THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Flag Financial Corporation (FLAG)

4/18/2006 Proxy Information

Directors, executive officers, principal shareholders of the Company and their affiliates have been customers of Flag Bank and predecessors from time to time in the ordinary course of business, and additional transactions may be expected to take place in the future. In accordance with applicable federal laws and regulations, all loans by Flag Bank to these persons are made (1) on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, (2) do not involve more than the normal risk of collectibility or embody other unfavorable features, and (3) comply with specified quantitative limits imposed by federal laws and regulations. At December 31, 2005, the aggregate amount of loans and extensions of credit outstanding to these persons was approximately $4.8 million, which represented approximately 2.2% of the total equity capital of the Company.

None of the loans outstanding at the Flag Bank or any predecessor of Flag Bank to directors, executive officers or principal shareholders of the Company at any time during or subsequent to 2005 was or has been on past due or non-accrual status, has been restructured, or is considered by Flag Bank to be a problem loan.