<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, 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, 2001.      Commission File No. 1-14081

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

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

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

                                 (919) 716-2266
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               (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_________
              -----------

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.    Yes    X              No ___________
                                      ---------
     Registrant's revenue for its most recent fiscal year were:   $  289,472   .
                                                                  -------------

   On March 8, 2002, 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 $ 1,774,377.
            -----------

   On March 8, 2002, the number of outstanding shares of Registrant's common
stock was 182,321.
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                       Documents Incorporated by Reference

   Portions of Registrant's Annual Report to Shareholders for the year ended
December 31, 2001 are incorporated herein in Part II.

   Portions of Registrant's definitive Proxy Statement dated March 25, 2002,
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, 2001
and December 31, 2000, respectively, there were 3,262 and 3,550 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.

                                       1

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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
of South Carolina, Inc. ("Bancorporation," a bank holding company headquartered
in Columbia, South Carolina); and (iii) Heritage. 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/ 01                         At 12/31/00
                       -------------                         -----------
                      Amount         %                  Amount           %
                    --------        ----              --------          ----

BancShares         $  2,021,649     15.8%             $ 1,659,485       15.1%
Bancorporation       10,242,473     80.6                8,842,473       80.7
Heritage                455,932      3.6                  455,932        4.2

         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 Insurance Company, Raleigh, North
Carolina, which is a wholly owned subsidiary of BancShares and 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, 2001, 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.

                                       2

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                                     PART II

Item 5.  Market for Common Equity and Related Shareholder Matters

         Incorporated herein by reference to page 6 of Registrant's 2001 Annual
         Report to Shareholders.

Item 6.  Management's Discussion and Analysis or Plan of Operation.

         Incorporated herein by reference to pages 4 through 6 of Registrant's
         2001 Annual Report to Shareholders.

Item 7.  Financial Statements.

         Incorporated herein by reference to pages 8 through 20 of Registrant's
         2001 Annual Report to Shareholders.

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

         Not applicable.


                                    PART III

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

         Incorporated herein by reference from pages 3 and 4 (under the captions
         "Section 16(a) Beneficial Ownership Reporting Compliance", "Proposal 1:
         Election of Directors" and "Executive Officers") of Registrant's
         definitive Proxy Statement dated March 25, 2002.

Item 10. Executive Compensation

         Incorporated herein by reference from page 4 (under the captions
         "Director Compensation" and "Executive Compensation") of Registrant's
         definitive Proxy Statement dated March 25, 2002.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

         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, 2002.

Item 12. Certain Relationships and Related Transactions.

         Incorporated herein by reference to page 4 and 5 (under the caption
         "Certain Relationships and Transactions") of Registrant's definitive
         Proxy Statement dated March 25, 2002.

Item 13.  Exhibits and Reports on Form 8-K.

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

                                       3

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     Exhibit
     Number                                Description
     ------     --------------------------------------------------------------
       3.1      Registrant's Restated Articles of Incorporation (incorporated
                herein by reference to Registrant's Registration Statement on
                Form 10-SB)

       3.2      Registrant's Bylaws (incorporated herein by reference to
                Registrant's Registration Statement on Form 10-SB)

      10.1      Administration Agreement between Registrant and American
                Guaranty Insurance Company (incorporated herein by reference to
                Registrant's Registration Statement on Form 10-SB)

      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-SB)

      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-SB)

      13        Registrant's 2001 Annual Report to Shareholders (filed herewith)

      22        Subsidiaries of Registrant (incorporated herein by reference to
                Registrant's Registration Statement on Form 10-SB)

      99        Registrant's definitive Proxy Statement dated March 25, 2002 as
                filed with the Securities and Exchange Commission (not being
                refiled)

     (b) Reports on Form 8-K. No Reports on Form 8-K were filed by
Registrant during the last quarter of the period covered by this Report on Form
10-KSB.

                                       4

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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      , 2002                    By: S/David S. Perry
            -----------                              ---------------------------
                                                     David S. Perry, President


         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.

<TABLE>
<CAPTION>
         Signature                                    Title                           Date
----------------------------                  -----------------------            --------------
<S>                                           <C>                                <C>
       /s/ David S. Perry                     President, Treasurer and           March 25, 2002
------------------------------------
         David S. Perry                       Director (chief executive
                                              and chief financial officer)


      /s/ E. Thomas Lucas                     Vice President, Secretary          March 25, 2002
------------------------------------
         E. Thomas Lucas                      and Director



      /s/ Hope Holding Connell                Director                           March 25, 2002
------------------------------------
         Hope Holding Connell
</TABLE>

                                       5

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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-SB)

      3.2       Registrant's Bylaws (incorporated herein by reference to
                Registrant's Registration Statement on Form 10-SB)

      10.1      Administration Agreement between Registrant and American
                Guaranty Insurance Company (incorporated herein by reference
                Registrant's Registration Statement on Form 10-SB)

      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-SB)

      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-SB)

      13        Registrant's 2001 Annual Report to Shareholders (filed herewith)

      22        Subsidiaries of Registrant (incorporated herein by reference to
                Registrant's Registration Statement on Form 10-SB)

      99        Registrant's definitive Proxy Statement dated March 25, 2002, as
                filed with the Securities and Exchange Commission (not being
                refiled)

                                       6