<PAGE>

                             EMPLOYMENT AGREEMENT
                             --------------------


     THIS AGREEMENT ("Agreement") is made and entered into effective as of the
1st day of January, 1997 (the "Effective Date"), by and among PREMIER LENDING
CORPORATION ("Employer"); and BRIAN D. SCHMITT ("Employee").

                              W I T N E S S E T H:
     WHEREAS, Employer is a wholly owned subsidiary of FIRST ALLIANCE/
PREMIER BANCSHARES, INC. (the "Holding Company");

     WHEREAS, the Board of Directors of Employer consider the establishment and
maintenance of highly competent and skilled management personnel for Employer to
be essential to protecting and enhancing the best interests of Employer;

     WHEREAS, the Board of Directors of Employer is desirous of inducing
Employee to remain in the employ of Employer, subject to the terms and
conditions hereof;
     WHEREAS, Employee is desirous of remaining in the employ of Employer,
subject to the terms and conditions hereof; and

     WHEREAS, the parties agree that the provisions of this Agreement shall
control with respect to the rights and obligations of the parties resulting from
the employment of Employee by Employer;

     NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:

     1.  Definitions.  The following terms used in this Agreement shall have the
         -----------
following meanings:
<PAGE>

     (a) "Base Salary" shall mean the annual compensation (excluding Incentive
Compensation as defined in (e) of this paragraph and other benefits) payable or
paid to Employee pursuant to paragraph 4(a) of this Agreement.
     (b) "Change of Control" shall be deemed to have occurred if:
     (i) transaction any person (or persons acting in concert), partnership,
corporation, or other organization shall own, control, or hold with the power to
vote more than fifty percent (50%) of any class of voting securities of the
                              --
Holding Company; or
     (ii) The Holding Company, or substantially all of the assets of the Holding
Company, shall be sold or transferred to, or consolidated or merged with,
another corporation; or

     (iii)  Employer, or substantially all of the assets of Employer, shall be
sold or transferred to, or consolidated or merged with, another corporation
which is not a majority owned subsidiary of the Holding Company;

Provided, however, if Employer shall become a subsidiary of another corporation
or shall be merged or consolidated into another corporation and a majority of
the outstanding voting shares of the parent or surviving corporation are owned
immediately after such acquisition, merger, or consolidation by the owners of a
majority of the voting shares of Employer immediately before such acquisition,
merger, or consolidation.
     (c) "Disability" shall mean the complete inability of Employee to perform
his duties for Employer under this Agreement on a full-time basis, as determined
by an independent physician selected with the approval of Employer and Employee.

                                      -2-
<PAGE>

     (d) "Event of Termination" shall mean the termination by Employer of
Employee's employment under this Agreement by written notice delivered to
Employee for any reason other than Termination for Cause as defined in (f) of
this paragraph or termination following a continuous period of disability
exceeding six (6) calendar months pursuant to paragraph 6(a) of this Agreement.
               --
     (e) "Incentive Compensation" shall mean that compensation payable or paid
to Employee pursuant to paragraph 4(b) of this Agreement.
     (f) "Termination for Cause" shall have the meaning provided in paragraph
7(a) of this Agreement.

     2.  Employment.  Employer agrees to continue Employee in its employ, and
         ----------
Employee agrees to remain in the employ of Employer, as its Senior Vice
President of Commercial Real Estate Lending, for the period stated in paragraph
3(a) hereof and upon the other terms and conditions herein provided.  Employee
agrees to perform faithfully such services as are reasonably consistent with his
positions and shall from time to time be assigned to him by the Board of
Directors of Employer in a trustworthy and businesslike manner for the purpose
of advancing the interests of Employer.  The Board of Directors of Employer may
also from time to time change Employee's position or alter his duties and
responsibilities and assign a new position or new duties and responsibilities
that are similar in scope and nature to Employee's existing position, duties and
responsibilities without invalidating this Agreement  or effecting the
termination of Employee.   At all times, Employee shall manage and conduct the
business of Employer  in accordance with the policies established by the Board
of Directors of Employer, and in compliance with applicable regulations
promulgated by governing regulatory agencies.  Responsibility for the
supervision of

                                      -3-
<PAGE>

Employee shall rest with the Board of Directors of Employer, which shall review
Employee's performance at least annually.  The Board of Directors of Employer
shall also have the authority to terminate Employee, subject to the provisions
outlined in paragraph 7 of this Agreement.

     3.  Term and Duties.
         ---------------
     (a) Term of Employment.  This Agreement and the period of Employee's
         ------------------
employment under this Agreement shall be deemed to have commenced as of the
Effective Date and shall continue for a period of twelve (12) full calendar
                                                          --
months thereafter, unless earlier terminated pursuant to this Agreement or
unless Employee dies before the end of such twelve (12) months, in which case
                                                    --
the period of employment shall be deemed to continue until the end of the month
of such death. On each anniversary of the Effective Date, this Agreement and
Employee's term of employment shall be extended for an additional twelve (12)
                                                                          --
month period provided that the Board of Directors of Employer determines that
the performance of Employee has met said Boards' requirements and standards and
further that this Agreement shall be extended.
     (b) Performance of Duties.  During the period of employment hereunder,
         ---------------------
except for periods of illness, disability, reasonable vacation periods, and
reasonable leaves of absence, Employee shall devote substantially all of his
business time, attention, skill, and efforts to the faithful performance of his
duties hereunder.  Employee shall be entitled to reasonable participation as a
member in community, civic, or similar organizations and the pursuit of personal
investments which do not present any material conflict of interest with
Employer, or otherwise unfavorably affect the performance of Employee's duties
pursuant to this Agreement.

                                      -4-
<PAGE>

     (c) Office of Employee.  The office of Employee shall be located at the
         ------------------
principal office of Employer in Atlanta, Georgia, or at such other location
within the State of Georgia as Employer may from time to time designate;
provided, however, that, in the event such relocation required Employee to move
his principal residence, Employer shall reimburse Employee for all his
reasonable moving expenses.
     (d) No Other Agreement.  The Employee shall have no employment contract or
         ------------------
other written or oral agreement concerning employment with any entity or person
other than Employer during the term of his employment under this Agreement.
     (e) Uniqueness of Employee's Services.  Employee hereby represents that the
         ---------------------------------
services to be performed by him under the terms of this Agreement are of a
special, unique, unusual, extraordinary, and intellectual character which gives
them a peculiar value, the loss of which cannot be reasonably or adequately
compensated in damages and in an action at law.  Accordingly, Employee expressly
agrees that Employer, in addition to any rights or remedies which Employer may
possess, shall be entitled to injunctive and other equitable relief to prevent
the breach of this Agreement by Employee.

     4.  Compensation.
         ------------
     (a) Salary.  Subject to the provisions of paragraph 7 hereof, Employer
         ------
shall pay Employee, as compensation for serving as Senior Vice President of
Commercial Real Estate Lending of Employer, an initial Base Salary of $90,000;
                                                                      -------
such initial Base Salary, or any increased Base Salary, shall be payable in
substantially equal installments in accordance with the Employer's normal pay
practices, but not less frequently than monthly. The Board of

                                      -5-
<PAGE>

Directors of Employer, if warranted in its discretion, may increase Employee's
Base Salary to reflect Employee's performance.
     (b) Incentive Compensation.  During the Term of Employment and in addition
         ----------------------
to the aforesaid Base Salary, Employee shall be entitled to such additional
Incentive Compensation as may be awarded from time to time by the Board of
Directors of Employer or any committee(s) designated thereby in its discretion.
Notwithstanding anything contained in this Agreement to the contrary, any
increase to Employee's Base Salary and any Incentive Compensation paid to
Employee shall be (i) in compliance with regulations, thrift bulletins,
pronouncements, directives, or orders issued or promulgated by any governing
regulatory agency and with any agreements by and between Employer and such
regulatory agencies, (ii) consistent with the safe and sound operation of
Employer, (iii) closely monitored by the Board of Directors of Employer and (iv)
comparable to such compensation paid to persons of similar responsibilities and
duties in other insured institutions of similar size, in similar locations, and
under similar circumstances including financial condition and profitability.
     (c) "Golden Parachute" Provision.  Notwithstanding anything contained in
         ----------------------------
this Agreement to the contrary, any payments made to Employee pursuant to this
Agreement, or otherwise to Employee, are subject to and conditioned upon their
compliance with 12 U.S.C. (S) 1828(k) and any regulations promulgated
thereunder.

     5.  Participation in Benefit Plans.  The payments provided in paragraph 4,
         ------------------------------
6, and 7 hereof are in addition to any benefits to which Employee may be, or may
become, entitled to, under any group hospitalization, health, dental care, or
sick leave plan; life insurance or death benefit plan;

                                      -6-
<PAGE>

travel or accident insurance; pension or retirement plan; stock option or
ownership plan; or other present or future group employee benefit plan or
program for which senior executive officers of Employer  shall be or shall
become eligible.  Said benefit shall include, without limitation, major
medical/dental insurance for Employee and his dependents.

     6.  Benefits Payable Upon Disability.
         --------------------------------
     (a) Disability Benefits.  In the event of the Disability of Employee,
         -------------------
Employer shall continue to pay Employee 100% of Employee's then current Base
                                        ----
Salary pursuant to paragraph 4(a) during the first six (6) months of a
                                                        -
continuous period of disability.  It is provided, however, that in the event
Employee is disabled for a continuous period exceeding six (6) months, Employer
                                                            -
may, at its election, terminate this Agreement, in which event payment of
Employee's Base Salary shall cease.
     (b) Disability Benefit Offset.  Any amounts payable under paragraph 6(a)
         -------------------------
hereof shall be reduced by any amounts paid to Employee under any other
disability program or policy of insurance maintained by Employer.

     7.  Payments to Employee Upon Termination of Employment.  The Board of
         ---------------------------------------------------
Directors of Employer  may terminate Employee's employment under this Agreement
at any time; but any termination other than Termination for Cause shall not
prejudice Employee's right to compensation or other benefits under this
Agreement.  Employee may voluntarily terminate his employment under this
Agreement.  The rights and obligations of Employer and Employee in the event of
such termination are set forth in this paragraph 7 as follows:
     (a) Termination for Cause.  Employee shall have no right to compensation or
         ---------------------
other benefits for any period after a Termination for Cause.  Termination for
Cause shall be

                                      -7-
<PAGE>

determined by the Board of Directors of Employer in the reasonable exercise of
its discretion and acting in good faith, and shall include termination because
of Employee's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duties involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation (other than
traffic violations or similar offenses), or a final cease-and-desist order, the
regulatory suspension or removal of Employee as defined in paragraphs 8(a) and
(b) hereof, the termination of this Agreement under paragraphs 8(c) and (d)
hereof, the failure of Employee to follow reasonable written instructions of the
Board of Directors of Employer, or a material breach of Employee of any
provision of this Agreement.  Termination for Cause from the Employer  shall be
determined by, and shall occur only upon the passage of a resolution by a vote
of not less than a two-thirds of Employer's Board of Directors specifying
Employee's Termination for Cause and the grounds therefor, after reasonable
notice to Employee and an opportunity for him to be heard before a meeting of
the Board of Directors called in accordance with the By-Laws of Employer.
Thereafter, Employee shall be deemed to be in material breach of this Agreement
and shall have no right to receive compensation or other benefits under this
Agreement for any period following such Termination for Cause. This provision on
Termination for Cause shall control over any and all other provisions relating
to discharge or termination for cause contained in any and all other agreements
between Employer and Employee.
     (b) Event of Termination Without Change of Control.  Upon the occurrence of
         ----------------------------------------------
an Event of Termination,  other than after a Change of Control as provided in
paragraph 7(c) hereof, Employer shall pay to Employee, or in the event of his
subsequent death, to his

                                      -8-
<PAGE>

designated beneficiary or beneficiaries, or to his estate, as the case may be,
as liquidated damages, in lieu of all other claims, a severance payment equal to
Employee's then current Base Salary plus any Incentive Compensation paid to
Employee during the immediately preceding twelve (12) months, to be paid in full
                                                  --
on the last day of the month following the date of said Event of Termination.
     (c) Event of Termination in Connection With a Change of Control.  If during
         -----------------------------------------------------------
the term of this Agreement and within one (1) year immediately following a
                                           -
Change of Control or within six (6) months immediately prior to such Change of
                                 -
Control:
     (i) Employee's employment with Employer under this Agreement is terminated
by an Event of Termination; or
     (ii) the status, character, capacity, and circumstances of Employee's
employment as provided in paragraphs 2 and 3 of this Agreement have been
materially altered by Employer  whether by a reduction in salary,
responsibilities, authority, or benefits, and Employee voluntary terminates the
employment contemplated by this Agreement for that reason;

then Employer shall pay to Employee, or in the event of his subsequent death, to
his designated beneficiary or beneficiaries, or to his estate, as the case may
be, as liquidated damages, in lieu of all other claims, a severance payment
equal to Employee's then current Base Salary plus any Incentive Compensation
paid to Employee during the immediately preceding twelve (12) months, to be paid
                                                          --
in full on the last day of the month following the date of said Event of
Termination or Employee's voluntary termination under (ii) above.  In no event
shall the total compensation paid to Employee upon the termination of his

                                      -9-
<PAGE>

employment in connection with a Change of Control exceed the amount permitted by
Section 280G of the Internal Revenue Code (as amended) or three times Employee's
average annual compensation.  Employee's average annual compensation shall be
based on the most recent five taxable years ending before the Change of Control
(or the period during which Employee was employed by Employer if Employee has
been employed by Employer for less than five years).
     (d) Voluntary Termination of Employment.  Employee shall have no right to
         -----------------------------------
compensation or other benefits under this Agreement for any period following the
voluntary termination of Employee's employment by Employee, except as provided
in paragraph 7(b) and 7(c) hereof.

     8.  Regulatory Suspension.
         ---------------------
     (a) If Employee is suspended and/or temporarily prohibited from
participating in the conduct of the affairs of Employer by a notice served under
Sections 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. (S)
1818(e)(3) or (g)(1), the obligations of Employer under this Agreement shall be
suspended as of the date of service of such notice, unless stayed by appropriate
proceedings.  If the charges in the notice are dismissed, Employer may in its
discretion (i) pay Employee all or part of the compensation withheld while its
contract obligations were suspended and (ii) reinstate in whole or in part any
of its obligations which were suspended.
     (b) If  Employee is removed and/or permanently prohibited from
participating in the conduct of the affairs of Employer by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. (S)
1818(e)(4) or (g)(1), all obligations of

                                      -10-
<PAGE>

Employer under this Agreement shall terminate as of the effective date of the
order, but vested rights of the parties hereto shall not be affected.
     (c) If Employer  is in "default" as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act, all obligations under this Agreement shall
terminate as of the date of default, but this paragraph shall not affect any
vested rights of the parties hereto.
     (d) All obligations under this Agreement shall be terminated, except to the
extent that it may be determined by any state or federal regulatory agency or
body having authority over Employer that continuation of this Agreement is
necessary for the continued operation of Employer, at any time the Federal
Deposit Insurance Corporation (the "FDIC") enters into an agreement to provide
assistance to or on behalf of Employer  under the authority contained in Section
13(c) of the Federal Deposit Insurance Act, at any time the FDIC approves a
supervisory merger to resolve problems related to the operation of Employer, or
when Employer is determined by the Georgia Department of Banking and Finance,
the Board of Governors of the Federal Reserve System (or the Federal Reserve
Bank of Atlanta acting pursuant to delegated authority), or the FDIC to be in an
unsafe and unsound condition.  Any rights of the parties hereto that have
already vested, however, shall not be affected by such action.

     9.  Nondisclosure of Confidential Information.  Employee acknowledges that
         -----------------------------------------
he possesses confidential information of a special and unique nature and value
affecting and relating to both Employer's and the Holding Company's business,
including, without limitation, the identity of the customers, deposits business
records, other trade secrets, and other similar confidential information
relating to Employer and/or the Holding Company and the business of each (all
the

                                      -11-
<PAGE>

foregoing being hereinafter collectively referred to as "Confidential
Information").  Employee recognizes and acknowledges that all Confidential
Information is the exclusive property of Employer and/or the Holding Company
respectively, constitutes trade secrets of Employer and/or the Holding Company,
is material and confidential, and greatly affects the goodwill and the effective
and successful conduct of the business of Employer and/or the Holding Company.
As a material inducement to Employer to enter into this Agreement and to employ
Employee, Employee covenants and agrees that he will not at any time during the
term of his employment under this Agreement, and for a period of one (1) year
                                                                      -
from the end of such employment, directly or indirectly, divulge, reveal, or
communicate any Confidential Information to any person, firm, corporation, or
entity whatsoever, or use any Confidential Information for his own benefit or
for the benefit of others.  Employee further acknowledges that said Confidential
Information has material commercial value to Employer and/or the Holding Company
so long as it is not known by competitors of Employer and/or the Holding Company
and that both Employer and the Holding Company have taken reasonable steps to
keep all such information and trade secrets confidential.

     10.  Source of Payments.  All payments provided in paragraphs 4, 6, and 7
          ------------------
hereof shall be paid in cash from the general funds of Employer  as provided
herein, and no special or separate fund shall be established by Employer, and no
other segregation of assets shall be made to assure payment.  Employee shall
have no right, title, or interest in or to any investments which Employer may
make to meet the obligations hereunder.

     11.  Injunctions.  In view of the irreparable harm and damage which
          -----------
Employer and/or the Holding Company would sustain as a result of a breach by
Employee of the covenants or agreements under paragraph 9 hereof, and in view of
the lack of an adequate remedy at law to protect the

                                      -12-
<PAGE>

interests of Employer and/or the Holding Company, Employer and/or the Holding
Company shall have the right to receive, and Employee hereby consents to the
issuance of, a permanent injunction of one (1) year in duration enjoining
                                            -
Employee from any violation of the covenants and agreements set forth in
paragraph 9 hereof. The foregoing remedy shall be in addition to, and not in
limitation of, any other rights or remedies to which Employer and/or the Holding
Company is or may be entitled at law or in equity respecting this Agreement. It
is expressly agreed by the parties hereto that the Holding Company is an
intended third party beneficiary of paragraph 9 and 11 of this Agreement and may
enforce same against Employee as if it were a party hereto.

     12.  Attorneys' Fees.  In the event any party hereto is required to engage
          ---------------
in legal action against any other party hereto, either as plaintiff or
defendant, in order to enforce or defend any of its or his rights under this
Agreement, and such action results in a final judgment in favor of one or more
parties, then the party or parties against whom said final judgment is obtained
shall reimburse the prevailing party or parties for all legal fees and expenses
incurred by the prevailing party or parties in asserting or defending its or his
rights hereunder.

     13.  Federal Income Tax Withholding.  Employer may withhold from any
          ------------------------------
benefits payable under this Agreement all federal, state, city, or other taxes
as shall be required pursuant to any law or governmental regulation or ruling.

     14.  Effect of Prior Agreements.  This Agreement contains the entire
          --------------------------
understanding between the parties hereto and supersedes any prior employment
agreement and any contemporaneous oral agreement or understanding by, between,
or among the Employer and Employee.

                                      -13-
<PAGE>

     15.  General Provisions.
          ------------------
     (a) Nonassignability.  Neither this Agreement nor any right or interest
         ----------------
hereunder shall be assignable by Employee, his beneficiaries or legal
representatives, without the written consent of Employer; provided, however,
that nothing in this paragraph 15(a) shall preclude (i) Employee from
designating a beneficiary to receive any benefits payable hereunder upon his
death, or (ii) the executors, administrators, or other legal representatives of
Employee or his estate from assigning any rights hereunder to the person or
persons entitled thereto.
     (b) No Attachment.  Except as required by law, no right to receive payments
         -------------
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation, or to
execution, attachment, levy, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void, and of no effect.
     (c) Binding Agreement.  This Agreement shall be binding upon, and inure to
         -----------------
the benefit of, Employer  and Employee and their respective heirs, successors,
assigns, and legal representatives.

     16.  Modification and Waiver.
          -----------------------
     (a) Amendment of Agreement.  This Agreement may not be modified or amended
         ----------------------
except by an instrument in writing, signed by the parties hereto, and which
specifically refers to this Agreement.
     (b) Waiver.  No term or condition of this Agreement shall be deemed to have
         ------
been waived, nor shall there be any estoppel against the enforcement of any
provision of this

                                      -14-
<PAGE>

Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future or as to any act other than that specifically
waived.

     17.  Severability.  If for any reason any provision of this Agreement is
          ------------
held invalid, such invalidity shall not affect any other provision of this
Agreement not held invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect.  If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect the rest of such provision not held so invalid, and the rest of such
provision, together with all other provisions of this Agreement, shall to the
full extent consistent with law continue in full force and effect.

     18.  Headings.  The headings of paragraphs herein are included solely for
          --------
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

     19.  Governing Law.  This Agreement has been executed and delivered in the
          -------------
State of Georgia, and its validity, interpretation, performance, and enforcement
shall be governed by the laws of said State.

     20.  Rights of Third Parties.  Nothing herein expressed or implied is
          -----------------------
intended to or shall be construed to confer upon or give to any person, firm, or
other entity, other than the parties hereto and their permitted assigns, any
rights or remedies under or by reason of this Agreement.

                                      -15-
<PAGE>

     21.  Notices.  All notices, requests, demands, and other communications
          -------
provided for by this Agreement shall be in writing and shall be sufficiently
given if and when mailed in the United States by registered or certified mail,
or personally delivered, to the party entitled thereto at the address stated
below or to such changed address as the addressee may have given by a similar
notice:

     To Employer:    Chairman of the Board
                     Premier Lending Corporation
                     2180 Atlanta Plaza
                     950 E. Paces Ferry Road
                     Atlanta, Georgia  30326

     Copied to:      Chairman of the Board
                     First Alliance/Premier Bancshares,  Inc.
                     2180 Atlanta Plaza
                     950 E. Paces Ferry Road
                     Atlanta, Georgia  30326

                          -and-

                     Steven S. Dunlevie, Esq.
                     Womble Carlyle Sandridge & Rice, PLLC
                     Suite 700
                     1275 Peachtree Street
                     Atlanta, Georgia 30309

     To Employee:    Mr. Brian D. Schmitt
                     710 Tuckahoe Trail
                     Alpharetta, Georgia 30202


     IN WITNESS WHEREOF, Employer has caused this Agreement to be executed and
its seal to be affixed hereunto by its duly authorized officer, and Employee has
signed this Agreement, as of the Effective Date.

                           [SIGNATURES ON NEXT PAGE]

                                      -16-
<PAGE>

ATTEST:                     PREMIER LENDING CORPORATION

/s/ Barbara J. Burtt       By: /s/ Darrell D. Pittard
----------------------         ---------------------------------------
Secretary                      Darrell D. Pittard
(CORPORATE SEAL)               Chairman of the Board


/s/ Cindy George            /s/ Brian D. Schmitt
----------------------      -----------------------------------(SEAL)
Witness                     BRIAN D. SCHMITT

                                      -17-