FORM 10-Q  
  
                           SECURITIES AND EXCHANGE COMMISSION  
                                Washington, D.C.  20549  
  
  
            [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  
                           SECURITIES EXCHANGE ACT OF 1934  
                    For the quarterly period ended September 30, 1996  
  
                                          OR  
  
          [  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  
                           SECURITIES EXCHANGE ACT OF 1934  
                    For the transition period from _______ to _______.  
  
                            Commission file number 010042  
  
  
                               One Valley Bancorp, Inc.  
                (Exact name of registrant as specified in its charter)  
  
  
             West Virginia                             55-0609408  
       (State or other jurisdiction                 (I.R.S. Employer   
     of incorporation or organization)              Identification No.)  
  
                 One Valley Square, Charleston, West Virginia  25326  
                     (Address of principal executive offices)  
                                   (Zip Code)  
  
  
                                (304) 348-7000  
                (Registrant's telephone number, including area code)  
  
  
                                 Not applicable                   
        (Former name, address, and fiscal year, if changed since last report)  
  
     Indicate by check mark whether the registrant (1) has filed all reports  
required to be filed by Sections 13 or 15(d) of the Securities and 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  XXX    No         
  
The number of shares outstanding of each of the issuer's classes of common 
stock as of September 30, 1996 was: 
 
 
               Common Stock, $10.00 par value -- 22,276,978 shares   
 
<PAGE> 
                       One Valley Bancorp, Inc. 
 
                    Part I.  Financial Information 
 
Item 1.     Financial Statements. 
 
The unaudited interim consolidated financial statements of One Valley Bancorp, 
Inc. (One Valley) or (Registrant) are included on pages 3 - 8 of this report. 
 
These consolidated financial statements have been prepared in accordance with 
generally accepted accounting principles for interim financial information and 
with instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, 
they do not include all the information and footnotes required by generally 
accepted accounting principles for annual year-end financial statements.  In 
the opinion of management, all adjustments considered necessary for a fair 
presentation have been included and are of a normal recurring nature.  
Operating results for the nine month period ended September 30, 1996, are not 
necessarily indicative of the results that may be expected for the year ending 
December 31, 1996.  For further information, refer to the consolidated 
financial statements and footnotes thereto included in the Registrant's Annual 
Report on Form 10-K for the year ended December 31, 1995. 
 
 
Item 2.     Management's Discussion and Analysis of Financial Condition and 
Results of Operations. 
 
Management's discussion and analysis of financial condition and results of 
operations is included on pages 9 - 19 of this report. 
 
 
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited in thousands)
<CAPTION>
                                                                     September 30 December 31  September 30
                                                                         1996         1995         1995
<S>                                                                  <C>          <C>          <C>
ASSETS
Cash and Due From Banks                                                 $151,116     $140,617     $142,951
Interest Bearing Deposits With Other Banks                                12,542        8,259        5,194
Federal Funds Sold                                                         2,800       16,800          500
                                                                      ----------   ----------   ----------
   Cash and Cash Equivalents                                             166,458      165,676      148,645
Securities
   Available-for-Sale, at fair value                                     972,313      871,699      549,106
   Held-to-Maturity (Estimated Fair Value,
   Sept. 30, 1996 - $204,207; December 31, 1995 - $212,040;
   Sept. 30, 1995 - $466,413)                                            205,195      205,153      464,453
Loans
   Total Loans                                                         2,794,102    2,511,962    2,469,786
   Less: Allowance For Loan Losses                                        41,709       39,534       39,428
                                                                      ----------   ----------   ----------
   Net Loans                                                           2,752,393    2,472,428    2,430,358
Premises & Equipment - Net                                                85,261       80,688       81,684
Other Assets                                                              88,306       62,652       63,805
                                                                      ----------   ----------   ----------
   Total Assets                                                       $4,269,926   $3,858,296   $3,738,051
                                                                      ==========   ==========   ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
   Non-interest Bearing                                                 $401,645     $389,514     $390,661
   Interest Bearing                                                    2,965,845    2,658,822    2,650,137
                                                                      ----------   ----------   ----------
   Total Deposits                                                      3,367,490    3,048,336    3,040,798
Short-term Borrowings
   Federal Funds Purchased                                                34,233       54,005       17,960
   Repurchase Agreements and Other Borrowings                            404,043      335,775      278,489
                                                                      ----------   ----------   ----------
   Total Short-term Borrowings                                           438,276      389,780      296,449
Long-term Borrowings                                                      15,892       13,411        8,434
Other Liabilities                                                         47,783       40,467       36,580
                                                                      ----------   ----------   ----------
   Total Liabilities                                                   3,869,441    3,491,994    3,382,261
Shareholders' Equity:
   Preferred Stock-$10 par value; 1,000,000 shares authorized
      but none issued                                                          0            0            0
   Common Stock-$10 par value; 40,000,000 shares authorized,
      Issued 24,872,838 shares at September 30, 1996;
      18,016,584 shares at December 31, 1995;
      17,994,164 shares at September 30, 1995                            248,728      180,166      179,942
   Capital Surplus                                                        73,663       34,603       34,340
   Retained Earnings                                                     142,924      168,625      160,043
   Unrealized (Loss) Gain on Securities Available-for-Sale,
      net of deferred taxes                                               (4,501)       6,252        1,795
   Treasury Stock - 2,595,860 shares at September 30, 1996,
      954,200 shares at December 31, 1995;
      860,200 shares at September 30, 1995; at cost                      (60,329)     (23,344)     (20,330)
                                                                      ----------   ----------   ----------
      Total Shareholders' Equity                                         400,485      366,302      355,790
                                                                      ----------   ----------   ----------
      Total Liabilities and Shareholders' Equity                      $4,269,926   $3,858,296   $3,738,051
                                                                      ==========   ==========   ==========
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited in thousands, except per share data)
<CAPTION>

                                                            For The Three Months      For The Nine Months
                                                             Ended September 30        Ended September 30
                                                              1996         1995         1996         1995
<S>                                                        <C>          <C>          <C>          <C>
INTEREST INCOME
   Interest and Fees on Loans
      Taxable                                               $60,655      $55,265     $174,290     $161,285
      Tax-Exempt                                                738          609        2,044        1,863
                                                           --------     --------     --------     --------
            Total                                            61,393       55,874      176,334      163,148
   Interest on Investment Securities
      Taxable                                                16,160       12,797       46,157       37,438
      Tax-Exempt                                              2,767        2,655        8,318        7,661
                                                           --------     --------     --------     --------
            Total                                            18,927       15,452       54,475       45,099
   Other Interest Income                                        143          491          388        1,614
                                                           --------     --------     --------     --------
            Total Interest Income                            80,463       71,817      231,197      209,861
INTEREST EXPENSE
   Deposits                                                  31,237       27,428       88,292       78,958
   Short-term Borrowings                                      4,819        3,486       13,691        9,962
   Long-term Borrowings                                         250          143          706          554
                                                           --------     --------     --------     --------
      Total Interest Expense                                 36,306       31,057      102,689       89,474
                                                           --------     --------     --------     --------
Net Interest Income                                          44,157       40,760      128,508      120,387
Provision For Loan Losses                                     1,353        1,762        3,836        3,988
                                                           --------     --------     --------     --------
Net Interest Income
   After Provision For Loan Losses                           42,804       38,998      124,672      116,399
OTHER INCOME
   Trust Department Income                                    2,287        2,036        6,967        6,063
   Service Charges on Deposit Accounts                        3,715        3,596       10,822       10,330
   Real Estate Loan Processing & Servicing Fees               1,442        1,272        4,224        3,551
   Other Service Charges and Fees                             1,444        1,391        4,211        3,776
   Other Operating Income                                     1,520        1,371        4,343        4,418
   Securities Transactions                                     (147)         (86)        (413)         (66)
                                                           --------     --------     --------     --------
      Total Other Income                                     10,261        9,580       30,154       28,072
OTHER EXPENSES
   Salaries and Employee Benefits                            16,254       15,261       48,928       47,142
   Occupancy Expense - Net                                    1,673        1,556        5,083        4,656
   Equipment Expenses                                         2,346        2,093        6,624        6,500
   Federal Deposit Insurance                                  4,159        1,479        4,760        4,815
   Outside Data Processing                                    1,206        1,180        3,762        3,396
   Other Operating Expenses                                   9,505        8,492       27,581       24,378
                                                           --------     --------     --------     --------
      Total Other Expenses                                   35,143       30,061       96,738       90,887
                                                           --------     --------     --------     --------
Income Before Taxes                                          17,922       18,517       58,088       53,584
Applicable Income Taxes                                       5,902        6,187       19,380       17,668
                                                           --------     --------     --------     --------
NET INCOME                                                  $12,020      $12,330      $38,708      $35,916
                                                           ========     ========     ========     ========

NET INCOME PER COMMON SHARE                                   $0.54        $0.57        $1.78        $1.67
                                                           ========     ========     ========     ========

Based on Average Shares Outstanding of                       22,360       21,449       21,782       21,498

</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(unaudited in thousands)
<CAPTION>
                                                                                                             Unrealized
                                                                                                             Gain (Loss)
                                                                                                           on Securities
                                                           Common       Capital     Retained     Treasury     Available
                                                            Stock       Surplus     Earnings       Stock      for Sale
<S>                                                       <C>        <C>         <C>          <C>           <C>
Balance December 31, 1995                                  $180,166      $34,603     $168,625     ($23,344)      $6,252
Stock Issued for Acquisition                                 17,890       37,817            0            0            0
Nine Months Ended September 30, 1996
   Net Income                                                     0            0       38,708            0            0
   Cash Dividends ($.68 per share)                                0            0      (14,663)           0            0
   Five for Four Stock Split                                 49,746            0      (49,746)           0            0
   Change in Fair Value of Securities
      Available for Sale, net of deferred taxes                   0            0            0            0      (10,753)
   Treasury Shares Purchased                                      0            0            0      (36,985)           0
   Stock Options Exercised                                      926        1,243            0            0            0
                                                           --------     --------     --------     --------     --------
Balance September 30, 1996                                 $248,728      $73,663     $142,924     ($60,329)     ($4,501)
                                                           ========     ========     ========     ========     ========


Balance December 31, 1994                                  $175,384      $25,954     $137,437     ($10,373)     ($6,535)
Stock Issued for Acquisition                                  4,116        8,130            0            0            0
Nine Months Ended September 30, 1995
   Net Income                                                     0            0       35,916            0            0
   Cash Dividends ($.62 per share)                                0            0      (13,310)           0            0
   Change in Fair Value of Securities                             0            0            0            0            0
      Available for Sale, net of deferred taxes                   0            0            0            0        8,330
   Treasury Shares Purchased                                      0            0            0       (9,957)           0
   Stock Options Exercised                                      442          256            0            0            0
                                                           --------     --------     --------     --------     --------
Balance September 30, 1995                                 $179,942      $34,340     $160,043     ($20,330)      $1,795
                                                           ========     ========     ========     ========     ========
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited in thousands)
<CAPTION>
                                                                          For The Nine Months
                                                                           Ended September 30
                                                                           1996         1995
<S>                                                                    <C>          <C>
OPERATING ACTIVITIES
   Net Income                                                            $38,708      $35,916
   Adjustments To Reconcile Net Income To Net Cash
      Provided by Operating Activities:
         Provision For Loan Losses                                         3,836        3,988
         Depreciation                                                      6,487        6,061
         Amortization and Accretion                                        3,172        2,643
         Net Loss (Gain) From Sales of Assets                                383           66
         Increase (Decrease) Due to Changes In:
            Accrued Interest Receivable                                     (414)      (3,024)
            Accrued Interest Payable                                        (426)       3,088
            Other Assets and Other Liabilities                             5,296          552
                                                                        --------     --------
            Net Cash Provided by Operating Activities                     57,042       49,290

INVESTING ACTIVITIES
   Proceeds From Sales of Securities Available for Sale                  104,662       80,669
   Proceeds From Maturities of Securities Available for Sale             187,639      177,181
   Proceeds From Maturities of Securities Held to Maturity                 5,686       25,191
   Purchases of Securities Available for Sale                           (277,049)    (219,400)
   Purchases of Securities Held to Maturity                               (5,788)     (45,164)
   Net Increase In Loans                                                (121,319)     (86,539)
   Acquisition of Subsidiary, Net of Cash Paid                            10,866        4,454
   Purchases of Premises and Equipment                                    (5,721)      (4,309)
                                                                        --------     --------
            Net Cash Used in Investing Activities                       (101,024)     (67,917)

FINANCING ACTIVITIES
   Net Increase in Interest Bearing and Non-interest Bearing Deposit      62,022       72,174
   Net Decrease in Federal Funds Purchased                               (19,772)     (35,185)
   Net Increase (Decrease) in Other Short-term Borrowings                 57,512      (43,705)
   Repayment of Long-term Debt                                            (5,519)     (11,516)
   Proceeds From Issuance of Common Stock                                  2,169          699
   Purchase of Treasury Stock                                            (36,985)      (9,957)
   Dividends Paid                                                        (14,663)     (13,310)
                                                                        --------     --------
            Net Cash Provided by (Used in) Financing Activities           44,764      (40,800)
                                                                        --------     --------
Increase (Decrease) in Cash and Cash Equivalents                             782      (59,427)

Cash And Cash Equivalents at Beginning of Year                           165,676      208,072
                                                                        --------     --------
Cash And Cash Equivalents, September 30                                 $166,458     $148,645
                                                                        ========     ========
</TABLE>
<PAGE>

 
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A - Basis of PresentationThe 
accounting and reporting policies of One Valley conform to generally accepted 
accounting principles and practices in the banking industry.  The preparation 
of the financial statements in conformity with generally accepted accounting 
principles requires management to make estimates and assumptions that affect 
the amounts reported in the financial statements and accompanying notes.  
Actual results could differ from those estimates.  All significant 
intercompany accounts and transactions have been eliminated in consolidation.  
The interim financial information included in this report is unaudited.  In 
the opinion of management, all adjustments necessary for a fair presentation 
of the results of the interim periods have been made.  These notes are 
presented in conjunction with the Notes to Consolidated Financial Statements 
included in the Annual Report of One Valley. 
 
Note B - Accounting Change 
 
In May 1995, the FASB issued Statement No. 122, "Accounting for Mortgage 
Servicing Rights" which is applicable to One Valley in 1996.  FAS 122 
eliminates the accounting inconsistencies that existed between mortgage 
servicing rights that are acquired through loan origination acitivites and 
those acquired through purchase transactions.  As of January 1, 1996, One 
Valley adopted FAS 122, the results of which are included in the first nine 
months of operating results presented for One Valley in this report and are 
immaterial. 
 
In October 1995, the FASB issued Statement No. 123, "Accounting for Stock-
Based Compensation" which is applicable to One Valley in 1996.  The Statement 
provides companies with the option of accounting for stock-based compensation 
under APB Opinion No. 25, "Accounting for Stock Issued to Employees" or 
applying the provisions of Statement 123.  As a result, One Valley has decided 
to continue to apply the provisions of APB No. 25 to account for stock-based 
compensation.  Required disclosure will be made in the 1996 year-end financial 
statements for One Valley.   
 
In June 1996, the FASB issued Statement No. 125, "Accounting for Transfers and 
Servicing of Financial Assets and Extinguishments of Liabilities" which is 
applicable to One Valley effective January 1, 1997.  However, on October 30, 
1996, the FASB agreed to defer the effective date for one year for the 
following transactions:  securities lending, repurchase agreements, dollar 
rolls and other similiar secured transactions.  The delay in implementation 
was necessary to allow companies to overcome technological problems in their 
systems which would create control and accountability issues.  Statement No. 
125 establishes standards for determining whether certain transfers of 
financial assets should be considered sales of all or part of the assets or as 
secured borrowings.  The Statement also establishes standards surrounding 
settlements of liabilities through the transfer of assets to a creditor or 
obtaining an unconditional release and whether these settlements should prove 
the debt extinguished.  One Valley's management anticipates this statement to 
have an immaterial effect on the financial results of the company for 1997.  
 
Note C - Acquisitions and Name Change 
 
At the close of business on April 30, 1996, One Valley Bancorp acquired all of 
the outstanding stock of CSB Financial Corporation, headquartered in 
Lynchburg, Virginia. Pursuant to the merger agreement, One Valley exchanged 
shares valued at approximately $55.7 million for CSB Financial common stock.  
The combination was accounted for under the purchase method of accounting.  
Accordingly, consolidated results as of September 30, 1996, include the 
operations of CSB Financial only from the date of acquisition.  Coinciding 
with the close of that transaction, One Valley shareholders previously voted 
to change the company name from One Valley Bancorp of West Virginia, Inc. to 
One Valley Bancorp, Inc.  This report refers to the registrant as One Valley 
Bancorp, Inc. 
 
Note D - Securities 
 
One Valley adopted the provisions of FASB Statement No. 115, "Accounting for 
Certain Investments in Debt and Equity Securities" for investments held as of 
or acquired after January 1, 1994.  In accordance with Statement No. 115, One 
Valley designates securities as available-for-sale or held-to-maturity based 
on management's intent at the time the security is purchased.  Securities 
designated as available-for-sale at September 30, 1996, had an historical cost 
of $979.8 million, with an unrealized loss of approximately $7.5 million, 
which decreased shareholders' equity by $4.5 million, net of $3.0 million in 
deferred income taxes.  At year-end December 31, 1995, and September 30, 1995, 
securities available-for-sale had a historical cost of $861.3 million and 
$546.1 million, with an unrealized gain of approximately $10.4 million and 
$3.0 million, respectively.  The unrealized gains increased shareholders' 
equity by $6.3 million and $1.8 million, net of $4.2 and $1.2 million in 
deferred income taxes, respectively. 
 
Note E - Stock Splits and Stock Dividends 
 
On September 18, 1996, One Valley's Board of Directors authorized a five-for-
four stock split of common shares effected in the form of a 25% stock dividend 
to shareholders of record on September 30, 1996.  Average shares outstanding 
and per share amounts included in the consolidated financial statements have 
been adjusted for the stock split. 
 
 
One Valley Bancorp, Inc. 
 
Management's Discussion and Analysis of Financial Condition and Results of 
Operations 
 
September 30, 1996 
 
 
INTRODUCTION AND SUMMARY 
 
     Net income for the third quarter of 1996 totaled $12.0 million, a 2.5% 
decrease from the $12.3 million earned in the same quarter of 1995.  Net 
income and earnings per share results include a one-time $2.3 million charge, 
net of applicable income taxes, for a special assessment on certain financial 
institutions to recapitalize the Savings Association Insurance Fund (SAIF).  
Details of this assessment are explained below.  Excluding this one-time 
assessment, One Valley earned net operating income of $14.4 for the quarter 
ended September 30, 1996, a 16.5% increase over the $12.3 earned during the 
same period of 1995.  On a per share basis, which has been adjusted for a 5 
for 4 stock split declared in September 1996, net income declined by 5.3% to 
$0.54 from the $0.57 earned in the third quarter of 1995 due to the special 
assessment.  Financial results discussed in this report include the effect of 
the one-time special assessment, $0.10 per share, unless otherwise indicated. 
 
     Return on average assets (ROA) measures how effectively One Valley 
utilizes its assets to produce net income.  ROA was 1.14% in the third quarter 
of 1996, a decrease from the 1.33% earned during the same period of 1995.  
Return on average equity (ROE) also decreased, from 13.93% for the third 
quarter of 1995 to 12.00% earned in the third quarter of 1996. 
 
     The following discussion is an analysis of the financial condition and 
results of operations of One Valley for the first nine months of 1996.  This 
discussion should be read in conjunction with the 1995 Annual Report to 
Shareholders and the other financial information included in this report. 
 
Supervision and Regulation 
 
     On September 30, 1996, President Clinton signed into law an omnibus 
appropration act.  The act contained a provision requiring a one-time 
assessment on certain financial institutions to recapitalize the Savings 
Association Insurance Fund (SAIF).  At September 30, 1996, One Valley had 
approximately $643.1 million of SAIF assessable deposits resulting from prior 
acquisitions of savings and loan institutions including CSB Financial 
Corporation (see below).  As a result, One Valley's portion of this special 
one-time assessment will be approximately $3.8 million ($2.3 million, net of 
applicable income taxes).  Net income and operating expenses reported for the 
quarter ended September 30, 1996, include this one-time assessment.   
 
Acquisitions and Name Change 
 
     At the close of business on April 30, 1996, One Valley Bancorp acquired 
all of the outstanding stock of CSB Financial Corporation, headquartered in 
Lynchburg, Virginia. Pursuant to the merger agreement, One Valley exchanged 
shares valued at approximately $55.7 million for CSB Financial common stock.  
The combination was accounted for under the purchase method of accounting.  
Accordingly, consolidated results as of September 30, 1996, include the 
operations of CSB Financial only from the date of acquisition.  Coinciding 
with the close of that transaction, One Valley shareholders previously voted 
to change the company name from One Valley Bancorp of West Virginia, Inc. to 
One Valley Bancorp, Inc. 
 
RESULTS OF OPERATIONS 
 
Net Interest Income 
 
     Net interest income for the nine months ended September 30, 1996, was 
$134.1 million on a fully tax-equivalent basis, a 6.9% increase over the 
$125.5 million earned during the same period in 1995.  This increase is 
largely due to a $243.6 million, or 10.1% increase in average total loans and 
a $156.3 million, or 15.8% increase in average securities during the first 
nine month comparison.  In total, average earning assets increased by 11.0% or 
$374.8 million in the first nine months of 1996 over the same period in 1995, 
while average interest bearing liabilities increased by 11.7% or $339.5 
million in the same period.  Both total interest income and total interest 
expense increased from the prior year due to the increases in volume and 
changes in the mix of assets and liabilities.  Approximately forty-five 
percent of this growth was attributable to the second quarter acquisition of 
CSB Financial Corporation while the remainder was due to internal growth. 
  
     As shown in the consolidated average balance sheets (page 19), the yield 
on earning assets declined to 8.37% for the first nine months of 1996 from 
8.44% during the first nine months of 1995.  During the same period, the cost 
of interest bearing liabilities increased 11 basis points to 4.22% from last 
year's 4.11% level.  This increased cost has resulted from a combination of 
changes in the mix of interest-bearing liabilities including a higher level of 
short-term borrowed funds, as well as a higher cost to attract deposit funds 
into certificates of deposit.  Additional discussion of the changes in balance 
sheet mix is discussed later in this report.  Due to the increase in the cost 
of interest bearing liabilities, the net interest margin decreased to 4.74% 
during the first nine months of 1996, compared to 4.92% during the first nine 
months of 1995.  Internal interest rate risk simulations indicate that over 
the next twelve months a sharp rise in interest rates would have a slightly 
positive influence on net interest income whereas, a sharp decline in rates 
would have a slightly negative influence on net interest income.  Normal 
fluctuations in market interest rates should not have a significant impact on 
One Valley's net interest margin. 
 
Credit Experience 
 
     The provision for loan losses was $3.8 million for the nine months ended 
September 30, 1996, 3.8% below the provision made in the same period of 1995.  
As a percentage of average total loans, the provision for loan losses through 
the first nine months of 1996 was 0.19% annualized, compared with 0.22% for 
the first nine months of 1995.  The provision for loan losses was based upon 
One Valley's continual evaluation process of the adequacy of the allowance for 
loan losses.  Net charge-offs as a percentage of average total loans in the 
first nine months of 1996 increased to 0.19% on an annualized basis, up from 
an annualized 0.12% during the same period of 1995. 
 
     Total non-performing assets at September 30, 1996, were 0.42% of period-
end loans, up from the 0.35% at December 31, 1995 and September 30, 1995.  Of 
the $1.9 million increase in non-accrual loans, $850,000 is attributable to 
the CSB Financial acquisition while $870,000 of the increase was in real 
estate secured non-accrual loans.  Foreclosed properties at September 30, 1996 
were up $1.2 million or 101.9% over September 30, 1995.  Although non-
perfoming assets at September 30, 1996, have increased from the level one year 
ago, the allowance for loan losses is sufficient to absorb over three and one-
half times the amount of non-performing assets.  At September 30, 1996, loans 
past due over 90 days were 0.21% of outstanding loans, a decrease from the 
0.22% level at year-end 1995, but up from the 0.18% at September 30, 1995.  An 
analysis of the allowance for loan losses and non-performing assets is 
included on page 18.  
 
     With the continued good credit quality of the loan portfolio, the 
allowance for loan losses has remained relatively stable.  At September 30, 
1996, the allowance was 1.49% of outstanding loans, as compared to the 1.57% 
at year-end and the 1.60% one year ago.  
 
Non-Interest Income and Expense 
 
     The net overhead ratio (non-interest expense less non-interest income 
excluding security transactions divided by average earning assets) is a 
measure of the company's ability to control costs and equalizes the comparison 
of various sized operations.  As this ratio decreases, more of the net 
interest margin flows to net income.  One Valley's net overhead ratio for the 
first nine months of 1996 was 2.34%, 2.20% excluding the SAIF Assessment.  The 
reported percentage was down from 2.39% during all of 1995 and down from the 
2.46% during the first nine months of 1995.  This improvement is a result of 
growth in average earning assets and decrease in net overhead, excluding the 
SAIF Assessment, from the same period in 1995.  Average earning assets 
increased 11.0% in the first nine months of 1996 when compared with the same 
period in 1995.  Excluding the effect of the SAIF Assessment, net overhead 
decreased by 0.6% during the same period due to an increase in non-interest 
income coupled with a decline in FDIC insurance expense.  These ratios reflect 
the inclusion of CSB Financial only for the five months since its acquisition 
on April 30, 1996. 
 
     Total non-interest income was $30.2 million through the first nine months 
of 1996, up 7.4% from the $28.1 million non-interest income earned during the 
same period in 1995.  Trust income increased by 14.9% from the first nine 
months of last year due to new business and an increase in the market value of 
trust assets managed during the first nine months of 1996 when compared to the 
same period of 1995.  Service charges on deposit accounts increased by 4.8% in 
the first nine month comparison due to changes in the service charge fee 
structure.  Real estate loan processing and service fees increased by 19.0% 
when compared to the first nine months of 1995.  This increase is due to fees 
from secondary mortgage loan activity combined with income recognized with the 
adoption of FAS 122, "Accounting for Mortgage Servicing Rights."  Other 
service charges and fees increased by 11.5% over the first nine months of 
1995, primarily due to increases in sales of mutual funds and other investment 
products.  Other operating income decreased by 1.7% due primarily to a lower 
level of income recognized on the disposition of other real estate owned and 
other loan payoffs.  Securities losses of $413,000 were recognized in the 
first nine months of 1996 as part of a restructuring of a portion of One 
Valley's investment portfolio. 
 
     In May 1995, the FASB issued Statement 122, Accounting for Mortgage 
Servicing Rights.  Statement 122 requires financial institutions to recognize 
rights to service mortgage loans for others as separate assets.  Mortgage 
Servicing Rights can be purchased from a third party or retained from loans 
originated internally and sold to third party investors.  This statement was 
adopted as of January 1, 1996.  The adoption of this Statement has had no 
material effect on One Valley's total financial results for the first nine 
months and is expected to be immaterial in future periods. 
 
     Total non-interest expense was $96.7 million during the nine months ended 
September 30, 1996, a 6.4% increase from the $90.9 million during the same 
period in 1995.  Excluding the SAIF Assessment the increase in non-interest 
expenses was limited to 2.3%, or $2.1 million from the same period last year.  
Staff costs increased by 3.8% from the level one year ago.  Staffing levels, 
excluding the effect of acquisitions, have declined by 6.1% from September 30, 
1995, as operations are continually being streamlined and levels are reduced 
through normal attrition; however, savings have been offset by normal salary 
and benefit increases and an increase in staff from the Lynchburg acquisition.  
Occupancy expense increased by 9.2% primarily due to an increase in 
depreciation resulting from facility renovations and the additional Lynchburg 
locations.  Increases in equipment maintenance costs are primarily due to the 
Lynchburg acquisition.  Federal deposit insurance expense includes the one-
time $3.8 million SAIF assessment described previously.  Outside data 
processing expense increased by 10.8% above the same period in 1995.  Nearly 
half of this increase is due to the new Lynchburg operations.  The remainder 
of this increase is primarily due to the second and third quarter 1995 
conversions of newly acquired affiliates to a common external data processing 
system.  Other operating expenses increased 13.1% in the first nine months of 
1996.  A third of this increase was the result of CSB Financial acquisition.  
The remainder is largely due to expenditures associated with a new marketing 
image campaign launched in the third quarter of 1996, maintenance and 
disposition of other real estate owned, increases in local non-income taxes, 
and increases in intangible amortization expense. 
 
     Income tax expense increased by $1.7 million, or 9.7%, for the first nine 
months of 1996 compared with the same period in 1995.  The increase in taxes 
is primarily a result of the 8.4% growth in pretax earnings.  One Valley's 
effective income tax rate for the first nine months of 1996 was 33.4% compared 
to 33.0% during the first nine months of 1995. 
 
FINANCIAL CONDITION 
 
Asset Structure 
 
     Total loans continued to grow when compared to the first nine months of 
1995.  At September 30, 1996, total loans exceeded September 30, 1995, levels 
by 13.1% or $324.3 million.  Approximately $173.4 million of the change in 
period-end loans was attributable to the CSB Financial acquisition.  The 
consolidated loan-to-deposit ratio has also increased to 81.7% at September 
30, 1996, compared to 79.9% at September 30, 1995.  Since year-end 1995, total 
loans have increased by 4.3% or $108.7 million, excluding the CSB transaction.  
This increase in total loans has resulted from growth in the three major loan 
categories - commercial, real estate, and consumer installment. 
 
     Investment portfolio assets increased $100.7 million or 9.3% from the 
level at year-end and by $163.9 million or 16.2% from the level one year ago, 
largely due to the CSB Financial acquistion.  Other increases in the 
investment portfolio were due to One Valley's asset/liability strategy which 
strives to minimize interest rate risk while enhancing the financial position 
of the company. 
 
     Securities designated as available-for-sale at September 30, 1996, had an 
historical cost of $979.8 million, with an unrealized loss of approximately 
$7.5 million, which decreased shareholders' equity by $4.5 million, net of 
$3.0 million in deferred income taxes.  At year-end December 31, 1995, and 
September 30, 1995, securities available-for-sale had a historical cost of 
$861.3 million and $546.1 million, with an unrealized gain of approximately 
$10.4 million and $3.0 million, respectively.  The unrealized gains increased 
shareholders' equity by $6.3 million and $1.8 million, net of $4.2 and $1.2 
million in deferred income taxes, respectively. 
 
     At the time of purchase, management determines the appropriate 
classification of securities.  Securities to be held for indefinite periods of 
time and not intended to be held to maturity or on a long-term basis are 
classified as available-for-sale and carried at fair value.  The corresponding 
difference between the historical cost and the current fair value of these 
securities, the unrealized gain or loss, is an adjustment to shareholders' 
equity, net of deferred income taxes.  Securities available-for-sale include 
securities that management intends to use as part of its asset/liability 
management strategy and that may be sold in response to changes in interest 
rates, resultant prepayment risk, and other related risk factors.  If 
management has the positive intent and One Valley has the ability at the time 
of purchase to hold securities until maturity, they are classified as held-
for-investment and carried at amortized historical cost adjusted for 
amortization of premiums and accretion of discounts, which are recognized as 
adjustments to interest income. 
 
     One Valley adopted the provisions of FASB Statement No. 115, "Accounting 
for Certain Investments in Debt and Equity Securities" for investments held as 
of or acquired after January 1, 1994.  At year-end 1994, approximately 55% of 
the total investment portfolio was classified as available-for-sale, while 45% 
was classified as held-to-maturity.  On November 15, 1995, the FASB staff 
issued a Special Report, "A Guide to Implementation of Statement 115 on 
Accounting for Certain Investments in Debt and Equity Securities."  In 
accordance with provisions in that Special Report, One Valley chose to 
reclassify certain securities from held-to-maturity to available-for-sale and 
thus increase the potential liquidity of the investment portfolio.  At the 
date of transfer, the amortized cost of those securities was $264.8 million 
and the net unrealized holding gain on those securities was approximately $3.3 
million.  As a result, at year-end 1995, approximately 81% of the total 
investment portfolio was classified as available-for-sale, while 19% was 
classified as held-to-maturity.  At the end of the third quarter of 1996, 
those ratios have changed only slightly from year-end but significantly from 
September one year ago.  At September 30, 1996, approximately 83% of the total 
investment portfolio was classified as available-for-sale, while 17% was 
classified as held-to-maturity, compared to 54% and 46%, respectively, for 
September 30, 1995. 
 
     In order to improve its fully tax equivalent net interest income and to 
hedge against higher income tax rates, One Valley increased its holdings of 
tax-exempt securities that were offering attractive yields in 1996 and 1995.  
As shown on the consolidated average balance sheets (page 19), average tax-
exempt securities in the first nine months of 1996 increased by 11.4% or $21.0 
million over the average during the first nine months of 1995.  One Valley 
will continue to monitor its investment opportunties and may purchase 
additional tax-exempt securities of similar yield and quality. 
 
     Federal funds sold at September 30, 1996, were $2.8 million, down $14.0 
million from year-end but up $2.3 million from one year ago.  Fluctuations in 
federal funds sold are normal and largely due to planned changes in the 
Company's asset/liability structure in order to maximize the return on 
investment in response to changes in the interest rate environment. 
 
Liability Structure 
 
     Total deposits at September 30, 1996, increased $319.2 million or 10.5% 
from the level at year-end and $326.7 million or 10.7% since September 30, 
1995.  Approximately $273.0 million of the change in total deposits was 
attributable to the CSB Financial acquisition.  Over the past few years growth 
in banking deposits has been modest.  Due to the low interest rate environment 
compared to the early 1990's, deposit customers are shortening the maturities 
of their deposit reinvestments and seeking higher yielding non-traditional 
investment alternatives.  The majority of the growth in One Valley's core 
deposits, exclusive of the CSB acquisition, has been in certificates of 
deposit, which have increased by 11.0% since September 1995.  Other deposits, 
including interest-bearing transaction accounts and savings accounts, have 
decreased by 14.7% during this time period.  Some of these deposits were 
reinvested in certificates of deposit or other investment products.  The 
average rate paid on interest bearing deposits increased to 4.13% in the first 
nine months of 1996, up from the 4.06% average rate paid for all of 1995, and 
the 4.03% average rate paid in the first nine months of 1995 largely due to 
increased rates on fixed rate CDs and IRAs.  In an effort to meet customer 
expectations for an integrated financial services delivery system, One Valley 
operates a fully licensed NASD Broker/Dealer subsidiary and continues to 
expand other product lines. 
 
     Total short-term borrowings increased by $48.5 million or 12.4% from the 
year-end level, and increased $141.8 million or 47.8% from the level at 
September 30, 1995.  Short-term borrowings, which consist of Federal funds 
purchased from correspondent banks, repurchase agreements with large corporate 
and public entities, advances on credit lines available to the Company, and 
commercial paper, can fluctuate significantly depending upon loan demand, 
deposit growth, and One Valley's asset/liablility strategy.  The increase from 
September one year ago is primarily the result of a $68.0 million increase in 
short-term borrowings with the Federal Home Loan Bank, and a $33.0 million 
increase in customer overnight repurchase agreements.  The increased level of 
short-term borrowings has been used to fund the $159.4 million loan growth as 
well as the higher level of investment portfolio assets as planned under One 
Valley's asset/liability management program. 
 
     Long-term borrowings increased $2.5 million or 18.5% since year-end 1995 
and $7.5 million or 88.4% since September 30, 1995.  The increase since 
September one year ago was the result of $8.0 million in FHLB advances 
acquired through the CSB Financial transaction and $5.0 million in FHLB 
advances incurred in the fourth quarter of 1995.  Partially offsetting the 
debt acquired were $5.5 million in payments primarily on long-term advances 
from the FHLB.  The $15.9 million of long-term borrowings at September 30, 
1996, principally consists of FHLB advances incurred prior to 1994 to fund 
investments in mortgage backed securites.  Approximately $2.0 million of these 
advances mature in the fourth quarter of 1996 and $7.0 million will mature in 
1997. 
 
Capital Structure and Liquidity 
 
     On September 18, 1996, One Valley approved a 5 for 4 stock split effected 
in the form of a 25% stock dividend.  On October 9, 1996, One Valley 
shareholders received one additional share of One Valley common stock for each 
four shares of stock they held as of the record date, September 30, 1996.  
Customary with a stock split, the market value and all per share information 
have been adjusted to reflect the additional shares outstanding. 
 
     One Valley's equity-to-asset ratio was 9.38%, down slightly from the 
9.49% at December 31, 1995, and 9.52% one year ago.  The decrease since year-
end is primarily attributable to the repurchase of common shares of One Valley 
Bancorp stock in the open market which was initiated in conjunction with the 
CSB Financial acquisition, and a $10.8 million swing in unrealized gains and 
losses on securities available for sale. 
 
     The Board of Directors has authorized management to repurchase shares of 
One Valley Bancorp common stock in the open market.  In January 1996, 
simultaneous with the announced merger agreement between One Valley and CSB 
Financial, the Board of Directors authorized management to repurchase an 
additional 2.2 million shares of One Valley common stock (adjusted for the 5 
for 4 stock split).  As of September 30, 1996, One Valley held 2.6 million 
shares of treasury stock and has remaining Board authorization for the 
repurchase of 1.1 million additional shares.  Any purchases under this or 
previous authorizations will depend upon future market conditions. 
 
     One Valley's cash dividends, totaling $0.68 per share through the first 
nine months of 1996, were up 10.4% over the $0.62 per share dividend during 
the same period in 1995.  One Valley's dividend policy coupled with the 
continued growth in net income, demonstrates management's commitment to a 
strong equity-to-asset ratio benefiting both the investor and the depositors 
of the local community.  One Valley's risk based capital ratio at September 
30, 1996 was 15.94%, well above the 8.0% required, while its Tier I capital 
ratio was 14.69%.  One Valley's strong capital position is demonstrated 
further by its leverage ratio of 8.99% compared to regulatory guidance of 4.0% 
to 5.0%.  The capital ratios of the banking subsidiaries also remain strong 
and allow them to effectively serve the communities in which they are located. 
 
     The capital positions of the banks, coupled with proper asset/liability 
matching and the stable nature of the primarily consumer base of core 
deposits, results in the maintenance of a strong liquidity position.  The 
liquidity of the parent company is dependent upon dividends from its banking 
subsidiaries which, although restricted by banking regulations, are adequate 
to meet its cash needs.  
 
Effects of Changing Prices 
 
     The results of operations and financial condition presented in this 
report are based on historical cost, unadjusted for the effects of inflation.  
Inflation affects One Valley in two ways.  One is that inflation can result in 
increased operating costs which must be absorbed or recovered through 
increased prices for services.  The second effect is on the purchasing power 
of the corporation.  Virtually all of a bank's assets and liabilities are 
monetary in nature.  Regardless of changes in prices, most assets and 
liabilities of the banking subsidiaries will be converted into a fixed number 
of dollars.  Non-earning assets, such as premises and equipment, do not 
comprise a major portion of One Valley's assets; therefore, most assets are 
subject to repricing on a more frequent basis than in other industries.  One 
Valley's ability to offset the effects of inflation and potential reductions 
in future purchasing power depends primarily on its ability to maintain 
capital levels by adjusting prices for its services and to improve net 
interest income by maintaining an effective asset/liability mix. 
 
 
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Analysis of Loan Losses and Non-Performing Assets
(unaudited in thousands)
<CAPTION>
                                                  For The Three Months                 For The Nine Months
                                                   Ended September 30                   Ended September 30
                                                    1996        1995                     1996        1995
<S>                                               <C>         <C>                  <C>         <C>
ALLOWANCE FOR LOAN LOSSES
   Balance, Beginning of Period                    $42,150     $38,642                 $39,534     $37,438
   Loan Losses                                       2,212       1,374                   5,073       3,779
   Loan Recoveries                                     418         398                   1,185       1,546
                                                   -------     -------                 -------     -------
      Net Charge-offs                                1,794         976                   3,888       2,233
   Balance of Acquired Subsidiary                        0           0                   2,227         235
   Provision For Loan Losses                         1,353       1,762                   3,836       3,988
                                                   -------     -------                 -------     -------
   Balance, End of Period                          $41,709     $39,428                 $41,709     $39,428
                                                   =======     =======                 =======     =======

Total Loans, End of Period                                                          $2,794,102  $2,469,786
Allowance For Loan Losses As a % of Total Loans                                           1.49        1.60
                                                                                    ==========  ==========

NON-PERFORMING ASSETS AT QUARTER END
   Non-Accrual Loans                                                                    $9,272      $7,325
   Foreclosed Properties                                                                 2,388       1,183
   Restructured Loans                                                                        0         186
                                                                                       -------     -------
   Total Non-Performing Assets                                                         $11,660      $8,694
                                                                                       =======     =======

Non-Performing Assets As a % of Total Loans                                               0.42        0.35

Loans Past Due Over 90 Days                                                             $5,823      $4,449
Loans Past Due Over 90 Days As a % of Total Loans                                         0.21        0.18

</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Average Balance Sheets
(unaudited in thousands)
<CAPTION>
                                  Three Months Ended September 30                 Nine Months Ended September 30
                                    1996                    1995                    1996                   1995
                             Amount   Yield/Rate     Amount   Yield/Rate     Amount   Yield/Rate    Amount   Yield/Rate
                                        (pct.)                  (pct.)                  (pct.)                 (pct.)
<S>                        <C>          <C>        <C>          <C>        <C>          <C>        <C>         <C>
ASSETS
Loans
   Taxable                  $2,731,099    8.84      $2,415,281    9.08      $2,616,544    8.90      $2,381,271   9.06
   Tax-Exempt                   46,481    9.72          33,338   11.15          42,615    9.86          34,241  11.19
                            ----------              ----------              ----------              ----------
      Total                  2,777,580    8.85       2,448,619    9.11       2,659,159    8.91       2,415,512   9.09
   Less: Allowance for 
       Losses                   42,311                  38,848                  41,172                  38,470
                            ----------              ----------              ----------              ----------
      Net Loans              2,735,269    8.99       2,409,771    9.25       2,617,987    9.05       2,377,042   9.23
Securities
   Taxable                     965,372    6.70         807,878    6.34         939,427    6.55         804,169   6.21
   Tax-Exempt                  205,302    8.29         193,045    8.46         204,707    8.34         183,704   8.55
                            ----------              ----------              ----------              ----------
      Total                  1,170,674    6.98       1,000,923    6.75       1,144,134    6.87         987,873   6.64
Federal Funds Sold 
        & Other                 15,829    3.59          34,419    5.66          14,533    3.57          36,894   5.85
                            ----------              ----------              ----------              ----------
   Total Earning Assets      3,921,772    8.37       3,445,113    8.49       3,776,654    8.37       3,401,809   8.44
Other Assets                   298,296                 274,153                 280,474                 267,981
                            ----------              ----------              ----------              ----------
   Total Assets             $4,220,068              $3,719,266              $4,057,128              $3,669,790
                            ==========              ==========              ==========              ==========


LIABILITIES AND EQUITY
Interest Bearing Liabilities
   Deposits                 $2,978,338    4.17      $2,646,008    4.11      $2,852,220    4.13      $2,619,924   4.03
   Short-term Borrowings       395,609    4.85         287,167    4.82         382,097    4.79         277,997   4.79
   Long-term Borrowings         16,241    6.12           8,992    6.31          15,412    6.12          12,352   6.00
                            ----------              ----------              ----------              ----------
      Total Interest
         Bearing 
         Liabilities         3,390,188    4.26       2,942,167    4.19       3,249,729    4.22       2,910,273   4.11
Non-interest Bearing
         Deposits              385,454                 390,120                 382,601                 382,813
Other Liabilities               43,882                  32,814                  41,106                  32,832
                            ----------              ----------              ----------              ----------
   Total Liabilities         3,819,524               3,365,101               3,673,436               3,325,918
Shareholders' Equity           400,545                 354,165                 383,692                 343,872
                            ----------              ----------              ----------              ----------
   Total Liabilities 
         & Equity           $4,220,069              $3,719,266              $4,057,128              $3,669,790
                            ==========              ==========              ==========              ==========

Interest Income To Earning Assets         8.37                    8.49                    8.37                   8.44
Interest Expense To Earning Assets        3.68                    3.58                    3.63                   3.52
                                        ------                  ------                  ------                 ------
Net Interest Margin                       4.69                    4.91                    4.74                   4.92
                                        ======                  ======                  ======                 ======

<FN>  Note:  Yields are computed on a fully taxable equivalent basis using the rate of 35%.

</TABLE>
<PAGE>
 
 
 
                       One Valley Bancorp, Inc. 

                   Part II.  Other Information

Item 6.     Exhibits and Reports on Form 10-Q

    a.)     Exhibits
       11.  Statement of Computation of Earnings per Share - page 21 attached. 
       27.  Financial Data Schedule - electronic filing only.
    b.)     Reports on Form 8-K
            None filed. 


SIGNATURES 

Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized. 
 
 
                                   One Valley Bancorp, Inc. 
 
DATE   November 14, 1996   
 
                                   BY  /s/J. Holmes Morrison                  
                                          J. Holmes Morrison 
                                          President and  
                                            Chief Executive Officer 
 
 
                                   BY  /s/Laurance G. Jones                   
                                          Laurance G. Jones 
                                          Executive Vice President and 
                                            Chief Financial Officer