EXHIBIT 10.21

                             FIRST AMENDMENT TO THE
                           FLAG FINANCIAL CORPORATION
                       1994 DIRECTORS STOCK INCENTIVE PLAN
               (AS AMENDED AND RESTATED AS OF SEPTEMBER 18, 1997)

     THIS  FIRST AMENDMENT is made as of the 21st day of December, 1998, by FLAG
Financial  Corporation,  a  Georgia  corporation  (the  "Corporation").

     WHEREAS,  the  Corporation  maintains  the  FLAG Financial Corporation 1994
Directors  Stock  Incentive  Plan  (the  "Plan").

     WHEREAS,  the Board of Directors of the Corporation approved an increase in
the  number of shares reserved for issuance under the Plan on December 21, 1998.

     WHEREAS,  the Board of Directors of the Corporation has also approved other
clarifying  revisions to the Plan to reflect events that have occurred since the
Plan  was  last  amended  and  restated  effective  September  18,  1997.

     NOW, THEREFORE, the Corporation does hereby amend the Plan, effective as of
the  date  first  set  forth  above,  as  follows:

2.   By  replacing  Article  4  in  its  entirety,  as  follows:

                                   "ARTICLE 4
                                      Stock

          The  stock  subject  to  the  Options and other provisions of the Plan
     shall  be  authorized  but  unissued  or reacquired shares of Common Stock.
     Subject to readjustment in accordance with the provisions of Article 7, the
     total  number of shares of Common Stock for which Options may be granted to
     persons participating in the Plan shall not exceed in the aggregate 165,938
     shares  of  Common  Stock.  Notwithstanding the foregoing, shares of Common
     Stock  allocable  to  the  unexercised portion of any expired or terminated
     Option  again  may  become  subject  to  Options  under  the  Plan."

3.   By deleting Section 5.2(c) and the last sentence of Section 5.2 of the Plan
     in  their  entirety  and  by substituting a new Section 5.2(c) therefor, as
     follows:

          "(c)     Condition to All Option Grants.  In the event the remaining
     number  of  shares  of  Stock  reserved  for  issuance  under  the  Plan is
     insufficient to grant Options for the appropriate number of shares of Stock
     to  all eligible Directors as of any grant date under either Section 5.2(a)
     or  Section  5.2(b),  or  both, then no Options shall be granted as of that
     grant  date  or  thereafter unless and until the Plan is further amended to
     increase  the  number of shares of Stock reserved for issuance thereunder."


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4.   By  deleting  the  second  sentence  of  Section  6.4.

5.   By deleting the first sentence of Section 6.5 and substituting therefor the
     following

     "Terms  of  Options  granted  under  the Plan shall commence on the date of
     grant and shall expire on such date as the Committee may determine for each
     Option;  provided,  in  no  event shall any Option be exercisable after ten
     years  from  the  date  the  Option  is  granted."

5.   By  replacing the designation "(H)" in the first sentence of Section 6.8(b)
     with  the  designation  of  "(ii)".

     6.   By  deleting  Section  7.1(a)  and (b) and replacing them, as follows:

         "(a)  The  Committee  shall  make  an  appropriate  adjustment  in

               (i)  the  number and kind of shares available for the granting of
                    Options  under  the  Plan;
               (ii) the number of shares of Stock reserved for issuance upon the
                    exercise  of  each  outstanding  Option;
               (iii)the  number  of  shares  that may be awarded under Section
                    5.2(a)  and  (b);  and
               (iv) the  exercise  price  of  each  outstanding Option (any such
                    adjustment  shall  be made without change in the total price
                    applicable to the unexercised portion of any such Option and
                    with  a  corresponding  adjustment  in  the Option Price per
                    share).

          (b)  No  fractional  shares  shall be issued or optioned in making the
          foregoing  adjustments,  and  the number of shares available under the
          Plan  or the number of shares subject to any outstanding Options shall
          be  the next lower number of shares, rounding all fractions downward."

     7.   By  deleting  the  existing  Section 7.3 and substituting therefor the
          following:

          "7.3  Dissolution  and  liquidation.  If  the  Board  adopts a plan of
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          dissolution  and  liquidation  that is approved by the shareholders of
          the  Company, the Committee shall give each Optionee written notice of
          such  event  at  least  ten  days prior to its effective date, and the
          rights  of  all  Optionees shall become immediately nonforfeitable and
          fully  exercisable or vested (to the extent permitted under federal or
          state  securities  laws)."

     8.   By  replacing  the designation "(H)" in the first paragraph of Section
          8.1  with  the  designation  of  "(ii)".

     9.   By  deleting  the  existing second sentence of the legend set forth in
          Section  8.1  and  substituting  therefor  the  following:

          "Accordingly,  these  shares may not be sold, hypothecated, pledged or
          otherwise transferred except (i) pursuant to an effective registration
          statement  under  the  Securities  Act  of  1933,  as amended, and any
          applicable securities laws or regulations of any state with respect to
          such  shares,  (ii)  in  accordance  with  Securities  and  Exchange
          Commission  Rule 144, or (iii) upon the issuance to the Corporation of
          a favorable opinion of counsel or the submission to the Corporation of
          such  other  evidence  as  may be satisfactory to the Corporation that
          such proposed sale, assignment, encumbrance or other transfer will not
          be  in  violation  of  the  Securities Act of 1933, as amended, or any
          applicable  securities  laws  of any state or any rules or regulations
          thereunder."


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          Except as specifically amended hereby, the remaining provisions of the
     Plan shall remain in full force and effect as prior to the adoption of this
     First  Amendment.

          IN WITNESS WHEREOF, the Corporation has caused this First Amendment to
     be  duly  executed under seal on its behalf, effective as specified herein.


ATTEST/WITNESS:                     FLAG  FINANCIAL  CORPORATION


By:___________________________          By:_________________________________

Print  Name:__________________          Print  Name:________________________

                                        Print  Title:_______________________

                                        Date:_______________________________


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