UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: February 13, 1998
VALLEY FINANCIAL CORPORATION
VIRGINIA 33-77568 54-1702380
(State of Incorporation) Commission File Number (I.R.S. Employer
Identification Number)
36 Church Avenue, S.W.
Roanoke, Virginia 24011
(Address of principal executive offices)
(540) 342-2265
(Issuer's telephone number, including area code)
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Item 5. Other Events.
Valley Financial Corporation (the "Company"), the holding company for
Roanoke, VA-based Valley Bank (the "Bank"), announced on February 5, 1998 its
financial results for the quarter and the fiscal year ended December 31, 1997.
The financial results are detailed in the Company's Press Release dated February
5, 1998, filed as Exhibit A to this Form 8-K and incorporated by reference
herein.
The Company's common stock is traded over the counter under the symbol
VYFC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VALLEY FINANCIAL CORPORATION
Date: February 13, 1998 /s/ A. Wayne Lewis
----------------------------------------
A. Wayne Lewis, Executive Vice President
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FOR RELEASE 5:00 p.m. February 5, 1998
- --------------------------------------
VALLEY FINANCIAL CORPORATION
36 Church Avenue, S.W.
Roanoke, Virginia 24011
For Further Information Contact:
Ellis L. Gutshall, President and Chief Executive Officer
A. Wayne Lewis, Executive Vice President and Chief Operating Officer
(540) 342-2265
VALLEY FINANCIAL CORPORATION ANNOUNCES
RECORD QUARTERLY PROFIT
ROANOKE, VIRGINIA. February 5, 1998 -- Roanoke-based Valley Financial
Corporation announced today its consolidated financial results for the quarter
and the fiscal year ended December 31, 1997. At December 31, the Company's
total assets were $74,677,000, total deposits were $65,588,000, total loans
stood at $46,647,000 and total shareholders' equity was $8,279,000. Compared
with December 31, 1996, the Company experienced increases of $22,934,000 or 44%
in total assets, $21,971,000 or 50% in total deposits and $13,165,000 or 39% in
total loans over the twelve-month period. With capital at December 31, 1997
representing 11% of total assets, the Company easily exceeds the regulatory
minimum to be considered "well capitalized."
For the three months ended December 31, 1997, Valley Financial reported net
income of $589,000 or $.61 per share, its fifth consecutive quarterly operating
profit, compared with net income of $165,000 or $.17 per share, $102,000 or $.11
per share and $27,000 or $.03 per share for the third, second and first quarters
of 1997, respectively. The Company's net income for the fourth quarter of 1997
also compares favorably with the profit of $4,000 or $.004 per share reported in
the fourth quarter of 1996. The Company's return on average total assets was
3.32% for 1997's fourth quarter, and its return on average shareholders' equity
was 30.24%.
Included in the fourth quarter results is a $397,000 income tax benefit
associated with recognition of deferred tax assets, including the Company's
available net operating loss carryforwards. Excluding this tax benefit, net
income for 1997's fourth quarter would have been $192,000 or $.20 per share,
return on average total assets would have been 1.08% and return on average
shareholders' equity would have been 9.85%.
Ellis L. Gutshall, President and CEO of Valley Financial, said, "The
financial results for the fourth quarter of 1997 represent attainment of our
goal of being a high-performing financial institution. We are very pleased to
report our fifth consecutive quarter in the black, and each profitable quarter
has represented a significant percentage increase in net income over the
preceding quarter. To have come this far in only 2 1/2 years since Valley Bank
opened for business is strong performance by any measure."
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For the year ended December 31, 1997, Valley Financial reported net income of
$883,000 or $.92 per share, compared to a net loss of $714,000 or $.74 per share
for 1996. Return on average total assets for the year was 1.40% and return on
average shareholders' equity was 11.79%. Exclusive of the income tax benefit,
net income for the year would have been $486,000 or $.50 per share, return on
average total assets would have been 0.77% and return on average shareholders'
equity would have been 6.48%.
Gutshall went on to point out that, "The size of the Company increased
significantly during each quarter of 1997, and went up 44% during the past
year. This rapid growth continues to demonstrate that Roanoke Valley residents
want to deal with a locally-owned and managed bank that offers competitive
products and a high level of personal service. Asset quality remains extremely
high as Valley Bank continues to have no non-performing assets or loans over 90
days past due, and there have been only $419 in loans charged off since the bank
opened for business. We continue to be well ahead of our original expectations
and look to the future with confidence."
Valley Financial Corporation is the holding company for Valley Bank, which
opened for business May 15, 1995 and engages in a general commercial and retail
banking business in the Roanoke Valley, emphasizing the needs of small
businesses, professional concerns and individuals. Valley Bank operates from
three full-service offices at 36 Church Avenue, SW and 2203 Crystal Spring
Avenue, SW in Roanoke City, and 4467 Starkey Road, SW in Roanoke County.
Additionally, it recently opened a loan production office at 302 East Main
Street in the City of Salem.
The Common Stock of Valley Financial Corporation is traded over the counter
under the symbol VYFC, and is quoted on the OTC Bulletin Board, an electronic
quotation and trade reporting service of the National Association of Securities
Dealers.
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VALLEY FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31 December 31
1997 1996
----------- -----------
(in thousands, except share data)
<S> <C> <C>
Assets
Cash and due from banks $ 3,324 $ 2,149
Money market investments 1,473 2,791
Securities available-for-sale 21,144 11,584
Loans 46,647 33,482
Less allowance for loan losses and
unearned fees (497) (361)
------- ------
Total net loans 46,150 33,121
Premises and equipment 1,315 1,397
Other assets 1,271 701
------- -------
Total assets $74,677 $51,743
======= =======
Liabilities and Shareholders' Equity
Non-interest bearing demand deposits $ 7,956 $ 3,514
Interest bearing demand, savings &
money market deposits 19,048 9,362
Time deposits greater than $100,000 6,481 4,442
Other time deposits 32,103 26,299
------- -------
Total deposits 65,588 43,617
======= =======
Short term borrowings 0 0
Other liabilities 810 773
------- -------
Total liabilities 66,398 44,390
------- -------
Preferred stock, no par value.
Authorized 10,000,000 shares; none issued
and outstanding
Common stock, no par value.
Authorized 10,000,000 shares; issued and
outstanding 964,040 at December 31, 1997
and 1996 9,089 9,089
Accumulated deficit (866) (1,749)
Unrealized gains (losses) on securities
available-for-sale, net of tax 56 13
Total shareholders' equity 8,279 7,353
------- -------
Total liabilities and shareholders'
equity $74,677 $51,743
======= =======
Asset Quality Ratios:
Nonperforming loans/total loans 0.00% 0.00%
Loans past due > 90 days/total loans 0.00% 0.00%
Allowance for loan losses/loans, net 0.99% 0.99%
</TABLE>
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended
December 31
---------------------------------------------
1997 1996 1997 1996
-------- -------- -------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Interest Income $1,359 $872 4,806 2,615
Interest Expense 700 439 2,511 1,254
------ ------ ------ ------
Net interest income 659 433 2,295 1,361
Provision for loan losses 12 50 131 191
------ ------ ------ ------
Net interest income after
provision for loan losses 647 383 2,164 1,170
Noninterest income 50 31 178 89
Noninterest expense 505 410 1,856 1,973
------ ------ ------ ------
Net income (loss) before taxes $192 $4 $486 ($714)
------ ------ ------ ------
Income tax benefit 397 0 397 0
------ ------ ------ ------
Net income (loss) $589 $4 $883 ($714)
====== ====== ====== ======
Net income (loss) per share $0.61 $0.004 $0.92 ($0.74)
====== ====== ====== ======
Selected Financial Ratios:
Return on average total assets 3.32% 0.03% 1.40% -1.98%
Return on average total
shareholders' equity 30.24% 0.21% 11.79% -9.37%
Yield on average earning assets 8.02% 7.89% 7.96% 7.87%
Cost of funds 4.48% 4.48% 4.55% 4.47%
Net interest margin 3.89% 3.91% 3.80% 4.09%
Overhead efficiency ratio 68.68% 88.51% 74.97% 136.10%
</TABLE>
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