##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934.
 For the quarterly period ended: September 30, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934.
 For the transition period from to
 Commission File Number: 000-51957
 FGBC BANCSHARES, INC.
  Georgia
    
    20 - 02743161(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification Number)
 101 Main Street, Franklin, Georgia 30217
 (Issuers telephone number)
 (Former name, former address and former fiscal year, if changed since last report)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



INDEX
 PagePart I. FINANCIAL INFORMATION
    
    
    4Item 1. Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    17Item 4. Controls and Procedures
    
    
    18Part II. OTHER INFORMATION
    
    
    18Item 1. Legal Proceedings
    
    
    18Item 1A. Risk Factors
    
    
    19Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    19Item 3. Defaults Upon Senior Securities
    
    
    19Item 4. Submission of Matters to a Vote of Security Holders
    
    
    19Item 5. Other Information
    
    
    19Item 6. Exhibits
    
    
    19EX-31.1 SECTION 302 CERTIFICATION OF CEOEX-31.2 SECTION 302 CERTIFICATION OF CFOEX-32 SECTION 906 CERTIFICATION OF CEO AND CFO




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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
   3




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##### Table of Contents



PART I. FINANCIAL INFORMATION
  Item 1. Financial Statements
 FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2008 AND DECEMBER 31, 2007
 September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)
    
    
    (audited)AssetsCash and due from banks
    
    $
    7,971,339
    
    
    $
    6,112,287Interest bearing deposits in banks
    
    
    72,168
    
    
    
    66,017Federal funds sold
    
    
    17,423,000
    
    
    
    20,005,000Securities available for sale, at fair value
    
    
    72,341,626
    
    
    
    80,731,983Restricted equity securities, at cost
    
    
    1,985,900
    
    
    
    1,041,800Loans
    
    
    690,983,550
    
    
    
    539,709,171Less allowance for loan losses
    
    
    9,606,372
    
    
    
    6,267,211Loans, net
    
    
    681,377,178
    
    
    
    533,441,960Premises and equipment
    
    
    37,621,703
    
    
    
    34,286,994Other assets
    
    
    13,141,159
    
    
    
    8,947,469Total assets
    
    $
    831,934,073
    
    
    $
    684,633,510Liabilities and Stockholders EquityDeposits:Noninterest-bearing
    
    $
    37,554,729
    
    
    $
    31,526,232Interest-bearing
    
    
    706,660,603
    
    
    
    583,710,127Total deposits
    
    
    744,215,332
    
    
    
    615,236,359Other borrowings
    
    
    16,750,000
    
    
    
    Other liabilities
    
    
    1,865,229
    
    
    
    2,607,209Total liabilities
    
    
    762,830,561
    
    
    
    617,843,568Stockholders equityCommon stock, par value $0; 100,000,000 shares authorized;
12,450,552 and 12,185,144 shares issued and outstanding, respectively
    
    
    71,524,008
    
    
    
    67,478,254Accumulated deficit
    
    
    (2,018,856
    )
    
    
    (617,429
    )Accumulated other comprehensive loss
    
    
    (401,640
    )
    
    
    (70,883
    )Total stockholders equity
    
    
    69,103,512
    
    
    
    66,789,942Total liabilities and stockholders equity
    
    $
    831,934,073
    
    
    $
    684,633,510See Notes to Consolidated Financial Statements.
 4




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FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Interest income:Loans, including fees
    
    $
    10,586,518
    
    
    $
    11,178,022
    
    
    $
    31,134,079
    
    
    $
    30,894,102Taxable securities
    
    
    752,249
    
    
    
    793,968
    
    
    
    2,394,566
    
    
    
    2,445,604Nontaxable securities
    
    
    151,873
    
    
    
    144,329
    
    
    
    466,499
    
    
    
    262,888Federal funds sold
    
    
    26,288
    
    
    
    256,987
    
    
    
    104,910
    
    
    
    948,649Other interest income
    
    
    14,645
    
    
    
    19,369
    
    
    
    60,917
    
    
    
    172,378Total interest income
    
    
    11,531,573
    
    
    
    12,392,675
    
    
    
    34,160,971
    
    
    
    34,723,621Interest expense:Deposits
    
    
    5,878,593
    
    
    
    6,645,034
    
    
    
    17,704,580
    
    
    
    18,457,268Other borrowings
    
    
    161,836
    
    
    
    
    
    
    
    324,102
    
    
    
    54,506Total interest expense
    
    
    6,040,429
    
    
    
    6,645,034
    
    
    
    18,028,682
    
    
    
    18,511,774Net interest income
    
    
    5,491,144
    
    
    
    5,747,641
    
    
    
    16,132,289
    
    
    
    16,211,847Provision for loan losses
    
    
    2,151,138
    
    
    
    841,072
    
    
    
    4,576,217
    
    
    
    1,633,791Net interest income
after
provision for loan
losses
    
    
    3,340,006
    
    
    
    4,906,569
    
    
    
    11,556,072
    
    
    
    14,578,056Other income:Service charges on deposit
accounts
    
    
    582,466
    
    
    
    475,631
    
    
    
    1,669,434
    
    
    
    1,348,339Mortgage origination fees
    
    
    281,633
    
    
    
    382,585
    
    
    
    1,000,737
    
    
    
    1,078,500Net gain on sale of securities
available for sale
    
    
    
    
    
    
    1,243
    
    
    
    629,987
    
    
    
    33,851Net gain on sale of premises
and equipment
    
    
    12,167
    
    
    
    
    
    
    
    182,305
    
    
    
    Other operating income
    
    
    45,392
    
    
    
    30,106
    
    
    
    180,648
    
    
    
    83,974Total other income
    
    
    921,658
    
    
    
    889,565
    
    
    
    3,663,111
    
    
    
    2,544,664Other expenses:Salaries and employee benefits
    
    
    3,201,367
    
    
    
    3,340,007
    
    
    
    10,159,410
    
    
    
    9,608,582Occupancy and equipment
expenses
    
    
    888,266
    
    
    
    742,663
    
    
    
    2,529,068
    
    
    
    2,203,124Other operating expenses
    
    
    1,690,718
    
    
    
    1,541,655
    
    
    
    4,898,804
    
    
    
    4,000,071Total other expenses
    
    
    5,780,351
    
    
    
    5,624,325
    
    
    
    17,587,282
    
    
    
    15,811,777Net income (loss)
before
income taxes
(benefits)
    
    
    (1,518,687
    )
    
    
    171,809
    
    
    
    (2,368,099
    )
    
    
    1,310,943Income tax expense (benefit)
    
    
    (591,070
    )
    
    
    32,875
    
    
    
    (966,671
    )
    
    
    (603,448
    )Net income (loss)
    
    
    (927,617
    )
    
    
    138,934
    
    
    
    (1,401,428
    )
    
    
    1,914,391Basic earnings (losses) per share
    
    $
    (0.08
    )
    
    $
    0.01
    
    
    $
    (0.11
    )
    
    $
    0.16Diluted earnings per (losses)
share
    
    $
    (0.08
    )
    
    $
    0.01
    
    
    $
    (0.11
    )
    
    $
    0.15Cash dividends per share
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 See Notes to Consolidated Financial Statements.
 5




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FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    (927,617
    )
    
    $
    138,934
    
    
    $
    (1,401,428
    )
    
    $
    1,914,391Other comprehensive income (loss):Reclassification adjustment for
net gains on sales of securities
included in net income, net of
tax of $0 and $0 for (three months) and $239,394 and $0 for (nine months)
    
    
    
    
    
    
    (771
    )
    
    
    (390,593
    )
    
    
    (20,988
    )Net unrealized holding losses on
securities available for sale
arising during period, net of tax
benefit of $536,529 and $0 for
(three months) and $36,673 and $0
for (nine months)
    
    
    875,388
    
    
    
    940,050
    
    
    
    59,836
    
    
    
    64,864Other comprehensive income (loss)
    
    
    875,388
    
    
    
    939,279
    
    
    
    (330,757
    )
    
    
    43,876Comprehensive income (loss)
    
    $
    (52,229
    )
    
    $
    1,078,213
    
    
    $
    (1,732,185
    )
    
    $
    1,958,267
 See Notes to Consolidated Financial
Statements.
 6




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##### Table of Contents



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Unaudited)
 2008
    
    
    2007OPERATING ACTIVITIESNet income (loss)
    
    $
    (1,401,428
    )
    
    $
    1,914,391Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation
    
    
    1,461,562
    
    
    
    1,144,159Amortization and accretion of securities
    
    
    18,571
    
    
    
    9,528Provision for loan losses
    
    
    4,576,217
    
    
    
    1,633,791Stock compensation expense
    
    
    269,095
    
    
    
    76,957Deferred taxes
    
    
    (1,410,066
    )
    
    
    (1,391,688
    )Net gain on sale of securities available for sale
    
    
    (629,987
    )
    
    
    (33,851
    )Net loss on sale of foreclosed assets
    
    
    320,958
    
    
    
    100,934Net (gain) loss on sale of premises and equipment
    
    
    (182,305
    )
    
    
    4,382Decrease in income taxes payable
    
    
    (117,397
    )
    
    
    (777,617
    )Excess tax
benefit from stock options exercised
    
    
    
    
    
    
    (80,104
    )Increase (decrease) in interest receivable
    
    
    532,067
    
    
    
    (929,597
    )Decrease in interest payable
    
    
    (68,212
    )
    
    
    (36,807
    )Net other operating activities
    
    
    (568,194
    )
    
    
    647,311Net cash provided by operating activities
    
    
    2,800,881
    
    
    
    2,281,789INVESTING ACTIVITIES(Increase) decrease in interest bearing deposits in banks
    
    
    (6,151
    )
    
    
    11,178,441Purchases of securities available for sale
    
    
    (42,954,149
    )
    
    
    (32,996,068
    )Proceeds from maturities of securities available for sale
    
    
    9,224,781
    
    
    
    19,164,751Proceeds from sales of securities available for sale
    
    
    42,197,663
    
    
    
    5,162,699(Purchases) redemptions of restricted equity securities
    
    
    (944,100
    )
    
    
    300,900Net decrease in federal funds sold
    
    
    2,582,000
    
    
    
    34,668,000Net increase in loans
    
    
    (156,925,283
    )
    
    
    (114,979,739
    )Purchase of premises and equipment
    
    
    (5,632,963
    )
    
    
    (6,766,423
    )Proceeds from sale of foreclosed assets
    
    
    1,262,293
    
    
    
    755,606Proceeds from sale of premises and equipment
    
    
    1,018,997
    
    
    
    10,833Additions to other real estate owned
    
    
    (270,549
    )
    
    
    (3,125
    )Net cash used in investing activities
    
    
    (150,447,461
    )
    
    
    (83,504,125
    )FINANCING ACTIVITIESNet increase in deposits
    
    
    128,978,973
    
    
    
    96,746,209Net increase in (repayments of) other borrowings
    
    
    16,750,000
    
    
    
    (15,000,000
    )Net decrease in federal funds purchased and repurchase agreements
    
    
    
    
    
    
    (1,026,230
    )Excess tax benefit from stock options exercised
    
    
    
    
    
    
    80,104Proceeds from sale of common stock
    
    
    3,601,650
    
    
    
    Proceeds from exercise of stock options
    
    
    182,953
    
    
    
    544,359Purchase of fractional shares of common stock
    
    
    (7,944
    )
    
    
    Net cash provided by financing activities
    
    
    149,505,632
    
    
    
    81,344,442Net increase in cash and due from banks
    
    
    1,859,052
    
    
    
    122,106Cash and due from banks, beginning of period
    
    
    6,112,287
    
    
    
    7,343,589Cash and due from banks, end of period
    
    $
    7,971,339
    
    
    $
    7,465,695SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid during period for:Interest
    
    $
    18,167,101
    
    
    $
    18,701,997Income taxes
    
    $
    336,000
    
    
    $
    1,565,857NONCASH TRANSACTIONSFinanced sales of foreclosed assets
    
    $
    
    
    
    $
    1,632,292Loans transferred to foreclosed assets
    
    $
    4,413,848
    
    
    $
    7,100
 See Notes to Consolidated Financial Statements.
 7




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FGBC BANCSHARES, INC.
AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2008
(Unaudited)
 NOTE 1. BASIS OF PRESENTATION
   NOTE 2. EARNINGS PER COMMON SHARE
  Three Months Ended September 30,2008
    
    
    2007Basic earnings (losses) per share:Weighted average common shares outstanding
    
    
    12,326,820
    
    
    
    12,147,249Net income (loss)
    
    $
    (927,617
    )
    
    $
    138,934Basic earnings (losses) per share
    
    $
    (.08
    )
    
    $
    .01Diluted earnings (losses) per share:Weighted average common shares outstanding
    
    
    12,326,820
    
    
    
    12,147,249Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market prices for the year
    
    
    
    
    
    
    749,455Total weighted average common shares and
common stock equivalents outstanding
    
    
    12,326,820
    
    
    
    12,896,704Net income (loss)
    
    $
    (927,617
    )
    
    $
    138,934Diluted earnings (losses) per share
    
    $
    (.08
    )
    
    $
    .01
 8




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##### Table of Contents



Nine Months Ended September 30,2008
    
    
    2007Basic earnings (losses) per share:Weighted average common shares outstanding
    
    
    12,238,873
    
    
    
    12,105,405Net income (loss)
    
    $
    (1,401,428
    )
    
    $
    1,914,391Basic earnings (losses) per share
    
    $
    (.11
    )
    
    $
    .16Diluted earnings (losses) per share:Weighted average common shares outstanding
    
    
    12,238,873
    
    
    
    12,105,405Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market prices for the year
    
    
    
    
    
    
    773,372Total weighted average common shares and
common stock equivalents outstanding
    
    
    12,238,873
    
    
    
    12,878,777Net income (loss)
    
    $
    (1,401,428
    )
    
    $
    1,914,391Diluted earnings (losses) per share
    
    $
    (.11
    )
    
    $
    .15
 NOTE 3. FAIR VALUE MEASUREMENTS
     9




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Quoted Prices
    
    
    Significantin Active
    
    
    Other
    
    
    SignificantMarkets for
    
    
    Observable
    
    
    UnobservableIdentical Assets
    
    
    Inputs
    
    
    Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalAssetsAvailable for sale investment
securities
    
    $
    
    
    
    $
    72,341,626
    
    
    $
    
    
    
    $
    72,341,626Total assets at fair value
    
    $
    
    
    
    $
    72,341,626
    
    
    $
    
    
    
    $
    72,341,626
 NOTE 4. COMMON STOCK SPLIT
  
 10




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
    Critical Accounting Policies
    Liquidity and Capital Resources
  11




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##### Table of Contents



RegulatoryMinimumRegulatory
    
    Requirement forActual
    
    Minimum
    
    Well CapitalizedConsolidated
    
    Bank
    
    Requirement
    
    StatusLeverage capital ratio
    
    
    8.57
    %
    
    
    8.29
    %
    
    
    4.00
    %
    
    
    5.00
    %Risk-based capital ratios:Tier I capital
    
    
    10.08
    
    
    
    9.76
    
    
    
    4.00
    
    
    
    6.00Total capital
    
    
    11.33
    
    
    
    11.01
    
    
    
    8.00
    
    
    
    10.00
  Off-Balance Sheet Risk
   September 30,2008(Dollars in Thousands)Commitments to extend credit
    
    $
    55,308Letters of credit
    
    
    1,484$
    56,792
   Financial Condition
  12




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##### Table of Contents



September 30,
    
    
    December 31,2008
    
    
    2007(Dollars in Thousands)Cash and due from banks
    
    $
    7,971
    
    
    $
    6,112Interest-bearing deposits in banks
    
    
    72
    
    
    
    66Federal funds sold
    
    
    17,423
    
    
    
    20,005Securities
    
    
    72,342
    
    
    
    80,732Loans, net
    
    
    681,377
    
    
    
    533,442Premises and equipment
    
    
    37,622
    
    
    
    34,287Other assets
    
    
    15,127
    
    
    
    9,989$
    831,934
    
    
    $
    684,633Deposits
    
    $
    744,215
    
    
    $
    615,236Other borrowings
    
    
    16,750
    
    
    
    Securities sold under repurchase agreement
    
    
    
    
    
    
    Other liabilities
    
    
    1,865
    
    
    
    2,607Stockholders equity
    
    
    69,104
    
    
    
    66,790$
    831,934
    
    
    $
    684,633
  Results of Operations for the Three and Nine Months Ended September 30, 2008 and 2007
  Three Months EndedSeptember 30,2008
    
    
    2007(Dollars in Thousands)Interest income
    
    $
    11,531
    
    
    $
    12,393Interest expense
    
    
    (6,040
    )
    
    
    (6,645
    )Net interest income
    
    
    5,491
    
    
    
    5,748Provision for loan losses
    
    
    (2,151
    )
    
    
    (841
    )Other income
    
    
    921
    
    
    
    889Other expense
    
    
    (5,780
    )
    
    
    (5,624
    )Pretax income (loss)
    
    
    (1,519
    )
    
    
    172Income tax expense (benefit)
    
    
    (591
    )
    
    
    33Net income (loss)
    
    $
    (928
    )
    
    $
    139
 Nine Months EndedSeptember 30,2008
    
    
    2007(Dollars in Thousands)Interest income
    
    $
    34,161
    
    
    $
    34,724Interest expense
    
    
    (18,029
    )
    
    
    (18,512
    )Net interest income
    
    
    16,132
    
    
    
    16,212Provision for loan losses
    
    
    (4,576
    )
    
    
    (1,634
    )Other income
    
    
    3,663
    
    
    
    2,545Other expense
    
    
    (17,587
    )
    
    
    (15,812
    )Pretax income (loss)
    
    
    (2,368
    )
    
    
    1,311Income tax expense (benefit)
    
    
    (967
    )
    
    
    (603
    )Net income (loss)
    
    $
    (1,401
    )
    
    $
    1,914
 13




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Provision and Allowance for Loan Losses
      14




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##### Table of Contents



September 302008
    
    2007(Dollars in Thousands)Non-accrual loans
    
    $
    12,777
    
    
    $
    1,696Loans contractually past due ninety days or more as to interest
or principal payments and still accruing
    
    
    
    
    
    
    Restructured loans in compliance with terms
    
    
    4,531
    
    
    
    Potential problem loans
    
    
    1,856
    
    
    
    Interest income that would have been recorded on non-accrual
and restructured loans under original terms
    
    
    1,735
    
    
    
    272Interest income that was recorded on non-accrual and restructured loans
    
    
    1,546
    
    
    
    189
 st
    15




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##### Table of Contents



Nine Months EndedSeptember 30,2008
    
    
    2007(Dollars in Thousands)Average amount of loans outstanding
    
    $
    613,487
    
    
    $
    470,439Balance of allowance for loan losses at beginning of period
    
    $
    6,267
    
    
    $
    5,244Loans charged offCommercial and financial
    
    
    (475
    )
    
    
    (116
    )Real estate mortgage
    
    
    (540
    )
    
    
    (367
    )Installment
    
    
    (281
    )
    
    
    (388
    )(1,296
    )
    
    
    (871
    )Loans recoveredCommercial and financial
    
    
    13
    
    
    
    1Real estate mortgage
    
    
    4
    
    
    
    Installment
    
    
    42
    
    
    
    4459
    
    
    
    45Net charge-offs
    
    
    (1,237
    )
    
    
    (826
    )Additions to allowance charged to operating expense during period
    
    
    4,576
    
    
    
    1,634Balance of allowance for loan losses at end of period
    
    $
    9,606
    
    
    $
    6,052Ratio of net loans charged off during the period to
average loans outstanding
    
    
    .20
    %
    
    
    .18
    %
 Other Income and Expenses
    16




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
     17




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##### Table of Contents



Analysis of Interest Sensitivity
As of September 30, 2008
(Dollars in Thousands)
 0  3
    
    3-12
    
    Over 1Months
    
    Months
    
    Year
    
    TotalInterest-earning assets:Interest-bearing deposits in banks
    
    
    72
    
    
    
    
    
    
    
    
    
    
    
    72Securities
    
    
    
    
    
    
    
    
    
    
    72,342
    
    
    
    72,342Restricted equity securities
    
    
    1,986
    
    
    
    
    
    
    
    
    
    
    
    1,986Federal funds sold
    
    
    17,423
    
    
    
    
    
    
    
    
    
    
    
    17,423Loans
    
    
    340,689
    
    
    
    100,661
    
    
    
    237,116
    
    
    
    678,466Total interest-earning assets
    
    
    360,170
    
    
    
    100,661
    
    
    
    309,458
    
    
    
    770,289Interest-bearing liabilities:Interest-bearing demand deposits
    
    
    80,120
    
    
    
    
    
    
    
    
    
    
    
    80,120Savings and money markets
    
    
    125,709
    
    
    
    
    
    
    
    
    
    
    
    125,709Time deposits
    
    
    116,520
    
    
    
    299,627
    
    
    
    84,685
    
    
    
    500,832Other borrowings
    
    
    
    
    
    
    
    
    
    
    16,750
    
    
    
    16,750Total interest-bearing liabilities
    
    
    322,349
    
    
    
    299,627
    
    
    
    101,435
    
    
    
    723,411Interest rate sensitivity gap
    
    
    37,821
    
    
    
    (198,966
    )
    
    
    208,023
    
    
    
    46,878Cumulative interest rate sensitivity gap
    
    
    37,821
    
    
    
    (161,145
    )
    
    
    46,878Interest rate sensitivity gap ratio
    
    
    1.12
    
    
    
    0.34
    
    
    
    3.05Cumulative interest rate sensitivity gap ratio
    
    
    1.12
    
    
    
    0.74
    
    
    
    1.06
  
 Item 4. Controls and Procedures
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  18




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##### Table of Contents



Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  31.1
    
    Certificate of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certificate of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
    
    Certificate of CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 19




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SIGNATURES
  FGBC BANCSHARES, INC.Date: November 10, 2008
    
    /s/ Jackie L. Reed

Jackie L. ReedPresident and CEODate: November 10, 2008
    
    /s/ Teresa L. Martin

Teresa L. MartinChief Financial Officer
 20