Peter Neill (41) from Westbourne Crescent in the town appeared before North Antrim Magistrates Court in Coleraine on Friday.
The court heard members of a local Orange lodge were putting flags up at Killowen Street close to the Heights area shortly after 8pm on Wednesday when a group of 12 to 15 people - including Neill - confronted them.

Neill - who appeared in the dock in a green hoodie and jeans - is accused of shouting "Orange bastards - you're not wanted here and we dont' want your f**king flags here!"
Wednesday's incident occurred just 100 yards from Somerset Drive where Mr McDaid was beaten to death.
Police were present in the area on Wednesday evening and witnessed the alleged incident, the court was told.
A police officer said he could connect Neill with the offence and requested he be remanded in custody.
"Following the recent murder tensions are very high and appear to be getting higher," he said.
During police interview on Thursday evening Neill totally denied shouting anything offensive at those putting flags up, the court was told.

Neill told police he had many friends who are Protestants and he would never refer to anyone as an 'Orange bastard'.
He claimed his arrest had been a case of mistaken identity but later admitted wearing the clothes described in the police report.
The police officer told the court Neill was "the leader of a group of persons in the Heights intent on starting problems in the area".
"Right up until the Twelfth tensions will heighten further," the officer said.

"If Peter Neill is free to run around the Heights he will lead the group to heighten tensions in the area."
The officer said he was also concerned that Neill may commit further offences should bail be granted.
A defence solicitor challenged the claim Neill was the leader of any group.
"He is not that stupid to engage in such behaviour while police are watching him," he added.

The police officer said Neill had been arrested for incitement to hatred and behaviour likely to or intended to incite hatred and not disorderly behaviour given the current unrest within the Heights area.
He said the area in question was a nationalist area traditionally and said local people had been frustrated that police had facilitated the use of a 'cherry-picker' machine by those putting up the flags.
The PSNI officer present said police were there to prevent any trouble breaking out and ensuring traffic wasn't hampered from passing through the area.

Neill denies the charges.
District Judge Richard Wilson refused bail.

"In the circumstances and for fear of the possibility of re-offending I am not prepared to give bail," he said.
Neill was remanded in custody to re-appear by video-link on Monday 6 July.