntarily terminated
prior to a "change in control," of the Company as defined in the employment
agreement, which is similar to the definition in Mr. Milligan's employment
agreement, and discussed generally above, Mr. Burnett shall be paid his base
salary and fringe benefits up through the date of termination. In addition, in
full settlement of all claims which he may have against Eastside Bank for
contractual damages for breach of employment agreement, he shall be paid at
least the following amounts: a lump sum amount equal to fifty percent (50%) of
the annual base salary paid to him over the previous twelve (12)-month period,
plus a lump sum amount equal to fifty percent (50%) of the annual incentive cash
bonus paid to him over the previous twelve (12) month period.

After a change in control has occurred, in the event that Mr. Burnett
is terminated "without cause," he shall be paid his base salary and fringe
benefits up through the date of termination. In addition, in full settlement of
all claims which Mr. Burnett shall have against Eastside Bank for contractual
damages for breach of the employment agreement, he shall be paid the following
amounts: a lump sum equal to his annual base salary paid to him over the
previous twelve (12)-month period, plus a lump sum amount equal to his annual
incentive cash bonus paid to him over the twelve (12)- month period.

In addition, in both cases he shall be entitled to participate for the
shorter of a period of six (6) months or twelve (12) months respectively, from
the date of such termination or until such time as the officer is employed by
another employer in all welfare benefit plans, practices, policies and programs
at least as favorable as the most favorable of such plan, practices, policies
and programs in effect at any time during the ninety (90)-day period preceding
his termination; provided, that in the event the officer is employed by another
employer before the end of such time period and the new employer does not
provide the same level of welfare benefits that the officer is entitled to under
the employment agreement, then Eastside Bank shall provide such supplemental
benefits as necessary to ensure that the officer has the same level of welfare
benefit coverage.

After a change in control, if Mr. Burnett voluntarily terminates his
employment for good reason (as defined in the employment agreement which
includes, among other things, an adverse change in his status, title, position
or responsibilities) he shall be entitled to receive his base compensation,
incentive bonus and fringe benefits and participate in all welfare benefit plans
up through the date of termination. In addition, he shall receive the following
amounts: a lump sum amount equal to his annual base salary paid to the officer
over the previous twelve (12)-month period, plus a lump sum amount equal to his
annual incentive cash bonus paid to the officer over the previous twelve
(12)-month period.

DIRECTOR COMPENSATION

Westside Bank

During 1997, the chairman of the board was paid $300 for each Board
meeting attended and Messrs. Milligan and Wofford were paid $200 per meeting
attended. The other directors of Westside Bank were paid $500 for each Board
meeting attended and, other than Mr. Milligan, were paid $100 for each committee
meeting attended. During 1997, the directors of Westside Bank were paid a total
of $79,400 for such services. During 1998, the chairman of the board shall be
paid $450 for each Board meeting attended and Messrs. Milligan and Wofford shall
be paid $300 per meeting attended and the other directors of Westside Bank shall
be paid $700 for each Board meeting attended. Except

12
<PAGE>

for Mr. Milligan, members of the Loan Committee and members of the Executive
Committee shall be paid $200 for each meeting attended. Except for Mr. Milligan,
each director shall be paid $100 for each other committee meeting attended in
1998.

The Company's 1995 Directors Stock Option Plan ("1995 Plan") was
adopted by the Board of Directors of the Company on April 19, 1995 and approved
by the Company's shareholders on May 17, 1995. It was amended by the Board of
Directors of the Company on November 15, 1995 and February 21, 1996. Under the
1995 Plan, 73,685 shares of common stock may be granted by the Company to all
directors of the Company or Westside Bank who are not employees of the Company
or Westside Bank; and any emeritus director who was a voting member of the Board
of Directors within the 12 months preceding the date of any grant of options to
such emeritus director. The following options are currently outstanding under
the 1995 Plan: 87,330 options were issued at an exercise price of $4.56 in April
1995; 54,120 options were issued at an exercise price of $6.20 in September
1995; and 4,920 options were issued at an exercise price of $6.91 in November
1995. In 1995, options to purchase 1,000 shares were exercised at $5.61 per
share. In 1997 options to purchase 2000 shares were exercised at $4.56 per
share. The above figures have been adjusted to reflect the 2 for 1 stock split
on March 30, 1998. There are no remaining options to be issued under the 1995
Plan.

Eastside Bank

During 1997, the chairman of the board of Eastside Bank was paid $300,
and Messrs. Milligan and Thibadeau were paid $200 for each Board meeting
attended and the other directors of Eastside Bank were paid $400 for each Board
meeting attended. Directors who were not employees of Eastside Bank were paid
$100 for each committee meeting attended. During 1997, the directors of Eastside
Bank were paid a total of $64,000 for such services. During 1998, the chairman
of the board shall be paid $450 and Messrs. Milligan and Thibadeau shall be paid
$300 for each Board meeting attended and the other directors shall be paid $700
for each Board meeting attended. Directors who are not employees of Eastside
Bank shall be paid $100 for each committee meeting attended.

The Company's 1997 Director's Stock Option Plan (the "1997 Plan") was
adopted by the Company's Board of Directors on March 26, 1997, subject to the
approval of the shareholders of the Company at the 1997 annual shareholder's
meeting. Under the 1997 Plan, 90,000 shares of common stock may be granted by
the Company to the directors of Eastside Bank who are not employees of the
Company or Eastside Bank. Each director of Eastside Bank who was not an employee
of the Company or the Bank was granted an option to purchase 10,000 shares of
the Company's common stock with an exercise price of $9 per share. The above
figures have been adjusted for the 2 for 1 stock split on March 30, 1998. The
options expire on March 25, 2007.

Company

During 1997, each director of the Company was paid $1,950 per calendar
quarter for all services as a member of the Company's Board of Directors. The
Company's directors were paid a total of $39,000 for such services in 1997. No
change is planned for 1998 in the compensation of the Company's directors.

13
<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information, as of March 31, 1998,
regarding the ownership of common stock by all directors and executive officers
of the Company as a group. Information regarding such ownership by each director
and for each nominee for election at the Annual Meeting is set forth in the
table appearing in "PROPOSAL ONE - ELECTION OF CLASS I DIRECTORS OF THE COMPANY
- - Board of Directors."

AMOUNT AND NATURE OF PERCENT
NAME BENEFICIAL OWNERSHIP(1) OF CLASS
- ----------------------------------------- ----------------------- --------
<S> <C> <C>
All directors and executive officers as 292,094 10.53%
a group (6 persons)

</TABLE>

Note to Table

(1) The information shown above is based upon information
furnished to the Company by the named persons. Beneficial
ownership as reported in the table above has been determined
in accordance with rules promulgated under the 1934 Act.

PROPOSAL TWO - APPROVAL OF THE 1997 INCENTIVE STOCK OPTION PLAN

On September 24, 1997, the Board of Directors of the Company adopted
the First Sterling Banks, Inc. 1997 Incentive Stock Option Plan (the "1997
Plan") for key employees of the Company and its subsidiaries. The 1997 Plan is
set forth in Appendix A attached to this Proxy Statement. The 1997 Plan is
effective September 24, 1997 subject to the approval of the shareholders of the
Company at the 1998 Annual Meeting. The 1997 Plan is intended to encourage key
employees to remain with and devote their best efforts to the Company and its
subsidiaries. The following discussion of the principal features and effects of
the 1997 Plan is qualified in its entirety by reference to the text of the 1997
Plan set forth in Appendix A.

The 1997 Plan will be administered by the Company's Compensation
Committee (the "Committee") who are not participants in the 1997 Plan. The
Committee will construe and interpret the 1997 Plan. The shares to be issued
under the 1997 Plan will be currently authorized shares. The number of shares of
Common Stock available under the 1997 Plan will be subject to adjustment upon
the occurrence of certain events, pursuant to the terms of the 1997 Plan. The
total number of shares of Common Stock that may be purchased pursuant to options
under the 1997 Plan shall not exceed 200,000 shares of Common Stock or 7.6% of
current outstanding shares. (All references herein to the number of shares
underlying an option and to option exercise prices have been adjusted for the
March 30, 1998, 2 for 1 stock split).

The Committee is authorized to grant stock options under the 1997 Plan
to fulltime key employees of the Company or one of its subsidiaries. The period
during which each option may be exercised shall be ten (10) years from the date
the option is granted, but no option may be exercised

14
<PAGE>

prior to six (6) months after the date it is granted, except in the case of a
merger, consolidation or reorganization. The price at which shares of stock
may be purchased under an option granted pursuant to the 1997 Plan shall be
determined by the Board of Directors but shall not be less than the fair
market value of such shares as determined by the Board on the date that the
option is granted. Any stock option granted under the 1997 Plan must be
granted on or before September 23, 2007. The options granted under the 1997
Plan are nontransferable except by will or by the laws of descent and
distribution. All unexercised stock options under the 1997 Plan will
terminate: (i) upon the lapse by their terms, (ii) immediately upon the
termination of the optionee's employment with the Company and its
subsidiaries, except by reason of death, retirement or disability, or (iii)
ninety (90) days after the termination of the optionee's employment with the
Company and its subsidiaries because of death, disability or retirement.

Upon exercise, the exercise price may be paid in cash or in shares
of the Company's Common Stock previously held by the optionee or a
combination of both. Shares surrendered in payment of the option price shall
be valued at their fair market value as of the date of exercise.

The options granted under the 1997 Plan are intended to be
"Incentive Stock Options ("ISO") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended. Under present federal tax law,
there will be no federal income tax consequences to the Company upon the
grant or exercise of an ISO. Moreover, there will be no federal income tax
consequences to the optionee upon the grant of an ISO. However, there may be
federal income tax consequences to the optionee upon the exercise of an ISO.
Although the optionee will realize no taxable income upon the exercise of an
ISO, the exercise of an ISO may subject the optionee to the alternative
minimum tax ("AMT"). The spread between the option price and the fair market
value of the Common Stock acquired pursuant to an ISO on the date of its
exercise is treated as an item of adjustment for AMT purposes where the
Common Stock acquired upon the exercise of an ISO is not disposed of in the
same taxable year.

If the shares of Common Stock acquired upon the exercise of an ISO
are disposed of within a year of the exercise of the ISO, the disposition
will be considered to be a disqualifying disposition for federal income tax
purposes. In such event, the gain on the sale or exchange will generally be
treated as ordinary income to the optionee in the year of disposition. If the
optionee disposes of the shares of Common Stock acquired upon the exercise of
an ISO more than one year after the exercise, any gain or loss realized on
the subsequent sale or exchange will constitute a long term capital gain or
loss.

The 1997 Plan may be amended or terminated by the Board of Directors
at any time. However, no amendments shall be made in the 1997 Plan without
the approval of the shareholders of the Company which: (a) increase the total
number of shares for which options may be granted under the 1997 Plan; (b)
change the minimum purchase price for the optioned shares; (c) affect any
outstanding option or any unexercised right thereunder; (d) extend the option
period; or (e) extend the termination date of the Plan.

15
<PAGE>

On September 24, 1997, the Board of Directors and the Committee granted
the following options subject to approval of the 1997 Plan by the Company's
shareholders at the 1998 Annual Meeting:

NUMBER OF SHARES
NAME OF EMPLOYEE UNDERLYING OPTIONS
----------------- -------------------
<S> <C>
Edward C. Milligan 34,000
Brenda Hampton 2,200
Charles Still 5,000
Michael Allen 15,800
George Wier 7,200
Frayne Bentley 3,700

</TABLE>

The options granted to Michael Allen and George Wier were terminated at the
time of their termination of employment. The term of the remaining options is
ten (10) years and the option exercise price is $9.25 per share which the
Board of Directors of the Company determined to be the fair market value of
the shares subject to the options on the date of grant. The option to
purchase the shares granted to Mr. Bentley, Ms. Hampton and Mr. Still shall
vest and be exercisable upon continuous employment with the Company and/or
any subsidiary thereof as follows: fifty percent (50%) of the shares
commencing on the first anniversary of September 24, 1997, and the remainder
commencing on the second anniversary of such date. The option to purchase
shares granted to Mr. Milligan shall vest and be exercisable upon continuous
employment with the Company or any subsidiary thereof as follows: 10,800
shares are immediately exercisable; 10,800 shares commencing on September 24,
1998; 10,800 shares commencing September 24, 1999; the remaining shares
commencing on September 24, 2000. All options are immediately vested upon any
"change in control" of the Company as defined below.

On January 5, 1998, the Company granted to Christopher H. Burnett,
the President of Eastside Bank, subject to the approval of the 1997 Plan by
the Company's shareholders at the 1998 Annual Meeting, the option to purchase
22,200 shares of the Common Stock at an exercise price of $12.50 per share
which the Board of Directors of the Company determined to be the fair market
value of the shares subject to the option on the date of the grant. The term
of this option is ten years and the option shall vest and be exercisable upon
the optionee's continuous employment with the Company or any subsidiary
thereof at the rate of 20% per year on each anniversary date of the grant
commencing with the first anniversary date. The option is 100% vested and
immediately exercisable upon any "change in control" as defined below.

The term "change in control" shall mean: (i) the acquisition (other
than from the Company) by any person, entity or "group" within the meaning of
Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 ("34
Act") (excluding, for this purpose, the Company, or any of its subsidiaries,
or any employee benefit plan of the Company, or any of its subsidiaries) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
34 Act) of more than 50% of

<PAGE>

either the outstanding shares of Common Stock or of the combined voting power of
the Company's outstanding voting securities entitled to vote generally in the
election of directors; or (ii) individuals who, as of the date of the grant of
any option, constitute the board of directors of the Company ("Incumbent Board")
cease for any reason to constitute at least a majority of the board of
directors, provided that any individual becoming a director subsequent to the
date of such grant whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual is a member of the Incumbent Board; or (iii) approval by the
shareholders of the Company of the sale of all or substantially all of the
assets of the Company or of a merger, consolidation or other reorganization in
each case, with respect to which persons who were the shareholders of the
Company and optionees immediately prior to such merger, consolidation or other
reorganization, immediately thereafter, do not own more than 50% of the combined
voting power entitled to vote generally in the election of directors of the
merged, consolidated or reorganized corporations, then outstanding voting
securities; provided, however, in such event the change in control will be
deemed to have occurred immediately prior to the merger, consolidation or other
reorganization.

There is currently outstanding under the 1997 Plan, subject to approval
of the 1997 Plan by the Company's shareholders at the 1998 Annual Meeting,
options to purchase a total of 67,100 shares.

The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock represented at the Annual Meeting is necessary to approve
and adopt the 1997 Plan.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTE
"FOR" APPROVAL OF THE 1997 INCENTIVE STOCK OPTION PLAN.

<PAGE>

MISCELLANEOUS

Relationship with Independent Public Accountants

Mauldin & Jenkins served as the independent accountants for the year
ended December 31, 1997, and performed an audit of the Company's 1997 financial
statements which are included in the 1997 Annual Report to Shareholders which
accompanies this Proxy Statement. The Company has selected Mauldin & Jenkins as
its independent accountants for the 1998 fiscal year.

Solicitation of Proxies

The cost of soliciting proxies for the Annual Meeting will be paid by
the Company. The Company has not engaged any outside organizations or agents to
assist in the solicitation of proxies.

1999 Annual Meeting - Shareholder Proposals

Proposals of shareholders of the Company intended to be presented at
the 1999 Annual Meeting must be received by the Company on or before December
31, 1998 to be included in the Company's Proxy Statement or Form of Proxy for
the 1999 Annual Meeting of Shareholders.

1997 Annual Report on Form 10-KSB

A copy of the Company's 1997 Annual Report on Form 10-KSB, filed with
the Securities and Exchange Commission, is available at no charge upon written
request to:

Ms. Barbara J. Bond
First Sterling Banks, Inc.
P.O. Box 2147
Marietta, Georgia 30061

The management of the Company knows of no other matter which is to be
presented for action at the Annual Meeting. If other matters are properly
brought before the Annual Meeting, it is intended that the shares represented by
proxies in the accompanying form will be voted by the persons named in the proxy
in accordance with their best judgment.

Edward C. Milligan
Chairman of the Board of Directors
and Chief Executive Officer

Kennesaw, Georgia
April 21, 1998

<PAGE>

APPENDIX A

FIRST STERLING BANKS, INC.

1997 INCENTIVE STOCK OPTION PLAN

1. DEFINITIONS

a. "Code" - Internal Revenue Code of 1986, as amended.
b. "Committee" - the Compensation Committee of the Board of
Directors.
c. "Common Stock" - common voting stock of the Company.
d. "Company" - FIRST STERLING BANKS, INC.
e. "Board" - voting members of the Board of Directors of the
Company.
f. "Option" - right to purchase shares of Common Stock.
g. "Option Agreement" - formal agreement for each grant with
specific terms and conditions not inconsistent with this
Plan.
h. "Optionee" - an eligible person under Section 5 below who has
been granted options under Plan.
i. "Plan" - First Sterling Banks, Inc. 1997 Incentive Stock
Option Plan.
j. "Subsidiary" - a subsidiary of the Company or a subsidiary of
a subsidiary.

2. PURPOSE

The purposes of the First Sterling Banks, Inc. 1997 Incentive Stock
Option Plan are: (i) to assist the Company and the Subsidiaries in
securing and retaining key employees of outstanding ability by making
it possible to offer them an increased incentive to join or continue in
the service of the Company and/or the Subsidiaries; and (ii) to
increase the key employees' efforts for the Company's and or the
Subsidiaries' welfare by participating in the ownership and growth of
the Company. The Options granted under the Plan are intended to be
"Incentive Stock Options" within the meaning of Section 422 of the
Code.

3. SHARES SUBJECT TO THE PLAN

Subject to adjustments pursuant to the provisions of Section 14, there
shall be authorized and reserved for issuance upon the exercise of
Options to be granted under the Plan, 100,000 shares of Common Stock.

A - 1

<PAGE>

4. ADMINISTRATION

The Committee whose members are not participants in the Plan will have
complete authority to interpret the Plan, make grants, and determine
terms and conditions within the context of the Plan.

5. ELIGIBILITY

The following persons are eligible to receive Options under the Plan:
Full-time key employees of the Company or a Subsidiary who are selected
by the Committee from time to time and who, in the opinion of the
Committee, have contributed in the past or who may be expected to
contribute materially in the future to the successful performance of
the Company and/or the Subsidiaries.

6. GRANTING OF OPTIONS; OPTION EXERCISE PRICE

All Options granted under the Plan are intended to be "Incentive Stock
Options" within the meaning of Section 422 of the Code and shall be
evidenced by an Option Agreement. The Board, upon recommendation of the
Committee, may grant Options to full-time key employees of the Company
or a Subsidiary as desirable. Any Option granted hereunder shall have a
per share option exercise price at least equal to the fair market value
of a share of the Common Stock on the date of the grant. The Option
exercise price shall be subject to adjustments in accordance with the
provisions of Section 14 herein.

7. TERM OF OPTION

Subject to the provisions of Section 9 herein, the period during which
each Option may be exercised shall be fixed by the Committee at the
time such Option is granted, but such period shall expire not later
than ten years from the date the Option is granted. Except in the case
of any merger, consolidation or reorganization as described in Section
14, no Option granted under the Plan may be exercised prior to six
months after the date it is granted.

8. MANNER OF EXERCISE

The Options shall be exercised by written notice, delivered to the
Secretary of the Company and signed by the Optionee or his or her
successors stating the number of shares with respect to which the
Option is being exercised. Payment in full of the Option price of the
said shares must be made at the time of exercise, and payment may be
made in cash or shares of the Common Stock previously held by the
Optionee or a combination. Payment in shares may be made with shares
received upon the exercise or partial exercise of an Option, whether or
not involving a series of exercises or partial exercises and whether or
not share certificates for such shares surrendered have been delivered
to the Optionee. Shares surrendered in payment of the Option price
shall be valued at the fair market value as of the date of the
exercise.

A - 2

<PAGE>

9. TERMINATION OF OPTIONS

All unexercised Options will terminate upon (i) the lapse by their
terms, (ii) immediately upon the termination of the Optionee's
employment with the Company and the Subsidiaries, except by reason of
death, retirement or disability, or (iii) ninety (90) days after the
termination of the Optionee's employment with the Company and the
Subsidiaries because of death, disability or retirement. During such
90-day period, all unexercised Options may be exercised by the Optionee
or his legal representative in the event of death or mental disability.

10. LIMITATIONS

Options shall not be granted to any individual pursuant to this Plan,
the effect of which would be to permit such person to first exercise
Options, in any calendar year, for the purchase of shares having a fair
market value in excess of $100,000 (determined at the time of the grant
of the Options). Optionee may exercise options for the purchase of
shares valued in excess of $100,000 (determined at the time of grant of
the Options) in a calendar year, but only if the right to exercise such
Options shall have first become available in prior calendar years.

No Optionee owning more than ten percent (10%) of the combined voting
power of all classes of stock of the Company then outstanding may
purchase Common Stock under this Plan for less than one hundred ten
percent (110%) of its fair market value on the date of grant nor may
any Option granted to such a person be exercisable on a date later than
five (5) years from the date of grant.

11. NONTRANSFERABILITY OF OPTIONS; RESTRICTIONS ON ISSUANCE OF
COMMON STOCK

Options granted under this Plan are nontransferable except by will or
by the laws of descent and distribution. No shares shall be delivered
pursuant to any exercise of an Option until the requirements of such
laws and regulations, as may be deemed by the Board to be applicable to
them, are satisfied and until payment in full as described in Section 6
of the Option price is received by the Company.

12. RIGHTS OF OPTIONEE

An Optionee will have no rights as a shareholder until a stock
certificate for the Common Stock is issued. Nothing in the Plan, in any
Option Agreement or resulting stock ownership, will give to an Optionee
any right to continuation of employment.

A - 3

<PAGE>

13. OTHER TERMS AND CONDITIONS

Any Option granted hereunder shall contain additional terms which are
not inconsistent with the terms of this Plan, as the Board or the
Committee deems necessary or desirable, provided that any such Option
shall qualify as an "Incentive Stock Option" within the meaning of
Section 422 of the Code.

14. CAPITAL ADJUSTMENTS AFFECTING STOCK

In the event of a capital adjustment resulting from a stock dividend,
stock split, reorganization, merger, consolidation, or a combination or
exchange of shares, the number of shares of stock subject to this Plan
and the number of shares under any Option granted hereunder shall be
adjusted consistent with such capital adjustment. The price of any
share under Option shall be adjusted so that there will be no change in
the aggregate purchase price payable upon the exercise of any such
Option. The granting of an Option pursuant to this Plan shall not
affect in any way the right or power of the Company to make
adjustments, reorganizations, reclassifications, or changes of its
capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or
assets.

After any merger, consolidation or reorganization of any form involving
the Company as a party thereto involving any exchange, conversion,
adjustment or other modification of the outstanding shares of the
Company's Common Stock, each Optionee at the time of such
reorganization shall, at no additional cost, be entitled, upon any
exercise of his or her Option, to receive, in lieu of the number and
class of shares of stock or other securities or such other property to
which such Optionee would have been entitled pursuant to the terms of
the agreement of merger or consolidation, if at the time of such merger
or consolidation, such Optionee had been a holder of record of a number
of shares of the Common Stock of the Company equal to the number of
shares as to which such Option shall then be so exercised. Comparable
rights shall accrue to each Optionee in the event of successive mergers
or consolidations of the character described above.

The foregoing adjustments and the manner of their application will be
in the sole discretion of the Committee to determine.

Anything contained herein to the contrary notwithstanding, upon the
dissolution or liquidation of the Company each Option granted under the
Plan shall terminate.

15. AMENDMENTS, SUSPENSION OR TERMINATION OF THE PLAN

The Board of the Company shall have the right, at any time, to amend,
suspend or terminate the Plan; provided, however, no amendments shall
be made in the Plan without the approval of the stockholders of the
Company which:

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(a) Increase the total number of shares for which Options may
be granted under this Plan for all key employees or for any one of them
except as provided in Section 14.

(b) Change the minimum purchase price for the optioned shares
except as provided in Section 14.

(d) Extend the option period provided in Section 7.

(e) Extend the termination date of the Plan.

16. EFFECTIVE DATE

The Plan shall take effect on September 24, 1997. Unless an earlier
termination date is specified under Section 9 above, this Plan shall
terminate on September 23, 2007. No Options may be granted under the
Plan after its termination date, but any Option granted prior thereto
may be exercised in accordance with its terms. The Plan and all Options
granted pursuant to it are subject to all laws, approvals, requirements
and regulations of any governmental authority which may be applicable
thereto and, notwithstanding any provisions of the Plan or Option
Agreement, the holder of an Option shall not be entitled to exercise
his or her Option nor shall the Company be obligated to issue any
shares to the holder if such exercise or issuance shall constitute a
violation by the holder or the Company of any provisions of any such
approval requirements, law or regulations.

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FIRST STERLING BANKS, INC.
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 20, 1998

The undersigned hereby appoints Edward C. Milligan, P. Harris Hines and Harry L.
Hudson, Jr. or any one of them, as Proxies, with the power to appoint his
substitute, and hereby authorizes them or any one of them to represent and to
vote, as designated below, all of the Common Stock of First Sterling Banks, Inc.
(the "Company"), 1200 Barrett Parkway, Kennesaw, Georgia 30144, which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders (the "Meeting") to be held at Crowne Plaza Ravinia
Hotel, 4355 Ashford Dunwoody Road, Atlanta, Georgia, on May 20, 1998, at 10:00
a.m. local time, and at any adjournments thereof, upon the proposals described
in the accompanying Notice of the Annual Meeting and the Proxy Statement
relating to the Meeting, receipt of which are hereby acknowledged.

THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR THE PROPOSALS

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<S> <C> <C>
Election of Class I Directors. The election of the
PROPOSAL ONE: following named persons each to serve as a Class I Director
for a three year term expiring at the 2001 Annual Meeting
of Shareholders or until his successor is duly elected and
qualified.

/ / For all the nominees listed / / Withhold authority
below (except as marked to the to vote for all
contrary below) nominees listed
below

(Instructions: To withhold authority to vote for any individual nominee or
nominees, strike a line through the nominee's name or names listed below.)

Harry L. Hudson, Jr. and Edward C. Milligan

Approval of the 1997 Incentive Stock Option Plan. The
PROPOSAL TWO: approval of the Company's 1997 Incentive Stock Option Plan
as described in and attached as Appendix A to the Proxy
Statement.

/ / FOR / / AGAINST / / ABSTAIN
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION TO THE CONTRARY IS INDICATED, IT WILL
BE VOTED FOR THE PROPOSALS.

DISCRETIONARY AUTHORITY IS HEREBY CONFERRED AS TO ALL OTHER MATTERS WHICH MAY
COME BEFORE THE ANNUAL MEETING.

If stock is held in the name of more than one person, all holders should
sign. Signatures should correspond exactly with the name or names appearing on
the stock certificate(s). When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.

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<S> <C>
DATED: , 1998
(Be sure to date your Proxy)
Name(s) of Shareholder(s)
Signature(s) of Shareholder(s)
</TABLE>

Please mark, date and sign this Proxy, and return it in the enclosed
self-addressed return envelope. No postage is necessary.