FLAG FINANCIAL CORPORATION
FIRST Capital Bank
Relationship Banking At Its Best
The Creation of a Compelling Metro-Atlanta Community Banking Franchise
Transaction Overview May 26, 2005
Filed by Flag Financial Corporation pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities
Exchange Act of 1934.
Subject Company:
First Capital Bancorp, Inc.
Commission File No. 000-23991
Forward Looking Statements
Certain of the matters discussed in this document may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These forward-looking statements may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” and similar expressions are intended to identify the forward-looking statements. The Company’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation:
The effects of future economic conditions;
Governmental monetary and fiscal policies, as well as legislative and regulatory changes;
The risks of unexpected changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities and interest rate protection agreements, as well as interest rate risks;
The effects of competition from other financial institutions and companies in the financial services industry;
The failure of assumptions underlying the establishment of reserves for possible loan losses and estimations of values of collateral and various financial assets and liabilities; and
Potential difficulties in integrating acquired businesses.
All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by these cautionary statements.
A registration statement and proxy statement relating to the Flag Financial Corporation common stock to be issued in the transaction will be filed with the Securities and Exchange Commission as soon as practicable. When filed, copies of this and other related documents may be obtained free of charge from the SEC website (www.sec.gov) or Flag Financial Corporation’s website (www.flag.net). These documents should be carefully reviewed because they will contain important information.
Transaction Overview
Transaction Overview
Summary of Terms
Fixed Exchange Ratio: 1.6 shares
Implied Price Per Share: (1) $ 25.22
Aggregate Transaction Value: $134.8 million
Transaction Structure: Stock-for-stock exchange
Any First Capital shareholder (non-
institutional) who owns in excess of
384,000 of the issued and outstanding
pro forma shares of Flag Financial will
receive cash for all shares in excess of
the 384,000 share amount
Projected Cost Savings: $4.0 million pre-tax in FY 2006
(approximately 18.4% of First Capital’s
projected FY 2006 non-interest expense)
Termination Fee: $2.0 million
(1) Based on Flag Financial’s closing stock price of $15.76 as of May 25, 2005.
Transaction Overview
Summary of Terms
Board of Directors:
Anticipated Closing:
Other Terms:
Three of twelve pro forma directors- Nat Padget plus two outside directors
Fourth quarter 2005
Due diligence completed
Subject to shareholder approval by both companies as well as customary regulatory approvals
Transaction Overview
Premium Analysis
Implied Price per Share: (1) $25.22
Price / Estimated FY 2005 EPS: (2) 25.0x
Price / March 31, 2005 Book Value: 221.5%
Price / March 31, 2005 Tangible Book Value: 255.7%
Core Deposit Premium: 24.4%
Current Market Premium: (3) 40.1%
(1) Based on Flag Financial’s closing stock price of $15.76 as of May 25, 2005. (2) Based on IBES estimates.
(3) Based on First Capital’s closing stock price of $18.00 as of May 25, 2005.
Company Overview
Flag Financial Corporation
Headquarters: Atlanta, Georgia
CEO: Joseph W. Evans
Banking Offices: 23
Stock Ticker: FLAG
Market Capitalization: (1) $134.4 Million
Total Assets: $840.4 Million
Total Loans: $613.5 Million
Total Deposits: $713.4 Million
Total Equity / Total Assets: 8.36%
Q1’2005 ROAA: 0.88%
Q1’2005 ROAE: 10.49%
Note: All financial information as of or for the period ended March 31, 2005.
(1) Based on Flag Financial’s closing stock price on May 25, 2005.
First Capital Bancorp Inc.
Headquarters: Norcross, Georgia
CEO: H.N. “Nat” Padget
Banking Offices: 5
Stock Ticker: FCBX.OB
Market Capitalization: (1) $91.2 Million
Total Assets: $675.0 Million
Total Loans: $493.9 Million
Total Deposits: $477.9 Million
Total Equity / Total Assets: 8.55%
Q1’2005 ROAA: 0.78%
Q1’2005 ROAE: 9.06%
Note: All financial information as of or for the period ended March 31, 2005.
(1) Based on First Capital’s closing stock price on May 25, 2005.
Pro Forma Franchise
Pro Forma Franchise
Financial Impact
Projected Fiscal Years:
2006 2007
Earnings
Flag Financial Stand-Alone EPS $0.92 $1.03
Pro Forma EPS $1.00 $1.14
EPS Accretion / (Dilution) 8.31% 10.54%
Performance
Return on Average Equity 8.43% 9.04%
Return on Average Tangible Equity 19.33% 18.80%
Return on Average Assets 0.87% 0.89%
Balance Sheet
Assets $2,046.5 $2,267.8
Net Loans $ 1,528.8 $1,716.7
Deposits $1,540.5 $1,710.3
EOP Fully Diluted Shares Outstanding 16,736,951 16,846,807
Flag Financial First Capital
28 Total Offices in Georgia
Marietta
Roswell
Forsyth
Cobb
Smyrna
Mableton
Douglas
College Park
East Point
Atlanta
Belvedere Park
Candler-McAfee
Redan
Rockdale
DeKalb
Decatur
Fulton
Georgia
North Atlanta
Tucker
Gwinnett
Lawrenceville
Sandy Springs
Dunwoody
175
120
185
1985
28 Total Offices in Georgia
1285
1675
Data Source: SNL Financial
Pro Forma Franchise
Deposit Franchise—Metro Atlanta(1)
Flag Financial Corporation
Central / West Georgia 50.8%
Metro Atlanta 49.2%
Pro Forma Franchise
Central / West Georgia 29.0%
Metro Atlanta 71.0%
Data Source: SNL Financial
(1) As a percentage of total company deposits. FDIC deposit data as of June 30, 2004.
Pro Forma Franchise
Deposit Franchise—Fulton County Deposit Market Share
Pending Ownership, Includes Commercial Banks(1)
Deposit Data as of June 30, 2004
June ‘04 June ‘03
Inst # of Total Market Market
County Rank Institution Type Branches Deposits Share(%) Share(%)
Fulton, GA 1 Wachovia Corp. (NC) Bank 70 12,045,223 30.97 32.83
Total County Deposits = 2 SunTrust Banks Inc. (GA) Bank 68 10,891,592 28.00 26.64
$38,894,120 3 Bank of America Corp. (NC) Bank 55 6,845,565 17.60 20.32
4 BB&T Corp. (NC) Bank 5 952,349 2.45 2.30
5 Synovus Financial Corp. (GA) Bank 6 886,529 2.28 2.23
6 Regions Financial Corp. (AL) Bank 8 420,388 1.08 1.12
7 Main Street Banks Inc. (GA) Bank 3 412,237 1.06 0.46
Pro Forma Combined Bank 7 345,874 0.89 0.47
8 Integrity Bancshares Inc. (GA) Bank 2 268,620 0.69 0.53
9 Fidelity Southern Corp. (GA) Bank 5 240,023 0.62 0.54
10 Flag Financial Corporation (GA) Bank 4 229,614 0.59 0.21
Top 10 Institutions 226 $33,192,140 85.34 87.18
20 First Capital Bancorp Inc. (GA) Bank 3 116,260 0.30 0.26
Data Source: SNL Financial
(1) Pending Ownership is defined as, if an institution is involved in a pending merger or acquisition, the prospective seller’s deposit data is included in prospective buyer’s deposit data. Excludes Monogram Credit Card Bank.
Pro Forma Franchise
Deposit Franchise—Atlanta MSA Deposit Market Share
Pending Ownership, Commercial Banks Only(1)
Deposit Data as of June 30, 2004
June ‘04 June ‘03
Inst # of Total Market Market
County Rank Institution Type Branches Deposits Share(%) Share(%)
Atlanta MSA 1 Wachovia Corp. (NC) Bank 253 21,396,736 26.54 27.70
Total Deposits = 2 SunTrust Banks Inc. (GA) Bank 246 15,425,506 19.14 18.86
$80,613,240 3 Bank of America Corp. (NC) Bank 184 12,238,320 15.18 16.46
4 Synovus Financial Corp. (GA) Bank 55 3,468,838 4.30 4.29
5 Regions Financial Corp. (AL) Bank 55 2,670,470 3.31 3.42
6 BB&T Corp. (NC) Bank 49 2,280,637 2.83 3.04
7 Main Street Banks Inc. (GA) Bank 21 1,461,680 1.81 1.72
8 Fidelity Southern Corp. (GA) Bank 20 998,393 1.24 1.14
9 Royal Bank of Canada Bank 27 839,869 1.04 1.06
10 United Community Banks Inc. (GA) Bank 23 785,945 0.97 1.00
Pro Forma Combined Bank 12 764,601 0.94 0.66
11 Brand Banking Company (GA) Bank 5 548,044 0.68 0.65
12 First Capital Bancorp Inc. (GA) Bank 4 462,889 0.57 0.49
13 Henry County Bancshares Inc. (GA) Bank 6 461,886 0.57 0.57
14 Georgian Bancorporation Inc. (GA) Bank 5 414,690 0.51 0.08
15 First Citizens BancShares Inc. (NC) Bank 18 412,729 0.51 0.50
16 Crescent Banking Co. (GA) Bank 9 402,938 0.50 0.43
17 GB&T Bancshares Inc. (GA) Bank 10 401,243 0.50 0.44
18 Colonial BancGroup Inc. (AL) Bank 13 398,836 0.49 0.46
19 Riverside Bancshares Inc. (GA) Bank 5 386,603 0.48 0.46
20 United Bank Corp. (GA) Bank 9 360,385 0.45 0.47
Top 20 Institutions 1,017 $65,816,637 81.62 83.24
24 Flag Financial Corporation (GA) Bank 8 301,712 0.37 0.17
Data Source: SNL Financial
(1) Pending Ownership is defined as, if an institution is involved in a pending merger or acquisition, the prospective seller’s deposit data is included in prospective buyer’s deposit data. Excludes Monogram Credit Card Bank.