The stock market turmoil has claimed another merger deal in Georgia. Flag Financial Corp., of La Grange, and Mount Vernon-based Heart of Georgia Bancshares said in a joint statement that they had called off their planned merger.
"On reflection, we did not feel that it was the right time for Heart of Georgia to take this significant step," Donald M. Thigpen, president and chief executive officer of the $33 million-asset holding company, said last week.
In August, $454 million-asset Flag said it would buy Heart of Georgia for an undisclosed amount of stock. Since then, Flag's stock has fallen by one-third, to about $12 per share.
This is the second community bank merger in Georgia to fall apart in recent weeks. Peoples Banking Corp., Blackshear, called off its sale to First Liberty Financial Corp., Macon, after First Liberty's stock dropped 24% in six months.
The Heart of Georgia merger was one of four acquisitions that Flag had pending. It also plans to buy Brown Bank, Metter, Ga.; Empire Banking Co., Homerville, Ga.; and a branch of First Georgia Bank in Brunswick.
J. Daniel Speight Jr., president and CEO of Flag, said the company is "disappointed" that Heart of Georgia is backing out, but he stressed that the cancellation would not affect the other deals.