SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of ~~the Securities Exchange Act of 1934~~

~~Date~~the ~~of earliest~~Securities ~~event~~Exchange ~~reported: July~~Act ~~18,~~of ~~2005~~1934

Date of Report (Date of earliest event reported): July 18, 2005

FLAG FINANCIAL CORPORATION

(Exact ~~Name~~name of Registrant as Specified in ~~its~~ Charter)

Georgia	000-24532	58-2094179
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

3475 Piedmont Road, N.E., Suite 550

Atlanta, Georgia 30305

(Address of Principal Executive Offices)

(Zip Code)

(404) 760-7700

(Registrant’s telephone number, including area code)

~~N/A~~NOT APPLICABLE

(Former name or former address, if changed since last report)

~~Chec~~Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

C[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

~~o Written~~[ ~~communications~~] Soliciting material pursuant to Rule ~~425~~14a-12 under the ~~Securities~~Exchange Act (17 CFR ~~230~~ 240.~~425~~14a-12)

~~o Soliciting~~[ ~~material~~] Pre-commencement communications pursuant to Rule ~~14a~~14d-122(b) under the Exchange Act (17 CFR 240.~~14a~~14d-122(b))

o [ ] Pre-commencement communications pursuant to Rule ~~14d~~13e-24(bc) under the Exchange Act (17 CFR 240.~~14d~~13e-24(bc))

~~o Pre-commencement~~Item ~~communications~~1.01 Entry into ~~pursuant~~a toMaterial ~~Rule~~Definitive ~~13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))~~Agreement

On July 18, 2005, Flag Financial Corporation (the “Registrant”) completed a trust preferred securities financing in the amount of $10 million. See Item 2.0203 below. ~~Results~~In ofconnection ~~Operations~~with the financing, the Registrant entered into a Junior Subordinated Indenture, a Guarantee Agreement and ~~Financial~~an ~~Condition~~Amended and Restated Trust Agreement filed as Exhibits 4.1, 4.2 and 4.3, respectively, to this Report and incorporated herein by reference.

OnItem ~~July~~ 2.03 Creation ~~18,~~ of ~~2005,~~a ~~Flag~~Direct Financial ~~Corporation~~Obligation ~~issued~~or aan ~~press~~Obligation ~~release~~under ~~reporting~~an ~~its~~Off-Balance ~~second~~Sheet ~~quarter~~ Arrangement ~~2005 results~~ of ~~operations.~~a ~~A copy of the press release is attached as an exhibit to this report.~~Registrant

Item 9.01	Financial Statements and Exhibits
(c)	Exhibits
No.	Description
99.1	Press Release dated July 18, 2005.

On July 18, 2005, the Registrant completed a trust preferred securities financing in the amount of $10 million. In the transaction, the Registrant established Flag Financial Statutory Trust II, a Delaware statutory trust (the “Trust”). The Trust issued and sold $10 million of Preferred Securities (the “Preferred Securities”) in a private placement and issued $310,000 of Trust common securities (the “Common Securities”) to the Registrant. The Trust used the proceeds of these issuances to purchase $10,310,000 of the Registrant’s Junior Subordinated Notes due September 30, 2035 (the “Notes”). The interest rate on the Notes and the Preferred Securities will bear interest at the three-month LIBOR rate plus 1.50%, adjusted quarterly. The Notes are the sole assets of the Trust and are subordinate to the Registrant’s senior obligations. Concurrently with the issuance of the Notes and the Preferred Securities, the Registrant issued a guarantee related to the trust securities for the benefit of the holders.

The ~~information~~ Notes may ~~furnished~~be redeemed after five years, and sooner in certain specific events, including in the ~~attached~~event ~~press~~that ~~release~~the ~~shall~~financing is not beeligible ~~deemed~~for totreatment as be Tier ~~“filed”~~ 1 ~~for~~capital, ~~purposes~~subject ofto ~~Section~~prior 18approval ofby the ~~Securities~~Federal ~~Exchange~~Reserve ~~Act~~Board, ofif ~~1934~~then required. Interest on the Notes may be deferred at any time or ~~otherwise~~ ~~subject~~from time to ~~the~~time for ~~liabilities~~a period not exceeding 20 consecutive quarterly payments (five years), provided there is no event of ~~that~~default ~~section~~and the deferral does not extend beyond September 30, 2035.

~~SIGNATURE~~Item 9.01 Financial Statements and Exhibits

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 4.1	-	Junior Subordinated Indenture between the Registrant and Wilmington Trust Company (the “Trustee”), dated as of July 18, 2005.

Exhibit 4.2	-	Guarantee Agreement between the Registrant and the Trustee, dated as of July 18, 2005.

Exhibit 4.3	-	Amended and Restated Trust Agreement among the Registrant, the Trustee and certain Administrative Trustees, dated as of July 18, 2005.

~~July 18, 2005~~SIGNATURES

~~FLAG~~Pursuant ~~FINANCIAL~~to ~~CORPORATION~~the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

By: /s/ J. Daniel Speight J. Daniel Speight Vice Chairman, Chief Financial Officer and Secretary

FLAG FINANCIAL CORPORATION

DATE: July 19, 2005	By:	/s/ J. Daniel Speight
		J. Daniel Speight
		Vice Chairman, Chief Financial Officer and Secretary

EXHIBIT INDEX

No.	Description
Exhibit 4.1		Junior Subordinated Indenture between the Registrant and Wilmington Trust Company (the “Trustee”), dated as of July 18, 2005.
99.1	Press Release dated July 18, 2005.
Exhibit 4.2		Guarantee Agreement between the Registrant and the Trustee, dated as of July 18, 2005.
Exhibit 4.3		Amended and Restated Trust Agreement among the Registrant, the Trustee and certain Administrative Trustees, dated as of July 18, 2005.

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