
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, January 31, 1995                   TAG: 9501310144
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: MAG POFF STAFF WRITER
DATELINE:                                 LENGTH: Medium

VALLEY BANK MOVES TOWARD OPENING

Valley Bank has sold the shares it needed to open, and Monday it began the process of construction and remodeling.

In a letter sent Monday to subscribers to the stock - who are now officially shareholders - the company said it will mail them stock certificates within 90 days and expects to open in the second quarter.

The bank has broken the escrow account in which it held money deposited to purchase stock. The money will be used to meet expenses for the opening and to provide capital to the bank.

Bank officials declined comment Monday because they are still driving toward the balance of the goal of 1.2 million shares of stock at $10 a share, or $12 million.

But the holding company, Valley Financial Corp. of Roanoke, has sold more than the minimum 800,000 shares or $8 million it had set as its own goal to open the bank. Valley Financial has also met the terms of releasing the escrow account by winning approvals from regulators for opening of a bank.

The sale of shares will continue until July 15 unless the final goal is reached earlier. Shares purchased now will be used by the bank immediately for organizational purposes rather than going into escrow.

Valley Financial actually sold 815,352 shares through last Friday, raising $8,153,520.

The money will be used to pay $296,318 in pre-opening expenses, most of it advanced by the bank's organizers who now constitute the board.

The bank said it estimated brokers' commissions at $191,180, while a financial adviser will cost $35,000. Shareholders had equity of $7.4 million at the end of December, but this number will be reduced by the costs of opening.

The capital raised for Valley Bank exceeds the regulatory requirement of $5 million to open a bank.

Valley Bank will remodel the former headquarters of First Federal Savings and Loan Association (later CorEast Savings Bank) at Church Avenue and First Street Southwest as its main office.

The bank also has an option to purchase land on Starkey Road in Roanoke County opposite the entrance to Holiday Inn Tanglewood for a branch. The site, which is marked by a sign visible from Virginia 419, also has access from Fallowater Road.

The mailing to the shareholders said that the company will set aside a maximum of 99,000 shares of stock for the employee stock-option plan. Some administrators will be granted options to purchase stock under their employment agreements.

by CNB