Continuing its buying spree, Flag Financial Corp. of LaGrange, Ga., announced plans to buy Thomaston Federal Savings Bank for $12.2 million of stock.

The purchase price is 2.3 times Thomaston's book value and 20 times its fourth-quarter earnings. Under terms of the deal, a tax-free merger, Flag is to exchange 1.7275 share of its common stock for each share of Thomaston. It will also retain the thrift's charter.

Thomaston Federal, which has $53.5 million of assets and four offices, is the second Georgia acquisition target in less than a month for Flag. The $550 million-asset company has also said it would buy First Hogansville Bankshares for $6.5 million in stock. Both deals are expected to close in the third quarter.

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