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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
                         Commission file number: 0-25932

                                   VRB Bancorp
             (Exact name of Registrant as specified in its charter)

           Oregon                                      93-0892559
(State or other jurisdiction             (I.R.S. Employer Identification Number)
of incorporation or organization)

             110 Pine St., P.O. Box 1046, Rogue River, Oregon 97537
             (Address of principal executive offices)       (Zip Code)

                                 (541) 582-4554
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act
                                      None

                      Name of exchange on which registered

           Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filing pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the
Registrant was $90,082,000 at March 1, 1998.

As of March 1, 1998, there were 8,340,744 shares of the Registrant's Common
Stock outstanding.

                      Documents Incorporated by Reference:

Portions of the Registrant's 1997 Annual Report to Shareholders is incorporated
by reference in Part II hereof. Portions of the Registrant's proxy statement
dated March 8, 1998, for the 1998 annual meeting of shareholders in incorporated
by reference in Part III hereof.



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Disclosure Regarding Forward-Looking Statements

        The following discussion includes forward-looking statements within the
meaning of the "safe-harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are based on the beliefs of
the Company's management and on assumptions made by and information currently
available to management. All statements other than statements of historical
fact, regarding the Company's financial position, business strategy and plans
and objectives of management for future operations of the Company are
forward-looking statements. When used herein, the words "anticipate," "believe,"
"estimate," "expect," and "intend" and words or phrases of similar meaning, as
they relate to the Company or management, are intended to identify
forward-looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct.
Forward-looking statements are subject to certain risks and uncertainties, which
could cause actual results to differ materially from those indicated by the
forward-looking statements. These risks and uncertainties include the Company's
ability to maintain or expand its market share or net interest margins, or to
implement its marketing and growth strategies. Further, actual results may be
affected by the Company's ability to compete on price and other factors with
other financial institutions; customer acceptance of new products and services;
and, general trends in the banking industry and the regulatory environment, as
they relate to the Company's cost of funds and returns on assets. In addition,
there are risks inherent in the banking industry relating to collectibility of
loans and changes in interest rates. The reader is advised that this list of
risks is not exhaustive and should not be construed as any prediction by the
Company as to which risks would cause actual results to differ materially from
those indicated by the forward-looking statements.


                                     PART I

ITEM 1.        DESCRIPTION OF BUSINESS

INTRODUCTION

        VRB Bancorp was organized in 1983 under Oregon law for the purpose of
becoming a holding company of Valley of the Rogue Bank, an Oregon
state-chartered bank organized in 1967. The Company conducts its business
through, and has no material operations outside of, Valley of the Rogue Bank.
Accordingly, reference to "VRB", "the Company", and "the Bank" are intended to
denote VRB Bancorp and Valley of the Rogue Bank as a consolidated entity, except
as the context may otherwise indicate.

BUSINESS

        VRB is the largest community bank in Southern Oregon, currently
operating nine full service branches in the Rogue Valley, and seeks significant
growth in its earning assets while maintaining a high return on shareholders'
equity. The Company believes that this objective can be achieved by continuing
to provide personalized, quality banking products and services to its customers.
The Company operates under the conviction that services that are specifically
designed to satisfy the needs of individual customers will enable the Bank to
retain and expand existing market share. The Company complements this strategy
by distinguishing its interactive services from those of the larger regional and
national banks, all of which are headquartered in other states and have
transferred lending decisions away from local branches.

        VRB is principally a commercial lender with loan products tailored to
meet the banking requirements of targeted customers in its market area. Products
available to business and commercial customers include equipment and inventory
financing, operating lines of credit, SBA loans for qualified businesses, and
accounts receivable financing. The Company is also an active construction lender
and frequently underwrites the purchase and refinance of commercial, residential
owner-occupied, and rental properties. VRB also provides consumer loans for a
variety of purposes, including secured and unsecured personal loans, home equity
and personal lines of credit, vehicle loans and student loans. VRB attempts to
maintain sound loan underwriting standards with written loan policies,
conservative individual and branch lending limits and oversight by Board
designated loan committees.



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        The Company offers a broad array of traditional deposit products and
services, including non-interest bearing and interest bearing checking accounts,
savings accounts, money market accounts and certificates of deposit. These
products generally earn interest at rates established by management based upon
competitive market factors and management's desire to increase certain types or
maturities of deposit liabilities. VRB strives to develop customer relations to
attract core deposits in non-interest bearing transactional accounts and thus
maintain a low cost of funds.

        While the Company recognizes that the majority of its customers have
come to expect traditional personal banking products and services, VRB has also
made the commitment to provide new technology-based products, including a
24-hour telephone account access system, a debit card program and an expanded
ATM network.


MARKET AREA AND COMPETITION

        The Company primarily accepts deposits and makes loans in Jackson and
Josephine Counties (the Rogue Valley) in southern Oregon. VRB's geographic
market area has undergone significant change in the last several years. Southern
Oregon has become increasingly popular as a family community and retirement
area, and has seen an increase in population of approximately 14.5% from 1990 to
1996. The region's employment base has diversified away from timber related
manufacturing to encompass growing industry sectors in non-timber manufacturing,
municipality, higher education and medical services.

        Within the Company's geographic market, VRB's primary competition for
deposits comes from commercial banks, savings and loan associations, and credit
unions, some of which may offer higher interest rates than VRB can or is willing
to offer. Major commercial bank competitors, or super-regional institutions
headquartered outside of the state of Oregon command approximately 75% of the
traditional deposits in the Rogue Valley. These institutions have the advantage
of offering their customers services and statewide banking facilities that VRB
does not offer. In addition, such institutions have high public visibility and
are able to maintain advertising and marketing activity on a much larger scale
than the Company can economically maintain. Secondary competition for funds
comes from issuers of corporate and government securities, insurance companies,
mutual funds and other financial intermediaries. See "Risk Factors"

        VRB's competition for loans comes from commercial banks, savings and
loan associations, mortgage companies, finance companies, and other
institutional lenders. Many of its competitors have substantially higher single
borrower lending limits than those of VRB. The Company competes for loan
originations through the level of interest rates and loan fees, the variety of
commercial and mortgage loan products, and the efficiency and quality of
services provided to borrowers. Lending activity can also be affected by the
availability of lendable funds, local and national economic conditions, current
interest rates, and loan demand. See "Risk Factors".


COLONIAL BANKING COMPANY ACQUISITION

        On July 24, 1997, the Bank entered into a Stock Option Agreement with
the shareholders of Investor Banking Corporation ("IBC") which owned
approximately 81% of the outstanding stock of Colonial Banking Company ("CBC").
Pursuant to the Stock Option Agreement, the Bank was given the right to acquire
all of the outstanding shares of IBC for an aggregate purchase price equal to
the number of Colonial shares held by IBC at a price of $41 per share. In
addition, as of September 30, 1997, the Bank entered into a Plan of Merger with
CBC. Effective January 5, 1998, VRB executed the Stock Option Agreement and Plan
of Merger which resulted in the acquisition of CBC (referred to herein as the
"Acquisition). The aggregate purchase price paid to the shareholders of IBC and
CBC was $15.7 million.

        CBC, previously headquartered in Grants Pass, Oregon, had $113.1 million
in total assets as of December 31, 1997 and operated five banking offices
throughout the Rogue Valley. In addition to these banking offices, Colonial had
a loan production office located in Portland, Oregon. The loans generated by
this office were geographically dispersed throughout the Portland metropolitan
area and the state of Oregon.

        Upon closing, CBC began operating under the name Valley of the Rogue
Bank. With the exception of the Rogue River Branch of CBC, which was
consolidated with the head office of the Bank, the Bank retained all of the



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branches of CBC. CBC's loan production office in Portland, Oregon, was closed,
and loans originated in that market are now serviced by existing Bank credit
administrators. Following the merger, the Bank instituted its pricing policies
for deposits and loans and introduced the Bank's products to all CBC customers
while endeavoring to provide the same services throughout its entire branch
network. By mid January 1998, CBC's data processing system had been discontinued
and converted into a data format compatible with VRB's data processing system,
allowing the two systems to merge.

EMPLOYEES

        As of December 31, 1997, the Bank employed a total of 124 full time
equivalent employees. Upon the Acquisition, the Bank increased its staffing to
170 full time equivalent employees. None of the employees are subject to a
collective bargaining agreement and the Bank considers its relationships with
its employees to be favorable.

RISK FACTORS

        Ownership of VRB Bancorp stock involves certain risks. Current and
prospective investors should carefully consider and evaluate all of the Risk
Factors as set forth below. The Company cautions the reader that this list of
risk factors may not be exhaustive.

EXPOSURE TO LOCAL ECONOMY

        The Company's performance is materially dependent upon and sensitive to
the economy of its market area in Southern Oregon consisting of the Rogue Valley
in Jackson and Josephine Counties. Adverse economic developments can affect loan
demand and the collectibility of existing loans and have a negative effect on
the Company's earnings and financial condition. The economy of the Rogue Valley
depends primarily on retail trade, tourism, government, services, agriculture,
forest products and other manufacturing industries. Particularly in the 1980's,
the Company's market area experienced high unemployment as a result of the
reduction in forest products manufacturing jobs. Subsequent developments have
reduced the dependence of the local economy on forest products manufacturing and
have increased the number of non-manufacturing jobs. Nonetheless, the loss of
forest industry jobs is projected to continue (but at a lower rate) and there
can be no assurance that new jobs will replace those lost, or that future
economic changes will not have a significant adverse effect on the Company.
Further, a decline in economic activity in the Company's market area could
adversely affect its borrowers' ability to repay loans, and the value of
collateral securing such loans.

COMPETITION

        In recent years, competition for deposits and loans has intensified. New
community banks have opened in Grants Pass and in Medford. In addition, two
super-regional banks in the Company's market area have been acquired by even
larger banks. Furthermore, pressure from outside the traditional banking system,
from credit unions, investment banking firms, insurance companies and related
industries offering bank-like products, has increased the competition for
deposits and loans. The banking industry in the Company's primary market area is
characterized by well-established branches of large banks which hold
approximately 75% of local deposits. These institutions have competitive
advantages over the Company in that they have higher public visibility and are
able to maintain advertising and marketing activity on a much larger scale than
the Company can economically sustain. Because single-borrower lending limits
imposed by law are dependent on the capital of the institution, the branches of
larger financial institutions also have a competitive advantage with respect to
loan applications which are in excess of the Company's legal lending limits.
See "Business - Competition."

CREDIT RISK

        The Company, like other lenders, is subject to credit risk, which is the
risk of losing principal and interest due to a customer's failure to repay loans
in accordance with their terms. Although the Company has an established lending
criteria and most loans are secured with collateral, a downturn in the economy
or the real estate market in the Rogue Valley or a rapid increase in interest
rates could have a negative effect on collateral values and borrowers' ability
to



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repay.

INTEREST RATE RISK

        VRB's earnings are largely derived from net interest income, which is
interest income and fees earned on loans and investment income, less interest
expense paid on deposits and other borrowings. Interest rates are highly
sensitive to many factors which are beyond the control of the Company's
management, including general economic conditions and the policies of various
governmental and regulatory authorities. As interest rates change, net interest
income is affected. With fixed rate assets (such as fixed rate loans) and
liabilities (such as certificates of deposit), the effect on net interest income
depends on the maturity of the asset or liability. Although the Company strives
to minimize interest rate risk through asset/liability management policies, from
time to time maturities are not balanced. Although rates have remained stable in
recent periods, an unanticipated decrease or increase in interest rates could
have an adverse effect on the spreads between the interest rates earned on
assets and the rates of interest paid on liabilities, and therefore on the level
of net interest income.

DEPENDENCE ON KEY PERSONNEL

        VRB's success is dependent on the services of William A. Haden,
President and Chief Executive Officer, and Tom Anderson, Executive Vice
President and Chief Operating Officer. The loss of services of either of these
executives, or of certain other key officers, could adversely affect the
Company. No assurance can be given that replacement officers of comparable
abilities could be found. The Company does not maintain key person life
insurance on these individuals.

REGULATION

        VRB and the Bank are subject to extensive regulations under federal and
state laws. These laws and regulations are intended to protect depositors, not
shareholders. As a state chartered bank, the Bank is subject to regulation and
supervision by the FDIC which insures the deposits of the Bank, and the Director
of the Oregon Department of Consumer and Business Services ("Oregon Director").
As a bank holding company, VRB is subject to regulation and supervision by the
Board of Governors of the Federal Reserve and the Oregon Director. Federal and
state regulation puts banks at a competitive disadvantage compared to less
regulated competitors such as finance companies, credit unions, mortgage banking
companies, and leasing companies. Although the Company has been able to compete
effectively in its market area in the past, there can be no assurance that it
will be able to continue to do so. Further, future changes in federal and state
banking regulations could adversely affect VRB's and the Bank's operating
results and ability to continue to effectively compete. See "Supervision and
Regulation."

ANTI-TAKEOVER PROVISIONS

        As a bank holding company, the acquisition of the Company or the Bank
would be subject to approval of banking regulators. These limitations and
requirements may serve to delay or prevent an acquisition of VRB by another
financial institution without the consent and cooperation of the Board of
Directors. Moreover, certain provisions of Oregon law limit the ability of
persons or entities to acquire control of VRB or to effect certain corporate
transactions without the consent of the Board of Directors or the shareholders.
These provisions are intended to discourage hostile corporate acquisitions. In
addition, VRB's articles of incorporation authorize the Board of Directors to
issue additional shares of authorized but unissued shares of VRB's stock,
including the Common Stock, voting preferred stock, and warrants, options or
other rights to acquire shares of stock. While this authority is intended to
give the Board of Directors the ability to raise capital and to provide
flexibility in financing corporate transactions, the issuance of additional
securities of VRB could have the effect of diluting the ownership interest of a
substantial shareholder or increasing the consideration necessary to acquire
control of VRB. The shareholders, therefore, may not benefit from a rise in the
price of the Common Stock that a takeover could cause.

SUPERVISION AND REGULATION

GENERAL



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        VRB and the Bank are extensively regulated under federal and state law.
These laws and regulations are intended to protect depositors, not shareholders.
To the extent that the following information describes statutory or regulatory
provisions, it is qualified in its entirety by reference to the particular
statutory or regulatory provisions. Any change in applicable laws or regulations
may have a material effect on the business and prospects of VRB and the Bank.
The operations of VRB may be affected by legislative changes and by the policies
of various regulatory authorities. The Company cannot accurately predict the
nature or the extent of the effects on its business and earnings that fiscal or
monetary policies, or new federal or state legislation may have in the future.

FEDERAL BANK HOLDING COMPANY REGULATION

        VRB is a bank holding company within the meaning of the Bank Holding
Company Act of 1956, as amended ("BHCA"), and as such, it is subject to
regulation, supervision and examination by the Board of Governors of the Federal
Reserve System (the "Federal Reserve"). VRB is required to file annual reports
with the Federal Reserve and to provide the Federal Reserve such additional
information as the Federal Reserve may require.

        Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Reserve Act on extensions of credit to the
bank holding company or its subsidiaries, on investments in their securities and
on the use of their securities as collateral for loans to any borrower. These
regulations and restrictions may limit VRB's ability to obtain funds from its
subsidiary banks for its cash needs, including funds for payment of dividends,
interest and operating expenses. Further, under the Federal Reserve Act and
certain regulations of the Federal Reserve, a bank holding company and its
subsidiaries are prohibited from engaging in certain tying arrangements in
connection with any extension of credit, lease or sale of property or furnishing
of services. For example, the Bank may not generally require a customer to
obtain other services from it or VRB, and may not require that the customer
promise not to obtain other services from a competitor, as a condition to an
extension of credit to the customer.

FEDERAL AND STATE BANK REGULATION

        The Bank, as a state chartered bank with deposits insured by the FDIC,
is subject to the supervision and regulation of the Oregon Director and of the
FDIC. These agencies may prohibit the bank from engaging in what they believe
constitute unsafe or unsound banking practices.

        The Community Reinvestment Act ("CRA") requires that, in connection with
examinations of financial institutions within their jurisdiction, the Federal
Reserve or the FDIC evaluates the record of the financial institutions in
meeting the credit needs of their local communities, including low and moderate
income neighborhoods, consistent with the safe and sound operation of those
banks. These factors are also considered in evaluating mergers, acquisitions and
applications to open a branch or facility. The Bank's current CRA rating is
"Satisfactory".

        Banks are also subject to certain restrictions imposed by the Federal
Reserve Act on extensions of credit to executive officers, directors, principal
shareholders or any related interest of such persons. Extensions of credit (i)
must be made on substantially the same terms, including interest rates and
collateral, and follow credit underwriting procedures that are not less
stringent than those prevailing at the time for comparable transactions with
persons not covered above and who are not employees, and (ii) must not involve
more than the normal risk of repayment or present other unfavorable features.
Banks are also subject to certain lending limits and restrictions on overdrafts
to such persons. A violation of these restrictions may result in the assessment
of substantial civil monetary penalties on the affected bank or any officer,
director, employee, agent or other person participating in the conduct of the
affairs of that bank, the imposition of a cease and desist order, and other
regulatory sanctions.

        Under the Federal Deposit Insurance Corporation Improvement Act
("FDICIA"), each federal banking agency has prescribed, by regulation,
non-capital safety and soundness standards for institutions under its authority.
These standards cover internal controls, information systems and internal audit
systems, loan documentation, credit underwriting, interest rate exposure, asset
growth, compensation, fees and benefits, other operational and managerial
standards as the agency determines to be appropriate, and standards for asset
quality, earnings and stock valuation. An institution which fails to meet these
standards must develop a plan acceptable to the agency, specifying the steps
that



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the institution will take to meet the standards. Failure to submit or implement
such a plan may subject the institution to regulatory sanctions. VRB believes
that the Bank meets all the standards, and therefore does not believe that these
regulatory standards materially affect VRB's business operations.


DEPOSIT INSURANCE

        As a FDIC member institution, deposits of the Bank are currently insured
to a maximum of $100,000 per depositor through the Bank Insurance Fund ("BIF"),
administered by the FDIC. The Bank is required to pay semiannual deposit
insurance premium assessments to the FDIC.

        The FDICIA included provisions to reform the Federal deposit insurance
system, including the implementation of risk-based deposit insurance premiums.
The FDICIA also permits the FDIC to make special assessments on insured
depository institutions in amounts determined by the FDIC to be necessary to
give it adequate assessment income to repay amounts borrowed from the U.S.
Treasury and other sources or for any other purpose the FDIC deems necessary.
Pursuant to the FDICIA, the FDIC implemented a transitional risk-based insurance
premium system on January 1, 1993. Generally, under this system, banks are
assessed insurance premiums according to how much risk they are deemed to
present to BIF. Banks with higher levels of capital and a low degree of
supervisory concern are assessed lower premiums than banks with lower levels of
capital or involving a higher degree of supervisory concern. The premium range
is from $.00, for the highest-rated institutions (subject to a statutory minimum
assessment of $2,000) to $.27 per $100 of domestic deposits. The Bank has a
current FDIC premium rate of $.00 per $100 of domestic deposits.

DIVIDENDS

        The principal source of VRB's cash revenues is dividends received from
the Bank. Under the Oregon Bank Act, the Bank is subject to restrictions on the
payment of cash dividends to its shareholders. A bank may not pay cash dividends
if that payment would reduce the amount of its capital below that necessary to
meet minimum applicable regulatory capital requirements. In addition, the amount
of the dividend may not be greater than its net unreserved retained earnings,
after first deducting (i) to the extent not already charged against earnings or
reflected in a reserve, all bad debts, which are debts on which interest is
unpaid and past due at least six months; (ii) all other assets charged off as
required by the Oregon Director or state or federal examiner; and, (iii) all
accrued expenses, interest and taxes of the bank. The Bank has been paying
regular dividends to shareholders, although no assurances can be given that
dividends will continue to be paid. See "Market Price of and Dividends on
Registrant's Common Equity and Related Stockholder Matters."

        In addition, the appropriate regulatory authorities are authorized to
prohibit banks and bank holding companies from paying dividends which would
constitute an unsafe or unsound banking practice. VRB is not currently subject
to any regulatory restrictions on their dividends other than those noted above.

CAPITAL ADEQUACY

        The federal bank regulatory agencies use capital adequacy guidelines in
their examination and regulation of bank holding companies and banks. If the
capital falls below the minimum levels established by these guidelines, the bank
holding company or bank may be denied approval to acquire or establish
additional banks or non-bank businesses or to open facilities.

        The FDIC and Federal Reserve have adopted risk-based capital guidelines
for banks and bank holding companies. The risk-based capital guidelines are
designed to make regulatory capital requirements more sensitive to differences
in risk profile among banks and bank holding companies, to account for
off-balance sheet exposure and to minimize disincentives for holding liquid
assets. Assets and off-balance sheet items are assigned to broad risk
categories, each with appropriate weights. The resulting capital ratios
represent capital as a percentage of total risk-weighted assets and off-balance
sheet items. The guidelines are minimums, and the Federal Reserve has noted that
bank holding companies contemplating significant expansion programs should not
allow expansion to diminish their



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capital ratios and should maintain ratios well in excess of the minimum. The
current guidelines require all bank holding companies and federally-regulated
banks to maintain a minimum risk-based total capital ratio equal to 8%, of which
at least 4% must be Tier 1 capital.

        The Federal Reserve also has implemented a leverage ratio, which is Tier
1 capital as a percentage of total assets less intangibles, to be used as a
supplement to risk-based guidelines. The principal objective of the leverage
ratio is to place a constraint on the maximum degree to which a bank holding
company may leverage its equity capital base. The Federal Reserve requires a
minimum leverage ratio of 3%. However, for all but the most highly rated bank
holding companies and for bank holding companies seeking to expand, the Federal
Reserve expects an additional cushion of at least 1% to 2%.

        The FDICIA created a statutory framework of supervisory actions indexed
to the capital level of the individual institution. Under regulations adopted by
the FDIC, an institution is assigned to one of five capital categories depending
on its total risk-based capital ratio, Tier 1 risk-based capital ratio, and
leverage ratio, together with certain subjective factors. Institutions which are
deemed to be "undercapitalized" depending on the category to which they are
assigned are subject to certain mandatory supervisory corrective actions. VRB
does not believe that these regulations have any material effect on its
operations.

EFFECTS OF GOVERNMENT MONETARY POLICY

        The earnings and growth of VRB are affected not only by general economic
conditions, but also by the fiscal and monetary policies of the federal
government, particularly the Federal Reserve. The Federal Reserve can and does
implement national monetary policy for such purposes as curbing inflation and
combating recession, but its open market operations in U.S. government
securities, control of the discount rate applicable to borrowings from the
Federal Reserve, and establishment of reserve requirements against certain
deposits, influence growth of bank loans, investments and deposits, and also
affect interest rates charged on loans or paid on deposits. The nature and
impact of future changes in monetary policies and their impact on VRB or the
Bank cannot be predicted with certainty.

CHANGING REGULATORY STRUCTURE OF THE BANKING INDUSTRY

        The laws and regulations affecting banks and bank holding companies are
currently undergoing significant changes. Bills are now pending or expected to
be introduced in the United States Congress that contain proposals for altering
the structure, regulation, and competitive relationships of the nation's
financial institutions. If enacted into law, these bills could have the effect
of increasing or decreasing the cost of doing business, limiting or expanding
permissible activities (including activities in the insurance and securities
fields), or affecting the competitive balance among banks, savings associations,
and other financial institutions. Whether or in what form any such legislation
may be adopted or the extent to which the business of VRB might be affected
thereby cannot be predicted with certainty.

        Of particular note is legislation enacted by Congress in 1995,
permitting interstate banking and branching, which allows banks to expand
nationwide through acquisition, consolidation or merger. Under this law, an
adequately capitalized bank holding company may acquire banks in any state if
permitted by state law. In addition, banks may merge across state lines if
permitted by state law. Further, banks may establish and operate branches in any
state subject to the restrictions of applicable state law. Under Oregon law, an
out-of-state bank or bank holding company may merge with or acquire an Oregon
state chartered bank or bank holding company if the Oregon bank, or in the case
of a bank holding company, the subsidiary bank, has been in existence for a
minimum of three years, and the law of the state in which the acquiring bank is
located permits such merger. Branches may not be acquired or opened separately,
but once an out-of-state bank has acquired branches in Oregon, either through a
merger with or acquisition of substantially all the assets of an Oregon bank,
the bank may open additional branches.

ITEM 2.        PROPERTIES

        The Company maintains its principal offices at the main office of its
subsidiary bank, Valley of the Rogue Bank, in Rogue River, Oregon, and conducts
its business through thirteen branch offices of the Bank throughout the Rogue
Valley, all of which are in good repair and are adequate for carrying on the
business of the Bank and the



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Company. All of the branches have drive-up facilities and automated teller
machines. In addition, the Bank maintains a satellite ATM in Medford, Oregon.
The Bank leases bank premises for the Talent, Stewart, and East Medford
branches. In addition, the Bank leases land for the Merlin, North Operations
Center, Downtown Grants Pass and Poplar branches. The following sets forth all
branch offices of the Bank.

         Main Office                                 Ashland Branch
         110 Pine St.                                250 Pioneer St.
         Rogue River, Oregon                         Ashland, Oregon

         Fruitdale Branch                            Medford Branch
         1040 Rogue River Highway                    220 E. 10th St.
         Grants Pass, Oregon                         Medford, Oregon

         Poplar Drive Branch                         Stewart Avenue Branch
         2400 Poplar Drive                           809 Stewart Ave.
         Medford, Oregon                             Medford, Oregon

         Phoenix Branch                              Talent Branch
         4000 S. Pacific Highway                     201 N. Pacific Highway
         Phoenix, Oregon                             Talent, Oregon

         Seventh & Midland Branch                    Merlin Branch
         100 N.E. Midland                            3600 Merlin Rd.
         Grants Pass, Oregon                         Merlin, Oregon

         Downtown GP Branch                          Williams Hwy. Branch
         117 N.E. "F" St.                            1670 Williams Hwy.
         Grants Pass, Oregon                         Grants Pass, Oregon

         East Medford Branch                         North Operations Center
         701 East Jackson                            8991 Rogue River Hwy
         Medford, Oregon                             Rogue River, Oregon


ITEM 3.        LEGAL PROCEEDINGS

        No material legal proceedings, to which the Company is a party or which
involve any of its properties, was pending as of the date of this report on Form
10-K.


ITEM 4.        SUBMISSIONS OF MATTERS TO A VOTE OF SECURITIES HOLDERS

        No matters were submitted to a vote of securities holders of the
Registrant during the quarter ended December 31, 1997.



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                                     PART II

ITEM 5. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS

        Effective November 5, 1997, VRB Bancorp stock began trading on the
Nasdaq National Market under the symbol "VRBA". Prior to that date, the stock
was traded over-the-counter through the Bulletin Board Service of the Nasdaq
Stock Market. The following table lists the high and low bid quotations obtained
from the Nasdaq Stock Market, and more recently, the Nasdaq National Market, as
adjusted for subsequent stock dividends and stock splits. Prices do not include
retail mark-ups, mark-downs or commissions and may not represent actual
transactions.


<TABLE>
<CAPTION>
                                     High Bid       Low Bid        Cash          Stock
                                       Price         Price       Dividends       Splits
                                     for Period    for Period    Declared       Declared
                                     ----------    ----------    --------       --------
<S>                                     <C>           <C>         <C>             <C>
1996
       First Quarter                  $ 4.33        $ 4.33
       Second Quarter                   4.67          4.33
       Third Quarter                    5.00          4.33
       Fourth Quarter                   5.50          5.50        $ 0.13          50%

1997
       First Quarter                  $ 7.50        $ 5.50
       Second Quarter                   8.00          7.50
       Third Quarter                   10.00          8.25        $ 0.14         100%
       Fourth Quarter                  10.00          7.50
</TABLE>




        As of December 31, 1997, there were 8,340,744 shares of common stock
outstanding, held by approximately 2,400 shareholders. VRB Bancorp's ability to
pay expenses and make cash dividend payments to shareholders is dependent on
earnings generated by its subsidiary, Valley of the Rogue Bank. Oregon and
federal banking laws and regulations place restrictions on the payment of
dividends by a bank to its shareholders. See "Supervision and Regulations -
Dividends". The Board of Directors' dividend policy is to review VRB's financial
performance, capital adequacy, regulatory compliance and cash resources and, if
such review is favorable, to declare and pay a cash dividend to shareholders
annually. Although VRB expects to continue to pay cash dividends, future
dividends are subject to these limitations and to the discretion of the Board of
Directors, and could be reduced or eliminated.

ITEM 6. SELECTED FINANCIAL DATA

        The response to this item is incorporated by reference to the
information under the caption "Selected Financial Data" set forth on page 3 of
the Company's 1997 Annual Report to Shareholders.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATION

        The response to this item is incorporated by reference to the section
entitled " Management's Discussion and Analysis of Financial Condition and
Results of Operations" on pages 6-14 of the Company's 1997 Annual Report to
Shareholders.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The financial statements called for by this item are incorporated by
reference to the Company's 1997 Annual Report to Shareholders. Such statements
are listed in the Index to Consolidated Financial Statements set forth on page
13 herein.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS



                                       10

<PAGE>   11

        None

                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        The response to this item is incorporated by reference to the sections
entitled "Election of Directors" and "Executive Officers" on pages 3-5 and page
7, respectively, of the Company's Proxy Statement for the 1998 annual meeting of
shareholders.


ITEM 11. EXECUTIVE COMPENSATION

        The response to this item is incorporated by reference to the section
entitled "Executive Compensation" on pages 7-9 of the Company's Proxy Statement
for the 1998 annual meeting of shareholders.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The response to this item is incorporated by reference to the section
entitled "Security Ownership of Management and Others" on pages 11-12 of the
Company's Proxy Statement for the 1998 annual meeting of shareholders.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        The response to this item is incorporated by reference to the section
entitled "Transactions with Management" on page 12 of the Company's Proxy
Statement for the 1998 annual meeting of shareholders.



                                       11

<PAGE>   12



                                     PART IV

ITEM 14.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

        (a)(1) Financial Statements:
                      None

          (2)  Financial Statement Schedules:
                      See the Index to Financial Statements and Schedules on
page 13.

          (3)  The exhibits filed herewith are listed in the Index to Exhibits
on page 14 herein.

        (b)    There were no current reports on Form 8-K filed by the Registrant
               during the last quarter of the year ended December 31, 1997.



                                       12

<PAGE>   13


SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.

VRB BANCORP
(Registrant)


By: /s/ Tom Anderson                                  Date: 03/26/98

    Tom Anderson, Executive Vice President

        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


By: /s/ James D. Coleman                              Date: 03/26/98
        James D. Coleman, Chairman, Director


By: /s/ John O. Dunkin                                Date: 03/26/98
        John O. Dunkin, Vice Chairman, Director


By: /s/ Gary Lundberg                                 Date: 03/26/98
        Gary Lundberg, Director


By: /s/ Robert J. DeArmond                            Date: 03/26/98
        Robert J. DeArmond, Director


By: /s/ Larry L. Parducci                             Date: 03/26/98
        Larry L. Parducci, Director


By: /s/ William A. Haden                              Date: 03/26/98
        William A. Haden, President, Director
        (Principal Executive Officer)


By: /s/ Tom Anderson                                  Date: 03/26/98
   Tom Anderson, Executive Vice President, Director


By: /s/ Felice Belfiore                               Date: 03/26/98
        Felice Belfiore, Senior Vice President
        (Principal Accounting Officer)


By: /s/ April Sevcik                                  Date: 03/26/98
        April Sevcik, Director


By: /s/ Michael Donovan                               Date: 03/26/98
        Michael Donovan, Director

                                       13

<PAGE>   14



            INDEX TO FINANCIAL CONSOLIDATED STATEMENTS AND SCHEDULES


Financial Statements

        The following consolidated financial statements and Report of
Independent Public Accountants, included in the 1997 Annual Report to
Shareholders at the pages indicated, are incorporated herein by reference:

<TABLE>
<CAPTION>
                                                                           Page of 1997 Annual
                                                                        Report to Shareholders
                                                                        ----------------------
<S>                                                                                    <C>
VRB Bancorp and subsidiaries

        Consolidated Balance Sheets at
               December 31, 1997 and 1996                                              20

        Consolidated Statements of Income
               for the years ended December 31, 1997, 1996 and 1995                     21

        Consolidated Statements of Changes in Shareholders' Equity
               for the years ended December 31, 1997, 1996 and 1995                  22-23

        Consolidated Statements of Cash Flows
               for the years ended December 31, 1997, 1996 and 1995                  24-25


        Notes to Consolidated Financial Statements                                      42


Report of Independent Public Accountants                                                43
</TABLE>


Financial Statement Schedules

        None



                                       14

<PAGE>   15

                                INDEX TO EXHIBITS

<TABLE>
<S>     <C>                                    
3.1     Articles of Incorporation of VRB Bancorp*

3.2     Bylaws of VRB Bancorp*

4.0     Specimen stock certificate*

10.1    Stock Option Agreement, dated July 24, 1997, between Valley of the Rogue
        Bank and the shareholders of Investors Banking Corporation**

10.2    Plan of Merger, dated September 30, 1997, between Valley of the Rogue
        Bank and Colonial Banking Company**

10.3    Ground Lease Agreement dated June 1, 1988, relating to lease of parking
        area of Poplar Drive Branch Office*

10.4    Lease Agreement and Memorandum of Agreement dated August 15, 1989
        relating to lease of Stewart Avenue Branch Office*

10.5    Lease Agreement dated December 27, 1979, and related agreements for the
        Talent Branch Office*

10.6    Employment Agreement dated April 10, 1992, by and between Valley of the
        Rogue Bank and Tom Anderson*

10.7    Employment Agreement dated January 11, 1993, and Amendment to Employment
        Agreement, dated September 26, 1994, by and between Valley of the Rogue
        Bank and William A. Haden*

10.8    1994 Amended Non-Discretionary Stock Option Plan for Non-Employee
        Directors (incorporated by reference to Exhibit 4.3 of the Registrant's
        registration statement on Form S-8 filed with the Commission on October
        3, 1995)

10.9    1994 Amended Non-Qualified Stock Option Plan (incorporated by reference
        to Exhibit 4.3 of the Registrant's registration statement on Form S-8
        filed with the Commission on October 3, 1995)

10.10   Employment Agreement dated February 27, 1997 by and among Valley of the
        Rogue Bank, VRB Bancorp and Felice Belfiore**

10.11   Employment Agreement dated May 1, 1996 by and between Valley of the
        Rogue Bank and Brad Copeland**

13.0    1997 Annual Report to Shareholders

23.0    Consent of Moss Adams, LLP

27.1    Financial Data Schedule

27.2    Restated Financial Data Schedule, December 31, 1996.

27.3    Restated Financial Data Schedule, June 30, 1997.

27.4    Restated Financial Data Schedule, September 30, 1996.

</TABLE>

----------
*       Incorporated by reference to the Company's registration statement on
        Form 10 (Commission file number 0-25932) filed April 26, 1995 pursuant
        to Section 12(g) of the Securities Exchange Act of 1934.

**      Incorporated by reference to the Company's registration statement on
        Form S-1 (Commission File number 333-37167) declared effective November
        5, 1997.



                                       15