FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person * Childers Kim M   2. Issuer Name and Ticker or Trading Symbol FLAG FINANCIAL CORP [FLAG] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) Exc VP & Chief Credit Officer (Last) (First) (Middle) 3475 PIEDMONT ROAD, NE, SUITE 550 3. Date of Earliest Transaction (Month/Day/Year) 12/08/2006 (Street) ATLANTA, GA 30305 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 12/08/2006   D   142,254 D (1) 0 D   Common Stock 12/08/2006   D   200 D (1) 0 I By Spouse

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Stock Option (right to buy)

$ 12.9

12/08/2006

D

4,000

(2)

02/04/2014

Common Stock

4,000

$ 12.6

0

D

Stock Option (right to buy)

$ 14.93

12/08/2006

D

5,000

(3)

01/12/2008

Common Stock

5,000

$ 10.57

0

D

Stock Option (right to buy)

$ 16.36

12/08/2006

D

15,182

(4)

12/28/2015

Common Stock

15,182

$ 9.14

0

D

Stock Option (right to buy)

$ 16.36

12/08/2006

D

4,818

(5)

12/28/2015

Common Stock

4,818

$ 9.14

0

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
Childers Kim M 3475 PIEDMONT ROAD, NE, SUITE 550 ATLANTA, GA 30305			Exc VP & Chief Credit Officer

Signatures

/s/ Kim M. Childers		12/19/2006
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	Disposed of pursuant to a merger agreement between issuer and RBC Centura Banks, Inc. in exchange for cash in the amount of $25.50 per share.
(2)	This option, which provides for vesting in three years from the grant date, was canceled in the merger in exchange for a cash payment of $50,400, representing the difference between the exercise price of the option and $25.50.
(3)	This option, which provides for vesting in three years from the grant date, was canceled in the merger in exchange for a cash payment of $52,850, representing the difference between the exercise price of the option and $25.50.
(4)	This option, which provides for vesting in three equal annual increments beginning December 28, 2006 , was canceled in the merger in exchange for a cash payment of $138,763, representing the difference between the exercise price of the option and $25.50.
(5)	This option, which was fully vested on the grant date , was canceled in the merger in exchange for a cash payment of $44,036, representing the difference between the exercise price of the option and $25.50.

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