20
002CSN4D9C
BENSONDonald ByrdWill ChandlerLandis HallDanny HollandWayne McLambAnn Wood
CLAYTONJoyce L. CanadyJoseph W. DelaineDr. James H. EllerbeTravis J. HillFrederick HuebnerLawrence E. Kristoff, IIW. Stewart McLeodBarry B. Woodard
DUNN John A. JohnsonLynn MatthewsDanny NorrisRobert PleasantMatthew Smith
FOUR OAKSJoyce BoykinLinwood E. ByrdRoy H. DunnEarl Wood LeeThomas PriceVeronica J. SurlesMike WinfreeAaron Allen Wood
FUQUAY-VARINABilly AdamsDavid BallHal Farthing Robert GoodwinSim HoneycuttCharles McLaurinBecky Medlin
GARNERCleveland AreaDonald AdamsDouglas BallLisa DennyDoris HuebnerAndrew SimsDon Wells
RALEIGH Garner StationLee CarrollDr. Byron DiggsLynda R. HerringKeith M. RobertsTommy Sims
HOLLY SPRINGSSusan Phares AldrichLen BradleyJeff Van DykeMike KuberGary J. MarkhamDon MizelleTony PernaParrish Womble
SMITHFIELD Dr. John BookerMickey LammKim McCullersEric SellersMarie WatsonCharlie Young
WALLACE / HARRELLS Michael J. BlackburnDr. Mott P. BlairEarl BrinkleyBill CaroneB. Warren CavenaughKaye L. FosterJames C. MooreDr. John D. Robinson
ZEBULON Renee Parrish BakerFay BrownBill ClementCharles EstesLinda JohnsonBob MathenyLes W. Merritt, Jr.
This statement has not been reviewed or confirmed for accuracy or relevance by the Securities and ExchangeCommission or the Federal Deposit Insurance Corporation.
Four Oaks Fincorp, Inc. Annual ReportDesigned & Produced By Sloan Communications
Four Oaks, NC919-963-6000
[email protected] By TCG Legacy Printing, Garner, NC
AR14-5.3M -5/15
As a True Community Bank, our primary focus isto provide the financial services needed by individuals and businesses in each of the communities we serve. Beyond that, we also try to bean active, contributing, corporate partner in thesecommunities. In that quest it is essential that wehave open lines of communication with individualswho are active within the business and civic environments of each of the markets we serve.
For that purpose, we maintain Community Advisory Boards. These are local Boards comprisedof Bank customers who live and work in the area.
Each has earned respect within their home community for their contributions to the businessand civic environments of that area.
These Boards serve a vital function in our role asa True Community Bank. They have their fingers onthe pulse of our marketplace and provide vital feedback, as well as input on our products and services, and how we can better tailor them to thespecific needs of the community. We are grateful tothese individuals for their involvement as customersand especially for their input and guidance in thisimportant role.
Four Oaks Fincorp, Inc. is the bank holding company for Four Oaks Bank & Trust Company, astate chartered bank headquartered in Four Oaks,North Carolina.
With approximately $821 million in assets and $665million in deposits, the Bank is ranked number one indeposit market share in Johnston County, holding29.80% of the deposits, as of June 30, 2014.
Four Oaks Bank is a full service financial institutioncommitted to providing our customers with modernbanking products and services without sacrificing thequality, personalized service our customers expect anddeserve. The Bank was chartered in1912 and its deposits are insured by the FDIC.
Financial Highlights 1Letter to Shareholders 2-3Strategic Plan 4-5Community Involvement 6-7 Professionalism Awards 8-9Top Performers 10-11
Acknowledgments 12Board of Directors & Executive Officers 13 City Executives 14Division Management 15 Locations & Corporate Information 16Community Advisory Boards 17
The discussion that follows contains forward-lookingstatements, as defined in the Private Securities LitigationReform Act of 1995. These statements may address issuesthat involve significant risks and uncertainties. Althoughwe believe that the expectations reflected in this
discussion are reasonable, actual results may be materiallydifferent. Please refer to the Four Oaks Fincorp, Inc. Form10-K for the year ending December 31, 2014, for a morethorough description of the types of risks and uncertaintiesthat may affect management’s forward-looking statements.
Company Profile
Contents
Four Oaks Fincorp, Inc.Annual Report 2014
Our Annual Report for 2014, especially our cover, reflects an overall feeling of excitement and energy that isfelt throughout our Bank with recent developments including the results of our capital raise. It is like the dawnof a new day with all its promise and potential.
The 2014 Annual Report is presented in a summary format to provide information regarding the performance ofFour Oaks Bank in a manner that is meaningful and usefulto the widest range of readers. The audited consolidated financial statements of Four Oaks Fincorp, Inc. and subsidiary, Four Oaks Bank & Trust Company, and othermore detailed analytical information regarding the Corporation, are contained in the Four Oaks Fincorp, Inc.2014 Form 10-K filed with the Securities and Exchange Commission.
Forward-Looking Statements
Community Advisory Boards
1
The following table sets forth selected financial data concerning the Company for the years ended December 31, 2014, 2013, 2012, 2011 and 2010. This information should be read in conjunction with, and is qualified in its entirety by reference to, the detailed audited financial statements and notesthereto, which are included in the Four Oaks Fincorp, Inc. 2014 Form 10-K for the year ended December 31, 2014.
(1) Includes Federal Funds sold, interest bearing bank balances, and FHLB stock.
(In thousands, except per share data)
Income Statement Data: Interest income Interest expense Net interest income Provision for loan losses Net interest income after provision for loan losses Other noninterest income Other noninterest expenses Income taxes Net loss
Per Share Data: Net loss Year end book value Dividends declared
Balance Sheet Data: Loans, net Investments (1)
Total assets Deposits Shareholders’ equity
Ratios: Profitability: Return on Average Assets Return on Average Equity
Capital Adequacy (Year End): Equity to Assets Primary Capital to Assets
Operating Efficiency: Non-interest Income/Average Assets Non-interest Expense/Average Assets Assets Per Employee (in millions)
As of and for the Year Ended December 312014 2013 2012 2011 2010
$ 28,8058,088
20,7177,954
12,76311,11428,066
-$ - 4,189
$ - 0.24 1.27
-
$442,879321,374820,796661,185
40,729
-0.50%-13.09%
4.96%6.04%
1.34%3.37%
$ 4.74
$ 29,0468,771
20,27535
20,2407,223
27,813-
$ - 350
$ - 0.04 2.71
-
$481,122285,244821,546657,620
21,623
-0.04%-1.53%
2.63%3.99%
0.88%3.39%
$ 4.64
$ 34,37912,00522,374
7,381
14,9937,394
29,531-175
$ - 6,969
$ - 0.902.90
-
$481,380291,214865,498699,856
22,676
-0.77%-22.87%
2.62%4.45%
0.82%3.28%
$ 4.42
$ 40,00414,09625,90811,440
14,4685,369
28,927-
$ - 9,090
$ - 1.133.84
-
$581,091284,754916,646745,889
29,692
-0.97%-25.28%
3.24%5.39%
0.60%3.11%
$ 4.72
$ 45,97715,28230,69531,744
- 1,0498,498
29,6666,074
$ - 28,291
$ - 3.784.700.03
$660,154227,218947,204769,216
35,455
-3.19%-46.13%
3.74%5.90%
0.90%3.12%
$ 4.62
Financial Highlights
2014 marked a new beginning for Four Oaks Fincorp,Inc. (the Company) and Four Oaks Bank & Trust Company(the Bank). Thank you for loyally standing with us throughthe “Great Recession” and its aftermath to arrive at thedawn of a new era. We raised$24 million of new capital bymeans of a Securities PurchaseAgreement and Rights Offeringwhich gave every shareholderthe opportunity to participate.The new capital and the execution of the related assetresolution plan (ARP) broughtthe Bank’s December 31, 2014Total Risk Based Capital ratio upto 14.7% and classified assetsratio down to 23.7%.
We finished the year with asolid quarter of earnings, posting net income of $633,000in the fourth quarter, while weincurred a loss of $4.2 million forthe twelve months ended December 31, 2014, primarily due to write-downs and charge-offsof loans and foreclosed assets included in theARP. With capital in hand and asset qualityrapidly improving, we are poised to benefitfrom an improving local economy.
Speaking of our capital raise, Kenneth R.Lehman, a private community bank investor,exhibited tremendous support for our Companyby purchasing a 49% interest in the Companyvia the Securities Purchase Agreement and theRights Offering. Mr. Lehman brings a wealth ofexpertise and insight to us, along with his sizeable monetary investment. Effective March23, 2015, Mr. Lehman was appointed to serveon our Board of Directors. We look forward to
his insights and leadership on the Board. We are extremelygrateful for his confidence in the Company and the Bank.
We are pleased to announce that David H. Rupp wasappointed President of the Company and the Bank effective
March 31, 2015. Mr. Ruppbecame the Bank’s ExecutiveVice President, Chief OperatingOfficer and acting Chief CreditOfficer in September 2014 afterserving as Senior Vice President,Strategic Project Manager sinceJune 2014. He was alsoappointed to the Board onMarch 23, 2015. We are fortunate to have found such an experienced and strong executive. His appointment asPresident is one example of ourBoard’s commitment to embracing change. Mr. Rupp’senergy and positive approach have invigorated the entire
management team and led to improved strategies and processes.
The Company and the Bank are mostappreciative that, from March 3, 1986 toSeptember 22, 2014, we had the benefit of theleadership, insight, and professionalism ofClifton L. Painter, our former SEVP, COO, andChief Credit Officer (CCO). Mr. Painter retiredfrom his primary responsibilities and took ona consulting role within the Bank. His upbeatnature will continue to lift our spirits as hecontinues to serve the Bank and its customerswhose relationships he has fostered over thelast 29 years. In his role as a consultant, wewill continue to benefit from Mr. Painter’s longrelationship with the Company while we benefit
2
Dear Fellow Shareholders,
The entire staff of Four Oaks Bank gathered in the Clayton Center for the unveiling of the Bank’s new Strategic Plan.
Investor Ken Lehman (left) sits with our Directors at acalled shareholder meeting in October.
David H. RuppPresident & COO
Letter To Shareholders
from fresh ideas and the diverseexperience of our newest teammembers.
Following an extensivesearch, effective March 23,2015, we hired Warren D.“Rocky” Herring, to serve asacting CCO. He brings over 20years of financial and creditindustry experience.
Advances in technologyenable us to continue improving our level of service.Mobile banking upgrades,including the addition of mobilecheck deposit, were the most visible of these advances in 2014. Much time and effortwas expended this year on technology planning and strategy, and we have many initiatives underway that will enhance and streamline ouroperations and customer delivery systems.
The Bank’s four Wake County offices haveprovided “True Community Banking” for several years. It was logical to further expandin this area by opening our Loan ProductionOffice at 5909 Falls of the Neuse Road, Raleighin November 2014. We selected our formerClayton City Executive, Jerry Thornton to takethe helm. He is an accomplished commerciallender who is in touch with the Raleigh market. We expect this LPO to reinforce ourcommitment to serve Wake County as a valuedbusiness partner. Raleigh and Wake County’scurrent and projected growth should provide valuable opportunities to effectivelyleverage our capital, while addingshareholder value.
We rolled out our strategic plan tothe entire staff and Board in January2015 at the Clayton Center. It calls forresponsible growth, emphasizingbuilding on relationships with our customers by providing the best service and products which meet theneeds in our markets. Service to ourcommunities is deeply ingrained inour corporate culture and is vital tobeing a “True Community Bank”.
Our stock is now traded onthe OTCQX marketplace makingit more accessible to investors. This is the top tier of the threemarketplaces for trading over-the-counter stocks. Trades in ourstock may be executed by ourFinancial Services Division, ledby Chris Vasques, or by the broker of your choice.
With profound gratitude wesay farewell to two of our longtime directors who retired at theend of 2014. William J. “Bill Joe”Edwards and Percy Y. Lee, bothreached mandatory retirement.Their direction, leadership, andcommunity presence have beeninvaluable over the years.
They remain dedicated to the Company andBank while having more time to pursue theirmany other interests.
Sadly, we continue to mourn the passing of our Chairman Emeritus Merwin S. (Bill)Canaday on December 19, 2014. He faithfullyserved the Company and the Four Oaks community during his 91 years. His legacyserves as a shining example to the management and employees of the Companyand he will be greatly missed.
Leadership like this has brought us to thepoint where we can now embark upon the nextera of successful service to our customers andshareholders. Our expectations for 2015 are sustained profitability and positioning forfuture growth, such as construction of our long
awaited permanent facility in Dunn, N.C.Most importantly, I would like to
thank you for your loyal support ofthe Company and the Bank. Your recommendations to family, friends,and associates are the very best advertising we could ever have. Please share your thoughts and concerns with us as we work to continue the tradition of being a “True Community Bank”.
3
Sincerely,
Ayden R. Lee, Jr.Chairman & Chief Executive Officer
Retiring Senior Executive Vice President and COO CliffPainter (center), is greeted by Brandon Strickland andBruce Behrendt of our Zebulon office, at Cliff’s retirement celebration on October 16, 2014.
Warren D. “Rocky” Herring Acting Chief Credit Officer
4
The capital that was raised by the Company has helped inmany ways. Four Oaks Bank is ready to look to the futureand grow. In order to plan for the future and identify thebest possible path forward, the Board of Directors askedmanagement to consider anumber of strategic growthoptions.
Chairman Ayden Lee specifically charged the management team to come upwith a plan for growth, but baseit on what is special about FourOaks Bank – the wonderfulrelationship between the Bank,its customers, employees andthe communities the Bankserves.
In September 2014, Jeff Pope and David Rupp calledtogether a group to draft the Strategic Plan. The team metweekly for three months, assessing the strengths of theBank and the challenges that we face.
The team reviewed the potential in our markets, manyof which are growing again, anddeveloped a plan to allow FourOaks Bank to compete and winin its region. The team alsoassessed the mission andvision of the Bank – helpingpeople through True CommunityBanking. After three monthsof work, the team had produceda strategic plan of which theBank can be proud.
ABOVE: Clayton City ExecutiveBrent George welcomes co-workersto our Strategic Plan event.
TOP: David H. Rupp unveilsand explains the newly developed strategic plan andtakes questions from Bankemployees.
LEFT: Chairman & CEO,Ayden R. Lee, Jr. addressesBank staff and introduces presenter David H. Rupp.
The Four Oaks Bank Strategic Plan: Committing
ABOVE CENTER: Members of the Strategic Plan Team met frequently in the second half of 2014 to develop the plan.
5
The new strategic plan emphasizes the roots of Four Oaks Bank and “doubles down” on True CommunityBanking. While many financial institutions grow largeand impersonal, Four Oaks Bank is working to ensurethat it maintains its unique customerapproach – building its business on its relationships with great customers and thegreat service our associates have alwaysprovided.
This plan does call for growth, butresponsible growth. It also calls forimprovements in delivery and new products, but always with an emphasison the customer need. After all, this Bankbelongs to our customers, as much as to us.
With the plan in hand, the entire Bank team wascalled together – all 173 associates. We had a teammeeting at the lovely Clayton Center in January. Thestrategic plan was rolled out with excitement and
optimism about the future. Projectleader David Rupp unveiled the plan in adetailed presentation, and interacted withthe audience taking questions and soliciting responses from team members.
Our entire Bank team is ready to goon offense again – helping customers,growing our Bank and winning in ourmarkets. We look forward to the futureand to continuing forward as Four OaksBank – a True Community Bank.
CENTER: Ken Lehman and Directors Michael Weeks and Warren Grimesvisit the buffet.
ABOVE & FAR RIGHT: Bank employeesenjoy a delicious buffet and relax after thepresentaton.
To Relationship Based, True Community Banking!
ABOVE CENTER: Each employee received a commemorative paperweight at the presentation.
6
Customer Appreciation Hot Dog Lunches - Held annually at each branch � Sponsor, Cabin Fever Throwdown toBenefit Transitions LifeCare of Wake County � ALS Ice Bucket Challenge- Bank-wide � Johnston County Walk to EndAlzheimer’s � Blood Drives, Holly Springs Branch � Dunn Business Festival � Johnston County Relay for Life � Harnett County Relay for Life � Clayton Chamber of Commerce Business & Community Expo � Johnston HealthChampion 5K � The Four Oaks Bank Cup High School Ladies Soccer Tournament � United Way of the GreaterTriangle � St. Baldrick’s Foundation, Clayton � Strawberry Festival, Cleveland Community � Zebulon Business Expo� Erwin Business Expo �Ham & Yam Festival, Smithfield �Harvest Festival, Clayton �Mule Days, Benson �CelebrateFuquay-Varina � Harrells Community Day � Wallace Christmas Parade � Music at Barbour’s Grove, Four Oaks �Benson Community Day � Concerts at the Crossroads Summer Concert Series at Flower’s Plantation, Clayton � Benson Business Expo � Wallace Christmas Tree Lighting and Caroling � Four Oaks Christmas Parade
A Partial Listing Of Four Oaks Bank’s Commitment
Commitment To The Growth And Devel
Our philosophy, as a True Community Bank, is based on the simple belief that mutual support is essential to successful relationships. If we as a Bank need the support of individuals and businesses within a community, then they have reason to expect us to support the community.
For that reason, we have always been committed to supporting and participating in the things that we realize areimportant to our communities.
Beyond what we do as a Bank, we are even more proud ofwhat our employees commit to do individually. They are everywhere, from organized events like the Johnston Health
5K run, chamber events, parades, spelling bees, and cycling events,to building wheelchair ramps for handicapped neighbors.We appreciate their personal commitment to community
service because, in a very real sense, our employees areFour Oaks Bank!
1 2 3 4
15
98
7
14
16
7
� Holly Springs Christmas Parade � Rocky Cross Baptist Church Golf Tournament, Zebulon � Downtown BountyFestival and Brunswick Stew Cook-Off, Fuquay-Varina � En Plein Air Art Paint-Off and Art Auction, Fuquay-Varina �Christmas at Twilight, Wallace � Wallace Strawberry Festival � Easter Egg Hunt at James B. Creech Library, FourOaks � Four Oaks 125th Anniversary Celebration & Homecoming � Living History Festival, Four Oaks � Arts in thePark at Barbour’s Grove, Four Oaks � Carolina Strawberry Golf Classic, Wallace � Clayton Christmas Parade �Fuquay-Varina Christmas Parade � Dunn Christmas Parade � Regional Forerunners Luncheons three times peryear � Community involvement by individual employees: Chambers of Commerce � Rotary Clubs � Civitan Clubs �Kiwanis � Lions Clubs � County Leadership Programs � Support for all Schools within our markets � Volunteerhours at local schools � And much more!
Of Support To Community Events During 2014
ABOVE: 1: We had a large team in the JohnstonHealth Foundation 5K. 2: David Rupp, Ayden Lee &Tim Barbour brave the elements in the Bank sponsoredFour Oaks Christmas parade. 3: Ayden Lee receives thePaul Harris Fellow award from Rotary President KeithDimsdale. 4 & 5: Bank employees spent several
weekends building handicap ramps. 6: Donors participate in the bank sponsored blood drive in Holly Springs. 7: A group selfie taken at our booth atthe Flowers Pantation concert series. 8: Four Oaks Bank Forerunners co-directors LottieSpruill-Webb & Ann Fowler hosted many events. 9: David Rupp, Jeff Pope, Dale Sparksand Ayden Lee at the Neal Lancaster Four Oaks Bank Charity Classic.
lopment Of The Communities We Serve
5 6
13
12
11
10
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10 & 11: All of our branches and offices participated in theALS Ice Bucket Challenge, including our Clayton folks. 12: Mike Wooten speaks to Princeton football players at aBank luncheon. 13. In keeping with our community spirit,customer Danielle Mann, shown with her brother, chose togive the TV she won in our drawing to someone in need. 14 & 15: Carla Beasley, Tim Barbour and Sue Wood prep hamburgers as John Wood greets South Johnston Footballplayers at a Bank cookout. 16: Paulette Jackson displays threeawards she received for her service to the Fuquay-Varina Chamber.17: Teams line up for tee off at the Four Oaks Bank Rotary Golf Classic.
People Helping People Accomplish Their Financial Goals Through TrueCommunity Banking.
Respect And Appreciation For Individual Initiative And Personal Growth.
�Honesty And Integrity.
�Teamwork: Working Together To Achieve The Best Results Possible.
�Professionalism: Performing One's Job In Such A Manner
And Attitude As To Uphold And Elevate Our Standards And Values.
The final line in our Core Values reads “Professionalism:Performing one’s job in such a manner and attitude asto uphold and elevate our standards and values.’’This has become the criteria for selecting ourProfessionalism Award Recipients each year.The staff of each branch and the administrative
staff members of Four Oaks Bank submitthe names of individuals who, in the dailyexecution of their duties, best follow andexemplify the values, ideals, and goals of the Bank, as defined by our VisionStatement, Core Values, and Mission Statement. This year’sProfessionalism Awards werepresented to twenty-three outstanding employees.
8
Recognitions & Achievements: 2014 Four Oaks Bank Professionalism Awards RecipientsIndividuals Applying The Principles Of Our Vision, Core Values And Mission
Vision Statement
Core Values
ROW 1: David Hall, Donna Barefoot, Amy Vause, Lori Tanner, Teresa Randall, Carey Telfer, Cathy Snead ROW 2: Pat Williams, Joanie Wood, Ann Fowler, Brent George
Exceed Customer Expectations By Providing Exceptional CustomerService.
�Provide An Environment Where Our Employees Can Learn, Grow, And Be Fulfilled In Their Work.
�Commit To The Growth And Development Of
The Communities We Serve.�
Maintain The High Standards Of The Banking Industry, While Striving To Provide Our Shareholders Competitive Returns On
Their Investments.
We are proud of each of these dedicatedindividuals and appreciate their personal effortsand the difference each of them makes forthe Bank and for our customers.
Our employees’ adherence to ourVision, Core Values, and Missionkeeps us on the course to growth and success. It is the performance,actions, and communication skills of
our people which build the most vital element of our existence - relationships.
Our winners are holding plaqueswhich recognize the individual dedication that sets our Bank apartfrom our competition.
9
Recognitions & Achievements: 2014 Four Oaks Bank Professionalism Awards RecipientsIndividuals Applying The Principles Of Our Vision, Core Values And Mission
Mission Statement
ROW 3: Tonya Massengill, Joy Jones, Deanna Hart, Gwen Rivenbark, Jamie West, Terri Moore, Rose HouseROW 4: Alan Jewells, Linda Winn, Miluska Tezekjian, Scott Booth, Mattie Keene
10
Six Earn Financial Services Referral Achievement Awards
Our branch associates have been very successful in makingcustomers aware of our Financial Services division. The total referrals from individuals are tracked throughout the year andexceptional efforts are recognized with the Financial ServicesAchievement Award.
In 2014, the award was presented to six individuals. 1st Place: Valerie Vonn-James; 2nd Place: (tie) Patsy Rowe andCharlene Browning; 3rd Place: (tie) Vickie Weaver, Tracy Pittmanand Erin McMahon. We appreciate their outstanding support.
We appreciate the many Four Oaks Bank associates who, bybuilding trust based relationships with their customers, wereable to supply steady referrals and contribute greatly to a verygood year for Four Oaks Financial Services in 2014. Congratulations to Shannon Johnson and the Dunn staff who
won the BIG DOG Award in 2014, the third consecutive year.
They did a great job supporting Financial Services all year and as a result generatedthe most referrals for the year.We appreciate the efforts of these associates, as well as all of
our employees, to identify customers who can benefit from ourFinancial Services division.
Dunn Office Staff - Lorie Beasley, Lori Tanner, Tammie Calcutt, Shannon Johnson and Judy Page.
Dunn Office Earns Third Financial Services’ “BIG DOG” Award
Tracy Pittman of Fuquay-Varina, Erin McMahon of Smithfield, Vickie Weaver of Cleveland, Charlene Browning of Zebulon, Valerie Vonn-James of Cleveland and Patsy Rowe of Zebulon.
Recognitions & Achievements: Individuals Making A Difference For Our Bank & Our Customers
11
Four Oaks Bank recognizes that, inorder for our organization to provide thehighest levels of effective customer service, we must maintain a high level ofinternal service. The better we supporteach other and communicate internally,the better we are able to serve our customers. The ‘‘Mission Possible’’ team continues
to oversee efforts to improve and supportinterdepartmental communications, andevaluate the results by survey. Employee communications in all
departments and divisions are assessed
twice each year by employees, rating standards of returning phone calls andemails in a timely manner, professional andrespectful treatment, helpful responses, andoverall communications.This year four departments were
recognized by their peers as Top Performersfor providing excellent communications andinterdepartmental service - CommercialServices, Training, Marketing and HumanResources. We appreciate the outstandingperformance by these professionals and allthey, and others, do to improve interactionsand communicationswithin the Bank.
ABOVE: Lottie Spruill-Webb and Pam Ashworth - Marketing.
..
ABOVE: Mattie Keene and Wanda Blow -Human Resources.
ABOVE CENTER: Pat Williams -Training.
Dunn Office Staff - Lorie Beasley, Lori Tanner, Tammie Calcutt, Shannon Johnson and Judy Page.
Our Teller Awards Program was initiated in 2008 to recognize and reward tellersquarterly for outstanding service. The program is based on a
point system with two categories. The first is technicalcompetence, including cashdrawer balancing. The secondcategory is sales excellence,which includes referrals and confirmed sales. Extra consideration is given
to employees who receive a commendation for going above andbeyond their normal job duties. Each quarterly winner is
recognized as a Top Teller andrewarded with a certificate and a$100.00 gift card. Our Top Tellers for 2014 are
Pamela Tatum of Holly Springs, whowas named for two quarters, andValerie Vonn-James of Cleveland.Erika Hall, not pictured, was alsonamed Top Teller.
Interdepartmental Communications ‘‘Top Performers” For 2014
Recognitions & Achievements: Individuals Making A Difference For Our Bank & Our Customers2014 ‘‘Top Teller’’ Recipients
BELOW CENTER: Christy Spell and LindaWinn - Commercial Services.
12
In Loving Memory & Grateful Appreciation OfMerwin S.“Bill” Canaday, Chairman Emeritus
Merwin S. (Bill) Canaday is an icon in the Four OaksCommunity and at Four Oaks Bank. After 91 years, his passingon December 19, 2014, filled us with sadness. Beyond that, itserved as a reminder of just how much impact one life can have. Bill Canaday lived through some amazing times watching the industrial revolution firsthand. He learned early about hard workand service to his fellow man in his family’s Four Oaks DrugCompany. He worked alongside his father after his graduationfrom UNC-Chapel Hill in 1944, becoming the sole owner in 1969.He upheld the highest standard of care for his customers andcommunity well into his 80’s, as a leader at Four Oaks Bank and
in the Four Oaks Community, and a friend to all he met. Mr. Canaday became a board member with Four Oaks Bank &
Trust in 1967 and President in 1969. In 1989 he was namedChairman of the Board and served in that capacity until hisretirement in 2006 when he was honored as Chairman Emeritus.He loved the Bank and was always a loyal supporter.He dearly loved his wife Elizabeth,“Lib”, and their family,
around whom his world revolved. His love of family carried overto all of us in his bank family. His leadership and contributionsto the direction of this Bank will continue to be a part of who weare as a True Community Bank as we go forward.
After many years of meritoriousservice on the Board of Directors ofFour Oaks Fincorp, Inc. and FourOaks Bank & Trust Company,William J. “Bill Joe” Edwards, whoserved 24 years, and Percy Y. Leewho served 22 years, resigned effective December 31, 2014, afterreaching mandatory retirement age. They have led us through our
growth years and also the turbulentyears of the “Great Recession”. We appreciate their service on theloan committee, with Mr. Edwardsserving as Chairman. Both are pillars of their communities. “We thank them for their leadership, dedication, and support
of the Company and the Bank as directors, shareholders,
customers, and friends.” saysAyden R. Lee, Jr. Chairman and CEO.“The effects of their service on theBoard will continue to strengthen usand the foundation laid under theirleadership will support our future expansion and success”.
Mr. Edwards may often be foundat the Edwards Food Store in FourOaks, and Mr. Lee will likely befound at the T. R. Lee Oil and LPGas Company in Clayton. That isunless they are at the beach, fishing, golfing, spending time with their families, or supporting the communities through attendance at
church and civic functions. It is with sincere gratitude we wishthem much happiness and continued success.
William J. EdwardsElected 1990
Percy Y. LeeElected 1992
Legacies Of Service: DirectorsWilliam J. Edwards & Percy Y. Lee Retire
13
Nancy S. WiseExecutive Vice PresidentChief Financial Officer
Lisa S. HerringExecutive Vice President
Chief Risk Officer
W. Leon Hiatt, IIIExecutive Vice President
Chief Administrative Officer
David H. RuppPresident &
Chief Operating Officer
Jeff D. PopeExecutive Vice PresidentChief Banking Officer
Ayden R. Lee, Jr.Chairman &
Chief Executive Officer
Board Of Directors
Front Row: left to right - Warren L. Grimes, Michael A. Weeks, Robert Gary Rabon, Paula Canaday Bowman. Back Row: Dr. R. Max Raynor, Kenneth R. Lehman, Chairman Ayden R. Lee, Jr., and David H. Rupp.
Executive Officers
14
Brent A. GeorgeVice President
Clayton
David L. HallSenior Vice President
Garner
John W. Wood, IIISenior Vice President
Benson
James M. RileySenior VP & Retail BankingManager, Fuquay-Varina
Scott E. BoothVice PresidentHolly Springs
N. Jeffery HargroveVice President
Wallace /Harrells
Michael C. WootenSenior Vice President
Smithfield
Bruce BehrendtVice President
Zebulon
Shannon R. JohnsonVice President
Dunn
John W. BullardSenior Vice President, Manager
Loan Production OfficeSouthern Pines
Jerry W. ThorntonSenior Vice President, Manager
Loan Production OfficeRaleigh
H. Timothy BarbourVice PresidentFour Oaks
City Executives
15
Christopher Vasques Senior Vice President,
Manager
2014 was a very good year for the Bankand the Financial Services Division. We experienced strong growth in assets undermanagement and revenue while continuing tomaintain exceptionalcustomer loyalty andretention.
Our staff grew aswell in 2014 and wewere fortunate enoughto bring two experienced and very capablefinancial services representatives onboard. Rick Lowe andMichael Nunez. Bothare committed to the division’s goal of providing clientfocused financial planning, investment portfolio management,
and insurance solutions to customers and potential customers of the Bank.
Financial Services continues to be a valuable resource for our customers and helps
build stronger relationships betweenFour Oaks Bank andthe communities weserve.
Our focus for 2015and beyond will remainthe same. We will continue to expand ourmarket share in the communities we serveand stay focused onproviding the highestquality, most efficientsolutions to our clientsand assure they stay ontrack in reaching theirfinancial goals.
The mortgage division entered growthmode in 2014, with the development of theBank’s new “In House” mortgage products anddeveloping new markets. To meet thatdemand we haveadded a loan processorto our office staff andtwo loan originators.
Ginger Waltmanjoined the Mortgagedivision to focus onour Clayton market.Ginger brings fifteenyears of experienceand specializes in HUD 184 loans (AmericanIndian Loans).
Chad Justice alsojoined our Mortgageteam and will concentrate his effortsin the Raleigh market.Chad specializes in
VA loans and assisting military veterans andtheir families with the mortgage loan process.Our new “In House” products will serve theneeds of the borrower not quite fitting into the
Secondary Marketguidelines, serve theJumbo market and the growing Hispanic andLatino markets.
Having expandedour products and staff,and increased training,we look forward torecord years of growthand production for theBank. We do this byexceeding customer expectations and providing exceptionalcustomer service through every step ofthe mortgage process.
Elaine CanadaSenior Vice President,
Manager
Ginger WaltmanMortgage Loan Consultant
Caroline CoreyMortgage Loan Consultant
Chad JusticeMortgage Loan Consultant
Michael NunezFinancial Services Representative
Rick LoweFinancial Services Representative
Four Oaks Mortgage
Four Oaks Financial Services
16
Four Oaks Fincorp’s Common Stock (FOFN) trades areconducted through the OTCQX marketplace. Four OaksFinancial Services, a division of Four Oaks Bank, canconduct stock trades. For assistance you may contact:
Four Oaks Financial Services325 N. Judd Parkway NEFuquay-Varina, NC 27526Telephone: 919-567-6006Attention: Christopher P. Vasques
Senior Vice President Division Manager [email protected]
As of December 31, 2014, the approximate number ofholders of record of the Common Stock of the Companywas 2,300. The Company has no other class of equitysecurities.State banking laws require a surplus of at least 50%
of paid-in capital stock be maintained in order for theBank to declare a dividend to the Company. No dividendswere paid by the Company in 2013 or 2014.
ANNUAL MEETINGThe Annual Meeting of Shareholders of Four Oaks
Fincorp, Inc. will be held on June 8, 2015, at 7:00 PM. at the Four Oaks Elementary School cafeteria at 180West Hatcher Street, Four Oaks, North Carolina.We encourage all shareholders to attend.
TRANSFER AGENCYShareholders desiring to transfer shares or who have
questions regarding their stock certificates should contact the company’s transfer agency:
CONTACT INFORMATION Wanda J. BlowVice PresidentCorporate SecretaryPO Box 309Four Oaks, NC 27524Telephone: [email protected]
ADDITIONAL INFORMATION www.fouroaksbank.com
Wanda J. BlowCorporate Secretary
Four Oaks Bank currently has fifteen locations, spreadover thirteen towns and six counties - Johnston, Wake,Harnett, Sampson, Duplin, and Moore.
In addition, our Administrative Offices andTraining Center are located
in Four Oaks, NC.
Administrative Building6114 US 301 S.Four Oaks, NC919-963-2177
Training Center5987 US 301 S.Four Oaks, NC919-963-2177
7. Raleigh919-772-2331
8. Raleigh Loan Production Office919-786-4149
9. Harrells910-532-6005
10. Holly Springs919-567-3888
11. Smithfield - Brightleaf919-989-6710
12. SmithfieldMainOffice919-989-6700
13. Southern PinesLoan Production Office910-693-1209
14. Wallace910-285-9300
15. Zebulon919-269-2155
1. Benson919-894-1800
2. Clayton919-553-2323
3. Dunn910-230-3775
4. Four Oaks 919-963-2177
5. Fuquay-Varina919-567-3434
6. Garner/Cleveland Area919-662-9005
By Regular Mail:ComputershareP.O. BOX 30170 College Station, TX 77842UNITED STATES
By Overnight Delivery:Computershare211 Quality Circle Suite 210 College Station, TX 77845UNITED STATES
Telephone:Toll Free - 800-368-5948Toll - +1-781-575-4223
Locations
Corporate Information
BENSONDonald ByrdWill ChandlerLandis HallDanny HollandWayne McLambAnn Wood
CLAYTONJoyce L. CanadyJoseph W. DelaineDr. James H. EllerbeTravis J. HillFrederick HuebnerLawrence E. Kristoff, IIW. Stewart McLeodBarry B. Woodard
DUNN John A. JohnsonLynn MatthewsDanny NorrisRobert PleasantMatthew Smith
FOUR OAKSJoyce BoykinLinwood E. ByrdRoy H. DunnEarl Wood LeeThomas PriceVeronica J. SurlesMike WinfreeAaron Allen Wood
FUQUAY-VARINABilly AdamsDavid BallHal Farthing Robert GoodwinSim HoneycuttCharles McLaurinBecky Medlin
GARNERCleveland AreaDonald AdamsDouglas BallLisa DennyDoris HuebnerAndrew SimsDon Wells
RALEIGH Garner StationLee CarrollDr. Byron DiggsLynda R. HerringKeith M. RobertsTommy Sims
HOLLY SPRINGSSusan Phares AldrichLen BradleyJeff Van DykeMike KuberGary J. MarkhamDon MizelleTony PernaParrish Womble
SMITHFIELD Dr. John BookerMickey LammKim McCullersEric SellersMarie WatsonCharlie Young
WALLACE / HARRELLS Michael J. BlackburnDr. Mott P. BlairEarl BrinkleyBill CaroneB. Warren CavenaughKaye L. FosterJames C. MooreDr. John D. Robinson
ZEBULON Renee Parrish BakerFay BrownBill ClementCharles EstesLinda JohnsonBob MathenyLes W. Merritt, Jr.
This statement has not been reviewed or confirmed for accuracy or relevance by the Securities and ExchangeCommission or the Federal Deposit Insurance Corporation.
Four Oaks Fincorp, Inc. Annual ReportDesigned & Produced By Sloan Communications
Four Oaks, NC919-963-6000
[email protected] By TCG Legacy Printing, Garner, NC
AR14-5.3M -5/15
As a True Community Bank, our primary focus isto provide the financial services needed by individuals and businesses in each of the communities we serve. Beyond that, we also try to bean active, contributing, corporate partner in thesecommunities. In that quest it is essential that wehave open lines of communication with individualswho are active within the business and civic environments of each of the markets we serve.
For that purpose, we maintain Community Advisory Boards. These are local Boards comprisedof Bank customers who live and work in the area.
Each has earned respect within their home community for their contributions to the businessand civic environments of that area.
These Boards serve a vital function in our role asa True Community Bank. They have their fingers onthe pulse of our marketplace and provide vital feedback, as well as input on our products and services, and how we can better tailor them to thespecific needs of the community. We are grateful tothese individuals for their involvement as customersand especially for their input and guidance in thisimportant role.
Four Oaks Fincorp, Inc. is the bank holding company for Four Oaks Bank & Trust Company, astate chartered bank headquartered in Four Oaks,North Carolina.
With approximately $821 million in assets and $665million in deposits, the Bank is ranked number one indeposit market share in Johnston County, holding29.80% of the deposits, as of June 30, 2014.
Four Oaks Bank is a full service financial institutioncommitted to providing our customers with modernbanking products and services without sacrificing thequality, personalized service our customers expect anddeserve. The Bank was chartered in1912 and its deposits are insured by the FDIC.
Financial Highlights 1Letter to Shareholders 2-3Strategic Plan 4-5Community Involvement 6-7 Professionalism Awards 8-9Top Performers 10-11
Acknowledgments 12Board of Directors & Executive Officers 13 City Executives 14Division Management 15 Locations & Corporate Information 16Community Advisory Boards 17
The discussion that follows contains forward-lookingstatements, as defined in the Private Securities LitigationReform Act of 1995. These statements may address issuesthat involve significant risks and uncertainties. Althoughwe believe that the expectations reflected in this
discussion are reasonable, actual results may be materiallydifferent. Please refer to the Four Oaks Fincorp, Inc. Form10-K for the year ending December 31, 2014, for a morethorough description of the types of risks and uncertaintiesthat may affect management’s forward-looking statements.
Company Profile
Contents
Four Oaks Fincorp, Inc.Annual Report 2014
Our Annual Report for 2014, especially our cover, reflects an overall feeling of excitement and energy that isfelt throughout our Bank with recent developments including the results of our capital raise. It is like the dawnof a new day with all its promise and potential.
The 2014 Annual Report is presented in a summary format to provide information regarding the performance ofFour Oaks Bank in a manner that is meaningful and usefulto the widest range of readers. The audited consolidated financial statements of Four Oaks Fincorp, Inc. and subsidiary, Four Oaks Bank & Trust Company, and othermore detailed analytical information regarding the Corporation, are contained in the Four Oaks Fincorp, Inc.2014 Form 10-K filed with the Securities and Exchange Commission.
Forward-Looking Statements
Community Advisory Boards
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