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As filed with the Securities and Exchange Commission on January 18, 2013

Registration No. 333-                

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

 

YADKIN VALLEY FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

North Carolina (State or jurisdiction of incorporation or organization)		6022 (Primary Standard Industrial Classification Code Number)		20-4495993 (I.R.S. Employer Identification No.)

209 North Bridge Street

Elkin, North Carolina 28621

(336) 526-6300

(Address, including zip code, and telephone number, including area code, of principal executive offices)

 

 

Joseph H. Towell

Chief Executive Officer

328 East Broad Street

Statesville, NC 28677

(336) 526-6300

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies of all communications, including copies of all communications

sent to agent for service, should be sent to:

Neil E. Grayson, Esq.

Nikki Lee, Esq.

Nelson Mullins Riley & Scarborough LLP

Poinsett Plaza, Suite 900

104 South Main Street

Greenville, South Carolina 29601

Telephone: (864) 250-2235

Facsimile: (864) 232-2359

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. þ

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  ¨		Accelerated filer                 ¨
Non-accelerated filer    ¨  (Do not check if a smaller reporting company)		Smaller reporting company þ

 

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of each Class of Securities to be Registered				Amount to be Registered(1)				Proposed Maximum Offering Price Per Share(2)				Proposed Maximum Aggregate Offering Price				Amount of Registration Fee
Common Stock, $1.00 par value per share				678,566				$2.98				$2,022,126.68				$275.82

(1) In accordance with Rule 416, there is being registered hereunder such indeterminate number of additional shares of Common Stock and Non-Voting Common Stock as may be issued from time to time with respect to shares being registered hereunder as a result of stock splits, stock dividends, or similar transactions.

(2) Estimated solely for the purpose of calculating the registration fee and based on the average of the high and low sales prices of the Common Stock of $2.98 on January 14, 2013 as reported on the NASDAQ Global Select Market, pursuant to Rule 457(c) under the Securities Act of 1933.

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

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The information in this prospectus is not complete and may be changed. Neither we nor the selling stockholder may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION: DATED JANUARY 18, 2013

PROSPECTUS

678,566 Shares of Common Stock

 

This prospectus relates to the securities identified below that may be offered for sale from time to time by the person named in this prospectus (and its permitted transferees) identified under the heading “Selling Stockholder” on page 18 of this prospectus who currently owns such securities.

Investing in our common stock involves risks. You should carefully consider all of the information set forth in this prospectus, including the risk factors on page 4 of this prospectus, as well as the risk factors and other information contained in any documents we incorporate by reference into this prospectus before investing in our common stock. See “Information Incorporated by Reference.”

This prospectus covers 678,566 shares (the “Shares”) of our common stock, $1.00 par value (the “Common Stock”) previously issued to the Selling Stockholder as part of a private placement completed on December 26, 2012 (the “2012 Transaction”). The 678,566 shares of Common Stock were issued to the Selling Stockholder in exchange for 2,000 shares of the Company’s Fixed Rate Cumulative Series T Perpetual Preferred Stock (the “Series T Preferred Stock”) pursuant to the terms of the Share Exchange Agreement dated October 23, 2012 by and among us and the shareholders identified therein (the “Share Exchange Agreement”). For a more detailed description of the 2012 Transaction, see “Summary of the Underlying Transaction” on page 7.

We agreed in the Share Exchange Agreement to file this registration statement covering the Shares.

The Selling Stockholder, who may sell or otherwise dispose of the Shares, is an initial investor in the 2012 Transaction described above. The Selling Stockholder may offer some or all of the Shares from time to time directly or through underwriters, broker-dealers or agents and in one or more public or private transactions and at fixed prices, at prevailing market prices, at prices related to prevailing market prices, at various prices determined at the time of sale or otherwise at negotiated prices. If the Shares are sold through underwriters, broker-dealers, or agents, the Selling Stockholder (or the purchasers of the Shares as negotiated with the Selling Stockholder) will be responsible for underwriting discounts or commissions or agent commissions, if any.

The registration of the shares of Common Stock does not necessarily mean that any of the shares will be sold by the Selling Stockholder. The timing and amount of any sale is within the respective Selling Stockholder’s sole discretion, subject to certain restrictions. See “Plan of Distribution” on page 27 of this prospectus.

We will not receive any proceeds from the sale of Common Stock by the Selling Stockholder.

Shares of our Common Stock are traded on the NASDAQ Global Select Market under the symbol “YAVY”. The closing sale price of our Common Stock as reported on the NASDAQ Global Select Market on January 14, 2013 was $3.00 per share.

None of the Securities and Exchange Commission (the “SEC”), the Federal Deposit Insurance Corporation (the “FDIC”), the Board of Governors of the Federal Reserve System, any state or other securities commission or any other federal or state bank regulatory agency has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The securities are not savings accounts, deposits, or other obligations of any bank, thrift or other depository institution and are not insured by the FDIC or any other governmental agency or instrumentality.

 

 

The date of this prospectus is.

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ABOUT THIS PROSPECTUS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			ii
WHERE YOU CAN FIND MORE INFORMATION			iv
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE			iv
SUMMARY			1
RISK FACTORS			4
SUMMARY OF THE UNDERLYING TRANSACTIONS			7
USE OF PROCEEDS			8
DIVIDEND POLICY			9
DESCRIPTION OF CAPITAL STOCK			10
SELLING STOCKHOLDER			18
PLAN OF DISTRIBUTION			21
LEGAL MATTERS			24
EXPERTS			24

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ABOUT THIS PROSPECTUS

You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized any person to provide you with different or inconsistent information. If anyone provides you with different or inconsistent information, you should not rely on it. The Selling Stockholder is not making an offer to sell these shares in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and the documents incorporated by reference is accurate only as of their respective dates. Yadkin Valley Financial Corporation’s business, financial condition, results of operations and prospects may have changed since such dates.

In this prospectus, we frequently use the terms “we,” “our” and “us” to refer to Yadkin Valley Financial Corporation (“Yadkin” or the “Company”) and its subsidiaries, including Yadkin Valley Bank and Trust Company (the “Bank”).

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus, including information included or incorporated by reference in this prospectus, contains statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, and which statements are inherently subject to risks and uncertainties. These statements are based on many assumptions and estimates and are not guarantees of future performance. Forward looking statements are statements that include projections, predictions, expectations or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often characterized by the use of qualifying words (and their derivatives) such as “may,” “would,” “could,” “should,” “will,” “expect,” “anticipate,” “predict,” “project,” “potential,” “continue,” “assume,” “believe,” “intend,” “plan,” “forecast,” “goal,” “estimate,” or other statements concerning opinions or judgments of Yadkin , the Bank, and its management about future events. Factors that could influence the accuracy of such forward looking statements include, but are not limited to, the financial success or changing strategies of the Bank’s customers or vendors, actions of government regulators, the level of market interest rates, and general economic conditions.

Potential risks and uncertainties that could cause our actual results to differ materially from those anticipated in any forward-looking statements include, but are not limited to, the following:

 

—

reduced earnings due to higher credit losses generally and specifically because losses in the sectors of our loan portfolio secured by real estate are greater than expected due to economic factors, including declining real estate values, increasing interest rates, increasing unemployment, or changes in payment behavior or other factors;

—

reduced earnings due to higher credit losses because our loans are concentrated by loan type, industry segment, borrower type, or location of the borrower or collateral;

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the rate of delinquencies and amount of loans charged-off;

—

the adequacy of the level of our allowance for loan losses and the amount of loan loss provisions required in future periods;

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results of examinations by our regulatory authorities, including the possibility that the regulatory authorities may, among other things, require us to increase our allowance for loan losses or writedown assets;

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the amount of our loan portfolio collateralized by real estate, and the weakness in the commercial real estate market;

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our efforts to raise capital or otherwise increase and maintain our regulatory capital ratios above the statutory and agreed upon minimums, including the impact of the proposed capital rules under Basel III;

—

the impact of our efforts to raise capital on our financial position, liquidity, capital, and profitability;

—

risks and uncertainties relating to not successfully negotiating and entering into definitive agreements with respect to, and closing the, currently contemplated asset dispositions and the asset sales or accelerated foreclosed properties dispositions not occurring within our currently expected ranges for price and other terms, and the pre-tax charges associated with such sales exceeding the pre-tax charges that we currently anticipate;

—

the increase in the cost of capital of our Series T and Series T-ACB Preferred Stock in 2014 if we do not redeem within five years of the date of issuance;

—

adverse changes in asset quality and resulting credit risk-related losses and expenses;

 

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increased funding costs due to market illiquidity, increased competition for funding, and increased regulatory requirements with regard to funding;

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significant increases in competitive pressure in the banking and financial services industries;

—

changes in the interest rate environment which could reduce anticipated or actual margins;

—

changes in political conditions or the legislative or regulatory environment, including the effect of recent financial reform legislation on the banking industry;

—

general economic conditions, either nationally or regionally and especially in our primary service area, becoming less favorable than expected resulting in, among other things, a deterioration in credit quality;

—

our ability to retain our existing customers, including our deposit relationships;

—

changes occurring in business conditions and inflation;

—

changes in technology;

—

changes in monetary and tax policies;

—

ability of borrowers to repay loans, which can be adversely affected by a number of factors, including changes in economic conditions, adverse trends or events affecting business industry groups, reductions in real estate values or markets, business closings or lay-offs, natural disasters, which could be exacerbated by potential climate change, and international instability;

—

changes in deposit flows;

—

changes in accounting principles, policies or guidelines;

—

changes in the assessment of whether a deferred tax valuation allowance is necessary;

—

our ability to maintain internal control over financial reporting;

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our reliance on secondary sources such as Federal Home Loan Bank advances, sales of securities and loans, federal funds lines of credit from correspondent banks and out-of-market time deposits, to meet our liquidity needs;

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loss of consumer confidence and economic disruptions resulting from terrorist activities;

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changes in the securities markets; and

—

other risks and uncertainties detailed from time to time in our filings with the SEC.

These risks are increased by the developments in national and international financial markets that have persisted over the past several years as well as the expiration of the federal tax reductions and increase spending cuts currently scheduled to go into effect, and we are unable to predict what effect these uncertain market conditions will continue to have on us. There can be no assurance that these unprecedented developments will not continue to materially and adversely affect our business, financial condition and results of operations.

We have based our forward-looking statements on our current expectations about future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee that these expectations will be achieved. We undertake no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

 

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WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational requirements of the Exchange Act, and file with the SEC proxy statements, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. You may read and copy any document we file at the SEC’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from the SEC’s web site at www.sec.gov or on our website at www.yadkinvalleybank.com under the “About Us”, then “Investor Relations” tabs. Information on, or that can be accessible through, our website does not constitute a part of, and is not incorporated by reference in, this prospectus.

This prospectus, which is a part of a registration statement on Form S-1 that we have filed with the SEC under the Securities Act, omits certain information set forth in the registration statement. Accordingly, for further information, you should refer to the registration statement and its exhibits on file with the SEC. Furthermore, statements contained in this prospectus concerning any document filed as an exhibit are not necessarily complete and, in each instance, we refer you to the copy of such document filed as an exhibit to the registration statement.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The SEC allows us to incorporate by reference the information we file with it, which means that we can disclose important information to you by referring you to those documents filed separately with the SEC. The information we incorporate by reference is an important part of this prospectus. We incorporate by reference the documents listed below, except to the extent that any information contained in those documents is deemed “furnished” in accordance with SEC rules. The documents we incorporate by reference, all of which we have previously filed with the SEC, include:

 

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Our Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on February 29, 2012;

 

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Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012, and September 30, 2012 filed with the SEC on April 26, 2012, July 30, 2012, and October 25, 2012, respectively;

 

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Our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 5, 2012; and

 

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Our Current Reports on Form 8-K filed with the SEC on January 9, 2012, March 21, 2012, May 22, 2012, July 31, 2012, August 8, 2012, October 25, 2012, November 9, 2012, and December 21, 2012.

A description of our capital stock can be found herein under “Description of Capital Stock.”

You may request a copy of any of these filings at no cost, by writing or telephoning the Corporate Secretary, Patricia Wooten at (704) 768-1125 or patti.wooten@yadkinvalleybank.com, or at the following address or telephone number: Yadkin Valley Financial Corporation, 209 North Bridge Street, Elkin, North Carolina 28621, Telephone: (336) 526-6300.

 

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RISK FACTORS

An investment in our Common Stock involves a high degree of risk. Before you purchase any of our shares, you should carefully consider the risks described below, together with the other information contained or incorporated by reference into this prospectus, including the information contained in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011, and any risks described in our other filings with the SEC, pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act , before making a decision to invest in our shares. The risks described below and in the documents referred to in the preceding sentence are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business operations. If any of the following risks actually occurs, our business, results of operations and financial condition could suffer. In that case, the trading price of our Common Stock and the values of any of our other securities could decline, and you may lose all or part of your investment.

Risks Relating to our Common Stock

Our Common Stock trades less frequently than the securities of many other financial services companies, which may make the value of your investment subject to fluctuation.

Although our Common Stock is listed for trading on The NASDAQ Global Select Market, the trading volume in our Common Stock is less than that of other larger financial services companies. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of our common stock at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. Given the lower trading volume of our Common Stock, significant sales of our Common Stock, or the expectation of these sales, could cause our stock price to fall.

Stock price volatility may make it more difficult for you to resell your Common Stock when you want and at prices you find attractive. Our stock price can fluctuate significantly in response to a variety of factors discussed in this section, including, among other things:

 

•

Actual or anticipated variations in quarterly results of operations;

•

Recommendations by securities analysts;

•

Operating and stock price performance of other companies that investors deem comparable to our Company;

•

News reports relating to trends, concerns and other issues in the financial services industry; and

•

Perceptions in the marketplace regarding our Company and/or its competitors and the industry in which we operate.

These factors may adversely affect the trading price of our Common Stock, regardless of our actual operating performance, and could prevent you from selling your Common Stock at or above the public offering price. In addition, the stock markets, from time to time, experience extreme price and volume fluctuations that may be unrelated or disproportionate to the operating performance of companies. These broad fluctuations may adversely affect the market price of our common stock, regardless of our trading performance.

Shares of our Common Stock are not insured deposits.

Shares of our Common Stock are not bank deposits and, therefore, are not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity. Investment in our Common Stock is inherently risky for the reasons described in this section and elsewhere in this prospectus and is subject to the same market forces that affect the price of securities in any company. As a result, if you acquire our Common Stock, you may lose some or all of your investment.

Our Articles of Incorporation and bylaws, as well as certain banking laws, may have an anti-takeover effect.

Provisions of our Articles of Incorporation and bylaws, as well as federal banking laws, including regulatory approval requirements, could make it more difficult for a third party to acquire us, even if doing so would be perceived to be beneficial to our shareholders. The combination of these provisions may hinder a non-negotiated merger or other business combination, which, in turn, could adversely affect the market price of our Common Stock.

We may raise additional capital, which could adversely affect the market price of our Common Stock.

We are not restricted from issuing additional shares of Common Stock or securities that are convertible into or exchangeable for, or that represent the right to receive, Common Stock, or from issuing additional shares of preferred stock. We frequently evaluate opportunities to access the capital markets, taking into account our regulatory capital ratios, financial condition and other relevant considerations. Subject to market conditions, we may take further actions to raise additional capital. Such actions could include, among other things, the issuance of additional shares of Common Stock or preferred stock in public or private

 

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transactions in order to further increase our capital levels above the requirements for a well-capitalized institution established by the federal bank regulatory agencies as well as other regulatory targets. These issuances would dilute ownership interests of the investors in the offering and could dilute the per share book value of our Common Stock. New investors may also have rights, preferences and privileges senior to our Common Stock and preferred shareholders, which may adversely impact our current shareholders.

Holders of our junior subordinated debentures have rights that are senior to those of our common and preferred shareholders.

At September 30, 2012, we had outstanding trust preferred securities totaling $35.0 million. Payments of the principal and interest on the trust preferred securities of these special purpose trusts are fully and unconditionally guaranteed by us. Further, the accompanying junior subordinated debentures are senior to our shares of Common Stock and preferred stock. As a result, we must make payments on the junior subordinated debentures before any dividends can be paid on our preferred or Common Stock and, in the event of our bankruptcy, dissolution or liquidation, the holders of the junior subordinated debentures must be satisfied before any distributions can be made on our preferred or common stock. We have the right to defer distributions on our junior subordinated debentures (and the related trust preferred securities) for up to a total of five years, during which time no cash dividends may be paid on our preferred or common stock.

We are a holding company and depend on our Bank for dividends, distributions and other payments.

Substantially all of our activities are conducted through the Bank, and, consequently, as the parent company of the Bank, we receive substantially all of our revenue as dividends from the Bank. The Bank is currently prohibited from paying dividends to the Company without prior approval from the FDIC and the North Carolina Banking Commissioner. In addition, the Company is currently prohibited from paying any dividends, common or preferred, without the prior approval of the Federal Reserve Bank of Richmond. There can be no assurances such approvals would be granted or with regard to how long these restrictions will remain in place. In the future, any declaration and payment of cash dividends will be subject to the Board’s evaluation of the Company’s operating results, financial condition, future growth plans, general business and economic conditions, and tax and other relevant considerations. The payment of cash dividends by the Company in the future will also be subject to certain other legal and regulatory limitations (including the requirement that the Company’s capital be maintained at certain minimum levels) and ongoing review by the Company’s banking regulators.

 

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Shares of our Common Stock are equity securities and therefore are subordinate to our indebtedness, as well as to our preferred stock.

Shares of our Common Stock are equity interests and do not constitute indebtedness of the Company. Consequently, our Common Stock ranks junior to all current and future indebtedness of the Company and other non-equity claims against us with respect to assets available to satisfy claims against us, including in the event of our liquidation or dissolution. We may, and the Bank and our other subsidiaries may also, incur additional indebtedness from time to time and may increase our aggregate level of outstanding indebtedness.

Further, holders of our Common Stock are subject to the prior dividend and liquidation rights of any holders of our preferred stock that may be outstanding from time to time, including our Series T and Series T-ACB Preferred Stock. Our Board of Directors is authorized to cause us to issue additional classes or series of preferred stock without any action on the part of our shareholders. If we issue preferred shares in the future that have a preference over our Common Stock with respect to the payment of dividends or distributions upon liquidation, or if we issue preferred shares with voting rights that dilute the voting power of our Common Stock, then the rights of holders of our Common Stock could be adversely affected. Further, the market price of our Common Stock could be adversely affected.

 

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SUMMARY OF THE UNDERLYING TRANSACTION

On October 23, 2012, the Company entered into the Share Exchange Agreement with the Selling Stockholder and certain other holders (together with the Selling Stockholder, the “Preferred Shareholders”) of the Series T Preferred Stock and the Company’s Fixed Rate Cumulative Series T-ACB Perpetual Preferred Stock (the “Series T-ACB Preferred Stock”). Pursuant to the Share Exchange Agreement, the Preferred Shareholders exchanged a total of 11,565 shares of the Series T Preferred Stock and 9,342 shares of the Series T-ACB Preferred Stock for 5,128,389 shares of the Common Stock and 1,965,000 shares of the Company’s non-voting common stock, $1.00 par value (the “Non-Voting Common Stock”), of which 2,000 shares of the Series T Preferred Stock were exchange by the Selling Stockholder for 678,566 shares of the Common Stock. The 678,566 shares of Common Stock issued to the Selling Stockholder are the securities being registered under this prospectus.

As part of the 2012 Transaction, contemporaneously with the execution of the Share Exchange Agreement, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain accredited investors and directors and executive officers of the Company (the “Investors”), pursuant to which the Investors purchased an aggregate of 45,000 shares of the Company’s Mandatorily Convertible Cumulative Non-Voting Perpetual Preferred Stock, Series A, no par value (the “Series A Preferred Stock”). The Company received approximately $45.0 million in gross proceeds from the sale of the Series A Preferred Stock.

Pursuant to the Securities Purchase Agreement, each share of Series A Preferred Stock converted into shares of the Common Stock at a conversion price of $2.80 per share. Accordingly, the conversion of the Series A Preferred Stock resulted in the issuance of 16,071,302 shares of our Common Stock.

Pursuant to the terms of the Share Exchange Agreement and the Securities Purchase Agreement, the Preferred Shareholders and the Investors also entered into respective Registration Rights Agreements with the Company. Under the Registration Rights Agreement entered into with the Preferred Shareholders, the Company agreed to file with the SEC, within 30 days following the closing of the 2012 Transaction, a registration statement covering the resale of the Common Stock, the Non-Voting Common Stock, and the shares of Common Stock issuable upon conversion of the Non-Voting Common Stock. Under the Registration Rights Agreement entered into with the Investors, the Company agreed to file with the SEC, within 30 days following the closing of the 2012 Transaction, a registration statement covering the resale of the shares of Common Stock.

The Company previously filed with the SEC a registration statement on Form S-1, as amended (Registration Statement No. 333-185058), covering the resale of (1) the shares of Common Stock and Non-Voting Common Stock (and the shares of Common Stock issuable upon conversion of the Non-Voting Common Stock) issued to the Preferred Shareholders other than the Selling Stockholder pursuant to the Share Exchange Agreement; and (2) the shares of Common Stock issued to the Investors pursuant to the Securities Purchase Agreement. The Company is now registering the 678,566 shares of the Common Stock issued to the Selling Stockholder pursuant to the Share Exchange Agreement.

The Company will be required to make certain payments as liquidated damages under the Registration Rights Agreements to the Preferred Shareholders and the Investors in certain circumstances if the registration statement is not (i) filed with the SEC within specific time periods, (ii) declared effective by the SEC within specified time periods or (iii) available (with certain limited exceptions) after having been declared effective.

 

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USE OF PROCEEDS

All shares of Common Stock sold pursuant to this prospectus will be offered and sold by the Selling Stockholder. We will not receive any of the proceeds from such sales.

 

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DIVIDEND POLICY

The ability of our Board to declare and pay dividends on our stock is subject to the terms of applicable North Carolina law and banking regulations. Our principal source of income is dividends that are declared and paid by the Bank on its capital stock. Therefore, our ability to pay dividends is dependent upon the receipt of dividends from the Bank. North Carolina banking law requires that cash dividends be paid out of retained earnings and prohibits the payment of cash dividends if payment of the dividend would cause the Bank’s surplus to be less than 50% of its paid-in capital. In addition, the Bank is currently prohibited from paying dividends to the Company without prior approval from the FDIC and the North Carolina Banking Commissioner.

Under federal banking law, no cash dividend may be paid if the Bank is undercapitalized or insolvent or if payment of the cash dividend would render the bank undercapitalized or insolvent, and no cash dividend may be paid by the Bank if it is in default of any deposit insurance assessment due to the FDIC. In addition, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) generally prohibits bank holding companies from paying cash dividends except out of operating earnings, provided that the prospective rate of earnings retention appears consistent with the bank holding company’s capital needs, asset quality and overall financial condition. As a North Carolina corporation, our payment of cash dividends is subject to the restrictions under North Carolina law on the declaration of cash dividends. Under such provisions, cash dividends may not be paid if a corporation will not be able to pay its debts as they become due in the usual course of business after paying such a cash dividend or if the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed to satisfy certain liquidation preferential rights.

The Bank is currently prohibited from paying dividends to the Company without prior approval from the FDIC and the North Carolina Banking Commissioner. In addition, the Company is currently prohibited from paying any dividends, common or preferred, without the prior approval of the Federal Reserve Bank of Richmond. There can be no assurances such approvals would be granted or with regard to how long these restrictions will remain in place. In the future, any declaration and payment of cash dividends will be subject to the Board’s evaluation of the Company’s operating results, financial condition, future growth plans, general business and economic conditions, and tax and other relevant considerations. The payment of cash dividends by the Company in the future will also be subject to certain other legal and regulatory limitations (including the requirement that the Company’s capital be maintained at certain minimum levels) and ongoing review by the Company’s banking regulators. As long as shares of our Series T and Series T-ACB Preferred Stock are outstanding, no dividends may be paid on our Common Stock unless all dividends on the Series T and Series T-ACB Preferred Stock have been paid in full. Also, we may not pay dividends on our capital stock if we are in default or have elected to defer payments of interest under our junior subordinated debentures.

There is no assurance that, in the future, the Company will have funds available to pay cash dividends, or, even if funds are available, that it will pay dividends in any particular amount or at any particular times, or that it will pay dividends at all.

 

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DESCRIPTION OF CAPITAL STOCK

The following is a brief description of the terms of our capital stock. This summary does not purport to be complete in all respects. This description is subject to and qualified in its entirety by reference to the North Carolina Business Corporation Act (“NCBCA”), federal law, our Articles of Incorporation, and our Bylaws. Copies of our Articles of Incorporation and Bylaws have been filed with the SEC and are also available upon request from us.

The authorized capital stock of Yadkin Valley consists of 100,000,000 shares of common stock, $1.00 par value, 5,000,000 of which are designated as Non-Voting Common Stock, and 1,000,000 shares of preferred stock, no par value. As of January 14, 2013, there were 41,186,646 shares of our Common Stock outstanding, 24,435 shares of Series T Preferred Stock outstanding, and 3,970 shares of Series T-ACB Preferred Stock outstanding.

Common Stock

The Company’s Articles of Incorporation currently authorize the issuance of up to 100,000,000 shares of voting common stock, of which 41,186,646 shares were outstanding as of January 14, 2013. Our common stock consists of two classes, of which 95,000,000 shares are designated as voting common stock, $1.00 par value (also referred to herein as the “Common Stock”), and 5,000,000 shares are designated as non-voting common stock, $1.00 par value (referred to herein as “Non-Voting Common Stock”). As of January 14, 2013, there were 41,186,646 shares of Common Stock issued and outstanding, held of record by approximately 5,900 shareholders. In addition, as of January 14, 2013, (i) 250,466 shares of our Common Stock were reserved for issuance upon exercise of outstanding stock options that were exercisable on that date (or within 60 days of that date), (ii) 36,050 shares of our Common Stock were reserved for future issuance of restricted shares, (iii) 659,524 shares of our Common Stock are reserved for issuance upon exercise of the warrant by the U.S. Department of the Treasury, and (iv) 1,965,000 shares of our Common Stock are reserved for conversion of Non-Voting Common Stock.

Our Common Stock is listed for quotation on the NASDAQ Global Select Market under the symbol “YAVY.” Our Non-Voting Common Stock will not be listed on any exchange, and we do not intend to list our Non-Voting Common Stock on any exchange. Outstanding shares of our Common Stock and Non-voting Common Stock are validly issued, fully paid, and non-assessable. Except for voting privileges, Non-Voting Common Stock carries the same rights and privileges as Common Stock (including in respect of dividends and in respect of distributions upon our dissolution, liquidation or winding up) and will be treated the same as Common Stock (including in any merger, consolidation, share exchange or other similar transaction).

Voting Common Stock

Preemptive Rights; Redemption Rights; Terms of Conversion; Sinking Fund and Redemption Provision

Our Common Stock does not have preemptive rights, redemption rights, conversion rights, sinking fund, or redemption provisions.

Voting Rights

Each holder of Common Stock is entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders, unless such matter relates solely to the terms of one or more classes of preferred stock, in which case holders of common stock will only be permitted to vote as required by law. Shareholders are not entitled to cumulate their votes for the election of directors. Directors are elected by a plurality of the votes cast. At all times that the number of directors is less than nine, each director is elected to a term ending as of the next succeeding annual meeting or until his or her earlier death, resignation, retirement, removal or disqualification or

 

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until his or her successor is elected and qualified. Otherwise, at all times that the number of directors is nine or more, the Articles of Incorporation and Bylaws provide that the Board of Directors is divided into three classes, with each class to be as nearly equal in number as possible, and directors in each class are to serve three-year terms in office.

Liquidation Rights

In the event of our liquidation, dissolution or winding up, holders of Common Stock are entitled to share ratably in all of our assets remaining after payment of liabilities, including but not limited to our outstanding subordinated debentures, and the liquidation preference of any then outstanding preferred stock. Because we are a bank holding company, our rights and the rights of our creditors and shareholders to receive the assets of any subsidiary upon liquidation or recapitalization may be subject to prior claims of our subsidiary’s creditors, except to the extent that we may be a creditor with recognized claims against our subsidiary.

Dividend Rights

Holders of our Common Stock are entitled to receive ratably such dividends as may be declared by our Board of Directors out of legally available funds. The ability of our Board of Directors to declare and pay dividends on our common stock is subject to the terms of applicable North Carolina law, banking regulations and the terms of our Series T and Series T-ACB Preferred Stock as described in “Dividend Policy” and our periodic reports. Our principal source of income is dividends that are declared and paid by the Bank on its capital stock. Therefore, our ability to pay dividends is dependent upon the receipt of dividends from the Bank. North Carolina commercial banks, such as the Bank, are subject to legal limitations on the amounts of dividends they are permitted to pay. The Bank may pay dividends from undivided profits, which are determined by deducting and charging certain items against actual profits, including any contributions to surplus required by North Carolina law. Also, an insured depository institution, such as the Bank, is prohibited from making capital distributions, including the payment of dividends, if, after making such distribution, the institution would become “undercapitalized,” as such term is defined in the applicable law and regulations. Also, we may not pay dividends on our capital stock if we are in default or have elected to defer payments of interest under our junior subordinated debentures. The Bank is currently prohibited from paying dividends to the Company without prior approval from the FDIC and the North Carolina Banking Commissioner. In addition, the Company is currently prohibited from paying any dividends, common or preferred, without the prior approval of the Federal Reserve Bank of Richmond. There can be no assurances such approvals would be granted or with regard to how long these restrictions will remain in place. In the future, any declaration and payment of cash dividends will be subject to the Board’s evaluation of the Company’s operating results, financial condition, future growth plans, general business and economic conditions, and tax and other relevant considerations. The payment of cash dividends by the Company in the future will also be subject to certain other legal and regulatory limitations (including the requirement that the Company’s capital be maintained at certain minimum levels) and ongoing review by the Company’s banking regulators.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Registrar and Transfer Company, Cranford, New Jersey.

Restrictions on Ownership

The Bank Holding Company Act of 1956, or “BHCA,” requires any “bank holding company,” as defined in the BHCA, to obtain the approval of the Federal Reserve Board before acquiring 5% or more of our common stock. Any person, other than a bank holding company, is required to obtain the approval of the Federal Reserve before acquiring 10% or more of our common stock under the Change in Bank Control Act. Any holder of 25% or more of our common stock, a holder of 33% or more of our total equity or a holder of 5% or more of our common stock if such holder otherwise exercises a “controlling influence” over us, is subject to regulation as a bank holding company under the BHCA.

 

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Non-Voting Common Stock

Preemptive Rights; Redemption Rights; Terms of Conversion; Sinking Fund and Redemption Provision

Our Non-Voting Common Stock does not have preemptive rights, redemption rights, sinking fund, or redemption provisions but does possess conversion rights. Any holder of Non-Voting Common Stock may convert any number of shares of Non-Voting Common Stock into an equal number of shares of Voting Common Stock at the option of the holder; provided, however, that each share of Non-Voting Common Stock is not convertible at the election of the initial holder or any affiliate thereof and may only be converted in connection with or after a transfer to a third party unaffiliated with such initial holder. The Non-Voting Common Stock may only be transferred through one or more of the following alternatives: (i) to an affiliate of the holder or to us; (ii) in a widely distributed public offering of common stock; (iii) in a transfer that is part of a private placement of common stock in which no one transferee (or group of associated transferees) acquires the rights to purchase in excess of 2% of our voting securities then outstanding (including pursuant to a related series of transfers); (iv) in a transfer of common stock to an underwriter for the purpose of conducting a widely distributed public offering; or (v) a transaction approved by the Federal Reserve or, if the Federal Reserve is not the relevant regulatory authority, any other regulatory authority with the relevant jurisdiction.

Voting Rights

The holders of Non-Voting Common Stock do not have any voting power and are not entitled to vote on any matter except as otherwise required by law.

Liquidation Rights

In the event of our liquidation, dissolution or winding up, holders of Non-Voting Common Stock are entitled to share ratably in all of our assets remaining after payment of liabilities, including but not limited to our outstanding subordinated debentures, and the liquidation preference of any then outstanding preferred stock. Because we are a bank holding company, our rights and the rights of our creditors and shareholders to receive the assets of any subsidiary upon liquidation or recapitalization may be subject to prior claims of our subsidiary’s creditors, except to the extent that we may be a creditor with recognized claims against our subsidiary.

Dividend Rights

Holders of our Non-Voting Common Stock are entitled to receive ratably such dividends as may be declared by our Board of Directors out of legally available funds. The ability of our Board of Directors to declare and pay dividends on our Non-Voting Common Stock is subject to the terms of applicable North Carolina law, banking regulations and our Series T and Series T-ACB Preferred Stock as described in “Dividend Policy” and our periodic reports. Our principal source of income is dividends that are declared and paid by the Bank on its capital stock. Therefore, our ability to pay dividends is dependent upon the receipt of dividends from the Bank. North Carolina commercial banks, such as the Bank, are subject to legal limitations on the amounts of dividends they are permitted to pay. The Bank may pay dividends from undivided profits, which are determined by deducting and charging certain items against actual profits, including any contributions to surplus required by North Carolina law. Also, an insured depository institution, such as the Bank, is prohibited from making capital distributions, including the payment of dividends, if, after making such distribution, the institution would become “undercapitalized,” as such term is defined in the applicable law and regulations. Also, we may not pay dividends on our capital stock if we are in default or have elected to defer payments of interest under our junior subordinated debentures. The Bank is currently prohibited from paying dividends to the Company without prior approval from the FDIC and the North Carolina Banking Commissioner. In addition, the Company is currently prohibited from paying any dividends, common or preferred, without the prior approval of the Federal Reserve Bank of Richmond. There can be no assurances such approvals would be granted or with regard to how long these restrictions will remain in place. In the future, any declaration and payment of cash dividends will be subject to the Board’s evaluation of the Company’s operating results, financial condition, future growth plans, general business and economic conditions, tax, and other relevant considerations. The payment of cash dividends by the Company in the future will also be subject to certain other legal and regulatory limitations (including the requirement that the Company’s capital be maintained at certain minimum levels) and ongoing review by the Company’s banking regulators.

 

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Transfer Agent and Registrar

The transfer agent and registrar for our Non-Voting Common Stock is Registrar and Transfer Company, Cranford, New Jersey.

Restrictions on Ownership

Any holder of 33% or more of our total equity (including Non-Voting Common Stock) or a holder of our Non-Voting Common Stock if such holder otherwise exercises a “controlling influence” over us, is subject to regulation as a bank holding company under the BHCA.

Preferred Stock

Series T and T-ACB Preferred Stock

This section summarizes the terms of the Series T and T-ACB Preferred Stock. The Series T and T-ACB Preferred Stock rank equally and have identical terms.

The Series T and T-ACB Preferred Stock have no maturity date. We issued the Series T Preferred Shares to the U.S. Department of the Treasury (the “Treasury”) on January 16, 2009 for an aggregate purchase price of $36.0 million and the Series T-ACB Preferred Shares to the Treasury on July 24, 2009 for an aggregate purchase price of $13.3 million. The Series T and T-ACB Preferred Stock were issued in connection with the Capital Purchase Program in a private placement exempt from the registration requirements of the Securities Act. The Series T and T-ACB Preferred Stock qualify as Tier 1 capital for regulatory purposes. The Series T and T-ACB Preferred Stock were sold by Treasury to unaffiliated third parties on September 18, 2012 in a Dutch public auction process. Pursuant to the Share Exchange Agreement, 20,907 shares of the Series T and T-ACB Preferred Stock were exchanged for 5,128,389 shares of Common Stock and 1,965,000 shares of Non-Voting Common Stock. 28,405 shares of Series T and T-ACB Preferred Stock remain outstanding.

Dividends

Rate. Dividends on the Series T and T-ACB Preferred Stock are payable quarterly in arrears, when, as and if authorized and declared by our board of directors out of legally available funds, on a cumulative basis on the $1,000 per share liquidation preference plus the amount of accrued and unpaid dividends for any prior dividend periods, at a rate of (i) 5% per annum, from the original issuance date to but excluding the first day of the first dividend period commencing on or after the fifth anniversary of the original issuance date (i.e., for the Series T Preferred Stock, 5% per annum from February 15, 2009 to but excluding February 15, 2014 and for the Series T-ACB Preferred Stock, 5% per annum from August 15, 2009 to but excluding August 15, 2014), and (ii) 9% per annum, from and after the first day of the first dividend period commencing on or after the fifth anniversary of the original issuance date (i.e., for the Series T-Preferred Stock, 9% per annum on and after February 15, 2014 and for the Series T-ACB Preferred Stock, 9% per annum on or after August 15, 2014). Dividends are payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year. As of the date of this prospectus, we have paid in full all of our quarterly dividend obligations on the Series T and T-ACB Preferred Stock. We must obtain regulatory approval prior to paying future dividends on the Series T and T-ACB Preferred Stock. Each dividend will be payable to holders of record as they appear on our stock register on the applicable record date, which will be the 15^th calendar day immediately preceding the related dividend payment date (whether or not a business day), or such other record date determined by our board of directors that is not more than 60 nor less than ten days prior to the related dividend payment date. Each period from and including a dividend payment date (or the date of the issuance of the Series T and T-ACB Preferred Stock) to but excluding the following dividend payment date is referred to as a “dividend period.” Dividends payable for each dividend period are computed on the basis of a 360-day year consisting of twelve 30-day months. If a scheduled dividend payment date falls on a day that is not a business day, the dividend will be paid on the next business day as if it were paid on the scheduled dividend payment date, and no interest or other additional amount will accrue on the dividend. The term “business day” means any day except Saturday, Sunday and any day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close.

 

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Dividends on the Series T and T-ACB Preferred Stock are cumulative. If for any reason our Board of Directors does not declare a dividend on the Series T and T-ACB Preferred Stock for a particular dividend period, or if the Board of Directors declares less than a full dividend, we will remain obligated to pay the unpaid portion of the dividend for that period and the unpaid dividend will compound on each subsequent dividend date (meaning that dividends for future dividend periods will accrue on any unpaid dividend amounts for prior dividend periods).

We are not obligated to pay holders of the Series T and T-ACB Preferred Stock any dividend in excess of the dividends on the Series T and T-ACB Preferred Stock that are payable as described above. There is no sinking fund with respect to dividends on the Series T and T-ACB Preferred Stock.

Priority of Dividends. So long as any of the Series T and T-ACB Preferred Stock remain outstanding, we may not declare or pay a dividend or other distribution on our Common Stock or any other shares of Junior Stock (other than dividends payable solely in Common Stock) or Parity Stock (other than dividends paid on a pro rata basis with the Series T and T-ACB Preferred Stock), and we generally may not directly or indirectly purchase, redeem or otherwise acquire any shares of Common Stock, Junior Stock or Parity Stock unless all accrued and unpaid dividends on the Series T and T-ACB Preferred Stock for all past dividend periods are paid in full.

“Junior Stock” means our common stock and any other class or series of our stock the terms of which expressly provide that it ranks junior to the Series T and T-ACB Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Company. We currently have no outstanding class or series of stock constituting Junior Stock other than our Common Stock. Upon receipt of Shareholder Approvals and completion of the Exchange, we will have 1,965,000 shares of Non-Voting Common Stock outstanding.

“Parity Stock” means any class or series of our stock, other than the Series T and T-ACB Preferred Stock, the terms of which do not expressly provide that such class or series will rank senior or junior to the Series T and T-ACB Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Company, in each case without regard to whether dividends accrue cumulatively or non-cumulatively. The Series T Preferred Shares and Series T-ACB Preferred Shares are considered Parity Stock as to each other.

Liquidation Rights

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, holders of the Series T and T-ACB Preferred Stock will be entitled to receive for each share of the Series T and T-ACB Preferred Stock, out of the assets of the Company or proceeds available for distribution to our shareholders, subject to any rights of our creditors, before any distribution of assets or proceeds is made to or set aside for the holders of our common stock and any other class or series of our stock ranking junior to the Series T and T-ACB Preferred Stock, payment of an amount equal to the sum of (i) the $1,000 liquidation preference amount per share and (ii) the amount of any accrued and unpaid dividends on the Series T and T-ACB Preferred Stock (including dividends accrued on any unpaid dividends). To the extent the assets or proceeds available for distribution to shareholders are not sufficient to fully pay the liquidation payments owing to the holders of the Series T and T-ACB Preferred Stock and the holders of any other class or series of our stock ranking equally with the Series T and T-ACB Preferred Stock, the holders of the Series T and T-ACB Preferred Stock and such other stock will share ratably in the distribution.

For purposes of the liquidation rights of the Series T and T-ACB Preferred Stock, neither a merger or consolidation of the Company with another entity, including a merger or consolidation in which the holders of the Series T and T-ACB Preferred Stock receive cash, securities or other property for their shares, nor a sale, lease or exchange of all or substantially all of the Company’s assets will constitute a liquidation, dissolution or winding up of the affairs of the Company.

 

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Redemptions and Repurchases

We may redeem the Series T and T-ACB Preferred Stock, at any time, in whole or in part, at our option, subject to prior approval by the appropriate federal banking agency, for a redemption price equal to 100% of the liquidation preference amount per Series T and T-ACB Preferred Stock plus any accrued and unpaid dividends to but excluding the date of redemption (including dividends accrued on any unpaid dividends), provided that any declared but unpaid dividend payable on a redemption date that occurs subsequent to the record date for the dividend will be payable to the holder of record of the redeemed shares on the dividend record date.

To exercise the redemption right described above, we must give notice of the redemption to the holders of record of the Series T and T-ACB Preferred Stock by first class mail, not less than 30 days and not more than 60 days before the date of redemption. Each notice of redemption given to a holder of Series T and T-ACB Preferred Stock must state: (i) the redemption date; (ii) the number of Series T and T-ACB Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (iii) the redemption price; and (iv) the place or places where certificates for such shares are to be surrendered for payment of the redemption price. In the case of a partial redemption of the Series T and T-ACB Preferred Stock, the shares to be redeemed will be selected either pro rata or in such other manner as our Board of Directors determines to be fair and equitable.

Series T and Series T-ACB Preferred Stock that we redeem, repurchase or otherwise acquire will revert to authorized but unissued shares of preferred stock, which may then be reissued by us as any series of preferred stock other than the Series T and T-ACB Preferred Stock.

No Conversion Rights

Holders of the Series T and T-ACB Preferred Stock have no right to exchange or convert their shares into common stock or any other securities.

Voting Rights

The holders of the Series T and T-ACB Preferred Stock do not have voting rights other than those described below, except to the extent specifically required by North Carolina law.

If we do not pay dividends on the Series T and T-ACB Preferred Stock for six or more quarterly dividend periods, whether or not consecutive, the authorized number of directors of the Company will automatically increase by two and the holders of the Series T and T-ACB Preferred Stock will have the right, with the holders of shares of any other classes or series of Voting Parity Stock outstanding at the time, voting together as a single class, to elect two directors (the “Preferred Directors”) to fill such newly created directorships at our next annual meeting of shareholders (or at a special meeting called for that purpose prior to the next annual meeting) and at each subsequent annual meeting of shareholders until all accrued and unpaid dividends (including dividends accrued on any unpaid dividends) for all past dividend periods on all outstanding Preferred Shares have been paid in full at which time this right will terminate with respect to the Series T and T-ACB Preferred Stock, subject to revesting in the event of each and every subsequent default by us in the payment of dividends on the Series T and T-ACB Preferred Stock. There is no limit on the number of nominations and a plurality of eligible votes would determine the election of the two new directors.

Our bylaws do not specify a process for nominating candidates to fill Preferred Director positions. Unless a nominating process for such directors is adopted, nominations would be made by holders of the Series T and T-ACB Preferred Stock and any voting party stock at the meeting at which the Preferred Directors are elected. Our board of directors may, prior to any meeting at which such Preferred Directors would be elected, adopt a process for the nomination of such candidates in advance of such meeting.

No person may be elected as a Preferred Director who would cause us to violate any corporate governance requirements of any securities exchange or other trading facility on which our securities may then be listed or traded that listed or traded companies must have a majority of independent directors. Upon any termination of the right of the holders of the Series T and T-ACB Preferred Stock and Voting Parity Stock as a class to vote for directors as described above, the Preferred Directors will cease to be qualified as directors, the terms of office of all Preferred Directors then in office will terminate immediately and the authorized number of directors will be reduced by the

 

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number of Preferred Directors which had been elected by the holders of the Series T and T-ACB Preferred Stock and the Voting Parity Stock. Any Preferred Director may be removed at any time, with or without cause, and any vacancy created by such a removal may be filled, only by the affirmative vote of the holders of a majority of the outstanding Preferred Shares voting separately as a class, together with the holders of shares of Voting Parity Stock, to the extent the voting rights of such holders described above are then exercisable. If the office of any Preferred Director becomes vacant for any reason other than removal from office, the remaining Preferred Director may choose a successor who will hold office for the unexpired term of the office in which the vacancy occurred.

The term “Voting Parity Stock” means with regard to any matter as to which the holders of the Series T and T-ACB Preferred Stock are entitled to vote, any series of Parity Stock (as defined under “—Dividends-Priority of Dividends” above) upon which voting rights similar to those of the Series T and T-ACB Preferred Stock have been conferred and are exercisable with respect to such matter. Other than the Series T and T-ACB Preferred Stock, which are considered Parity Stock as to each other, we currently have no outstanding class or series of stock constituting Parity Stock.

Although the Company does not believe the Series T and T-ACB Preferred Stock are considered “voting securities” currently, if they were to become voting securities for the purposes of the BHCA, whether because the Company has missed six dividend payments and holders of the Series T and T-ACB Preferred Stock have the right to elect directors as a result, or for other reasons, a holder of 25% of more of the Series T and T-ACB Preferred Stock, or a holder of a lesser percentage of our Preferred Shares that is deemed to exercise a “controlling influence” over us, may become subject to regulation under the BHCA. In addition, if the Series T and T-ACB Preferred Stock become “voting securities”, then (a) any bank holding company or foreign bank that is subject to the BHCA may need approval to acquire or retain more than 5% of the then outstanding Series T and T-ACB Preferred Stock, and (b) any holder (or group of holders acting in concert) may need regulatory approval to acquire or retain 10% or more of the Series T and T-ACB Preferred Stock. A holder or group of holders may also be deemed to control us if they own one-third or more of our total equity, both voting and non-voting, aggregating all shares held by the investor across all classes of stock. Holders of the Series T and T-ACB Preferred Stock should consult their own counsel with regard to regulatory implications.

In addition to any other vote or consent required by North Carolina law or by our Articles of Incorporation, the vote or consent of the holders of at least 66-2/3% of the outstanding Series T and T-ACB Preferred Stock, voting as a separate class, is required in order to do the following:

 

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amend or alter our Articles of Incorporation or the Articles of Amendment for the Series T and T-ACB Preferred Stock to authorize or create or increase the authorized amount of, or any issuance of, any shares of, or any securities convertible into or exchangeable or exercisable for shares of, any class or series of our capital stock ranking senior to the Series T and T-ACB Preferred Stock with respect to either or both the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Company; or

•

amend, alter or repeal any provision of our Articles of Incorporation or the Articles of Amendment for the Series T and T-ACB Preferred Stock in a manner that adversely affects the rights, preferences, privileges, or voting powers of the Series T and T-ACB Preferred Stock; or

•

consummate a binding share exchange or reclassification involving the Series T and T-ACB Preferred Stock or a merger or consolidation of the Company with another entity, unless (i) the Series T and T-ACB Preferred Stock remain outstanding or, in the case of a merger or consolidation in which the Company is not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (ii) the Series T and T-ACB Preferred Stock remaining outstanding or such preference securities, have such rights, preferences, privileges, voting powers, limitations and restrictions, taken as a whole, as are not materially less favorable than the rights, preferences, privileges, voting powers, limitations and restrictions of the Series T and T-ACB Preferred Stock immediately prior to consummation of the transaction, taken as a whole;

provided, however, that (1) any increase in the amount of our authorized shares of preferred stock, including authorized Series T and T-ACB Preferred Stock necessary to satisfy preemptive or similar rights granted by us to other persons prior to the date of the issuance of the Series T and T-ACB Preferred Stock, and (2) the creation and issuance, or an increase in the authorized or issued amount, of any other series of preferred stock, or any securities

 

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convertible into or exchangeable or exercisable for any other series of preferred stock, ranking equally with and/or junior to the Series T and T-ACB Preferred Stock with respect to the payment of dividends, whether such dividends are cumulative or non-cumulative and the distribution of assets upon our liquidation, dissolution or winding up, will not be deemed to adversely affect the rights, preferences, privileges or voting powers of the Series T and T-ACB Preferred Stock and will not require the vote or consent of the holders of the Series T and T-ACB Preferred Stock.

To the extent holders of the Series T and T-ACB Preferred Stock are entitled to vote, holders of Series T and T-ACB Preferred Stock will be entitled to one vote for each share then held.

The voting provisions described above will not apply if, at or prior to the time when the vote or consent of the holders of the Series T and T-ACB Preferred Stock would otherwise be required, all outstanding Series T and T-ACB Preferred Stock have been redeemed by us or called for redemption upon proper notice and sufficient funds have been set aside by us for the benefit of the holders of Series T and T-ACB Preferred Stock to effect the redemption.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Registrar and Transfer Company, Cranford, New Jersey.

 

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SELLING STOCKHOLDER

When we refer to the “Selling Stockholder” in this prospectus we mean Keefe, Bruyette & Woods, Inc. (or its permitted affiliate transferees). The Selling Stockholder may from time to time offer and sell any or all of the shares of Common Stock set forth below pursuant to this prospectus. We do not know when or in what amounts the Selling Stockholder may offer shares for sale. It is possible that the Selling Stockholder will not sell any or all of the shares offered under this prospectus.

The Selling Stockholder acquired the shares of Common Stock covered by this prospectus pursuant to the Share Exchange Agreement. The Selling Stockholder may, at any time and from time to time, offer and sell pursuant to this prospectus any or all of the shares in any type of transaction as more fully described in “—Plan of Distribution.”

Other than with respect to the acquisition of the shares from us, the Selling Stockholder has not, or within the past three years has not, had any position, office, or other material relationship with us.

As mentioned in “—Plan of Distribution,” in offering the Shares covered by this prospectus, the Selling Stockholder and any brokers, dealers or agents that participate in the distribution of the Shares may be deemed to be “underwriters” within the meaning of the Securities Act.

Securities Covered by this Prospectus Held by the Selling Stockholder

The information provided below sets forth the Selling Stockholder’s ownership of the Shares of Common Stock to be offered pursuant to this prospectus. The percentage (reflected below) of the Company’s outstanding shares of Common Stock comprised of the Shares is based on the (i) 41,186,646 shares of Common Stock that were outstanding as of January 14, 2013 and (ii) the 1,965,000 shares of Common Stock issuable upon conversion of the Non-Voting Common Stock.

We do not know when or in what amounts the Selling Stockholder may offer the Shares of Common Stock for sale. It is possible that the Selling Stockholder will not sell any or all of the Shares offered under this prospectus. Because the Selling Stockholder may offer all or some of the Shares pursuant to this prospectus, and because we have been advised that there are currently no agreements, arrangements or understandings with respect to the sale of any such Shares, we cannot estimate the number of Shares that will be held by the Selling Stockholder after completion of the offering.

For purposes of the following information, we have assumed that the Selling Stockholder would sell all of the Shares held by it and therefore would hold no Shares following the offering and hold zero percentage of the Shares following the offering: (i) shares of Common Stock owned pre-offering: 678,566, (ii) maximum Shares of Common Stock to be offered: 678,566, (iii) shares of Common Stock owned post-offering: zero, (iv) percentage of outstanding Common Stock owned post-offering: zero. Notwithstanding the information in the preceding sentence, in the ordinary course of business, the Selling Stockholder, as a registered broker-dealer, may, from time to time also purchase shares of Common Stock in the market as a market maker in the Company’s Common Stock, and may from time to time have a long or short position in, and buy or sell, debt or equity securities of the Company, as the case may be, for the account of the Selling Stockholder or the account of its customers. The Selling Stockholder served as the Company’s placement agent in connection with the 2012 Transaction. The Company paid the Selling Stockholder approximately $3.7 million in fees in the aggregate in connection with closing of the transactions contemplated by the Share Exchange Agreement and the Securities Purchase Agreement. The Selling Stockholder is a registered broker-dealer and, accordingly, may be deemed an “underwriter” within the meaning of the Securities Act as to the Shares of Common Stock sold for the account of the Selling Stockholder.

The Selling Stockholder has requested that all of the Shares it acquired pursuant to the Share Exchange Agreement be registered for resale in this offering. The information set forth above is based in part on information provided by the Selling Stockholder.

 

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PLAN OF DISTRIBUTION

We are registering the shares of Common Stock issued to the Selling Stockholder to permit the resale of these shares by the Selling Stockholder from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the Selling Stockholder of the shares. We will bear all fees and expenses incident to our obligation to register the shares.

The Selling Stockholder may from time to time offer some or all of the shares of Common Stock through brokers, dealers or agents who may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholder and/or the purchasers of the shares of Common Stock for whom they may act as agent. The shares of Common Stock may be sold on any national securities exchange or quotation service on which the shares may be listed or quoted at the time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over the-counter market and in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions. The Selling Stockholder may use anyone or more of the following methods when selling the Shares:

 

•

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

•

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

•

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

•

an exchange distribution in accordance with the rules of the applicable exchange;

•

privately negotiated transactions;

•

settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;

—

broker-dealers may agree with the Selling Stockholder to sell a specified number of such shares at a stipulated price per share;

—

through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise;

•

a combination of any such methods of sale; and

•

any other method permitted pursuant to applicable law.

The Selling Stockholder also may resell all or a portion of the shares of Common Stock in open market transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or Section 4(1) under the Securities Act, if available, rather than under this prospectus, provided that it meets the criteria and conforms to the requirements of those provisions.

Broker-dealers engaged by the Selling Stockholder may arrange for other broker-dealers to participate in sales. If the Selling Stockholder effects such transactions by selling the Shares of Common Stock to or through underwriters, broker-dealers, or agents, such underwriters, broker-dealers, or agents may receive commissions in the form of discounts, concessions or commissions from the Selling Stockholder or commissions from purchasers of the shares for whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction will not be in excess of a customary brokerage commission in compliance with NASD Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with NASD Rule IM 2440.

In connection with sales of the shares of Common Stock or otherwise, the Selling Stockholder may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the shares in the course of hedging in positions they assume. The Selling Stockholder may also sell shares of Common Stock

 

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short and if such short sale shall take place after the date that this Registration Statement is declared effective by the Commission, the Selling Stockholder may deliver shares covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The Selling Stockholder may also loan or pledge shares to broker-dealers that in turn may sell such shares, to the extent permitted by applicable law. The Selling Stockholder may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the foregoing, the Selling Stockholder has been advised that it may not use shares registered on this registration statement to cover short sales of shares of our Common Stock made prior to the date the registration statement, of which this prospectus forms a part, has been declared effective by the SEC.

The Selling Stockholder may, from time to time, pledge or grant a security interest in some or all of the shares of Common Stock owned by it and, if it defaults in the performance of its secured obligations, the pledgees or secured parties may offer and sell the shares from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, if necessary, amending the information provided above under the heading “Selling Stockholder” concerning the Selling Stockholder’s ownership of the Shares to include the pledgee, transferee or other successors in interest as Selling Stockholders under this prospectus. The Selling Stockholder also may transfer and donate the shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

Any broker-dealer or agents participating in the distribution of the Shares may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions paid, or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The Selling Stockholder is a registered broker-dealer and, accordingly, may be deemed an “underwriter” within the meaning of the Securities Act as to the Shares of Common Stock sold for its account. As such, the Selling Stockholder would be subject to the applicable prospectus delivery requirements of the Securities Act and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12, and 17 of the Securities Act and Rule 10b-5 under the Exchange Act.

The Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the shares of Common Stock. Upon the Company being notified in writing by the Selling Stockholder that any material arrangement has been entered into with a broker-dealer for the sale of the Shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed by the Company, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In no event shall any broker-dealer receive fees, commissions and markups, which, in the aggregate, would exceed eight percent (8%).

Under the securities laws of some states, the shares of Common Stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and such shares are in compliance with the exemption.

There can be no assurance that the Selling Stockholder will sell any or all of the shares of Common Stock registered pursuant to the shelf registration statement, of which this prospectus forms a part.

 

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The Selling Stockholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of Common Stock by the Selling Stockholder and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares to engage in market-making activities with respect to the shares. All of the foregoing may affect the marketability of the shares and the ability of any person or entity to engage in market-making activities with respect to the shares.

We will pay all expenses of the registration of the shares of Common Stock pursuant to the registration rights agreement, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, that the Selling Stockholder will pay all underwriting discounts and selling commissions, if any and any related legal expenses incurred by it. We will indemnify the Selling Stockholder against certain liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreement, or the Selling Stockholder will be entitled to contribution. We may be indemnified by the Selling Stockholder against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the Selling Stockholder specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution.

 

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LEGAL MATTERS

The validity of the shares of Common Stock offered by this prospectus and certain other legal matters will be passed upon for us by Nelson Mullins Riley & Scarborough LLP, Greenville, South Carolina.

EXPERTS

Our consolidated financial statements as of December 31, 2011 and 2010 and for each of the years in the three-year period ended December 31, 2011 have been incorporated by reference in this prospectus in reliance upon the report of Dixon Hughes Goodman LLP, an independent registered public accounting firm, incorporated by reference herein and therein, and upon the authority of said firm as experts in accounting and auditing.

 

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.  Other Expenses of Issuance and Distribution.

We will bear our fees and expenses incurred in connection with the registration of the Shares of our Common Stock in connection with this offering. The Selling Stockholder will bear all selling and other expenses that it incurs in connection with its sale of the Shares of Common Stock pursuant to the prospectus which is part of this registration statement. All amounts shown are estimates except for the SEC registration fee.

 

								Amount to be Paid
SEC Registration Fee						$			275.82
Legal Fees and Expenses									10,000.00
Accounting Fees and Expenses									5,000.00
Printing Expenses and Miscellaneous									5,000.00
TOTAL						$			20,275.82

Item 14.  Indemnification of Directors and Officers.

Our Articles of Incorporation contain a provision which, subject to certain exceptions described below, eliminates the liability of a director or an officer to us or our shareholders for monetary damages for any breach of duty as a director or officer.

Yadkin’s Bylaws provide that Yadkin shall indemnify, to the fullest extent provided by law, all directors, officers, employees, agents of the corporation, and any person who, at the corporation’s request, is or was serving as director, officer, partner, trustee, employee, or agent of another corporation, against liability and expenses in any proceeding arising out of their status or activities in any of the foregoing capacities except when the party’s activities were at the time of action known or believed by such party to be clearly in conflict with the best interests of Yadkin.

Under our Articles of Incorporation and bylaws, indemnification will be disallowed for (i) acts or omissions not made in good faith that the director at the time of breach knew or believed were in conflict with the best interests of the Corporation; (ii) any liability under Section 55-8-33 of the North Carolina General Statutes; or (iii) any transaction from which the director derived an improper personal benefit (which does not include a director’s compensation or other incidental benefit for or on account of his service as a director, officer, employee, independent contractor, attorney, or consultant of the Corporation). In addition to the Articles of Incorporation and Bylaws, Section 55-8-52 of the NCBA requires that “unless limited by its articles of incorporation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding.”

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons under the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Item 15.  Recent Sales of Unregistered Securities.

On May 6, 2011, the Company completed a private placement of 3,081,867 shares of Common Stock (the “2011 Private Placement”) to accredited investors, including certain of the Company’s officers and directors, for total cash proceeds of $6.4 million. The purchase price per share for investors was at a 10% discount to the weighted average closing sale price of the Company’s Common Stock on Nasdaq for the 10-day period ending five business days prior to the closing of the 2011 Private Placement. On June 23, 2011, the Company’s shareholders approved the 2011 Private Placement which permitted the Company, pursuant to Nasdaq Rule 5635(c), to issue to the Company’s directors and executive officers, for no additional consideration, 151,681 additional shares of Common Stock, enabling the directors and executive officers to invest on the same terms as other investors that participated in the 2011 Private Placement. Including this additional issuance, the Company issued a total 3,233,548 shares of Common Stock as a result of the 2011 Private Placement. Proceeds received from the 2011 Private Placement were kept at the holding company level for general corporate purposes.

 

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On October 23, 2012, the Company entered into the Share Exchange Agreement with the Preferred Shareholders, pursuant to which the Preferred Shareholders exchanged shares of the Preferred Stock for shares of the Company’s Common Stock and shares of the Company’s Non-Voting Common Stock. The total amount of Preferred Stock exchanged for Common Stock and Non-Voting Common Stock was approximately $21 million. The Non-Voting Common Stock will convert into shares of Common Stock under certain conditions in accordance with the terms of the Articles of Amendment creating the class of the Non-Voting Common Stock. The Company will not receive any of the proceeds from such sales.

As part of the 2012 Transaction, contemporaneously with the execution of the Securities Purchase Agreement, the Company entered into the Securities Purchase Agreement with the Investors, pursuant to which the Investors purchased 45,000 shares of the Series A Preferred Stock at a price of $1,000 per share. The Series A Preferred Stock converted into shares of the Company’s Common Stock at a price of $2.80 per share on December 26, 2012. The Company raised approximately $41.8 million in net proceeds from the sale of the Series A Preferred Stock. The Company intends to use the proceeds from the offering to further improve its balance sheet and accelerate the disposition of approximately $67.0 million in classified assets composed of $16.5 million in other real estate owned and $50.0 million in classified loans. The Company anticipates the after-tax charges associated with this asset sale to be in the range of $26.0 million to $30.0 million in the aggregate. The assets were marked in the fourth quarter of 2012, and the sale process is anticipated to be substantially complete by the end of the first quarter of 2013.

The Selling Stockholder served as the Company’s placement agent in connection with the 2012 Transaction. The Company paid the Selling Stockholder approximately $3.7 million in fees in the aggregate in connection with the closing of the transactions contemplated by the Share Exchange Agreement and the Securities Purchase Agreement.

Item 16.  Exhibits and Financial Statement Schedules.

 

Exhibit 3.1		Articles of Incorporation (incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K dated July 1, 2006)
Exhibit 3.2		Bylaws (incorporated by reference to Exhibit 3.1 of the Form 8-K filed on December 19, 2008)
Exhibit 3.3		Articles of Amendment to the Company’s Articles of Incorporation establishing the terms of the Series T Preferred Stock (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on January 20, 2009)
Exhibit 3.4		Articles of Amendment to the Company’s Articles of Incorporation establishing the terms of the Series T-ACB Preferred Stock (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on July 27, 2009)
Exhibit 3.5		Articles of Amendment to the Company’s Articles of Incorporation establishing the terms of the Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on October 25, 2012)
Exhibit 3.6		Articles of Amendment to the Company’s Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on December 21, 2012)
Exhibit 4.1		Specimen certificate for Common Stock (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K for the year ended December 31, 2006)
Exhibit 5.1		Opinion of Nelson Mullins Riley and Scarborough LLP
Exhibit 10.1		Yadkin Valley Financial Corporation 1998 Employees Incentive Stock Option Plan (incorporated by reference to Exhibit 4 to Registration Statement on Form S-8 filed August 8, 2006*
Exhibit 10.2		Yadkin Valley Financial Corporation 1999 Stock Option Plan (incorporated by reference to Exhibit 4 to Registration Statement on Form S-8 filed August 8, 2006)*
Exhibit 10.3		Yadkin Valley Financial Corporation 1998 Non-Statutory Stock Option Plan (incorporated by reference to Exhibit 4 to Registration Statement on Form S-8 filed August 8, 2006)*
Exhibit 10.4		Yadkin Valley Financial Corporation 1998 Incentive Stock Option Plan (incorporated by reference to Exhibit 4 to Registration Statement on Form S-8 filed August 8, 2006)*
Exhibit 10.5		Amended and Restated Employment Agreement with William A. Long (incorporated by reference to Exhibit 10.5 to the Annual Report on Form 10-K for the year ended December 31, 2008)*
Exhibit 10.6		Retirement and Transition Agreement with William A. Long (incorporated by reference to Exhibit 10.2 of Form 8-K filed on November 24, 2010)*
Exhibit 10.7		Amended and Restated Employment Agreement with Joseph H. Towell (incorporated by reference to Exhibit 10.2 of Form 8-K filed on November 24, 2010)*
Exhibit 10.8		Amendment to Amended and Restated Employment Agreement with Joseph H. Towell (incorporated by reference to Exhibit 10.3 of Form 8-K filed on November 24, 2010)*

 

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Exhibit 10.9		Employment Agreement with Jan H. Hollar (incorporated by reference to Exhibit 10.1 to Form 8-K filed June 22, 2010)*
Exhibit 10.10		Amendment to Employment Agreement with Jan H. Hollar (incorporated by reference to Exhibit 10.1 filed November 24, 2010)*
Exhibit 10.11		Employment Agreement with William M. DeMarcus (incorporated by reference to Exhibit 10.5 of Form 8-K filed on November 24, 2010)*
Exhibit 10.12		Amended and Restated Employment Agreement with Stephen S. Robinson (incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K for the year ended December 31, 2008)*
Exhibit 10.13		Amendment to Amended and Restated Employment Agreement with Stephen S. Robinson (incorporated by reference to Exhibit 10.1 of Form 8-K filed on August 24, 2010)*
Exhibit 10.14		2007 Group Term Carve Out Plan (incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K for the year ended December 31, 2007)*
Exhibit 10.15		2008 Omnibus Stock Ownership and Long-Term Incentive Plan (incorporated by reference to Exhibit 4 to the Form S-8 filed on September 5, 2008).*
Exhibit 10.16		Retirement and Transition Agreement by and between F. Spencer Cosby, Jr. and Sidus Financial, LLC dated July 20, 2011 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on July 22, 2011)*
Exhibit 10.17		Employment Agreement with J. Ricky Patterson, dated January 4, 2012 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on January 9, 2012)*
Exhibit 10.18		Securities Purchase Agreement, dated as of October 23, 2012, by and among Yadkin Valley Financial Corporation and the Purchasers thereto (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on October 25, 2012)
Exhibit 10.19		Share Exchange Agreement, dated as of October 23, 2012, by and among Yadkin Valley Financial Corporation and the Shareholders thereto (incorporated by reference to Exhibit 10.2 to the Form 8-K filed on October 25, 2012)
Exhibit 10.20		Registration Rights Agreement, dated as of October 23, 2012, by and among Yadkin Valley Financial Corporation and the Purchasers thereto (incorporated by reference to Exhibit 10.3 to the Form 8-K filed on October 25, 2012)
Exhibit 10.21		Registration Rights Agreement, dated as of October 23, 2012, by and among Yadkin Valley Financial Corporation and the Shareholders thereto (incorporated by reference to Exhibit 10.4 to the Form 8-K filed on October 25, 2012)
Exhibit 21.1		List of Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to the Annual Report on Form 10-K for the year ended December 31, 2011 filed on February 29, 2012)
Exhibit 23.1		Consent of Dixon Hughes Goodman LLP
Exhibit 23.2		Consent of Nelson Mullins Riley & Scarborough LLP (included in Exhibit 5.1)
Exhibit 24		Power of Attorney (contained on the signature pages)

 

*	Management contract or compensatory plan or arrangement

Copies of exhibits are available upon written request to:

Corporate Secretary, Yadkin Valley Financial Corporation, P.O. Drawer 888, Elkin, North Carolina 28621.

Item 17.  Undertakings.

The registrant hereby undertakes:

 

(a)

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

(i)

to include any prospectus required by Section 10(a)(3) of the Securities Act;

 

(ii)

to reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

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(iii)

to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

 

(b)

That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(c)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(d)

That, for the purpose of determining liability under the Securities Act to any purchaser:

 

(i)

each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

 

(ii)

each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

 

(e)

That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(i)

Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

(ii)

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

 

(iii)

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

 

(iv)

Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

(f)

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other that the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit of proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

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(g)

The undersigned registrant hereby undertakes that:

 

(i)

For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

 

(ii)

For the purpose of determining any liability under the Securities Act each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Elkin, State of North Carolina, on January 18, 2013.

 

		YADKIN VALLEY FINANCIAL CORPORATION
		By:		/s/ Joseph H. Towell
				Joseph H. Towell
				President and Chief Executive Officer

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Joseph H. Towell and Jan H. Hollar, and each of them, as such person’s true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in such person’s name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and any Registration Statement filed pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and any other regulatory authority, granting unto this attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that this attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature/ Title		Date
/s/ Joseph H. Towell		Date:  January 18, 2013
Joseph H. Towell
President, Chief Executive Officer, and
Director
/s/ Nolan G. Brown		Date:  January 18, 2013
Nolan G. Brown
Director
/s/ Harry M. Davis		Date:  January 18, 2013
Harry M. Davis
Director
/s/ Thomas J. Hall		Date:  January 18, 2013
Thomas J. Hall
Director
/s/ James A. Harrell, Jr.		Date:  January 18, 2013
James A. Harrell, Jr.
Director
/s/ Larry S. Helms		Date:  January 18, 2013
Larry S. Helms
Director

 

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/s/ Dan W. Hill, III		Date:  January 18, 2013
Dan W. Hill, III
Director
/s/ Jan H. Hollar		Date:  January 18, 2013
Jan H. Hollar
Executive Vice President and Chief Financial Officer
“Principal Accounting Officer”
/s/ James L. Poindexter		Date:  January 18, 2013
James L. Poindexter
Director
/s/ Alison J. Smith		Date:  January 18, 2013
Alison J. Smith
Director
/s/ James N. Smoak		Date:  January 18, 2013
James N. Smoak
Director
/s/ Harry C. Spell		Date:  January 18, 2013
Harry C. Spell
Director

 

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