Item 1.02. Termination of a Material Definitive Agreement.

On August 23, 2012, Valley Financial Corporation, a registered bank holding company (the "Company"), and its wholly-owned subsidiary, Valley Bank, a state-chartered bank and a member of the Federal Reserve System (the "Bank"), announced that the September 30, 2010 written agreement ("Written Agreement") with the Federal Reserve Bank of Richmond (the "Reserve Bank") had been terminated by the Federal Reserve Bank. In a notice posted on the Federal Reserve System Board of Governors' website on August 23, 2012, (www.federalreserve.gov), the Federal Reserve Bank noted that the Company and the Bank has fully satisfied all of the provisions of the Written Agreement and, accordingly, the Federal Reserve Bank had terminated the Written Agreement effective August 20, 2012.

The Company's common stock is traded on the NASDAQ Capital Market under the symbol VYFC.

Item 8.01 Other Events

Today, the Company issued a press release announcing the termination of the Written Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No. Description
99.1 Press Release dated August 23, 2012.

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