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U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-KSB

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

| | For the Fiscal Year Ended December 31, 2004. | Commission File No. 1-14081
| | -------------------------------------------- | ---------------------------

|YADKIN VALLEY COMPANY                            
|-------------------------------------------------
|                                                 
|(Name of small business   issurer in its charter)

|North Carolina                                                   |  | 56-1249566                         
|---------------------------------------------------------------- |  | -----------------------------------
|                                                                 |  |                                    
|(State or other   jurisdiction of incorporation or organization) |  | (IRS Employer   Identification No.)

|Post Office Box 18747   Raleigh, North Carolina 27619 |  | 27602     
|----------------------------------------------------- |  | ----------
|                                                      |  |           
|(Address of Principal   Executive Offices)            |  | (Zip Code)

| | (919) 716-2266                                      | 
| | --------------------------------------------------- | 
| |                                                     | 
| | (Registrants Telephone Number including area code) | 

Securities registered under Section 12(b) of the Act :     None

|Securities registered under Section 12(b) of the Act   : | Common stock, $1.00   par value per share
|-------------------------------------------------------- | -----------------------------------------
|                                                         |                                          
|                                                         | (Title   of Class)                       

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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
o
|----- | ----

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will 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-KSB or any amendment to this Form 10-KSB.
x

Registrants revenue for its most recent fiscal year was:  $     237,248.

On March 8, 2005, the aggregate market value of the voting and non-voting common equity held by nonaffiliates (computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity) was $     3,481,657.

On December 31, 2004, the number of outstanding shares of Registrants common stock was 180,700.

Documents Incorporated by Reference

Portions of Registrants Annual Report to Shareholders for the year ended December 31, 2004 are incorporated herein in Part II.

Portions of Registrants definitive Proxy Statement dated March 25, 2005, are incorporated herein in Part III.

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PART I

|Item 1. | Description of Business.
|------- | ------------------------

Yadkin Valley Company (the Registrant) was incorporated under the laws of North Carolina during 1979.  Its primary activity is the ownership of all the outstanding capital stock, and serving as the parent holding company, of Yadkin Valley Life Insurance Company (Yadkin Valley Life) which is incorporated under the laws of Arizona and is engaged in the business of reinsuring credit life insurance policies.

Yadkin Valley Lifes reinsurance activities currently are limited to assuming risks associated with credit life insurance policies (credit life policies), up to a maximum risk of $25,000 on any one insured, issued only by Triangle Life Insurance Company, Raleigh, North Carolina (Triangle Life), and sold only in North Carolina by Southern Bank and Trust Company, Mount Olive, North Carolina (Southern), The Fidelity Bank, Fuquay-Varina, North Carolina (Fidelity) and The Heritage Bank, Lucama, North Carolina (Heritage). Triangle Life is a wholly owned subsidiary of First-Citizens Bank & Trust Company, Raleigh, North Carolina (FCB).  Registrant is affiliated with Southern, Fidelity, Heritage and FCB through certain common control relationships. See Item
12. Certain Relationships and Related Transactions. In consideration of its assumption of risk, Yadkin Valley Life receives a portion of the premium income on policies it reinsures, less the amount of claims paid.

Southern,
Fidelity and Heritage sell credit life policies pursuant to insurance contracts
between them and Triangle Life and pursuant to which they each receive
commissions from Triangle Life on policies sold.  These policies provide
life insurance coverage, subject to the amount, age and other limitations
specified in the insurance contracts. The policies are written on the lives of
customers of Southern, Fidelity and Heritage in connection with various
extensions of credit to those customers, including consumer and commercial loans
(installment and term), overdraft and equity lines of credit, and credit card
accounts. Yadkin Valley Life, pursuant to a Reinsurance Agreement between it and
Triangle Life, reinsures certain of these policies. The Reinsurance Agreement
provides that Triangle Life will automatically cede to Yadkin Valley Life, and Yadkin Valley Life will accept from Triangle Life, 100% of
the rights, obligations, liabilities and risks on credit life policies up to a
maximum of $25,000 of insurance in force on any one life.  At December 31,
2004 and December 31, 2003, respectively, there were 1,862 and 2,573 policies in
force which were reinsured by Yadkin Valley Life.

Yadkin Valley Lifes revenues are derived primarily from premium income received in connection with the reinsurance of credit life insurance and income on its investments.  On a monthly basis, Triangle Life pays to Yadkin Valley Life, on a net basis, 100% of the amount of premiums on reinsured credit life policies written, less the amount of reinsurance commissions owed by Yadkin Valley Life pursuant to the Reinsurance Agreement.  Reinsurance commissions are equal to 5% of the gross premiums received on the reinsured policies, plus the amount of all (i) premium taxes and regulatory charges which Triangle Life is required to pay on such policies, (ii) all commissions or service fees, including any contingent compensation or other compensation, paid to creditors or agents with respect to such policies,
and (iii) all guaranty association assessments or payments attributable to such policies.

Southern, Fidelity and Heritage report claims on policies reinsured by Yadkin Valley Life to Triangle Life as they arise and those claims are investigated and paid by the claims department of Triangle Life.  Yadkin Valley Life reimburses Triangle Life monthly for claims paid up to the limits of its risk.  Yadkin Valley Life maintains a reserve for claims, the amount of which is set and changed from time to time by management.  The reserve is reviewed annually by a certified consulting actuary and adjusted based on industry standard methodologies.

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Neither Registrant nor Yadkin Valley Life employs any personnel.  Subject to the supervision and control of Registrants Board of Directors, all managerial, administrative and operational services necessary in carrying on Registrants insurance holding company business and Yadkin Valley Lifes reinsurance business are provided to Registrant and Yadkin Valley Life by American Guaranty Insurance Company, Raleigh, North Carolina (American Guaranty), pursuant to Administration Agreements (the Agreements). American Guaranty is a wholly owned subsidiary of First Citizens BancShares Inc. (BancShares), Raleigh, North Carolina. See Item 12. Certain Relationships and Related Transactions.

Registrant is not significantly affected by competition in that Yadkin Valley Life does not seek to reinsure policies issued by any insurer other than Triangle Life or sold by any other creditors.  Also, premium rates for credit life insurance sold in North Carolina are the prima facie rates promulgated by the North Carolina Department of Insurance, and regulation of the terms of credit life insurance policies results in the policies offered by various issuers being substantially the same.  The volume of Yadkin Valley Lifes business does vary from year to year based on the volume of loans originated by the banks that are eligible for credit life insurance and the amount of those loans on which the banks are able to write insurance. However, historically, Yadkin Valley Lifes reinsurance business has not demonstrated any
seasonality nor dependency on a few purchasers of policies. Yadkin Valley Life does depend on sales of credit life policies by Fidelity, Heritage and Southern for all of its business.

In
addition to its investment in its subsidiary, Yadkin Valley Life, a substantial
amount of Registrants assets are represented by investments it holds in
equity securities of (i) BancShares;  (ii) First
Citizens Bancorporation, Inc. (Bancorporation, a bank holding
company headquartered in Columbia, South Carolina); and (iii) Heritage
BancShares, Inc.  See Item 12. Certain Relationships and Related
Transactions.  These investments were made by Registrant beginning in
1986 and are deemed by Registrants management and directors to be prudent
and sound investments for Registrant.  The following table lists the
aggregate amounts of each of these investments, and the percentages of
Registrants total consolidated assets represented by each such amount, at
the dates indicated.

|                         |  | At 12/31/ 04 |            | At 12/31/03 | 
|------------------------ |  | ------------ | ---------- | ----------- | 
|                         |  |              |            |             | 
|                         |  | Amount       |            | %           | 
|                         |  |              |            |             | 
|BancShares               |  | $            | 3,071,647  |             | 
|Bancorporation           |  |              | 18,642,473 |             | 
|Heritage BancShares, Inc |  |              | 455,932    |             | 

Registrant and Yadkin Valley Life have three officers, none of whom are compensated for their services as such. See Item 9. Directors, Executive Officers, Promoters and Control Persons.

|Item 2. | Description of Property.
|------- | ------------------------

Registrant and Yadkin Valley Life own no properties.  Their offices are located at the offices of American Guaranty which provides Registrant with certain managerial, administrative and operational services.  See Item 12. Certain Relationships and Related Transactions below.

|Item 3. | Legal Proceedings
|------- | -----------------

At December 31, 2004, Registrant was not a party to any legal proceedings that are expected to have a material effect on its financial condition or results of operation.

|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

Not applicable.

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PART II

|Item 5. | Market for Common Equity, Related Stockholder Matters and   Small Business Issuer Purchases of Equity Securities
|------- | ----------------------------------------------------------------------------------------------------------------

Market and other information regarding Registrants outstanding common stock are incorporated herein by reference to pages 6 and 7 (under the Caption Market for Common Equity and Related Stockholders Matters) of Registrants 2004 Annual Report to Shareholders.

Registrant did not sell any equity securities during 2004 and, during the fourth quarter of 2004, it did not repurchase any of its outstanding equity securities.

|Item 6. | Managements Discussion and Analysis or Plan of Operation.
|------- | ----------------------------------------------------------

Managements Discussion and Analysis of Financial Condition and Results of Operation are incorporated herein by reference to  pages 4 through 6 of Registrants 2004 Annual Report to Shareholders.

|Item 7. | Financial Statements.
|------- | ---------------------

Registrants audited financial statements are incorporated herein by reference to pages 10 through 21 of Registrants 2004 Annual Report to Shareholders.

|Item 8. | Changes in and Disagreements with   Accountants on Accounting and Financial Disclosures.
|------- | ----------------------------------------------------------------------------------------

Not applicable.

|Item   8(A). | Controls   and Procedures
|------------ | -------------------------

Registrants Chief Executive Officer, who also serves as Registrants Chief Financial Officer, has evaluated the effectiveness of the design and operation of Registrants disclosure controls and procedures in accordance with Rule 13a-15 of the Securities Exchange Act of 1934 (the Exchange Act). Based on his evaluation, he concluded that, as of the end of the period covered by this report, Registrants disclosure, controls and procedures were effective in enabling Registrant to record, process, summarize and report in a timely manner the information required to be disclosed in reports Registrant files under the Exchange Act.

No changes in Registrants internal control over financial reporting occurred during the fourth quarter of 2004 that has materially affected, or is reasonably likely to materially affect, Registrants internal control over financial reporting.

|Item 8(B). | Other Information
|---------- | -----------------

Not applicable

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PART III

|Item 9. | Directors, Executive Officers, Promoters and Control   Persons; Compliance with Section 16(a) of the Exchange Act.
|------- | ------------------------------------------------------------------------------------------------------------------

Directors and Executive Officers:Information regarding Registrants directors and executive officers is incorporated herein by reference from page 3 (under the caption, Proposal 1: Election of Directors) and page 5 (under the caption Executive Officers) of Registrants definitive Proxy Statement dated March 25, 2005.

Audit
Committee Financial Expert:Rules recently adopted by the Securities and
Exchange Commission (the SEC) require that Registrant disclose
whether its Board of Directors has determined that its Audit Committee includes
a member who qualifies as an audit committee financial expert as
that term is defined in the SECs rules. To qualify as an audit committee
expert under the SECs rules, a person must have a relatively high level of
accounting and financial knowledge or expertise which he or she has acquired
through specialized education or training or through experience in certain types
of positions. Because Registrants Board of Directors includes only three
directors, the Board itself performs the functions that would be performed by an
audit committee, and the Board has not appointed a separate audit committee. Registrant currently does not have a director
who the Board believes could be considered an audit committee financial expert.
The Board believes that small companies such as Registrant will find it
difficult to locate persons with the specialized knowledge and experience needed
to qualify as an audit committee financial expert who are willing to serve as
directors without being compensated at relatively high levels. Moreover, the
Board believes that, because Registrant does not pay any compensation to its
directors, it will be especially difficult for Registrant to have a director who
qualifies as an audit committee financial expert. Registrants current
directors have a level of financial knowledge and experience that the Board
believes is sufficient for a company the size of Registrant that, like
Registrant, does not engage in a wide variety of business activities and, for
that reason, the ability to qualify as an audit committee financial expert will
not be the primary criteria in the Boards selection of candidates to
become new directors.

Compliance with Section 16(a) of the Securities Exchange Act of 1934:Information regarding compliance by Registrants directors, executive officers and principal shareholders with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 is incorporated by reference to page 3 (under the caption Section 16(a) Beneficial Ownership Reporting Compliance) of Registrants definitive Proxy Statement dated March 25, 2005.

Code of Ethics**:** Registrants Board of Directors has adopted a Code of Ethics that applies to its directors and to all its officers, including without limitation its principal executive officer and principal financial officer. A copy of Registrants Code of Ethics will be provided without charge to any person upon request. Requests for copies should be directed by mail to Corporate Secretary, Yadkin Valley Company, Post Office 18747, Raleigh, North Carolina 27619.

Procedures for Shareholders Recommendation of Candidates.  Shareholders who wish to recommend candidates to Registrants Board of Directors for selection as nominees for election as directors should send their recommendations in writing to Registrants Corporate Secretary at Registrants office in Raleigh, North Carolina.  Recommendations with respect to the Boards selection of nominees for a particular Annual Meeting should be sent so that they are received them not later than the 120th day prior to the first anniversary of the date that Registrants proxy statement was first mailed to shareholders in conjunction with Registrants preceding years Annual Meeting.  The Board of Directors has not established any other specific
procedures for submitting those recommendations.

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|Item   10. | Executive   Compensation
|---------- | ------------------------

Director Compensation: Registrants directors receive no fees or other compensation for their services as directors.

Executive Compensation: Registrant has no employees, and its officers receive no salary or other compensation or benefits for their services as officers.

|Item 11. | Security Ownership of Certain Beneficial Owners and   Management and Related Stockholder Matters
|-------- | ------------------------------------------------------------------------------------------------

Information regarding the beneficial ownership of Registrants common stock by its directors, executive officers and principal shareholders is incorporated herein by reference to pages 2 and 3 (under the caption Beneficial Ownership of Securities) of Registrants definitive Proxy Statement dated March 25, 2005.

|Item 12. | Certain Relationships and Related Transactions.
|-------- | -----------------------------------------------

Information regarding transactions between Registrant and its directors, executive officers, principal shareholders  and their related interest is incorporated herein by reference to page 5 and 6 (under the caption Transactions with Related Parties) of Registrants definitive Proxy Statement dated March 25, 2005.

|Item 13. | Exhibits
|-------- | --------

The following exhibits are filed herewith or incorporated herein by reference as part of this Report.

| | Exhibit   Number |  | Description                                                                                                                                                                                                
| | ---------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                  |  |                                                                                                                                                                                                            
| | 3.1              |  | Registrants Restated Articles of Incorporation   (incorporated herein by reference to Registrants Registration Statement on   Form 10-KSB)                                                               
| |                  |  |                                                                                                                                                                                                            
| | 3.2              |  | Registrants Bylaws (incorporated herein by   reference to Registrants Registration Statement on Form 10-KSB)                                                                                             
| |                  |  |                                                                                                                                                                                                            
| | 10.1             |  | Administration Agreement between Registrant and   American Guaranty Insurance Company (incorporated herein by reference to   Registrants Registration Statement on Form 10-KSB)                           
| |                  |  |                                                                                                                                                                                                            
| | 10.2             |  | Administration Agreement between Yadkin Valley Life   and American Guaranty Insurance Company (incorporated herein by reference to   Amendment No. 1 to Registrants Registration Statement on Form 10-KSB)
| |                  |  |                                                                                                                                                                                                            
| | 10.3             |  | Reinsurance Agreement between Yadkin Valley Life and   Triangle Life Insurance Company (incorporated herein by reference to   Amendment No. 1 to Registrants Registration Statement on Form 10-KSB)       
| |                  |  |                                                                                                                                                                                                            
| | 13               |  | Registrants 2004 Annual Report to Shareholders   (filed herewith)                                                                                                                                         
| |                  |  |                                                                                                                                                                                                            
| | 21               |  | Subsidiaries of Registrant (incorporated herein by   reference to Registrants Registration Statement on Form 10-KSB)                                                                                      

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| | 31.1 |  | Certification of Registrants Principal Executive   Officer pursuant to Rule 13a-14(a) (filed herewith)                                       
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
| |      |  |                                                                                                                                               
| | 31.2 |  | Certification of Registrants Chief Financial   Officer pursuant to Rule 13a-14(a) (filed herewith)                                           
| |      |  |                                                                                                                                               
| | 32   |  | Certification of Registrants Chief Financial   Officer pursuant to 18 U. S. C. Section 1350 (filed herewith)                                 
| |      |  |                                                                                                                                               
| | 99   |  | Registrants definitive Proxy Statement dated March   25, 2005 as filed with the Securities and Exchange Commission (being filed   separately)

|Item 14. | Principal Accountant Fees and   Services
|-------- | ----------------------------------------

Information regarding services provided to Registrant by its independent accountants is incorporated by reference from pages 6 and 7 (under the captions Appointment of Independent Accountants and Services and Fees During 2004) of Registrants definitive Proxy Statement dated March 25, 2005.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

|                         | YADKIN VALLEY COMPANY
|------------------------ | ---------------------
|                         |                      
|Date:   March 25,   2005 | By:                  
|                         |                      
|                         |                      

In accordance with Section13 or 15(d) of  the Securities and 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.

|Signature                  |  | Title                                                                               |  | Date          
|-------------------------- |  | ----------------------------------------------------------------------------------- |  | --------------
|                           |  |                                                                                     |  |               
|                           |  |                                                                                     |  |               
|/s/ David S. Perry         |  | President, Treasurer and   Director (chief executive   and chief financial officer) |  | March 25, 2005
|                           |  |                                                                                     | 
|David S. Perry             |  |                                                                                     | 
|                           |  |                                                                                     |  |               
|/s/ Denton F. Lee,   Jr.   |  | Vice President, Secretary   and Director                                            |  | March 25, 2005
|                           |  |                                                                                     | 
|Denton F. Lee, Jr.         |  |                                                                                     |  |               
|                           |  |                                                                                     |  |               
|/s/ Hope Holding   Connell |  | Director                                                                            |  | March 25, 2005
|                           |  |                                                                                     |  |               
|Hope Holding Connell       |  |                                                                                     |  |               

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EXHIBIT INDEX

|Exhibit   Number |  | Description                                                                                                                                                                                                
|---------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                 |  |                                                                                                                                                                                                            
|3.1              |  | Registrants Restated   Articles of Incorporation (incorporated herein by reference to Registrants   Registration Statement on Form 10-KSB)                                                               
|                 |  |                                                                                                                                                                                                            
|3.2              |  | Registrants Bylaws   (incorporated herein by reference to Registrants Registration Statement on   Form 10-KSB)                                                                                           
|                 |  |                                                                                                                                                                                                            
|10.1             |  | Administration Agreement between Registrant and   American Guaranty Insurance Company (incorporated herein by reference   Registrants Registration Statement on Form 10-KSB)                              
|                 |  |                                                                                                                                                                                                            
|10.2             |  | Administration Agreement between Yadkin Valley Life   and American Guaranty Insurance Company (incorporated herein by reference to Amendment No.   1 to Registrants Registration Statement on Form 10-KSB)
|                 |  |                                                                                                                                                                                                            
|10.3             |  | Reinsurance Agreement between Yadkin Valley Life and   Triangle Life Insurance Company (incorporated herein by reference to   Amendment No. 1 to Registrants Registration Statement on Form 10-KSB)       
|                 |  |                                                                                                                                                                                                            
|13               |  | Registrants 2004 Annual Report to Shareholders   (filed herewith)                                                                                                                                         
|                 |  |                                                                                                                                                                                                            
|21               |  | Subsidiaries of Registrant (incorporated herein by   reference to Registrants Registration Statement on Form 10-KSB)                                                                                      
|                 |  |                                                                                                                                                                                                            
|31.1             |  | Certification of Registrants Principal Executive   Officer pursuant to Rule 13a-14(a) (filed herewith)                                                                                                    
|                 |  |                                                                                                                                                                                                            
|31.2             |  | Certification of Registrants Chief Financial   Officer pursuant to Rule 13a-14(a) (filed herewith)                                                                                                        
|                 |  |                                                                                                                                                                                                            
|32               |  | Certification of Registrants Chief Financial   Officer pursuant to 18 U. S. C. Section 1350 (filed herewith)                                                                                              
|                 |  |                                                                                                                                                                                                            
|99               |  | Registrants definitive Proxy Statement dated March   25, 2005 as filed with the Securities and Exchange Commission (being filed   separately)                                                             

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