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Southern Financial Bancorp Inc/VA · DEF 14A · For 4/23/98

Filed On 3/20/98 · SEC File 0-22836 · Accession Number 1002105-98-36

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

 3/20/98  Southern Financial Bancorp Inc/VA DEF 14A     4/23/98    1:17                                     1002105

Definitive Proxy Solicitation Material · Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     DEF 14A Filed by Southern Financial Bancorp, Inc.     17     88K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Compensation of Directors
1	1st Page
15	Compensation of Directors

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SCHEDULE 14A
(Rule 14a-101)
 Information Required in Proxy Statement

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
 Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant [X]                                                     
Filed by a Party other than the Registrant [ ]                                  

Check the appropriate box:                                                      

                                                        · Enlarge/Download Table

                                                                                            
[ ]  Preliminary Proxy Statement                [ ]  Confidential, For Use of the Commission
                                                     Only (as permitted by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement                                                             
[ ]  Definitive Additional Materials                                                        
[ ]  Soliciting Material Pursuant to Rule 14a-                                              
     11(c) or Rule 14a-12                                                                   

SOUTHERN FINANCIAL BANCORP, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              

[X]  No fee required.                                                           

[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.   

(1)   Title of each class of securities to which transaction applies: 
           .....................................................................
(2)   Aggregate number of securities to which transaction applies:    
           .....................................................................
     (3)   Per unit  price or other  underlying  value of  transaction  computed
           pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
           .....................................................................
(4)   Proposed maximum aggregate value of transaction:                
           .....................................................................
(5)   Total fee paid:                                                 
           .....................................................................

[ ]  Fee paid previously with preliminary materials.                            
           .....................................................................

[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2)  and identify the filing for which the  offsetting  fee was paid
     previously.  Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.                   

(1)   Amount previously paid:                                         
           .....................................................................
(2)   Form, Schedule or Registration Statement no.:                   
           .....................................................................
(3)   Filing Party:                                                   
           .....................................................................
(4)   Date Filed:                                                     
           .....................................................................

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SOUTHERN FINANCIAL BANCORP, INC.

Dear Shareholders:                                                              

         You are cordially  invited to attend the Annual Meeting of Shareholders
of Southern Financial Bancorp, Inc. (the "Company"), which will be held on April
23, 1998 at 2:00 p.m.,  at the Fauquier  Springs  Country  Club,  Springs  Road,
Warrenton, Virginia 20186.                                                      

         At the Meeting, two directors of the Company will be elected for a term
of three  years.  Whether or not you plan to attend in person,  it is  important
that your shares be represented at the Meeting. Please complete,  sign, date and
return  promptly the enclosed  form of proxy.  If you later decide to attend the
Meeting  and vote in person,  or if you wish to revoke your proxy for any reason
prior to the vote at the  Meeting,  you may do so and your  proxy  will  have no
further effect.                                                                 

         The Board of Directors and  management of the Company  appreciate  your
continued support and look forward to seeing you at the Annual Meeting.         

                  Sincerely yours,

                    GEORGIA S. DERRICO
              Chairman and
                         Chief Executive Officer

Warrenton, Virginia                                                             
March 20, 1998                                                                  

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SOUTHERN FINANCIAL BANCORP, INC.
 37 E. Main Street
 Warrenton, Virginia 20186

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

         NOTICE IS HEREBY GIVEN that the Annual Meeting of the holders of shares
of Common  Stock,  par value  $0.01 per share (the  "Common  Stock") of Southern
Financial  Bancorp,  Inc. (the "Company")  will be held at the Fauquier  Springs
Country Club, Springs Road, Warrenton, Virginia, on April 23, 1998 at 2:00 p.m.,
for the following purposes:                                                     

         1.     To  elect  two  directors  to serve  on the  Company's  Board of
                Directors for a term of three years,  or until their  successors
are elected and qualify;                        

         2.     To ratify the designation by the Board of Directors of KPMG Peat
                Marwick LLP as auditors  for the fiscal year ended  December 31,
      1997 and the fiscal year ending December 31, 1998; and

         3.     To transact such other  business as may properly come before the
meeting.                                        

         The Board of Directors  has fixed the close of business on February 28,
1998 as the record date for the determination of shareholders entitled to notice
of, and to vote at, the Annual Meeting.                                         

                                        By Order of the Board of Directors

                      Mary F. Henward,
               Secretary

Warrenton, Virginia                                                             
March 20, 1998                                                                  

--------------------------------------------------------------------------------
YOU ARE  CORDIALLY  INVITED TO ATTEND THIS  MEETING.  IT IS IMPORTANT  THAT YOUR
SHARES BE REPRESENTED REGARDLESS OF THE NUMBER THAT YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE,  SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE  ENVELOPE  PROVIDED.  IF YOU ATTEND THIS  MEETING,  YOU MAY VOTE
EITHER IN PERSON OR BY YOUR  PROXY.  ANY PROXY  GIVEN MAY BE  REVOKED  BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.                 
--------------------------------------------------------------------------------

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SOUTHERN FINANCIAL BANCORP, INC.

 -------------------

 PROXY STATEMENT

 -------------------

ANNUAL MEETING OF SHAREHOLDERS
April 23, 1998

 GENERAL INFORMATION

         This Proxy Statement is furnished to holders of common stock,  $.01 par
value per share  ("Common  Stock"),  of Southern  Financial  Bancorp,  Inc. (the
"Company"),  in  connection  with the  solicitation  of  proxies by the Board of
Directors  (the  "Board")  of the  Company to be used at the  Annual  Meeting of
Shareholders  to be held on April 23, 1998 at 2:00 p.m. at the Fauquier  Springs
Country Club, Springs Road,  Warrenton,  Virginia (the "Annual Meeting") and any
adjournment thereof.                                                            

         The  principal  executive  offices of the  Company are located at 37 E.
Main  Street,   Warrenton,   Virginia  20186,   telephone  (540)  349-3900.  The
approximate date on which this Proxy Statement,  the accompanying proxy card and
Annual Report to  Shareholders  (which is not part of the  Company's  soliciting
materials) are being mailed to the Company's shareholders is March 20, 1998. The
cost of soliciting proxies will be borne by the Company.                        

         The proxy  solicited  hereby,  if properly  signed and  returned to the
Company and not revoked prior to its use,  will be voted in accordance  with the
instructions  contained  thereon.  If no contrary  instructions are given,  each
proxy  received  will  be  voted  "for"  the  proposals  described  herein.  Any
shareholder  giving a proxy has the power to revoke it at any time  before it is
exercised by (i) filing  written  notice  thereof with Lynette D. Ridgley,  Vice
President,  Southern  Financial  Bancorp,  Inc.,  37 E. Main Street,  Warrenton,
Virginia  20186;  (ii) submitting a duly executed proxy bearing a later date; or
(iii) appearing at the Annual Meeting or at any  adjournment  thereof and giving
the  Secretary  notice  of his or her  intention  to  vote  in  person.  Proxies
solicited hereby may be exercised only at the Annual Meeting and any adjournment
thereof and will not be used for any other meeting.                             

         Only  shareholders  of record at the close of business on February  28,
1998 (the "Record Date") will be entitled to vote at the Annual Meeting.  On the
Record Date,  there were 1,592,781 shares of Common Stock issued and outstanding
and 274 record  holders.  Each share of Common  Stock is entitled to one vote at
the Annual Meeting.  The Company had 15,634 shares of preferred stock issued and
outstanding at the Record Date.  Holders of preferred  stock are not entitled to
notice of, or to vote at, the Annual Meeting.                                   

         As of the Record Date,  directors and executive officers of the Company
and their  affiliates,  persons and entities as a group,  owned  beneficially  a
total of 443,044 shares of Common Stock, or  approximately  25.30% of the shares
of Common Stock  outstanding on such date.  Directors and executive  officers of
the Company have indicated an intention to vote their shares of Common Stock FOR
the election of the nominees set forth on the enclosed proxy.                   

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         A  shareholder  may  abstain or (only with  respect to the  election of
directors) withhold his or her vote  (collectively,  "abstentions") with respect
to each item submitted for shareholder approval. Abstentions will be counted for
purposes of determining the existence of a quorum.  Abstentions  will be counted
as not voting in favor of the relevant item.  Since the election of directors is
determined by a plurality vote, abstentions will not affect such election.      

         A broker who holds  shares in street name has the  authority to vote on
certain items when it has not received  instructions  from the beneficial owner.
Except for certain items for which brokers are prohibited from exercising  their
discretion,  a broker is entitled to vote on matters put to shareholders without
instructions  from the  beneficial  owner.  Where  brokers do not have or do not
exercise such  discretion,  the inability or failure to vote is referred to as a
broker non-vote. Under the circumstances where the broker is not permitted to or
does not exercise its discretion,  assuming proper  disclosure to the Company of
such  inability  to vote,  broker  non-votes  will be counted  for  purposes  of
determining the existence of a quorum, but also will be counted as not voting in
favor of the particular matter.                                                 

 ELECTION OF DIRECTORS

         The Company's Articles of Incorporation provide that the Board shall be
divided into three classes as nearly equal in number as possible. The members of
each  class  are to be  elected  for a term  of  three  years  and  until  their
successors are elected and qualify.  One class of directors is elected annually.
Two  directors  are to be elected  at the Annual  Meeting to serve for a term of
three years.                                                                    

         The Board acts as a nominating committee for selecting the nominees for
election as directors.  The nominating committee delivers written nominations to
the  secretary  of the  Company  at least  twenty  days prior to the date of the
Annual Meeting. The Board has no reason to believe that any of the nominees will
be unavailable to serve as a director if elected. Five other directors have been
elected to terms that end either in 1999 or 2000, as indicated below.           

         The Company's Bylaws provide,  however,  that shareholders  entitled to
vote for the election of directors  may name nominees for election to the Board.
Under the Company's  Bylaws,  notice of a proposed  nomination  meeting  certain
specified requirements must be received by the Company not less than 60 nor more
than 90 days prior to any  meeting of  shareholders  called for the  election of
directors,  provided  in each case that,  if fewer  than 70 days'  notice of the
meeting is given to  shareholders,  such  written  notice  shall be received not
later than the close of the tenth day  following  the day on which notice of the
meeting was mailed to shareholders.                                             

         The Company's Bylaws require that the shareholder's notice set forth as
to each nominee (i) the name,  age,  business  address and residence  address of
such nominee, (ii) the principal occupation or employment of such nominee, (iii)
the class and number of shares of the  Company  that are  beneficially  owned by
such nominee,  and (iv) any other  information  relating to such nominee that is
required  under  federal  securities  laws to be disclosed in  solicitations  of
proxies for the  election of  directors,  or is otherwise  required  (including,
without  limitation,  such nominee's  written  consent to being named in a proxy
statement  as nominee and to serving as a director if  elected).  The  Company's
Bylaws  further  require  that  the  shareholder's  notice  set  forth as to the
shareholder  giving the notice (i) the name and address of such  shareholder and
(ii) the class and  amount of such  shareholder's  beneficial  ownership  of the
Company's  capital  stock.  If the  information  supplied by the  shareholder is
deficient in any material aspect or if the foregoing  procedure is not followed,
the  chairman  of the  annual  meeting  may  determine  that such  shareholder's
nomination should not be brought before the annual meeting and that such nominee
shall not be eligible for election as a director of the Company.                

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         Unless  authority  is withheld in the proxy,  each proxy  executed  and
returned by a shareholder  will be voted for the election of the nominees listed
below.  Proxies distributed in conjunction herewith may not be voted for persons
other than the nominees named thereon.  If any person named as nominee should be
unable or unwilling to stand for election at the time of the Annual Meeting, the
proxy  holders  will  nominate  and vote for a  replacement  nominee or nominees
recommended by the Board. At this time, the Board knows no reason why any of the
nominees  listed  below may not be able to serve as a director if  elected.  The
proxy also confers  discretionary  authority upon the persons named therein,  or
their  substitutes,  with  respect to any other  matter that may  properly  come
before the meeting.                                                             

         In the election of directors,  those  receiving the greatest  number of
votes will be elected  even if they do not receive a majority.  Abstentions  and
broker  non-votes  will not be  considered  a vote  for,  or a vote  against,  a
director.                                                                       

THE BOARD OF DIRECTORS RECOMMENDS THAT THE NOMINEES BE ELECTED AS DIRECTORS.

 NOMINEES FOR ELECTION FOR TERM EXPIRING IN 2001

                                                        · Enlarge/Download Table

                                                                                  Year First
             Name; Age; Principal Occupation for Past Five Years;                 Elected as
                   and Directorships in Public Corporations                        Director 
                   ----------------------------------------                        -------- 
                                                                                            
Georgia S. Derrico       53, Chairman of the Board and Chief  Executive  Officer     1986   
                         of the Company since 1986; having served as Senior Vice            
                         President,  Chief  Administrative  and Credit  Officer,            
                         Multinational Division,  District Head of Chemical Bank            
                         prior thereto.                                                     

John L. Marcellus, Jr.   75,  Retired  President  and  Chairman  of  the  Board,     1986   
                         Oneida, Ltd., a silverware manufacturing company. Other            
                         directorship: Kuhlman Corporation.                                 

 INCUMBENT DIRECTORS SERVING FOR TERM EXPIRING IN 1999

                                                        · Enlarge/Download Table


                                                                                  Year First
             Name; Age; Principal Occupation for Past Five Years;                 Elected as
                   and Directorships in Public Corporations                        Director 
                   ----------------------------------------                        -------- 
                                                                                            
Virginia Jenkins         50, Owner, V. Jenkins Interiors and Antiques.               1988   

Michael P. Rucker        57, Executive with  Caterpillar,  Inc., a manufacturing     1991   
                         company; Chairman of the Board, George H. Rucker Realty            
                         Corp., a real estate development company.                          

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 INCUMBENT DIRECTORS SERVING FOR TERM EXPIRING IN 2000

                                                        · Enlarge/Download Table


                                                                                  Year First
             Name; Age; Principal Occupation for Past Five Years;                 Elected as
                   and Directorships in Public Corporations                        Director 
                   ----------------------------------------                        -------- 
                                                                                            
Neil J. Call             64, Executive Vice President, MacKenzie Partners, Inc.,     1986   
                         a New York financial  consulting  company,  since 1990;            
                         having served as Executive Vice President,  D.F. King &            
                         Co.,  Inc.  from  1986  to  1990;  and  Executive  Vice            
                         President,  Finance,  Gulf and Western Industries prior            
                         thereto.                                                           

David de Give            55,  Senior Vice  President of the Company  since 1992;     1986   
                         having been a cattle breeder and private  investor from            
                         1989 to 1992;  having  served as  President,  Newmarket            
                         Capital Corp., a mortgage  company,  from 1986 to 1989;            
                         and Vice President in charge of U.S. Funding,  Chemical            
                         Bank, prior thereto.                                               

R. Roderick Porter       52,  President,  FX Concepts,  Ltd.,  an  international     1986   
                         money  management  firm,  since  January  1994;  having            
                         served as Managing Director, West Capital, Inc., a real            
                         estate  advising  firm,  from  1992 to 1994;  Chairman,            
                         Newmarket  Capital  Corp.,  a  mortgage  company;   and            
                         Principal of Morgan Stanley prior thereto.                         


         In 1997,  each  director  attended at least 75% of the aggregate of (i)
the total  number of meetings of the Board and (ii) the total number of meetings
of all committees of the Board on which the director then served. Seven meetings
of the Board were held during 1997.                                             

Committees of the Board                                                         

         The  Asset/Liability  Management  Committee  has  authority  for policy
formulation  and  administration  of the  Company's  asset/liability  management
policies.  The  Asset/Liability  Management  Committee,  which  consists  of Ms.
Derrico and Messrs.  Porter (Chairman) and de Give, reports monthly to the Board
on the  interest  sensitivity  of the  Company,  including  an  analysis  of the
duration of the Company's assets, liabilities and contingent liabilities as well
as the mortgage  pipeline  and a  calculation  of the duration of the  Company's
equity. The  Asset/Liability  Management  Committee met seven times during 1997.
The Asset/Liability  Management  Committee frequently discusses policy issues by
teleconference (see "Compensation of Directors").                               

         The Credit  Committee has authority and  responsibility  to oversee the
prudent  operation of the  Company's  lending  function,  including  the ongoing
qualitative review of the loan portfolio.  The Credit Committee,  which consists
of Ms.  Derrico and Messrs.  Call  (Chairman)  and Rucker,  is  responsible  for
reviewing all loans and approving loans above a certain minimum amount,  and for
insuring  the   development   and  maintenance  of  sound  credit  policies  and
procedures.  The Credit  Committee  met in person three times  during 1997.  The
Credit  Committee  frequently  discusses  credit issues by  teleconference  (see
"Compensation of Directors").                                                   

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         The Audit  Committee  assists  the Board in  fulfilling  its  fiduciary
responsibilities relating to corporate accounting and reporting practices of the
Company.  The Audit Committee consists of Messrs.  Call (Chairman) and Marcellus
and Ms. Jenkins and met one time during 1997.                                   

         The Compensation  Committee reviews the performance of, and establishes
the  compensation  for, the  executive  officers of the Company.  The  Company's
executive  compensation  programs are  designed to retain and reward  executives
based upon (i) their  individual  performance and ability to lead the Company to
achieving  its  goals  and  (ii) the  Company's  performance.  The  Compensation
Committee consists of Messrs. Call and Marcellus  (Chairman) and Ms. Jenkins and
met two times during 1997.                                                      

Certain Relationships and Related Transactions                                  

         Georgia S. Derrico,  Chairman of the Board and Chief Executive  Officer
and a director  of the  Company,  and R.  Roderick  Porter,  a  director  of the
Company, are married to each other.                                             

         It is currently  the  Company's  policy not to make loans to members of
its executive management.  However, the following residential mortgage loan from
the  Company to William H.  Lagos,  the  Company's  Senior  Vice  President  and
Controller, currently is outstanding:                                           

                                                        · Enlarge/Download Table


Name and Type  Year  Original Loan  Highest Balance    Balance as of    Interest Rate at 
  of Loan      Made     Balance      During 1997     December 31, 1997  December 31, 1997
  -------      ----     -------      -----------     -----------------  -----------------
                                                                                         
 One Year                                                                                
Adjustable     1987     $138,000      $116,987           $113,757         5.25%          

 STOCK OWNERSHIP

         The following table lists those persons  (including any "group" as that
term is used in Section  13(d)(3) of the  Securities  Exchange  Act of 1934,  as
amended (the  "Exchange  Act")) who, to the  knowledge of the Company,  were the
beneficial  owner  of  more  than 5% of the  outstanding  voting  shares  of the
Company, as of January 31, 1998.                                                

                                                                · Download Table


                Name and Address of          Number of   Percent 
Title of Class   Beneficial Owners           Shares(1)   of Class
--------------   -----------------           ---------   --------

                                                                 
Common Stock    Georgia S. Derrico(2)        179,786(3)   10.74% 
                R. Roderick Porter                               
                2954 Burrland Lane                               
                The Plains, Virginia  20171                      


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                                                                · Download Table


                Name and Address of                        Number of   Percent 
Title of Class   Beneficial Owners                         Shares(1)   of Class
--------------   -----------------                         ---------   --------

                                                                               
                Max C. Chapman                             127,118       7.98% 
                Nomura Holding America                                         
                2 World Financial Center                                       
                Building B                                                     
                New York, New York  10281-1198                                 

                The Torray Companies                       123,101(4)    7.73% 
                Robert E. Torray                                               
                6610 Rockledge Drive, Suite 450                                
                Bethesda, Maryland  20817                                      

                Value Partners, Ltd.                       117,289(5)    7.36% 
                Fisher Ewing Partners                                          
                Richard W. Fisher                                              
                Timothy G. Ewing                                               
                2200 Ross Avenue, Suite 4600                                   
                West Dallas, Texas  75201                                      

                Hovde Capital, L.L.C.                          *(6)        *   
                Financial Institution Partners II, L.P.                        
                1629 Colonial Parkway                                          
                Inverness, Illinois  60067                                     

                Salem Investment Counselors, Inc.           98,848(7)    6.21% 
                P. O. Box 25427                                                
                Winston-Salem, North Carolina  27114-5427                      

                David G. Booth(8)                           95,635(9)    5.89% 
                Jane Marvel Garnett                                            
                24 Monroe Place #9A                                            
                Brooklyn, New York  11201                                      

____________________________                                                    

(1)     Except as otherwise indicated, includes shares held directly, as well as
        shares  held in  retirement  accounts  or by certain  family  members or
        corporations  over  which  the named  individuals  may be deemed to have
voting or investment power.                                     

(2)     Georgia S. Derrico and R. Roderick Porter are married to each other.    

(3)     Includes (a) 78,689 shares owned  individually by Ms. Derrico over which
        she has sole  voting and  investment  power and 76,856  shares  that Ms.
        Derrico may acquire  pursuant to the exercise of stock options;  and (b)
        20,202 shares of Common Stock and 4,039 shares of convertible  preferred
        stock owned individually by Mr. Porter over which he has sole investment
        power. Ms. Derrico and Mr. Porter disclaim beneficial  ownership of each
other's shares.                                                 

(4)     The Torray Fund, as managed by The Torray Corporation, beneficially owns
        86,236 shares.  The Torray Corporation may be deemed to have sole voting
        and investment power over all such shares.  Robert E. Torray,  President
        of The  Torray  Corporation,  may be deemed to have  shared  voting  and
investment  power  over  these  shares.  Robert  E.             

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        Torray & Co., Inc.  beneficially owns, on behalf of its clients,  36,865
        shares.  Mr.  Torray may be deemed to have sole  voting  and  investment
power over 28,130 of such shares.                               

(5)     Value  Partners,   Ltd.,  as  managed  by  Fisher  Capital   Management,
        beneficially owns 117,289 shares. Fisher Ewing Partners may be deemed to
have sole voting and investment power over all such shares.     

(6)     Hovde Capital,  L.L.C. is the General  Partner of Financial  Institution
        Partners II, L.P. As of January 31, 1998, neither Hovde Capital,  L.L.C.
        nor  Financial  Institution  Partners  II, L.P.  beneficially  owned any
        shares of Common  Stock.  On February  11, 1998,  Financial  Institution
        Partners II, L.P.  purchased 100,000 shares of Common Stock, or 6.28% of
        the outstanding voting shares of the Company. Hovde Capital,  L.L.C. and
        Financial  Institution  Partners  II, L.P.  may be deemed to have shared
voting and investment powers over all such shares.              

(7)     Salem Investment  Counselors,  Inc.  beneficially owns 98,848 shares and
        may be deemed to have sole  voting  and  investment  power over all such
shares.                                                         

(8)     David G. Booth and Jane Marvel Garnett are married to each other.       

(9)     Includes  1,028 shares owned by Mr. Booth and 94,607 shares owned by Ms.
        Garnett. The Company makes no representation as to whether Mr. Booth and
        Ms.  Garnett  share  voting or  investment  power with  respect to their
shares.                                                         

         The  following  table sets forth as of January 31, 1998 the  beneficial
ownership  of Common  Stock by all  directors  and  nominees,  each of the named
executive  officers,  and directors  and executive  officers of the Company as a
group. Unless otherwise indicated,  each person listed below has sole voting and
investment power over all shares beneficially owned by such person.             

                                                        · Enlarge/Download Table

                             Number of Shares  Number of Shares                          
                             with Sole Voting    with Shared                             
                              and Investment      Voting and     Total Number  Percent of
Name of Beneficial Owner         Power(6)      Investment Power   of Shares      Class   
------------------------         --------      ----------------   ---------      -----   

                                                                                         
R. Roderick Porter                 24,241           155,545       179,786(2)     10.74   

Neil J. Call                       40,340              -0-         40,340(3)      2.52   

David de Give                      68,541             2,297        70,838         4.35   

Georgia S. Derrico                155,545            24,241       179,786(2)     10.74   

John L. Marcellus                  15,008               640        15,648(4)     * (1)   

Virginia Jenkins                    2,263              -0-          2,263        * (1)   

Michael P. Rucker                  12,618            64,365        76,983(5)      4.82   

William H. Lagos                   33,290               534        33,824         2.11   

                                   -7-                                                   

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                             Number of Shares  Number of Shares                          
                             with Sole Voting    with Shared                             
                              and Investment      Voting and     Total Number  Percent of
Name of Beneficial Owner         Power(6)      Investment Power   of Shares      Class   
------------------------         --------      ----------------   ---------      -----   

Linda Sandridge                    12,821               -0-        12,821        * (1)   

Laura L. Vergot                    10,463                78        10,541        * (1)   

Directors and Officers as a                                                              
Group (10 persons)                375,130           247,700       443,044        25.30   

_______________________________                                                 

(1)     Ms. Jenkins,  Mr. Marcellus,  Ms. Sandridge and Ms. Vergot own less than
1% of the outstanding shares of Common Stock.                   

(2)     Includes (a) 78,689 shares owned  individually by Ms. Derrico over which
        she has sole  voting and  investment  power and 76,856  shares  that Ms.
        Derrico may acquire  pursuant to the exercise of stock options;  and (b)
        20,202 shares of Common Stock and 4,039 shares of convertible  preferred
        stock owned individually by Mr. Porter over which he has sole investment
        power. Ms. Derrico and Mr. Porter disclaim beneficial  ownership of each
other's shares.                                                 

(3)     Includes  33,331 shares of Common Stock and 7,009 shares of  convertible
preferred stock.                                                

(4)     Includes  13,427 shares of Common Stock and 2,221 shares of  convertible
preferred stock.                                                

(5)     Includes  11,627  shares of Common  Stock and 991 shares of  convertible
        preferred  stock owned by Michael  Rucker,  5,973 shares of Common Stock
        and 2,402 shares of convertible  preferred  stock owned by Derek Rucker,
        8,378 shares of Common Stock owned by Lucy Jones, 5,025 shares of Common
        Stock owned by Susan Jones Cooper, 4,832 shares of Common Stock owned by
        David  Dodrill and 37,755  shares of Common Stock owned by Rucker Realty
        and  persons  associated  with  Rucker  Realty.  The  Company  makes  no
        representation  as to whether any of these persons,  individually  or in
        any combination, share voting or investment power with any other or with
Rucker Realty with respect to their shares.                     

(6)     The amounts in this column  include  shares of Common Stock with respect
        to which certain persons have the right to acquire beneficial  ownership
        within sixty days after  December 31,  1997,  pursuant to the  Company's
        1986  Stock  Option and  Incentive  Plan,  as  amended  in 1987,  and as
        superseded by the Company's 1993 Stock Option and Incentive Plan: Mr. de
        Give:  37,403 shares;  Ms.  Derrico:  76,856 shares;  Mr. Lagos:  11,802
        shares; Ms. Sandridge:  9,717 shares; Ms. Vergot:  7,298 shares; and the
directors and officers as a group: 143,076 shares.              

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COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

Summary Compensation                                                            

         The following table presents information relating to total compensation
of the Chief  Executive  Officer and the other named  executive  officers of the
Company for the years ended December 31, 1997, 1996 and 1995.                   

SUMMARY COMPENSATION TABLE

                                                        · Enlarge/Download Table


                                                                            Long-Term                 
                                     Annual Compensation                     Compen-                  
                                     -------------------                     sation                   
                                                                             ------                   
                                                                           Securities                 
                                                                           Underlying                 
Name and                                                   Other Annual      Options     All Other    
Principal Position      Year     Salary         Bonus     Compensation(1)      (#)     Compensation(2)
------------------      ----     ------         -----     ---------------      ---     ---------------

                                                                                                      
Georgia S. Derrico      1997    $175,000      $175,000          --           10,000        $4,500     
Chairman of the Board   1996     175,000       132,500          --           22,003         4,500     
  and Chief Executive   1995     175,000       100,000          --           14,667         4,500     
  Officer                                                                                             

David de Give           1997     $84,240       $12,000          --            3,000        $2,887     
Senior Vice President   1996      84,240        25,000          --           13,203         3,240     
                        1995      78,000        25,000          --            8,800         3,108     

William H. Lagos        1997     $87,125       $10,000          --            8,000        $2,913     
Senior Vice President  1996(3)    51,875        12,500          --            8,802           500     
  and Controller        1995     105,000        25,000          --            8,800         3,917     

Linda Sandridge         1997     $51,120       $16,000          --            3,000        $  900     
Senior Vice President   1996      46,960        10,000          --            1,652           900     
                        1995      44,935         8,000          --            1,613           900     

Laura L. Vergot         1997     $50,144       $16,000          --            3,000        $1,984     
Senior Vice President   1996      44,615        10,000          --            1,652         1,640     
                        1995      41,520         7,000          --            1,613         1,457     

_________________________                                                       

(1)     None of the named executive officers received Other Annual  Compensation
        in excess of the lesser of $50,000 or 10% of  combined  salary and bonus
for the years indicated.                                        

(2)     The  amounts set forth in this column  constitute  contributions  to the
Company's 401(k) Plan.                                          

(3)     Mr.  Lagos  did not work  for the  Company  from  June 1,  1996  through
November 30, 1996.                                              

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Option Grants in Last Fiscal Year                                               

         The  following  table sets forth for the year ended  December 31, 1997,
the grants of stock options to the named executive officers:                    

 OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1997

                                                        · Enlarge/Download Table


                                                                                   Potential Realizable  
                                                                                     Value at Assumed    
                                                                                     Annual Rates of     
                                                                                       Stock Price       
                                                                                     Appreciation for    
                                       Individual Grants(1)                            Option Term       
                    -------------------------------------------------------------      -----------       
                                      Percent of                                                         
                     Number of       Total Options                                                       
                    Securities        Granted to                                                         
                    Underlying       Employees in      Exercise of                                       
                      Options         Fiscal Year      Base Price      Expiration                        
Name                Granted (#)         (%)(2)          ($/Share)         Date         5% ($)     10% ($)
----                -----------         ------          ---------         ----         ------     -------

                                                                                                         
Georgia S. Derrico     10,000             31.75           16.00         7/31/07       260,623     414,999

David de Give           3,000              9.52           16.00         7/31/07        78,187     124,500

William H. Lagos        3,000             25.40           13.75         1/30/07        67,192     106,992
                        5,000                             16.00         7/31/07       130,312     207,499

Linda Sandridge         3,000              9.52           16.00         7/31/07        78,187     124,500

Laura L. Vergot         3,000              9.52           16.00         7/31/07        78,187     124,500

________________________                                                        

(1)     Stock  options  were  awarded at the fair market  value of the shares of
        Common Stock at the date of award and are exercisable  after January 30,
1998 and July 31, 1998.                                         

(2)     Options  to  purchase  27,000  shares of Common  Stock  were  granted to
executive officers during the year ended December 31, 1997.     

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Option Exercises in Last Fiscal Year                                            

         Set forth in the table below is information concerning each exercise of
stock option during the fiscal year ended December 31, 1997 by each of the named
executive officers and the year end value of unexercised options.               

 AGGREGATED OPTION EXERCISES IN YEAR ENDED DECEMBER 31, 1997
 AND FISCAL YEAR END OPTION VALUES

                                                        · Enlarge/Download Table


                                                          Number of                                        
                                                    Securities Underlying         Value of Unexercised     
                                                     Unexercised Options          In-The-Money Options     
                                                 at December 31, 1997 (#)(1)   at December 31, 1997 ($)(2) 
                                                 ---------------------------   ----------------------------
                       Shares                                                                              
                    Acquired on       Value                                                                
Name                Exercise (#)  Realized ($)  Exercisable     Unexercisable  Exercisable    Unexercisable
----                ------------  ------------  -----------     -------------  -----------    -------------

                                                                                                           
Georgia S. Derrico     12,907        103,256       76,856           10,000        857,690         60,000   

David de Give            --            --          37,403            3,000        398,830         18,000   

William H. Lagos         --            --           8,802            8,000         73,585         54,750   

Linda Sandridge          --            --           9,717            3,000        115,091         18,000   

Laura L. Vergot          --            --           7,298            3,000         82,911         18,000   

__________________________                                                      

(1)     Each of these Options relates to Common Stock.                          

(2)     These values are based on $22.00,  the closing  price of Common Stock on
December 31, 1997.                                              

Employment Agreements                                                           

         The Company  entered into an employment  agreement  with Ms. Derrico in
1996 for a term of three years with automatic  one-year  extensions.  If, during
the term of the  agreement,  there is a change in  control  of the  Company  and
within 12 months  thereafter  Ms.  Derrico's  employment is terminated  for good
reason (as provided in the  agreement) or on account of disability  (as provided
in the agreement),  Ms. Derrico shall be entitled to receive severance pay equal
to three times the sum of her annual base salary at its highest  rate during the
preceding  12 months and her highest  annual  bonus  during the three  preceding
calendar years. The term "change in control" as used in Ms. Derrico's  agreement
shall  refer  generally  to (i) the  acquisition  of 25% or  more of the  voting
securities  of the Company by any  "person"  (within the  definition  of Section
13(d) of the Exchange  Act),  (ii) the  acquisition of 10% or more of the voting
securities  of  the  Company  by  any  such  person  if  the  Board  has  made a
determination  that such acquisition  constitutes or will constitute  control of
the Company, (iii) the approval by the Company's shareholders of an agreement to
merge or  consolidate  with another  corporation if the directors who constitute
the Board six  months  prior to such  approval  cease to  constitute  a majority
during the period  therefrom and ending two years after such approval,  and (iv)
the sale by the Company of 80% or more of its assets to any such person.        

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         The Company entered into an employment agreement with Mr. Lagos in 1997
for a term of 18 months with automatic one-year extensions.  If, during the term
of the  agreement,  Mr. Lagos'  employment  is terminated in connection  with or
subsequent  to a change of control of the Company by (i) the Company  other than
for cause or as a result of Mr. Lagos' death, disability or retirement,  or (ii)
Mr.  Lagos for good reason (as  provided in the  agreement),  Mr. Lagos shall be
entitled to receive  severance pay equal to 150% of the total cash  compensation
paid to him during the previous 12 months.  The term "change in control" as used
in his agreement  shall refer generally to (i) the acquisition of 40% or more of
the voting  securities  of the Company by any  "person"  or "group"  (within the
definition of Section 13(d) and 14(d) of the Exchange Act), (ii) a change in the
composition  of the Board to less than a majority  of  incumbent  directors  (as
defined in the agreement),  or (iii) the approval by the Company's  shareholders
of either a business  combination  with any other person or group,  other than a
merger or  consolidation  that  would  result in the  Common  Stock  outstanding
immediately  prior thereto  representing at least 50% of the Common Stock of the
surviving entity outstanding immediately thereafter, or a plan of liquidation or
sale or disposition of all or substantially all of the Company's assets.        

Compensation of Directors                                                       

         Each  member of the Board who was not an employee of the Company or any
of its  subsidiaries  is paid (i) $500 for  attendance at each Board meeting and
(ii) $150 for attendance at each meeting of a committee of the Board of which he
or she is a member.  Directors  are not  compensated  for meetings  conducted by
teleconference.  In  addition,  each  director  is paid an annual fee of $3,000.
Employee  members of the Board are not paid  separately for their service on the
Board or its committees.                                                        

 DESIGNATION OF AUDITORS

         The Board  has  designated  KPMG Peat  Marwick  LLP,  Certified  Public
Accountants,  as the  Company's  independent  auditors for the fiscal year ended
December  31, 1997 and the fiscal  year ending  December  31,  1998,  subject to
shareholder ratification.  A representative of KPMG Peat Marwick LLP is expected
to be  present  at the  Annual  Meeting,  will  have the  opportunity  to make a
statement  if he or she  desires to do so, and is expected  to be  available  to
respond to appropriate questions.                                               

         The  principal  function  of KPMG  Peat  Marwick  LLP is to  audit  the
consolidated  financial  statements of the Company and its subsidiaries  and, in
connection  with  that  audit,  to  review  certain  related  filings  with  the
Securities  and  Exchange  Commission  and to  conduct  limited  reviews  of the
financial statements included in each of the Company's quarterly reports.       

         The Company's  financial  statements  have  previously  been audited by
Arthur Anderson LLP,  Certified  Public  Accountants,  for the fiscal year ended
June 30, 1995,  the six month period ended December 31, 1995, and the year ended
December  31, 1996.  On June 26, 1997,  Arthur  Anderson LLP was  terminated  as
independent  auditors  for the Company.  Arthur  Anderson  LLP's  reports on the
Company's  financial  statements for the last two years of Arthur Anderson LLP's
engagement  did not contain an adverse  opinion or a disclaimer of opinion,  and
were not  qualified or modified as to  uncertainty,  audit scope,  or accounting
principles.  For the  Company's  last two fiscal  years and any interim  periods
preceding  Arthur Anderson LLP's  termination,  there was no  disagreement  with
Arthur  Anderson  LLP on any  matter  of  accounting  principles  or  practices,
financial  statement   disclosure,   or  auditing  scope  or  procedure,   which
disagreement,  if not resolved to the satisfaction of Arthur Anderson LLP, would
have caused it to make a reference to the subject matter of the  disagreement in
connection with its report.                                                     

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         The  Company  engaged  the  services  of KPMG Peat  Marwick  LLP as its
independent  accountants as of June 26, 1997.  During the two most recent fiscal
years and the interim period prior to June 26, 1997, the Company did not consult
with KPMG Peat  Marwick LLP on items which (i) were or should have been  subject
to SAS 50 or (ii) concern the subject  matter of a  disagreement  or  reportable
event with the former  auditor as described in Item  304(a)(2) of Regulation S-K
under the Exchange Act.                                                         

FINANCIAL STATEMENTS

         A copy of the Company's Annual Report on Form 10-K for the period ended
December 31, 1997, to be filed with the Securities and Exchange Commission, will
be provided on written request without charge to any shareholder  whose proxy is
being solicited by the Board. The written request should be directed to:        

Lynette D. Ridgley
 Shareholder Relations
Southern Financial Bancorp, Inc.
 37 E. Main Street
 Warrenton, Virginia 20186

 PROPOSALS FOR 1999 ANNUAL MEETING

         Any  shareholder  desiring  to make a proposal  to be acted upon at the
1999 annual meeting of shareholders must present such proposal to the Company at
its principal office at 37 E. Main Street,  Warrenton,  Virginia, not later than
November 20, 1998, in order for the proposal to be  considered  for inclusion in
the Company's proxy statement.  The Company  anticipates holding the 1999 annual
meeting on April 22, 1999.                                                      

 OTHER MATTERS

         The Board is not aware of any matters to be presented for action at the
meeting other than as set forth herein.  However,  if any other matters properly
come  before the  meeting,  or any  adjournment  thereof,  the person or persons
voting the proxies will vote them in accordance with their best judgment.       

                                By Order of the Board of Directors

                        Mary F. Henward, Secretary

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SOUTHERN FINANCIAL BANCORP, INC.
37 E. Main Street 
Warrenton, Virginia 22186 
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
Proxy is Solicited by the Board of Directors

         The undersigned  hereby  appoints Mary F. Henward,  Georgia S. Derrico,
and  William  H.  Lagos  as  proxies  (and if the  undersigned  is a  proxy,  as
substitute),  each with the power to appoint his or her  substitute,  and hereby
authorizes  each of them to represent and to vote, as designated  below,  all of
the  shares  of  Common  Stock  of  Southern   Financial   Bancorp,   Inc.  (the
"Corporation") held of record by the  undersigned  on  February  28, 1998 at the
Annual Meeting of  Shareholders to be held on April 23, 1998, or any adjournment
thereof.                                                                        

         The  Board of  Directors  recommends  a vote FOR each of the  following
Proposals:                                                                      

1.       Election of two directors for a three-year term.                       

                                                                · Download Table

                                                                          
 _                                               _                        
|_|  FOR all nominees                           |_|  WITHHOLD AUTHORITY to
     listed below                                    vote for all nominees
     (except as marked to the contrary)                                   

         (INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in list below.)      

Georgia S. Derrico, John L. Marcellus, Jr.

2.       To ratify  the  designation  of KPMG Peat  Marwick  LLP as  independent
         certified  public  accountants  for the fiscal year ended  December 31,
1997 and the fiscal year ending December 31, 1998.            
 _                            _                              _
         |_| FOR                      |_| AGAINST                    |_| ABSTAIN

3.       In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.             

         This  proxy,  when  properly  executed,  will be  voted  in the  manner
directed  herein by the undersigned  shareholder.  If no direction is made, this
proxy will be voted FOR each of Proposals 1 and 2.                              

         Please sign exactly as the name  appears on the label.  When shares are
held by joint  tenants,  both should sign.  When signing as attorney,  executor,
administrator, trustee, guardian, or agent, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.

                                                                · Download Table

                                                                             
Date:  _______________, 1998  ___________________________________            
                                           Signature                         
Printed Name:                                                                

____________________________  ___________________________________            
                                   Signature, if held jointly                
Number of Shares:                                                            
                                                                       _     
____________________          I plan to attend the meeting in person  |_| Yes
                                                                       _     
                                                                      |_| No 


Please mail this form in the enclosed envelope.

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This DEF 14A Filing	Date	First	Last	Other Filings

	6/30/95	15
	12/31/95	12	15
	6/1/96	12
	11/30/96	12
	12/31/96	12	15	10-K/A, 10-K
	6/26/97	15	16	8-K
	12/31/97	3	17	10-K
	1/30/98	13
	1/31/98	8	10
	2/11/98	10
	2/28/98	3	17
Filed On / Filed As Of	3/20/98	2	4
For The Period Ended	4/23/98	2	17
	7/31/98	13
	11/20/98	16
	12/31/98	3	17	10-K, NT 10-K
	4/22/99	16

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Southern Financial Bancorp Inc/VA · DEF 14A · For 4/23/98

Filed On 3/20/98 · SEC File 0-22836 · Accession Number 1002105-98-36

Definitive Proxy Solicitation Material · Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Definitive Proxy Solicitation Material · Schedule 14A
Filing Table of Contents