A proxy battle has erupted at Georgia's largest thrift company, Bankers First Corp. of Augusta, whose compensation packages and unwillingness to sell are being challenged by a thrift raider.

Mid-Atlantic Investors of Columbia, S.C., recently mailed its own proxy to shareholders of the $1.1 billion-asset company, asserting its intention to install its own nominee on the board and to control the management's salaries, which it calls "extravagant."

The thrift raider, which owns 9.5% of Bankers First stock, has tried periodically to persuade management to sell the company since it became a shareholder in July 1993.

"We didn't receive any satisfaction at last year's (shareholders') meeting," said Jerry Shearer, the managing partner of Mid-Atlantic. "We felt that management was continuing to stonewall shareholders and that this year's annual meeting was shaping up the same way."

In response to Mid-Atlantic's actions, Bankers First announced last week that it will delay this year's shareholders' meeting until May 10. It was originally scheduled for April 18.

"They're trying to railroad us into doing something that will meet their objective, but we're not playing their game," said H.M. Osteen Jr., chairman and chief executive of Bankers First. "Mr. Shearer told me he wanted to raise my stress level so high that it would pop out of the top of my head. Well, I'm not going to tell you what I told him."

Mid-Atlantic's letter to shareholders consists of four proposals to be voted on. They are: to sell the bank, terminate an interest-free loan program that benefits senior officers, require shareholder approval of the CEO's retirement package, and require shareholder approval for any salaries over $200,000 a year.

Mr. Shearer said that Mr. Osteen's $322,000 compensation in 1993 was "not only high, but extravagant." Company officials said the package is in line with peer group averages.

Bankers First officials said they believe the company could get a higher price on the market once it further reduces its nonperforming assets and its real estate investments. Nonperforming assets decreased 50% last year to $6.4 million.

"The philosophy is that you sell a company when you have maximized earnings," said Mr. Osteen, who owns 7.2% of the stock. "We've had a couple of things that have impeded that, but we're moving rapidly in that direction."

Odyssey Partners, a New York investment group that owns 6.3% of the stock, would vote with Mid-Atlantic, according to a source. Another major holder, Keefe Managers Inc., with 6.5%, could not be reached for comment.

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