FIRST STERLING BANKS INC, DEF 14A, 1999-04-29

FIRST STERLING BANKS INC
DEF 14A, 1999-04-29
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

/ / 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(s) 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)(4) 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):

______________________________________________________________________

<PAGE>

(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 29, 1999

To the Shareholders of
First Sterling Banks, Inc.

The Annual Meeting of Shareholders of First Sterling Banks, Inc. will be held
at The Ashford Club, 400 Perimeter Center Terrace, 10th Floor, Atlanta,
Georgia, 30346, on May 26, 1999, at 5:00 o'clock p.m. local time.

A reception will be held immediately following the business session for all
of our shareholders including the former shareholders of Georgia Bancshares.
We completed our merger with Georgia Bancshares on April 23 and we are happy
to welcome Community Bank of Georgia into our banking family. Our directors,
officers, attorneys and auditors will be available at the reception to
discuss all aspects of the Company and to answer any questions you may have.

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 26, 1999, 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 Ashford Club, 400 Perimeter Center
Terrace, 10th Floor, Atlanta, Georgia, 30346, at 5:00 o'clock p.m., local
time, on May 26, 1999, for the following purposes:

1. ELECT CLASS II DIRECTORS. To elect three (3) Class II directors to
serve for three-year terms expiring at the 2002 Annual Meeting of
Shareholders or until their successors are duly elected and qualified.

2. 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 19, 1999,
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 29, 1999

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

PROPOSAL - ELECTION OF CLASS II DIRECTORS OF THE COMPANY..........................................................2
Board of Directors..........................................................................................3
Board Committees and Attendance.............................................................................6
Executive Committee ........................................................................................6
Directors Stock Option Committees...........................................................................6
Audit Committee.............................................................................................6
Compensation Committee......................................................................................7
Reports required by Section 16(a) of the Securities Exchange Act of 1934 (the "Act")........................8
Certain Transactions........................................................................................8
Officers....................................................................................................9

EXECUTIVE COMPENSATION............................................................................................9
Cash Compensation Table.....................................................................................9
Stock Options..............................................................................................11

AGREEMENTS WITH EXECUTIVES.......................................................................................12
Company and Westside Bank..................................................................................12
Eastside Bank..............................................................................................14

DIRECTOR COMPENSATION............................................................................................15
Westside Bank..............................................................................................15
Eastside Bank .............................................................................................15
Company....................................................................................................16

SECURITY OWNERSHIP OF MANAGEMENT.................................................................................16

MISCELLANEOUS....................................................................................................17
Relationship with Independent Public Accountants...........................................................17
Solicitation of Proxies....................................................................................17
2000 Annual Meeting - Shareholder Proposals................................................................17
</TABLE>

<PAGE>

FIRST STERLING BANKS, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 26, 1999

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 5:00 o'clock p.m., local time on
May 26, 1999, and at any adjournments thereof ("Annual Meeting").

At the Annual Meeting, the shareholders of the Company will be asked
to: (1) elect three (3) Class II directors each to serve for a three-year
term, or until his successor is duly elected and qualified; and (2) transact
such other business as may properly come before the Annual Meeting or any
adjournments thereof.

This Proxy Statement is dated April 29, 1999, and is first being mailed
to the shareholders of the Company on or about April 29, 1999. The 1998
Annual Report to Shareholders of the Company and the Form 10-KSB accompany
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 19, 1999, 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 2,635,144 shares
of Common Stock outstanding and held by approximately 788 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 AND IN THE DISCRETION OF THE
PROXY HOLDER AS TO

<PAGE>

ANY OTHER MATTER WHICH MAY 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 REQUIRED

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 three (3) nominees for Class II membership on the
Board of Directors. 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 - ELECTION OF CLASS II DIRECTORS OF THE COMPANY

At the Annual Meeting three (3) Class II 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 II directors expires at the 1999 Annual
Meeting. The Board of Directors has set the number of the Class II directors
at three (3). The Board of Directors has nominated the following persons for
Class II membership on the Board, and unanimously recommends a vote "FOR" the
election of these persons: Christopher H. Burnett, Ted. A. Murphy and
Benjamin H. Wofford, M.D. all of whom are currently serving as Class II
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 three (3) Class II 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 THREE (3) NOMINEES LISTED ABOVE.

BOARD OF DIRECTORS

The following table sets forth the name of each current director and
each nominee for Class II 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"), The Eastside Bank & Trust
Company ("Eastside Bank"), and Community Bank of Georgia ("Community 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, 1999 and the number of shares of Common
Stock beneficially owned by him as of April 19, 1999 as adjusted for the
.2858 stock split paid on April 22, 1999, 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 2001 Annual Meeting; the
terms of the Class II directors expire 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 55 Justice Hines has served as Chairman of the 23,115(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. 55 Mr. Hudson is an agent for the State Farm 56,582(3)
(1996) Insurance Company. Mr. Hudson has been 1.66%
associated with State Farm since January 1,
1970, and he has served as Agent, Agency
Class I Manager and Agency Field Executive. Mr.
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 54 Mr. Milligan is Chairman of the Board of 146,861(4)
(1994) Directors, President and Chief Executive Officer 4.22%
of the Company and has served as President
and Chief Executive Officer of Westside Bank
Class I since its organization in 1990. Mr. Milligan has
served as a Director of Eastside Bank since
August, 1996.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
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. 51 Since 1973, Mr. Thibadeau has been President 25,716(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. 60 Dr. Wofford served as Chairman of the Board 85,550(6)
(1994) of Directors of Westside Bank from its 2.51%
organization until April 1991. Prior to his
retirement in 1997, Dr. Wofford, since 1970, had
Class II been a physician specializing in plastic and
Nominee cosmetic surgery in Marietta, Georgia.
- -----------------------------------------------------------------------------------------------------------------------
Eugene L. Argo (7) 66 Mr. Argo has served on the Board of Directors
(1999) of Georgia Bancshares from February 15, 1995
until its merger with the Company in April of
Class I 1999. Mr. Argo serves as the Chairman of the
Board of Directors of Community Bank. For
the past five years Mr. Argo has been
President of Stacy's Pharmacy, Inc. Mr. Argo
also serves as Vice President of Medical
Therapies, Inc.
- -----------------------------------------------------------------------------------------------------------------------
Ted A. Murphy (8) 61 Mr. Murphy has served on the Board of
(1999) Directors of Georgia Bancshares from February
15, 1995 until its merger with the Company in
Class II April of 1999. Since 1989, Mr. Murphy has
Nominee served as President and Chief Executive Officer
of Community Bank and has been a member of
its Board of Directors.
- -----------------------------------------------------------------------------------------------------------------------
James L. Armstrong, Jr.(9) 58 Mr. Armstrong has served on the Board of
(1999) Directors of Georgia Bancshares from February
15, 1995 until its merger with the Company in
Class III April of 1999. Mr. Armstrong is Vice Chairman
of the Board of Directors of Community Bank.
For the past five years, Mr. Armstrong has
been the owner of Jim Armstrong Insurance
Agency.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

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 15,815 shares of Common Stock obtainable upon the exercise of
options.

(3) Includes 12,858 shares of Common Stock obtainable upon the exercise of
options and 25,716 shares held as joint tenant with spouse.

(4) Includes 94,326 shares of Common Stock obtainable upon the exercise of
the options and 800 shares held by Mr. Milligan's minor child.

(5) Includes 12,858 shares of Common Stock obtainable upon the exercise of
options.

(6) Includes 15,815 shares of Common Stock obtainable upon the exercise of
options and 15,815 shares held as joint tenant with spouse.

(7) As a result of the merger of Georgia Bancshares and the Company on
April 23, 1999, Mr. Argo has a right to receive 84,207 shares of
Company stock in exchange for his shares of Georgia Bancshares stock. As
a result of the merger, Mr. Argo's option to purchase 6,114 shares of
Georgia Bancshares stock was converted to options to purchase the same
number of shares of Company stock.

(8) As a result of the merger of Georgia Bancshares and the Company on
April 23, 1999, Mr. Murphy has a right to receive 20,000 shares of
Company stock in exchange for his shares of Georgia Bancshares stock. As
a result of the merger, Mr. Murphy's option to purchase 8,614 shares of
Georgia Bancshares stock was converted to options to purchase the same
number of shares of Company stock.

(9) As a result of the merger of Georgia Bancshares and the Company on
April 23, 1999, Mr. Armstrong has a right to receive 62,290 shares of
Company stock in exchange for his shares of Georgia Bancshares stock. As
a result of the merger, Mr. Armstrong's option to purchase 6,114 shares
of Georgia Bancshares stock was converted to options to purchase the
same number of shares of Company stock.

(10) Includes 28,544 shares of common stock obtainable upon the exercise of
options and 2,828 shares held by spouse.

<PAGE>

BOARD COMMITTEES AND ATTENDANCE

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

During 1998, the Company's Board of Directors held five (5) regular
meetings, and all of the Company's directors attended at least 75% of 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 on 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., John S. Thibadeau, Jr., Benjamin H. Wofford, and Edward C.
Milligan. During 1998, 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 1998, the Directors Stock Option Committees did not meet.

AUDIT COMMITTEE

The primary functions of the Company's Audit Committee are to see that
an audit 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 1998, the Audit Committee held one
meeting.

<PAGE>

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., Eugene L. Argo and Benjamin H. Wofford.
During 1998, the Compensation Committee did not meet.

<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, 1998, 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.

CERTAIN TRANSACTIONS

During 1998, 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 table set forth below shows for each officer of the Company (a) the
person's name, (b) his or her age at March 31, 1999, (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.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
FIRST
YEAR
NAME AGE ELECTED BUSINESS EXPERIENCE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Edward C. Milligan 54 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 50 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.

EXECUTIVE COMPENSATION

CASH COMPENSATION TABLE

No compensation was paid or provided by the Company to its officers in
1998. 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, 1998 to the chief executive officer of the Company and to
the executive officers of its subsidiaries, Westside Bank and Eastside Bank,
on December 31, 1998, whose compensation exceeded $100,000.00 are as follows:

<PAGE>

<TABLE>
<CAPTION>
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 1998 142,922.00 56,000.00 --- 38,413.00(1)
President of the ------------------------------------------------------------------------------------------------
Company; 1997 131,672.00 46,200.00 43,717(2) 67,708.00(1)
President/CEO ------------------------------------------------------------------------------------------------
Westside Bank 1996 122,136.00 42,000.00 --- 7,882.00(1)
- ------------------------------------------------------------------------------------------------------------------------
Barbara J. Bond 1998 86,000.00 21,500.00 --- 7,599.00(3)
Secretary/CFO of the ------------------------------------------------------------------------------------------------
Company and 1997 77,750.00 18,565.00 --- 14,174.00(3)
Westside Bank; ------------------------------------------------------------------------------------------------
Executive Vice 1996 73,583.00 17,390.00 --- 2,637.00(3)
President
Westside Bank
- ------------------------------------------------------------------------------------------------------------------------
Michael Henderson 1998 92,500.00 23,125.00 --- 12,873.00(4)
Executive Vice ------------------------------------------------------------------------------------------------
President 1997 88,095.00 20,093.00 --- 18,988.00(4)
Westside Bank ------------------------------------------------------------------------------------------------
1996 81,500.00 19,270.00 --- 8,445.00(4)
- ------------------------------------------------------------------------------------------------------------------------
Christopher Burnett 1998 109,601.00 38,000.00 28,544(2) 15,600.00(5)
President/CEO
Eastside Bank
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTES TO TABLE
- --------------

(1) Amounts contributed by Westside Bank during 1996, 1997 and 1998 to Mr.
Milligan's account in Westside Bank's 401(k) Plan were $2,381.80,
$7,125.00 and $6,500.00 respectively. Mr. Milligan was paid $5,500 in
1996, $2,400 in 1997 and $3,600 in 1998 for his services as a director of
Westside Bank. Mr. Milligan was paid $2,000 in 1997 and $3,300 in 1998 for
his services as a director of Eastside Bank and $7,800 in 1997 and 1998
for his services as a director of the Company. Westside Bank accrued
$17,213.00 as a liability for the account of Mr. Milligan pursuant to a
Deferred Compensation Plan in 1998.

(2) Adjusted for 2 for 1 stock split on March 30, 1998 and 0.2858 stock
split on April 22, 1999.

(3) Amounts contributed by Westside Bank during 1996, 1997 and 1998 to Ms.
Bond's account in Westside Bank's 401(k) Plan were $2,637.00, $4,281.30
and $4,078.00 respectively. Westside Bank accrued $3,521 as a liability
for the account of Ms. Bond pursuant to a Deferred Compensation Plan in
1998.

(4) Amounts contributed by Westside Bank during 1996, 1997 and 1998 to Mr.
Henderson's account in Westside Bank's 401(k) Plan were $2,445.00,
$3,808.13, and $3,607.00 respectively. Westside Bank accrued $3,266 as a
liability for the account of Mr. Henderson pursuant to a Deferred
Compensation Plan in 1998. Mr. Henderson was paid $6,000 in each year as
an automobile allowance.

<PAGE>

(5) Mr. Burnett was paid an automobile allowance of $7,200 and directors
fees of $8,400 in 1998.

STOCK OPTIONS

The following table sets forth information in regard to incentive stock
options granted to executive officers in 1998 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 (#)(1) FISCAL YEAR ($/SH)(1) DATE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Christopher H. Burnett 28,544(1) 58% $9.72 01-04-2008
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTE TO TABLE
- -------------

(1) Adjusted for 2 for 1 stock split on March 30, 1998 and 0.2858 stock split
on April 22, 1999. The options are vested upon continuous employment with
the Company and/or Eastside Bank and/or any subsidiary thereof as follows:
one-fifth (1/5) of the shares commencing on the 1st anniversary of January
5, 1998, additional one-fifth (1/5) of shares commencing on the 2nd
anniversary of January 5, 1998, additional one-fifth (1/5) of shares
commencing on the 3rd anniversary of January 5, 1998, additional one-fifth
(1/5) of shares commencing on the 4th anniversary of January 5, 1998, and
an additional one-fifth (1/5) of shares commencing on the 5th anniversary
of January 5, 1998. The options are immediately vested upon any change in
control as defined in Mr. Burnett'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:

<PAGE>

<TABLE>
<CAPTION>
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(1) UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Edward C. Milligan -0- -0- 78,382/15,943 $475,638/$58,900
- -----------------------------------------------------------------------------------------------------------------------
Barbara J. Bond -0- -0- 37,956 $279,778
- -----------------------------------------------------------------------------------------------------------------------
Christopher H. -0- -0- 0/28,544 $0/$33,300
Burnett
- -----------------------------------------------------------------------------------------------------------------------
Michael J. -0- -0- 37,956 $279,778
Henderson
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTE TO TABLE
- -------------

(1) Adjusted for 2 for 1 stock split on March 30, 1998 and 0.2858 stock split
on April 22, 1999. For Mr. Milligan, 13,886 shares of the unexercisable
options become exercisable on September 24, 1999, the remaining 2,057
shares are exercisable on September 24, 2000. All options owned by Ms.
Bond and Mr. Henderson are exercisable. For Mr. Burnett, options are
vested at the rate of 1/5 per year, beginning on January 5, 1999.

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

<PAGE>

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.

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 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
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 13d-2 promulgated under the
1934 Act of 20% or more of the voting power of the Company's outstanding
voting stock; a change in one-third (1/3) of the Company's

<PAGE>

board membership unless approved by two-thirds (2/3) of the Company's board;
or a merger, consolidation, reorganization, complete liquidation or
dissolution involving the Company or an agreement for 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 entered 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. Burnett shall be paid an automobile allowance of $600.00 per
month.

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

<PAGE>

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 1998, the chairman of the board was paid $450 for each Board
meeting attended and Messrs. Milligan and Wofford were paid $300 per meeting
attended. The other directors of Westside Bank were paid $700 for each Board
meeting attended. Other than Mr. Milligan, members of the loan committee and
members of the executive committee are paid $200 for each meeting attended.
Directors serving on other committees are paid $100 for each committee
meeting attended, with the exception of Mr. Milligan. Beginning in May 1999,
the chairman of the board shall be paid $500 for each Board meeting attended,
Messrs. Milligan and Wofford shall be paid $350 per meeting attended and the
other directors of Westside Bank shall be paid $750 for each Board meeting
attended. Committee fees will remain the same.

EASTSIDE BANK

During 1998, the chairman of the board of Eastside Bank was paid $450,
and Messrs. Milligan and Thibadeau were paid $300 for each Board meeting
attended and the other directors of Eastside Bank were paid $700 for each
Board meeting attended. Directors who were not employees of Eastside Bank
were paid $200 for each loan or executive committee meeting attended and $100
for each other committee meeting attended. Effective May, 1999, the chairman
of the board shall be paid $500 and Messrs. Milligan and Thibadeau shall be
paid $350 for each Board meeting attended and the other directors shall be
paid $750 for each Board meeting attended. Committee fees will remain the
same.

<PAGE>

COMPANY

During 1998, each director of the Company was paid $1,950.00 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 1998. Beginning in May 1999 each director will be paid $2,050 per
calendar quarter for their service as a member of the Company's Board of
Directors.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information, as of March 31, 1999
(accounts for the .2858 stock split paid on April 22, 1999), 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 - ELECTION OF CLASS II 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 382,851 10.70%
of March 31, 1999 as 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.

<PAGE>

MISCELLANEOUS

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

Mauldin & Jenkins served as the independent accountants for the year
ended December 31, 1998, and performed an audit of the Company's 1998
financial statements which are included in the 1998 Annual Report to
Shareholders which accompanies this Proxy Statement. The Company has selected
Mauldin & Jenkins as its independent accountants for the 1999 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.

2000 ANNUAL MEETING - SHAREHOLDER PROPOSALS

Proposals of shareholders of the Company intended to be presented at
the 2000 Annual Meeting must be received by the Company on or before December
31, 1999 to be included in the Company's Proxy Statement or Form of Proxy for
the 2000 Annual Meeting of Shareholders.

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.

/s/ Edward C. Milligan

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

Kennesaw, Georgia
April 29, 1999

<PAGE>
FIRST STERLING BANKS, INC.
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 26, 1999

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 The Ashford Club, 400
Perimeter Center Terrace, 10th Floor, Atlanta, Georgia on May 26, 1999, at 5:00
p.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 PROPOSAL

PROPOSAL: Election of Class II Directors. The election of the following named
persons each to serve as a Class II Director for a three year term
expiring at the 2002 Annual Meeting of Shareholders or until his
successor is duly elected and qualified.

<TABLE>
<S> <C> <C> <C>
/ / For all the nominees listed below / / Withhold authority to vote for all
(except as marked to the contrary below) nominees listed below
</TABLE>

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

Christopher H. Burnett, Ted A. Murphy and Benjamin H. Wofford, M.D.
<PAGE>
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 PROPOSAL.

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.
DATED: ______________________, 1999
(Be sure to date your Proxy)
___________________________________
Name(s) of Shareholder(s)
___________________________________
Signature(s) of Shareholder(s)

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