##### 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: June 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
 (678) 839-4510
 N/A
 þ o
  Large accelerated filer  o
    
    Accelerated filer  þNon-accelerated filer  o
    
    Smaller reporting company  o(Do not check if a smaller reporting company)
 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
    
    
    19Item 1.
    
    Legal Proceedings
    
    
    19Item 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
    
    
    20EX-31.1 SECTION 302, CERTIFICATION OF CEOEX-31.2 SECTION 302, CERTIFICATION OF CFOEX-32 SECTION 906, CERTIFICATION OF CEO & CFO




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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
   3




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PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED BALANCE SHEET
JUNE 30, 2008 AND DECEMBER 31, 2007
 June 30,
    
    
    December 31,2008
    
    
    2007(unaudited)
    
    
    (audited)AssetsCash and due from banks
    
    $
    10,559,784
    
    
    $
    6,112,287Interest-bearing deposits in banks
    
    
    79,342
    
    
    
    66,017Federal funds sold
    
    
    8,582,000
    
    
    
    20,005,000Securities available for sale, at fair value
    
    
    71,721,480
    
    
    
    80,731,983Restricted equity securities, at cost
    
    
    1,907,100
    
    
    
    1,041,800Loans
    
    
    646,850,393
    
    
    
    539,709,171Less allowance for loan losses
    
    
    7,635,436
    
    
    
    6,267,211Loans, net
    
    
    639,214,957
    
    
    
    533,441,960Premises and equipment
    
    
    36,011,789
    
    
    
    34,286,994Other assets
    
    
    12,331,723
    
    
    
    8,947,469Total assets
    
    $
    780,408,175
    
    
    $
    684,633,510Liabilities and Stockholders EquityDeposits:Noninterest-bearing
    
    $
    41,154,993
    
    
    $
    31,526,232Interest-bearing
    
    
    654,335,778
    
    
    
    583,710,127Total deposits
    
    
    695,490,771
    
    
    
    615,236,359Other borrowings
    
    
    15,000,000
    
    
    
    Other liabilities
    
    
    2,187,305
    
    
    
    2,607,209Total liabilities
    
    
    712,678,076
    
    
    
    617,843,568Stockholders equityCommon stock, par value $0; 100,000,000 shares authorized;
12,205,690 and 12,185,144 shares issued and outstanding, respectively
    
    
    70,098,367
    
    
    
    67,478,254Accumulated deficit
    
    
    (1,091,240
    )
    
    
    (617,429
    )Accumulated other comprehensive loss
    
    
    (1,277,028
    )
    
    
    (70,883
    )Total stockholders equity
    
    
    67,730,099
    
    
    
    66,789,942Total liabilities and stockholders equity
    
    $
    780,408,175
    
    
    $
    684,633,510
 See Notes to Consolidated Financial Statements.
 4




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FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2008 AND 2007
AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Interest income:Loans, including fees
    
    $
    10,031,672
    
    
    $
    10,254,689
    
    
    $
    20,547,561
    
    
    $
    19,716,080Taxable securities
    
    
    768,111
    
    
    
    813,876
    
    
    
    1,642,317
    
    
    
    1,651,636Nontaxable securities
    
    
    155,052
    
    
    
    99,910
    
    
    
    314,626
    
    
    
    118,559Federal funds sold
    
    
    47,186
    
    
    
    383,004
    
    
    
    78,622
    
    
    
    691,662Other interest income
    
    
    27,268
    
    
    
    27,230
    
    
    
    46,272
    
    
    
    153,009Total interest income
    
    
    11,029,289
    
    
    
    11,578,709
    
    
    
    22,629,398
    
    
    
    22,330,946Interest expense:Deposits
    
    
    5,625,336
    
    
    
    6,210,504
    
    
    
    11,825,987
    
    
    
    11,812,234Other borrowings
    
    
    135,531
    
    
    
    
    
    
    
    162,266
    
    
    
    54,506Total interest expense
    
    
    5,760,867
    
    
    
    6,210,504
    
    
    
    11,988,253
    
    
    
    11,866,740Net interest income
    
    
    5,268,422
    
    
    
    5,368,205
    
    
    
    10,641,145
    
    
    
    10,464,206Provision for loan losses
    
    
    1,566,267
    
    
    
    500,910
    
    
    
    2,425,079
    
    
    
    792,719Net interest income after
provision for loan
losses
    
    
    3,702,155
    
    
    
    4,867,295
    
    
    
    8,216,066
    
    
    
    9,671,487Other income:Service charges on deposit
accounts
    
    
    569,756
    
    
    
    460,598
    
    
    
    1,086,968
    
    
    
    872,708Mortgage origination fees
    
    
    348,549
    
    
    
    364,923
    
    
    
    719,104
    
    
    
    695,915Net gain on sale of securities
available for sale
    
    
    20,955
    
    
    
    
    
    
    
    629,987
    
    
    
    Net gain (loss) on sale of
premises and equipment
    
    
    (3,732
    )
    
    
    
    
    
    
    170,138
    
    
    
    Other operating income
    
    
    51,349
    
    
    
    8,704
    
    
    
    135,256
    
    
    
    86,476Total other income
    
    
    986,877
    
    
    
    834,225
    
    
    
    2,741,453
    
    
    
    1,655,099Other expenses:Salaries and employee benefits
    
    
    3,465,584
    
    
    
    3,134,875
    
    
    
    6,958,043
    
    
    
    6,268,575Occupancy and equipment
expenses
    
    
    828,766
    
    
    
    781,777
    
    
    
    1,640,802
    
    
    
    1,460,461Other operating expenses
    
    
    1,662,071
    
    
    
    1,233,843
    
    
    
    3,208,086
    
    
    
    2,458,416Total other expenses
    
    
    5,956,421
    
    
    
    5,150,495
    
    
    
    11,806,931
    
    
    
    10,187,452Net income (loss) before
income taxes
    
    
    (1,267,389
    )
    
    
    551,025
    
    
    
    (849,412
    )
    
    
    1,139,134Income tax benefit
    
    
    (503,764
    )
    
    
    (636,323
    )
    
    
    (375,601
    )
    
    
    (636,323
    )Net income (loss)
    
    
    (763,625
    )
    
    
    1,187,348
    
    
    
    (473,811
    )
    
    
    1,775,457Basic earnings (losses) per
share
    
    $
    (0.06
    )
    
    $
    0.10
    
    
    $
    (0.04
    )
    
    $
    0.15Diluted earnings (losses) per
share
    
    $
    (0.06
    )
    
    $
    0.09
    
    
    $
    (0.04
    )
    
    $
    0.14Cash 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 JUNE 30, 2008 AND 2007
AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    (763,625
    )
    
    $
    1,187,348
    
    
    $
    (473,811
    )
    
    $
    1,775,457Other comprehensive loss:Reclassification adjustment for
net gains on sales of securities
included in net income, net of
tax of $7,963 and $0 for three
months and $239,394 and $0
for six months
    
    
    (12,992
    )
    
    
    
    
    
    
    (390,593
    )
    
    
    Net unrealized holding gains on
securities available for sale
arising during period, net of tax
benefit of $586,382 and $0 for
three months and $499,856
and $0 for six months
    
    
    (956,729
    )
    
    
    (948,114
    )
    
    
    (815,552
    )
    
    
    (895,403
    )Other comprehensive income (loss)
    
    
    (969,721
    )
    
    
    (948,114
    )
    
    
    (1,206,145
    )
    
    
    (895,403
    )Comprehensive income (loss)
    
    $
    (1,733,346
    )
    
    $
    239,234
    
    
    $
    (1,679,956
    )
    
    $
    880,054
 See Notes to Consolidated Financial Statements.
 6




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FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2008 AND 2007
(Unaudited)
 2008
    
    
    2007OPERATING ACTIVITIESNet income (loss)
    
    $
    (473,811
    )
    
    $
    1,775,457Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation
    
    
    945,017
    
    
    
    738,921Amortization and accretion of securities
    
    
    17,421
    
    
    
    7,205Provision for loan losses
    
    
    2,425,079
    
    
    
    792,719Stock compensation expense
    
    
    172,998
    
    
    
    32,352Deferred taxes
    
    
    (731,365
    )
    
    
    (1,239,639
    )Net gain on sale of securities available for sale
    
    
    (629,987
    )
    
    
    Net loss on sale of foreclosed assets
    
    
    175,741
    
    
    
    63,110Net (gain) loss on sale of premises and equipment
    
    
    (170,138
    )
    
    
    4,382Increase (decrease) in income taxes payable
    
    
    (165,765
    )
    
    
    14,316Increase (decrease) in interest receivable
    
    
    377,270
    
    
    
    (482,033
    )Decrease in interest payable
    
    
    (90,480
    )
    
    
    (76,139
    )Net other operating activities
    
    
    (34,276
    )
    
    
    (493,002
    )Net cash provided by operating activities
    
    
    1,817,704
    
    
    
    1,137,649INVESTING ACTIVITIES(Increase) decrease in interest bearing deposits in banks
    
    
    (13,325
    )
    
    
    10,897,948Purchases of securities available for sale
    
    
    (42,954,149
    )
    
    
    (31,727,478
    )Proceeds from maturities of securities available for sale
    
    
    8,434,160
    
    
    
    20,991,246Proceeds from sales of securities available for sale
    
    
    42,197,663
    
    
    
    (Purchases) redemptions of restricted equity securities
    
    
    (865,300
    )
    
    
    300,900Net decrease in federal funds sold
    
    
    11,423,000
    
    
    
    36,969,000Net increase in loans
    
    
    (111,630,815
    )
    
    
    (83,197,487
    )Purchase of premises and equipment
    
    
    (3,505,670
    )
    
    
    (4,491,020
    )Proceeds from sale of foreclosed assets
    
    
    1,024,856
    
    
    
    555,372Proceeds from sale of premises and equipment
    
    
    1,005,997
    
    
    
    Additions to other real estate owned
    
    
    (188,150
    )
    
    
    (3,125
    )Net cash used in investing activities
    
    
    (95,071,733
    )
    
    
    (49,704,644
    )FINANCING ACTIVITIESNet increase in deposits
    
    
    80,254,412
    
    
    
    65,340,922Net increase in (repayments of) other borrowings
    
    
    15,000,000
    
    
    
    (15,000,000
    )Net decrease in federal funds purchased and repurchase
agreements
    
    
    
    
    
    
    (1,027,230
    )Excess tax benefit from stock options exercised
    
    
    
    
    
    
    80,104Proceeds from sale of common stock
    
    
    2,306,040
    
    
    
    Proceeds from exercise of stock options
    
    
    149,018
    
    
    
    247,264Purchase of fractional shares of common stock
    
    
    (7,944
    )
    
    
    Net cash provided by financing activities
    
    
    97,701,526
    
    
    
    49,641,060Net increase in cash and due from banks
    
    
    4,447,497
    
    
    
    1,074,065Cash and due from banks, beginning of period
    
    
    6,112,287
    
    
    
    7,343,589Cash and due from banks, end of period
    
    $
    10,559,784
    
    
    $
    8,417,654SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid during period for:Interest
    
    $
    12,142,561
    
    
    $
    12,073,579Income taxes
    
    $
    200,000
    
    
    $
    1,263,857NONCASH TRANSACTIONSFinanced sales of foreclosed assets
    
    $
    
    
    
    $
    808,129Loans transferred to foreclosed assets
    
    $
    3,432,739
    
    
    $
    7,100
 See Notes to Consolidated Financial Statements.
 7




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FGBC BANCSHARES, INC.
AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008
(Unaudited)
 NOTE 1. BASIS OF PRESENTATION
   NOTE 2. EARNINGS PER COMMON SHARE
  Three Months Ended June 30,2008
    
    
    2007Basic earnings (losses) per share:Weighted average common shares outstanding
    
    
    12,198,712
    
    
    
    12,092,971Net income (loss)
    
    $
    (763,625
    )
    
    $
    1,187,348Basic earnings (losses) per share
    
    $
    (.06
    )
    
    $
    .10Diluted earnings (losses) per share:Weighted average common shares outstanding
    
    
    12,198,712
    
    
    
    12,092,971Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market prices for the year
    
    
    
    
    
    
    818,460Total weighted average common shares and
common stock equivalents outstanding
    
    
    12,198,712
    
    
    
    12,911,431Net income (loss)
    
    $
    (763,625
    )
    
    $
    1,187,348Diluted earnings (losses) per share
    
    $
    (.06
    )
    
    $
    .09
 8




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Six Months Ended June 30,2008
    
    
    2007Basic earnings (losses) per share:Weighted average common shares outstanding
    
    
    12,194,416
    
    
    
    12,084,137Net income (loss)
    
    $
    (473,811
    )
    
    $
    1,775,457Basic earnings (losses) per share
    
    $
    (.04
    )
    
    $
    .15Diluted earnings (losses) per share:Weighted average common shares outstanding
    
    
    12,194,416
    
    
    
    12,084,137Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market prices for the year
    
    
    
    
    
    
    785,331Total weighted average common shares and
common stock equivalents outstanding
    
    
    12,194,416
    
    
    
    12,869,468Net income (loss)
    
    $
    (473,811
    )
    
    $
    1,775,457Diluted earnings (losses) per share
    
    $
    (.04
    )
    
    $
    .14
 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
    
    $
    
    
    
    $
    71,721,480
    
    
    $
    
    
    
    $
    71,721,480Total assets at fair value
    
    $
    
    
    
    $
    71,721,480
    
    
    $
    
    
    
    $
    71,721,480
 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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RegulatoryMinimumRegulatory
    
    Requirement forActual
    
    Minimum
    
    Well CapitalizedConsolidated
    
    Bank
    
    Requirement
    
    StatusLeverage capital ratio
    
    
    9.29
    %
    
    
    8.99
    %
    
    
    4.00
    %
    
    
    5.00
    %Risk-based capital ratios:Tier I capital
    
    
    10.80
    
    
    
    10.45
    
    
    
    4.00
    
    
    
    6.00Total capital
    
    
    12.00
    
    
    
    11.65
    
    
    
    8.00
    
    
    
    10.00
 Off-Balance Sheet Risk
   June 30,2008(Dollars in Thousands)Commitments to extend credit
    
    $
    66,051Letters of credit
    
    
    1,782$
    67,833
   12




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Financial Condition
  June 30,
    
    
    December 31,2008
    
    
    2007(Dollars in Thousands)Cash and due from banks
    
    $
    10,560
    
    
    $
    6,112Interest-bearing deposits in banks
    
    
    79
    
    
    
    66Federal funds sold
    
    
    8,582
    
    
    
    20,005Securities
    
    
    71,721
    
    
    
    80,732Loans, net
    
    
    639,215
    
    
    
    533,442Premises and equipment
    
    
    36,012
    
    
    
    34,287Other assets
    
    
    14,239
    
    
    
    9,989$
    780,408
    
    
    $
    684,633Deposits
    
    $
    695,491
    
    
    $
    615,236Other borrowings
    
    
    15,000
    
    
    
    Securities sold under repurchase agreement
    
    
    
    
    
    
    Other liabilities
    
    
    2,187
    
    
    
    2,607Stockholders equity
    
    
    67,730
    
    
    
    66,790$
    780,408
    
    
    $
    684,633
  Results of Operations for the Three and Six Months Ended June 30, 2008 and 2007
  Three Months EndedJune 30,2008
    
    
    2007(Dollars in Thousands)Interest income
    
    $
    11,029
    
    
    $
    11,579Interest expense
    
    
    (5,761
    )
    
    
    (6,211
    )Net interest income
    
    
    5,268
    
    
    
    5,368Provision for loan losses
    
    
    (1,566
    )
    
    
    (501
    )Other income
    
    
    986
    
    
    
    834Other expense
    
    
    (5,955
    )
    
    
    (5,150
    )Pretax income (loss)
    
    
    (1,267
    )
    
    
    551Income tax benefit
    
    
    (504
    )
    
    
    (636
    )Net income (loss)
    
    $
    (763
    )
    
    $
    1,187
 Six Months EndedJune 30,2008
    
    
    2007(Dollars in Thousands)Interest income
    
    $
    22,629
    
    
    $
    22,331Interest expense
    
    
    (11,988
    )
    
    
    (11,867
    )Net interest income
    
    
    10,641
    
    
    
    10,464Provision for loan losses
    
    
    (2,425
    )
    
    
    (792
    )Other income
    
    
    2,741
    
    
    
    1,655Other expense
    
    
    (11,806
    )
    
    
    (10,188
    )Pretax income (loss)
    
    
    (849
    )
    
    
    1,139Income tax benefit
    
    
    (375
    )
    
    
    (636
    )Net income (loss)
    
    $
    (474
    )
    
    $
    1,775
 13




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Provision and Allowance for Loan Losses
     14




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June 302008
    
    2007(Dollars in Thousands)Non-accrual loans
    
    $
    2,134
    
    
    $
    1,160Loans contractually past due ninety days or more as to interest
or principal payments and still accruing
    
    
    
    
    
    
    Restructured loans
    
    
    
    
    
    
    Potential problem loans
    
    
    642
    
    
    
    Interest income that would have been recorded on non-accrual
and restructured loans under original terms
    
    
    365
    
    
    
    73Interest income that was recorded on non-accrual and restructured loans
    
    
    270
    
    
    
    53
    15




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Six Months EndedJune 30,2008
    
    
    2007(Dollars in Thousands)Average amount of loans outstanding
    
    $
    582,165
    
    
    $
    451,648Balance of allowance for loan losses at beginning of period
    
    $
    6,267
    
    
    $
    5,244Loans charged offCommercial and financial
    
    
    (459
    )
    
    
    (16
    )Real estate mortgage
    
    
    (474
    )
    
    
    (76
    )Installment
    
    
    (157
    )
    
    
    (176
    )(1,090
    )
    
    
    (268
    )Loans recoveredCommercial and financial
    
    
    1
    
    
    
    1Real estate mortgage
    
    
    4
    
    
    
    Installment
    
    
    28
    
    
    
    2633
    
    
    
    27Net charge-offs
    
    
    (1,057
    )
    
    
    (241
    )Additions to allowance charged to operating expense during
period
    
    
    2,425
    
    
    
    793Balance of allowance for loan losses at end of period
    
    $
    7,635
    
    
    $
    5,796Ratio of net loans charged off during the period to
average loans outstanding
    
    
    .18
    %
    
    
    .05
    %
 Other Income and Expenses
   16




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Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    17




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##### Table of Contents



Analysis of Interest Sensitivity
As of June 30, 2008
(Dollars in Thousands)
 0-3
    
    3-12
    
    Over 1Months
    
    Months
    
    Year
    
    TotalInterest-earning assets:Interest-bearing deposits in banks
    
    
    79
    
    
    
    
    
    
    
    
    
    
    
    79Securities
    
    
    
    
    
    
    
    
    
    
    71,721
    
    
    
    71,721Restricted equity securities
    
    
    1,907
    
    
    
    
    
    
    
    
    
    
    
    1,907Federal funds sold
    
    
    8,582
    
    
    
    
    
    
    
    
    
    
    
    8,582Loans
    
    
    330,825
    
    
    
    95,423
    
    
    
    220,602
    
    
    
    646,850Total interest-earning assets
    
    
    341,393
    
    
    
    95,423
    
    
    
    292,323
    
    
    
    729,139Interest-bearing liabilities:Interest-bearing demand deposits
    
    
    84,581
    
    
    
    
    
    
    
    
    
    
    
    84,581Savings and money markets
    
    
    104,343
    
    
    
    
    
    
    
    
    
    
    
    104,343Time deposits
    
    
    142,383
    
    
    
    247,685
    
    
    
    75,344
    
    
    
    465,412Other borrowings
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    15,000Total interest-bearing liabilities
    
    
    331,307
    
    
    
    247,685
    
    
    
    90,344
    
    
    
    669,336Interest rate sensitivity gap
    
    
    10,086
    
    
    
    (152,262
    )
    
    
    201,979
    
    
    
    59,803Cumulative interest rate sensitivity gap
    
    
    10,086
    
    
    
    (142,176
    )
    
    
    59,803Interest rate sensitivity gap ratio
    
    
    1.03
    
    
    
    0.39
    
    
    
    3.24Cumulative interest rate sensitivity gap ratio
    
    
    1.03
    
    
    
    0.75
    
    
    
    1.09
  
 Item 4.
    
    Controls and Procedures
  18




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PART II. OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 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
  (1)
    
    Proposal One  Election of Five Class I Directors
 Name
    
    Votes For
    
    Votes Against/AbstainRoy L. Denney
    
    6,681,996
    
    83,937Greg M. Hagan
    
    6,681,996
    
    83,937Emmett K. Harrod
    
    6,681,996
    
    83,937Edward R. Newbern
    
    6,681,996
    
    83,937G. Randall Pugh
    
    6,681,996
    
    83,937Bart R. Smith
    
    6,681,996
    
    83,937
 (2)
    
    Proposal Two  Proposal Three  To ratify the selection of Mauldin & Jenkins,
LLC as the Companys independent auditors for 2007.
 Votes For
    
    Votes Against
    
    Abstain6,752,087
    
    
    0
    
    
    
    13,846
 
 Item 5.
    
    Other Information
  19




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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
 20




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SIGNATURES
  FGBC BANCSHARES, INC.Date: August 11, 2008
    /s/ Jackie L. ReedJackie L. ReedPresident and CEODate: August 11, 2008
    /s/ Teresa L. MartinTeresa L. MartinChief Financial Officer 21