Yadkin Valley founder corrects misstatement about resigning from board

By Lisa Kerner

Charlotte, N.C., April 14 - Daniel J. Park, who resigned as a director of Yadkin Valley Financial Corp. and Yadkin Valley Bank and Trust Co. on April 9, clarified his reason for resigning in a Friday letter to Yadkin Valley included in a form 425 filed with the Securities and Exchange Commission on Tuesday.

Park said his resignation was due in part to an apparent desire by management to pursue "growth for the sake of growth alone" - not management's "decision to pursue growth opportunities," as the company had stated.

"Growing just to grow is potentially reckless and harmful to Yadkin Valley, which I believe is demonstrated by the company's performance since 2002," Park said in the letter.

According to Park, Yadkin Valley shareholders will give up a 28% equity stake and the company will pay $18 million in the proposed merger with American Community Bancshares, Inc.

"That's what I mean by growing just to grow, which is much different from pursuing 'opportunities' (unless I misunderstand the meaning of that word)," Park said.

Park also continues to disagree with the company's decision to give its shareholders only until the shareholders meeting on Thursday to consider supplemental proxy materials mailed to them on April 1, calling the process "hurried and sloppy."

The Yadkin Valley board of directors rejected Park's motion to adjourn the April 16 special meeting of shareholders to April 30.

As previously reported, Park founded Yadkin Valley Bank and had been a director for more than 40 years.

At the time of his resignation, Park was the chairperson of Yadkin Valley Financial's nominating and compensation committee and a member of the executive committee.

Shareholders to vote

Yadkin Valley and American Community will reconvene their respective special meetings of shareholders on Thursday.

Shareholders will be asked to approve a merger in which Yadkin Valley will acquire American Community in a cash-and-stock deal valued at approximately $92 million.

Subsidiaries Yadkin Valley Bank and Trust and American Community Bank will also combine.

Under the merger agreement, American Community shareholders will have the right to receive either $12.35 in cash or 0.8517 Yadkin Valley shares for each American Community share, subject to the limitation that 19.5% of the total consideration is to be paid in cash and 80.5% in Yadkin Valley shares.

American Community is the parent of American Community Bank, a Charlotte, N.C.-based state-chartered bank.

Yadkin Valley is a one-bank holding company for Yadkin Valley Bank and Trust located in Elkin, N.C.

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