Yadkin Valley Financial Corporation (Yadkin) is a bank holding company for Yadkin Valley Bank and Trust Company (the Bank). The Bank is a chartered commercial bank. The Bank’s operations are primarily retail oriented and directed towards individuals, and small and medium-sized businesses located in its banking market, and to a lesser extent, areas surrounding its immediate banking market. The Bank provides commercial and consumer banking services, and its principal activities are accepting of demand and time deposits, and the making of consumer and commercial loans. The Bank’s primary source of revenue is the interest income derived from its lending activities. It operates the offices in Jefferson and West Jefferson (Ashe County), Wilkesboro and North Wilkesboro (Wilkes County), Elkin (Surry County), East Bend, Jonesville and Yadkinville (Yadkin County), and Pfafftown (Forsyth County) under the Yadkin name. On March 31, 2008, the Bank acquired Cardinal State Bank (Cardinal).