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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2005
Commission File Number 0-22787
---------
FOUR OAKS FINCORP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-2028446
- -------------------------------- ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
6114 U.S. 301 SOUTH, FOUR OAKS, NC 27524
- --------------------------------------------------------------------------------
(Address of principal executive office, including zip code)
(919) 963-2177
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes_X_ No___
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.) Yes___ No_X_
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, 3,469,235
par value $1.00 per share (Number of shares outstanding
(Title of Class) as of May 5, 2005)
1
Page No.
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Part I. FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Consolidated Balance Sheets
March 31, 2005 and December 31, 2004....................... 3
Consolidated Statements of Income
Three Months Ended March 31, 2005 and 2004................. 4
Consolidated Statements of Comprehensive Income
Three Months Ended March 31, 2005 and 2004................. 5
Consolidated Statement of Shareholders' Equity
Three Months Ended March 31, 2005.......................... 6
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2005 and 2004................. 7
Notes to Consolidated Financial Statements................. 8
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 11
Item 3 - Quantitative and Qualitative Disclosure About Market Risk..... 13
Item 4 - Controls and Procedures....................................... 13
Part II. OTHER INFORMATION
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds... 14
Item 6 - Exhibits...................................................... 15
2
Part I. FINANCIAL INFORMATION
Item 1 - Financial Statements
FOUR OAKS FINCORP, INC.
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
March 31, December 31,
2005 2004*
(Unaudited)
----------- ------------
(In thousands)
ASSETS
Cash and due from banks $ 11,547 $ 10,634
Interest-earning deposits 7,666 3,615
Investment securities available for sale 64,186 52,342
Loans 322,114 312,815
Allowance for loan losses (4,185) (4,055)
----------- ------------
Net loans 317,929 308,760
Accrued interest receivable 2,094 2,210
Bank premises and equipment, net 10,109 10,149
FHLB stock 2,734 2,621
Investment in life insurance 6,098 6,054
Other assets 2,615 2,115
----------- ------------
Total assets $ 424,978 $ 398,500
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 64,279 $ 59,528
Money market and NOW accounts 58,845 55,467
Savings 15,035 14,900
Time deposits, $100,000 and over 123,160 108,655
Other time deposits 79,385 76,757
----------- ------------
Total deposits 340,704 315,307
Borrowings 43,160 43,160
Accrued interest payable 1,558 1,201
Other liabilities 1,563 1,537
----------- ------------
Total liabilities 386,985 361,205
----------- ------------
Shareholders' equity:
Common stock; $1.00 par value, 10,000,000 shares
authorized; 3,463,738 and 3,438,107 shares issued and
outstanding at March 31, 2005 and December 31, 2004,
respectively 3,464 3,438
Additional paid-in capital 9,205 8,788
Retained earnings 25,962 25,091
Accumulated other comprehensive loss (638) (22)
----------- ------------
Total shareholders' equity 37,993 37,295
----------- ------------
Total liabilities and shareholders' equity $ 424,978 $ 398,500
=========== ============
* Derived from audited consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial
statements.
3
FOUR OAKS FINCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
---------------------
2005 2004
-------- --------
(In thousands, except
per share data)
Interest income:
Loans, including fees $ 5,668 $ 4,690
Investment securities:
Taxable 464 300
Tax-exempt 34 51
Dividends 32 22
Interest-earning deposits 25 5
-------- --------
Total interest income 6,223 5,068
-------- --------
Interest expense:
Deposits 1,375 942
Borrowings 430 396
-------- --------
Total interest expense 1,805 1,338
-------- --------
Net interest income 4,418 3,730
Provision for loan losses 187 568
-------- --------
Net interest income after
provision for loan losses 4,231 3,162
-------- --------
Non-interest income:
Service charges on deposit accounts 428 496
Other service charges, commissions and fees 264 184
Gain (loss) on sale of investment securities available
for sale (54) 56
Loss on sale of loans (2) -
Merchant fees 83 73
Income from investment in bank owned life insurance 43 49
-------- --------
Total non-interest income 762 858
-------- --------
Non-interest expense:
Salaries 1,426 1,323
Employee benefits 314 293
Occupancy expenses 142 135
Equipment expenses 334 276
Professional and consulting fees 222 169
Other taxes and licenses 63 62
Merchant processing expenses 75 65
Other operating expenses 619 467
-------- --------
Total non-interest expense 3,195 2,790
-------- --------
Income before income taxes 1,798 1,230
Income taxes 622 431
-------- --------
Net income $ 1,176 $ 799
======== ========
Net income per common share:
Basic and diluted $ .34 $ .24
======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
4
FOUR OAKS FINCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
-------------------
2005 2004
-------- --------
(Amounts in
thousands)
Net income $ 1,176 $ 799
-------- --------
Other comprehensive income (loss):
Securities available for sale:
Unrealized holding gains (losses) on available for sale
securities (757) 371
Tax effect 303 (147)
Reclassification of (gains) losses recognized in net
income 54 (56)
Tax effect (22) 22
-------- --------
Net of tax amount (422) 190
-------- --------
Cash flow hedging activities:
Unrealized holding gains (losses) on cash flow hedging
activities (325) 353
Tax effect 131 (140)
-------- --------
Net of tax amount (194) 213
-------- --------
Total other comprehensive income (loss) (616) 403
-------- --------
Comprehensive income $ 560 $ 1,202
======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
5
FOUR OAKS FINCORP, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------
Accumulated
Common Stock Additional other Total
------------ paid-in Retained comprehensive shareholders'
Shares Amount capital earnings loss equity
----------- -------- ---------- --------- ------------- -------------
(Amounts in thousands, except share and per share data)
Balance, December 31, 2004 3,438,107 $ 3,438 $ 8,788 $ 25,091 $ (22) $ 37,295
Net income - - - 1,176 - 1,176
Other comprehensive loss - - - - (616) (616)
Issuance of common stock 25,631 26 379 - - 405
Current income tax benefit - - 38 - - 38
Cash dividends of $.09 per share - - - (305) - (305)
----------- -------- ---------- --------- ------------- -------------
Balance, March 31, 2005 3,463,738 $ 3,464 $ 9,205 $ 25,962 $ (638) $ 37,993
=========== ======== ========== ========= ============= =============
The accompanying notes are an integral part of the consolidated financial
statements.
6
FOUR OAKS FINCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
---------------------
2005 2004
--------- ---------
(In thousands)
Cash flows from operating activities:
Net income $ 1,176 $ 799
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 187 568
Provision for depreciation and amortization 260 251
Net amortization of bond premiums and discounts 9 51
(Gain) loss on sale of securities 54 (56)
Loss on sale of loans 2 -
Increase in cash surrender value of life insurance (43) (49)
Changes in assets and liabilities:
Increase in other assets (354) (294)
Decrease in interest receivable 116 152
Increase in other liabilities 65 643
Increase in interest payable 357 15
--------- ---------
Net cash provided by operating activities 1,829 2,080
--------- ---------
Cash flows from investing activities:
Proceeds from sales and calls of securities available
for sale 10,711 11,147
Proceeds from maturities of securities available for
sale - 2,826
Purchase of securities available for sale (23,321) (19,955)
Net increase in loans (9,364) (17,773)
Additions to premises and equipment (216) (78)
Purchase of Federal Home Loan Bank stock (113) (227)
Proceeds from sale of foreclosed assets 268 -
Purchases of bank-owned life insurance (1) (1)
--------- ---------
Net cash used in investment activities (22,036) (24,061)
--------- ---------
Cash flows from financing activities:
Net proceeds from borrowings - 10,001
Net increase in deposit accounts 25,071 12,496
Proceeds from issuance of common stock 405 646
Cash dividends paid (305) (271)
--------- ---------
Net cash provided by financing activities 25,171 22,872
Net increase in cash and cash equivalents 4,964 891
Cash and cash equivalents at beginning of period 14,249 15,825
--------- ---------
Cash and cash equivalents at end of period $ 19,213 $ 16,716
========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
7
FOUR OAKS FINCORP, INC.
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
In management's opinion, the financial information contained in the accompanying
unaudited consolidated financial statements reflects all adjustments (consisting
solely of normal recurring adjustments) necessary for a fair presentation of the
financial information as of and for the three-month periods ended March 31, 2005
and 2004, in conformity with accounting principles generally accepted in the
United States of America. The consolidated financial statements include the
accounts of Four Oaks Fincorp, Inc. (the "Company") and its wholly-owned
subsidiaries, Four Oaks Bank & Trust Company (the "Bank") and Four Oaks Mortgage
Services, LLC, a mortgage origination subsidiary. All significant intercompany
transactions and balances have been eliminated in consolidation. Operating
results for the three-month period ended March 31, 2005 are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 2005.
The organization and business of the Company, accounting policies followed by
the Company and other information are contained in the notes to the consolidated
financial statements filed as part of the Company's annual report on Form 10-K
for the year ended December 31, 2004. This quarterly report should be read in
conjunction with such annual report.
Certain amounts in 2004 were reclassified to conform with the presentation in
2005. These reclassifications had no effect on the Company's previously reported
consolidated financial position or results of operations.
NOTE 2 - NET INCOME PER SHARE
Basic and diluted net income per common share are computed based on the weighted
average number of shares outstanding during each period after retroactively
adjusting for a 5-for-4 stock split paid on October 29, 2004. Diluted net income
per common share reflects the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or converted into common
stock or resulted in the issuance of common stock that would then share in the
net income of the Company.
Basic and diluted net income per common share have been computed based upon net
income as presented in the accompanying consolidated statements of income
divided by the weighted average number of common shares outstanding or assumed
to be outstanding as summarized below:
Three Months Ended
March 31,
------------------------
2005 2004
----------- -----------
Weighted average number of common shares
used in computing basic net income per share 3,451,761 3,366,250
Effect of dilutive stock options 22,012 16,980
----------- -----------
Weighted average number of common shares
and dilutive potential common shares used
in computing diluted net income per share 3,473,773 3,383,230
=========== ===========
8
As of March 31, 2005 and 2004, there were no antidilutive shares outstanding for
either three-month period.
NOTE 3 - STOCK COMPENSATION PLANS
Statement of Financial Accounting Standards, ("SFAS") No. 123, Accounting for
Stock-Based Compensation, ("SFAS 123") encourages all entities to adopt a fair
value based method of accounting for employee stock compensation plans, whereby
compensation cost is measured at the grant date based on the value of the award
and is recognized over the service period, which is usually the vesting period.
However, it also allows an entity to continue to measure compensation cost for
those plans using the intrinsic value based method of accounting prescribed by
Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued
to Employees, whereby compensation cost is the excess, if any, of the quoted
market price of the stock at the grant date (or other measurement date) over the
amount an employee must pay to acquire the stock. Stock options issued under the
Company's stock option plans have no intrinsic value at the grant date as they
are granted with an exercise price equal to the fair market value on that date
and, under APB Opinion No. 25, no compensation cost is recognized for them. The
Company has elected to continue with the accounting methodology in APB Opinion
No. 25 and, as a result, has provided the following pro forma disclosures of net
income and earnings per share and other disclosures as if the fair value based
method of accounting had been applied.
Three Months Ended
March 31,
------------------
2005 2004
-------- -------
(Amounts in
thousands, except
per share data)
Net income:
As reported $ 1,176 $ 799
Deduct: Total stock-based employee compensation
expense determined under fair value method
for all awards, net of related tax effects (20) (15)
-------- -------
Pro forma $ 1,156 $ 784
======== =======
Basic earnings per share:
As reported $ .34 $ .24
Pro forma .33 .23
Diluted earnings per share:
As reported $ .34 $ .24
Pro forma .33 .23
In December 2004, the FASB issued SFAS 123 (revised 2004), Share-Based Payment,
("SFAS No. 123(R)"), which is a revision of SFAS No. 123. The implementation of
SFAS No. 123(R) has been delayed and will not take effect until January 1, 2006.
Additional details on the expected impact for the Company are included in the
Company's Annual Report on Form 10-K, in Note A to the Consolidated Financial
Statements.
9
NOTE 4 - COMMITMENTS
At March 31, 2005, loan commitments were as follows (in thousands):
Commitments to extend credit $ 66,029
Undisbursed lines of credit 22,356
Letters of credit 1,777
10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion provides information about the major components of the
financial condition and results of operations of the Company and its
subsidiaries and should be read in conjunction with our Consolidated Financial
Statements and Notes thereto.
Comparison of Financial Condition at
March 31, 2005 and December 31, 2004
During the three months ended March 31, 2005, the Company's total assets grew
from $398.5 million at December 31, 2004 to $425.0 million, an increase of $26.5
million or 6.64%. Our liquid assets, consisting of cash and cash equivalents and
investment securities available for sale, experienced a net increase of $16.8
million, primarily from increases in investment securities of $11.8 million.
Additional funds available from deposit growth provided an opportunity to
increase investments as yields improved during March 2005. Net loans grew from
$308.8 million at December 31, 2004 to $317.9 million at March 31, 2005 due to a
$10.5 million growth in loans secured by real estate. Our loan portfolio
continues to reflect a trend towards growth in commercial real estate lending.
Deposits from our local market continued to be our primary funding source,
increasing by $20.7 million, while wholesale deposits increased $4.6 million.
Deposits grew from $315.3 million at December 31, 2004 to $340.7 million. This
increase occurred primarily within our time deposit accounts, which increased
locally by $12.4 million, with additional funds provided by increases in
non-interest bearing deposits and interest checking deposits of $4.8 million and
$3.4 million, respectively, during the quarter. Deposit growth can be attributed
to rising interest rates as we increased our rates in response to continued
pricing pressures from our competitive market.
Total shareholders' equity increased $698,000 from $37.3 million at December 31,
2004 to $38.0 million at March 31, 2005. This increase in shareholders' equity
resulted principally from income from operations during the period of $1.2
million and net proceeds from the issuance of common stock from stock option
exercises of $284,000 and dividend reinvestment in the amount of $158,000.
Offsetting these increases were other comprehensive losses of $616,000, and
dividends paid to our shareholders of $305,000. At March 31, 2005, both the
Company and the Bank were considered to be well capitalized, as such term is
defined in applicable federal regulations.
Results of Operations for the Three Months Ended
March 31, 2005 and 2004
Net Income. Net income for the three months ended March 31, 2005 was $1.2
million, or $.34 basic per share, as compared with net income of $799,000 or
$.24 basic per share for the three months ended March 31, 2004, an increase of
$377,000 or $.10 per share. This increase resulted primarily from an increase in
the Company's net interest income for the three months ended March 31, 2005 of
$688,000, which was partially offset by increased non-interest expense of
$405,000.
Net Interest Income. Like most financial institutions, the primary component of
earnings for the Bank is net interest income. Net interest income is the
difference between interest income, principally from loan and investment
securities portfolios, and interest expense, principally on customer deposits
and borrowings. Changes in net interest income result from changes in volume,
spread and margin. For this purpose, volume refers to the average dollar level
of interest-earning assets and interest-bearing liabilities, spread refers to
the difference between the average yield on interest-earning assets and the
average cost of interest-bearing liabilities and margin refers to net interest
income divided by average interest-earning assets. Margin is influenced by the
level and relative mix of interest-earning assets and interest-bearing
liabilities, as well as by levels of non-interest-bearing liabilities and
capital.
11
Net interest income for the three months ended March 31, 2005 was $4.4 million,
an increase of $688,000 compared to the first quarter of 2004, which resulted
primarily from the increase in the level of our average interest-earning assets
of $52.8 million relative to the increase in the level of our average
interest-bearing liabilities of $44.9 million during the quarter. Also,
contributing to the increase in net interest income, was the average growth in
interest free demand deposits of $7.5 million. The growth in demand deposits
provided a partial offset to the $30.5 million increase in higher costing time
deposits. The above factors combined to increase our net interest margin by 13
basis points from 4.59% in the 2004 quarter to 4.72% in the current year
quarter.
Provision for Loan Losses. The provision for loan losses was $187,000 and
$568,000 for the three months ended March 31, 2005 and 2004, respectively, a
decrease of $381,000. The provision for the first quarter of 2004 reflected an
increase due to an unsecured overdraft related to a discontinued product. Net
charge-offs of $57,000 were recorded during the first three months of 2005,
compared to $133,000 for the first quarter of 2004. Non-performing loans
aggregated $1.3 million at March 31, 2005, increasing $320,000 from the $944,000
at December 31, 2004, while the allowance for loan losses, expressed as a
percentage of gross loans, was 1.30% at March 31, 2005 and December 31, 2004.
Management believes that the allowance is adequate to absorb probable losses
inherent in the loan portfolio.
Non-Interest Income. Non-interest income decreased $96,000 for the three months
ended March 31, 2005 to $762,000 as compared to $858,000 for the same period in
2004. The decline of $96,000 was primarily due to losses on sales of investment
securities of $54,000 compared to gains of $56,000 on sales of investment
securities for the prior year quarter. Service charges on deposit accounts
declined $68,000. The decline in these fees is attributable to increased
competition among banking institutions to offer lower fees and a more
enlightened customer base as they continue to migrate into more cost efficient
deposit products. There were no other significant changes in any of the
categories of income that comprise our total non-interest income.
Non-Interest Expense. Non-interest expense increased $405,000 to $3.2 million
for the three months ended March 31, 2005 compared to $2.8 million for the three
months ended March 31, 2004. This increase was due in part to an increase in
salaries and employee benefits of $124,000, which resulted from normal salary
adjustments, newly appointed officer or management level personnel, and rising
benefits costs. The addition of two offices in January 2005 contributed to
increased operating expenses including advertising expense of approximately
$36,000, printing and office supplies of approximately $16,000 and telephone
expense of approximately $14,000. In addition to the opening of new offices,
upgrades in technology resulted in an increase in equipment expense of $58,000.
Professional fees also increased $53,000 primarily due to increased regulatory
requirements. There were no other significant increases in any of the remaining
non-interest expenses which grew due to the Company's overall asset growth.
Provision for Income Taxes. The Company's provision for income taxes, as a
percentage of income before income taxes, was 34.6% and 35.0% for the three
months ended March 31, 2005 and 2004, respectively.
12
Liquidity and Capital Resources
Our liquidity position is primarily dependent upon the Bank's need to respond to
loan demand, the short-term demand for funds caused by withdrawals from deposit
accounts (other than time deposits) and the liquidity of its assets. The Bank's
primary liquidity sources include cash and amounts due from other banks, federal
funds sold, and U.S. Government Agency and other short-term investment
securities. In addition, the Bank has the ability to borrow funds from the
Federal Reserve Bank and the Federal Home Loan Bank of Atlanta and to purchase
federal funds from other financial institutions. Management believes that the
Company's liquidity sources are adequate to meet our operating needs and the
operating needs of the Bank for the next eighteen months. Total shareholders'
equity was $38.0 million or 8.9% of total assets at March 31, 2005 and $37.3
million or 9.4% of total assets at December 31, 2004.
Forward Looking Information
Information set forth in this Quarterly Report on Form 10-Q, under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contains various "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which statements represent our
judgment concerning the future and are subject to risks and uncertainties that
could cause our actual operating results and financial position to differ
materially. Such forward looking statements can be identified by the use of
forward looking terminology, such as "may," "will," "expect," "anticipate,"
"estimate," or "continue" or the negative thereof, or other variations thereof,
or comparable terminology.
We caution that any such forward looking statements are further qualified by
important factors that could cause our actual operating results to differ
materially from those in the forward looking statements, including, without
limitation, the effects of future economic conditions, governmental fiscal and
monetary policies, legislative and regulatory changes, the risks of changes in
interest rates on the level and composition of deposits, the effects of
competition from other financial institutions, the failure of assumptions
underlying the establishment of the allowance for loan losses, the low trading
volume of our common stock, other considerations described in connection with
specific forward looking statements and other cautionary elements specified in
our periodic filings with the Securities and Exchange Commission (the
"Commission"), including without limitation, our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and current Reports on Form 8-K.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We believe there has not been any significant change in the overall analysis of
financial instruments considered market risk sensitive, as measured by the
factors of contractual maturities, average interest rates and the difference
between estimated fair values and book values, since the analysis prepared and
presented in conjunction with our Form 10-K Annual Report for the fiscal year
ended December 31, 2004.
ITEM 4 - CONTROLS AND PROCEDURES
As required by paragraph (b) of Rule 13a-15 under the Exchange Act, an
evaluation was carried out under the supervision and with the participation of
the Company's management, including its Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the Company's disclosure controls and
procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act)
as of the end of the period covered by this report. Based on such evaluation,
the Chief Executive Officer and Chief Financial Officer have concluded that as
of the end of the period covered by this report, the Company's disclosure
controls and procedures are effective, in that they provide reasonable
assurances that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods required by the Commission's
rules and forms.
13
There have been no changes in the Company's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the period covered by this report that we believe have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.
Part II. OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information with respect to purchases made by or on
behalf of the Company or any "affiliated purchaser" (as defined in Rule
10b-18(a)(3) under the Exchange Act) of the Company's common stock during the
three months ended March 31, 2005.
Total Number
of Shares
Purchased as Maximum Number
Part of of Shares That
Total Number Average Price Publicly May Yet Be
of Shares Paid per Announced Purchased Under
Period Purchased (1) Share Program the Program (2)
------ ------------ ------------- -------------- ---------------
January 1, 2005 to January 31, 2005 1,200 $ 22.96 - 36,611
February 1, 2005 to February 28, 2005 - $ - - -
March 1, 2005 to March 31, 2005 - $ - - -
------------ ------------- -------------- ---------------
Total 1,200 $ 22.96 - 36,611
============ ============= ============== ===============
(1) This represents purchases of stock by the Company on behalf of the Employee
Stock Ownership Plan.
(2) On December 10, 2001, the Company announced the authorization by its Board
of Directors of a program to repurchase up to 100,000 shares of the
Company's outstanding common stock, which expires on December 31, 2005. The
Company did not repurchase any stock under the program during first quarter
2005. As of March 31, 2005, there were an aggregate of 100,000 shares of
our common stock that have been approved for repurchase under the program,
of which an aggregate of 63,389 shares have already been repurchased.
14
ITEM 6. EXHIBITS
Exhibit Description
- ------- -----------
31.1 Certification of the Chief Executive Officer pursuant to Rule
13a-14(a) or Rule 15d-4(a) as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
31.2 Certification of the Chief Financial Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
32.1 Certification by the Chief Executive Officer pursuant to 18 U.S.C.
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
32.2 Certification by the Chief Financial Officer pursuant to 18 U.S.C.
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
15
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FOUR OAKS FINCORP, INC.
Date: May 13, 2005 By: /s/ Ayden R. Lee, Jr.
----------------------------------
Ayden R. Lee, Jr.
President and Chief Executive Officer
Date: May 13, 2005 By: /s/ Nancy S. Wise
----------------------------------
Nancy S. Wise
Executive Vice President and Chief
Financial Officer
16
Exhibit Index
-------------
Exhibit No. Description
- ----------- -----------
31.1 Certification of the Chief Executive Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
31.2 Certification of the Chief Financial Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32.1 Certification by the Chief Executive Officer pursuant to 18
U.S.C. 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
32.2 Certification by the Chief Financial Officer pursuant to 18
U.S.C. 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
17