Flag Financial Corp., La Grange, Ga., has agreed to acquire First Hogansville (Ga.) Bankshares in a $6.5 million, tax-free stock swap.

First Hogansville shareholders would receive 6.08466 shares of Flag common stock for each of their shares. The deal, announced last week, represents 1.9 times First Hogansville's book value.

First Hogansville, parent of Citizens Bank, has $30 million of assets. Its chief executive officer, John R. Hines Jr., would become a Flag director and senior vice president.

Flag is a $550 million-asset company with 24 offices throughout Georgia. The transaction is expected to close in the third quarter.

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