SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[X] Definitive Additional Materials

[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

FOUR OAKS FINCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Not Applicable
- --------------------------------------------------------------------------------
(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)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(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):

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[_] 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
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(1) Amount Previously Paid:

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FOUR OAKS FINCORP, INC.

6114 US 301 South
Four Oaks, North Carolina 27524

_____________________________________________________________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

April 23, 2001

_____________________________________________________________________

You are cordially invited to attend the Annual Meeting of Shareholders of
Four Oaks Fincorp, Inc. which will be held on Monday, April 23, 2001 at 8:00
p.m., local time, at the main office of Four Oaks Bank & Trust Company, located
at 6144 US 301 South, Four Oaks, North Carolina, for the following purposes:

(1) To elect the persons listed in the accompanying Proxy Statement
dated April 2, 2001 to the Board of Directors of Four Oaks Fincorp, Inc.; and

(2) To transact such other business as may properly come before the
meeting or any adjournments thereof.

Shareholders of record at the close of business on March 5, 2001 are
entitled to notice of and to vote at the Annual Meeting and any and all
adjournments thereof.

IT IS DESIRABLE THAT YOUR SHARES OF STOCK BE REPRESENTED AT THE MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU MAY HOLD. EVEN THOUGH YOU MAY PLAN TO
ATTEND THE MEETING IN PERSON, PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN
THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND
VOTE IN PERSON.

By Order of the Board of Directors

/s/ Ayden R. Lee, Jr.
Ayden R. Lee, Jr.
Chief Executive Officer and
President

April 2, 2001

FOUR OAKS FINCORP, INC.

6114 US 301 South
Four Oaks, North Carolina 27524

PROXY STATEMENT

This Proxy Statement, accompanying proxy card, Notice of Annual Meeting of
Shareholders and the Annual Report to Shareholders are being furnished to
shareholders on or about April 2, 2001 by the Board of Directors of Four Oaks
Fincorp, Inc. in connection with the solicitation of proxies for use at the
Annual Meeting of Shareholders to be held at our main office, located at 6144 US
301 South, Four Oaks, North Carolina on Monday, April 23, 2001 at 8:00 p.m.,
local time, and at all adjournments thereof. All expenses incurred in connection
with this solicitation will be paid by us. In addition to solicitation by mail,
certain of our officers, directors, and regular employees, who will receive no
additional compensation for their services, may solicit proxies by telephone,
personal communication, or other means.

ANNUAL MEETING

Purposes of the Annual Meeting

The principal purposes of the annual meeting are: (1) to elect seven (7)
nominees to our board of directors and (2) to transact such other business as
may properly come before the annual meeting or any adjournments thereof. Our
board of directors knows of no matters other than those stated above to be
brought before the annual meeting or any adjournments thereof. Nonetheless, the
proxyholders named on the enclosed proxy card may vote in accordance with the
instructions of the board of directors or in the absence thereof, in accordance
with their discretion, on any other matter properly presented for action of
which the board of directors is not now aware.

Proxies

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised. Proxies may be revoked by:

. filing a written notice of revocation with our corporate secretary;

. duly executing a subsequent proxy and filing it with our corporate
secretary before the revoked proxy is exercised; or

. attending the annual meeting and voting in person.

If the proxy card is signed and returned, but voting directions are not
made, the proxy will be voted in favor of the proposals set forth in the
accompanying "Notice of Annual Meeting of Shareholders."

Record Date

Our board of directors has fixed the close of business on March 5, 2001 as
the record date for determination of shareholders entitled to receive notice of
and to vote at the annual meeting and all adjournments thereof. As of the close
of business on March 5, 2001, we had 2,077,707 shares of common stock
outstanding.

Voting Rights

Except as otherwise provided by law, each holder of our common stock, or
their proxies, is entitled to one vote per share upon all matters voted upon by
shareholders. The North Carolina Business Corporation Act provides that with
respect to the election of directors, cumulative voting is not available to our
shareholders.

SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information as of March 5, 2001
regarding shares of our common stock beneficially owned by: (i) each director;
(ii) director nominee; (iii) each executive officer named in the Summary
Compensation Table in this proxy statement; and (iv) all directors and executive
officers as a group. Except as otherwise indicated, the persons listed below
have sole voting and investment power with respect to all shares of common stock
owned by them, except to the extent that such power may be shared with a spouse.
Fractional share amounts are rounded off to the nearest whole number.

Name of
Beneficial Owner Shares Owned(1) Percent of Class (1)
---------------- --------------- --------------------
M.S. Canaday(2) 54,948 2.6%
Ayden R. Lee, Jr.(3) 59,142 2.8
Paula Canaday Bowman(4) 36,168 1.7
William J. Edwards(5) 7,578 *
Warren L. Grimes(6) 7,807 *
Percy Y. Lee(7) 18,568 *
Dr. R. Max Raynor, Jr. 150 *
Clifton L. Painter(8) 23,696 1.1
All Directors and Executive 226,378 11.0%
Officers as a Group (10 persons)(9)

_________________
*Less than 1%

(1) Based upon 2,077,707 shares of common stock outstanding on March 5, 2001.
The securities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission. Accordingly, they
may include securities owned by or for, among others, the spouse and/or
minor children of the individual and any other relative who resides in the
home of such individual, as well as other securities as to which the
individual has or shares voting or investment power or has the right to
acquire under outstanding stock options within 60 days of March 5, 2001.
Beneficial ownership may be disclaimed as to certain of the securities.
(2) Includes 1,575 shares subject to stock options which are exercisable within
60 days.

(3) Includes 12,186 shares owned by spouse has sole voting and investment power
with respect to these shares and 21,000 shares subject to stock options
which are exercisable within 60 days.
(4) Includes 1,575 shares subject to stock options which are exercisable within
60 days.
(5) Includes 546 shares subject to stock options which are exercisable within
60 days.
(6) Includes 3306.736 shares owned jointly with spouse, 750.509 owned by spouse
who has sole voting and investment power with respect to these shares and
1,575 shares subject to stock options which are exercisable within 60 days.
(7) Includes 12,894.67 shares owned jointly with spouse and 1,575 shares
subject to stock options which are exercisable within 60 days.
(8) Includes 225 shares owned by minor child who resides in the home and 11,550
shares subject to stock options which are exercisable within 60 days.
(9) Includes 1,673 shares owned by minor children who reside in the home and
15,900 shares subject to stock options which are exercisable within 60 days
by non-director executive officers.

The following table sets forth certain information as of March 5, 2001
regarding any person who is known to us to be the beneficial owner of more than
five percent (5%) of our common stock.

Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
- ---------------- -------------------- ----------------

William Ashley Turner and Debra C. 119,289 5.7%
Turner, Joint Tenants with right of
survivorship
2256 Shotwell Road
Clayton, North Carolina 27520

Josephine L. Sturdivant 109,392 5.3%
5426 Hampton Road
Fayetteville, North Carolina 28311-1322

ELECTION OF DIRECTORS

The nominees for the election of directors are named and certain other
information is provided in the following tabulation.

Positions and Offices with our Company
Year first & Business Experience During
Name Age Elected Past Five (5) Years
- ---- --- ------- -------------------

M.S. Canaday 77 1969 Chairman of the board of directors of Four Oaks
Fincorp, Inc. and Four Oaks Bank & Trust Company;
Owner of Four Oaks Drug Co.
Ayden R. Lee, Jr. 52 1983 Chief Executive Officer, President, and Director of
Four Oaks Fincorp, Inc. and Four Oaks Bank & Trust
Company
Dr. R. Max Raynor, Jr. 43 2000 Director of Four Oaks Fincorp, Inc. and Four Oaks
Bank & Trust Company; Owner of Professional Eye
Care, with locations in Benson, North Carolina and
Roseboro, North Carolina
Paula Canaday Bowman 52 1989 Director of Four Oaks Fincorp, Inc. and Four Oaks
Bank & Trust Company
William J. Edwards 57 1990 Director of Four Oaks Fincorp, Inc. and Four Oaks
Bank & Trust Company; President, Chief Executive
Officer and Chairman of the Board of Four Oaks IGA
Foodliner, Inc. and Secretary of Edwards IGA
Percy Y. Lee 60 1992 Director of Four Oaks Fincorp, Inc. and Four Oaks
Bank & Trust Company; Member of Clayton Area
Advisory Board of the Bank; President of T.R. Lee
Oil Co.; Senior Partner of Lee Brother's Rental;
Partner in Lee & Dupree, a rental real estate
partnership
Warren L. Grimes 52 1992 Director of Four Oaks Fincorp, Inc. and Four Oaks
Bank & Trust Company; General Partner in Reedy
Creek Direct Marketing Association; Solid Waste
Division Manager for Johnston County; Chairman of
the Company's Compensation Committee; Chief
Financial Officer and Director of Reedy Creek
Technologies, Inc.

The number constituting our board of directors must be at least five (5),
but not more than twenty-one (21). The number of directors within this variable
range may be fixed or changed from time to time by our shareholders or our board
of directors. Our board of directors has set the

number of directors at seven (7). The members of our board of directors are
elected by our shareholders to serve one (1) year terms.

All directors and executive officers hold office until the next annual
meeting or until their successors are elected and qualified. Our board of
directors has no reason to believe that the persons named above as nominees will
be unable or will decline to serve as a director if elected. However, in the
event of death or disqualification of any nominee or refusal or inability of any
nominee to serve, it is the intention of the proxyholders to vote for the
election of such other person or persons as the proxyholders determine in their
discretion; but in no circumstance will the proxy be voted for more than seven
(7) nominees. Properly executed and returned proxies, unless revoked, will be
voted as directed by the shareholder or, in the absence of such direction, will
be voted in favor of the election of the recommended nominees.

Pursuant to North Carolina law, the seven (7) candidates who receive the
highest number of votes will be elected as directors. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a
quorum for the transaction of business, but are not counted in the election of
directors and will not be included in determining which candidates received the
highest number of votes.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES FOR ELECTION
AS DIRECTORS.

Director Compensation

The Chairman of our board of directors is paid a fee of $1,075 per month.
Other directors, except Mr. Lee who is not paid a director's fee, are paid fees
of $875 per month. During 2000, all of the directors other than Mr. Lee were
paid a bonus of $850. Two (2) of our directors are related to each other. M.S.
Canaday is Paula Canaday Bowman's uncle.

Board of Directors Meetings

During the last fiscal year, our board of directors met seventeen (17)
times. Each incumbent director attended seventy-five percent (75%) or more of
the aggregate of the total number of board of director meetings and the total
number of meetings held by all committees of the board of directors on which he
or she served.

Board Committees

Our board of directors has an audit committee and a compensation committee.
The audit committee is composed of Merwin S. Canaday (Chairman), Warren L.
Grimes and William J. Edwards and operates under a written charter (a copy of
which is attached to this Proxy Statement as Appendix A) adopted by our board of
directors. In addition, Ayden R. Lee, Jr. attends all meetings of the audit
committee as a non-voting member. Messrs. Canaday, Grimes and Edwards are
"independent directors" as defined by Nasdaq.

The audit committee reviews the results and scope of the annual audit and
other services provided by our independent accountants. The audit committee also
reviews our financial statements and audit letters provided by our independent
accountants. The audit committee recommends to our board of directors the
appointment of independent accountants. The audit committee met two (2) times
during 2000.

The Compensation Committee is composed of Paula Canaday Bowman, Warren L.
Grimes (Chairman) and Ayden R. Lee, Jr. and is responsible for the approval of
compensation arrangements for our officers and the review of our compensation
plans and policies. During 2000, the compensation committee met three (3) times.

Our board of directors does not have a separate nominating committee, but
performs that function itself.

Audit Committee Report

The members of the audit committee are not professionally engaged in the
practice of auditing or accounting nor are they experts in the fields of
auditing or accounting, including in respect of auditor independence. Management
is responsible for our internal controls and the financial reporting process,
including the presentation and integrity of our financial statements. Our
independent accountants are responsible for performing an independent audit of
our consolidated financial statements in accordance with auditing standards
generally accepted in the United States of America and to issue a report
thereon. The audit committee's responsibility is to monitor and oversee these
processes. The audit committee also recommends to our board of directors the
selection of our independent accountants. Members of the audit committee rely
without independent verification on the information provided to them and on
representations of management and our independent accountants.

Accordingly, the audit committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or appropriate internal control
and procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the audit committee's
considerations and discussions referred to below do not assure that the audit of
our financial statements has been carried out in accordance with auditing
standards generally accepted in the United States of America, that our financial
statements are presented in accordance with generally accepted accounting
principles or that our auditors are in fact "independent."

In this context, the audit committee has met and held discussions with our
management, who represented to the audit committee that our consolidated
financial statements were prepared in accordance with accounting principles
generally accepted in the United States of America. The audit committee has
reviewed and discussed the consolidated financial statements with both
management and the independent accountants. The audit committee also discussed
with the independent accountants matters required to be discussed by Statement
on Auditing Standards No. 61 (Communication with Audit Committees). Our
independent accountants also provided to the audit committee the written
disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the audit committee has

considered whether the provision of audit and other non-audit services (set
forth under Audit Firm Fee Summary below) is compatible with maintaining the
accountants independence and has discussed with the independent accountants
their independence.

Based upon the audit committee's discussions with management and the
independent accountants, and the audit committee's review of our consolidated
financial statements, representations of management and the report of the
independent accountants to the audit committee, and subject to the limitations
on the role and responsibility of the audit committee referred to above and the
audit committee charter attached hereto as Appendix A, the audit committee
recommended that our board of directors include the audited consolidated
financial statements in our Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2000 filed with the Securities and Exchange Commission. The
audit committee also recommended that Dixon Odom PLLC be retained as our
independent accountants for the 2001 fiscal year.

Audit Committee
Merwin S. Canaday
Warren L. Grimes
William J. Edwards

EXECUTIVE COMPENSATION

The following tables sets forth annual and long-term compensation paid or
accrued by the Company for services rendered for the fiscal years indicated by
the Company's Chief Executive Officer and the next most highly compensated
executive officer whose total salary and bonus exceeded $100,000 individually
during the year ended December 31, 2000 (the "named executive officers").

Summary Compensation Table

Annual Compensation(1) Long-Term Compensation
---------------------- --------------------------------------------
Awards Payouts
------------------------ ------------------
Securities All Other
Name & Principal Position Year Salary Bonus Underlying Options Compensation(2)
- --------------------------- ---- ------ ----- ------------------ ---------------

Ayden R. Lee, Jr., Chief 2000 $201,162 $34,542 6,000 $8,376
Executive Officer and 1999 152,640 20,860 6,000 7,276
President 1998 144,000 21,718 9,000 7,129

Clifton L. Painter, Senior 2000 $114,091 $18,455 3,300 $4,805
Vice President, Chief 1999 99,332 8,749 3,300 4,018
Operating Officer 1998 80,305 11,944 9,900 4,052

________________________
(1) Amounts shown in the table include amounts paid to the named executive
officers as executive officers of our subsidiary, Four Oaks Bank & Trust
Company. Four Oaks Bank & Trust Company was reorganized as our wholly owned
subsidiary in July 1997. Amounts shown also include amounts deferred by the
named executive officers under our Master Corporate Profit Sharing
Retirement Plan and Trust.
(2) The amounts shown for Mr. Lee represent our contributions to him under our
Master Corporate Profit Sharing Retirement Plan and Trust in the amounts of
$8,046, $6,940 and $6,649, for each of the years ended 2000, 1999 and 1998,
respectively. The remainder of the amounts shown for Mr. Lee for each year
represent insurance premiums paid by us on term life insurance. The amounts
shown for Mr. Painter represent our contributions to him under our Master
Corporate Profit Sharing Retirement Plan and Trust in the amounts of
$4,564, $3,791 and $3,710, for each of the years ended 2000, 1999 and 1998,
respectively. The remainder of the amounts shown for Mr. Painter for each
year represent insurance premiums paid by us on term life insurance.

Option Grants in Last Fiscal Year

The following table sets forth certain information concerning options to
purchase common stock granted to the named executive officers during the year
ended December 31, 2000.

Number of
Securities % of Total Options Exercise
Underlying Granted to Employees or Base
Name Options Granted in Fiscal Year Price Exercise Date Expiration Date
---- --------------- ------------- ----- ------------- ---------------

Ayden R. Lee, Jr. 6,000 31% $20.67 February 22, 2001 February 22, 2004
Clifton L. Painter 3,300 17% $20.67 February 22, 2001 February 22, 2004

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

The following table sets forth certain information concerning options to
purchase common stock held by the named executive officers during the year ended
December 31, 2000, the aggregate value of gains on the date of exercise, and the
value of unexercised options as of December 31, 2000.

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at December 31, 2000 December 31, 2000(1)
--------------------------------------------------------------
Shares
Acquired on Value Received
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------

Ayden R. Lee, Jr. -- -- 15,000 6,000 $345,000 $138,000

Clifton L. Painter -- -- 8,250 3,300 189,750 75,900

________________________
(1) Based on the difference between the exercise price and a price per share of
$23.00, which is the last sale price of our common stock as of December 31,
2000.

Employment Agreements

We have an employment agreement with Ayden R. Lee, Jr., Chief Executive
Officer and President. The employment agreement provides for a one-year term and
on each anniversary date thereafter, the agreement is automatically extended for
an additional year, unless either party gives notice of nonrenewal. The current
base salary under the agreement may be increased at the discretion of our board
of directors. Our board of directors has established the 2001 base salary amount
for Mr. Lee at $171,491. In addition to the base salary, Mr. Lee's employment
agreement provides for, among other things, additional benefits applicable to
executive personnel and benefits applicable to all our salaried employees. The
agreement provides for termination by us for "cause" (as defined in the
agreement) at any time.

We also have an employment agreement with Clifton L. Painter, Vice
President and Chief Operating Officer. The employment agreement provides for a
one-year term and on each anniversary date thereafter, the agreement is
automatically extended for an additional year, unless either party gives notice
of nonrenewal. The current base salary under the agreement may be increased at
the discretion of our board of directors. Our board of directors has established
the 2001 base salary amount for Mr. Painter at $95,863. In addition to the base
salary, Mr. Painter's employment agreement provides for, among other things,
additional benefits applicable to executive personnel and benefits applicable to
all our salaried employees. The agreement provides for termination by us for
"cause" (as defined in the agreement) at any time.

Severance Compensation Agreement

We have adopted a severance compensation agreement for Mr. Lee that will
provide him with severance pay benefits in the event of a "change in control."
The purpose of this compensation plan is to recognize the services and
contributions of Mr. Lee as a key employee and the uncertainties relating to
continual employment, reduced employee benefits, management changes, and
relocations in the event of a change in control. Under the severance
compensation agreement, in the event a change in control (as defined in the
agreement) occurs and Mr. Lee's employment is "terminated" (as defined in the
agreement) he will be entitled to receive a cash severance payment equal to two
(2) years' salary based upon his then most recent annual compensation and the
amount of his most recent annual bonus at the time of termination. In addition,
Mr. Lee will be entitled to all life insurance, health, accidental death and
dismemberment, and disability plans or programs in which he is entitled to
participate immediately prior to his termination for two (2) years after the
date of his termination or unless and until he obtains other full-time
employment.

Supplemental Executive Retirement Plan

Our subsidiary, Four Oaks Bank & Trust Company, has adopted a supplemental
executive retirement plan ("SERP") for Mr. Lee that, upon his retirement from
the bank, will provide him with supplemental annual payments for the remainder
of his life. The purpose of the SERP is to encourage Mr. Lee to remain as an
employee of the bank and to reward him for contributing materially to the
success of the bank. Under the SERP, the bank will be obligated to pay Mr. Lee
an annual payment upon his retirement in an amount which, when added to Mr.
Lee's 401(k) benefits (based on future estimated amounts) and social security
benefits (based on future estimated amounts), will ensure Mr. Lee a total annual
retirement benefit equal to seventy-five percent (75%) of his Average Annual
Compensation (as defined in the SERP) on the date of his retirement. Depending
upon Mr. Lee's age at retirement, the annual payment as a percentage of Mr.
Lee's fully vested retirement benefit will vary (from fifty-eight percent (58%)
of fully vested retirement benefit at age fifty-five (55) to one hundred percent
(100%) at age sixty-two (62)). The annual payment which we are obligated to pay
Mr. Lee each year after his retirement is subject to certain limitations,
including a maximum limit of fifty thousand dollars ($50,000) per year. In the
event of a change of control (as defined in the SERP) of Four Oaks Fincorp, Inc.
and termination of Mr. Lee's employment within twenty-four (24) months
thereafter (for any reason, except termination by the bank for cause), Mr. Lee
will be entitled to receive a lump-sum cash payment equal to the

actuarial equivalence of the greater of (i) the amount he would have been
entitled to had he retired on such date and (ii) the amount of his pro rata
fully vested benefit under the SERP as of such date.

Certain Transactions

Certain of our directors and executive officers are customers of, and
borrowers from, Four Oaks Bank & Trust Company in the ordinary course of
business. From January 1, 2000 to December 31, 2000, loans outstanding to our
directors and executive officers, and their associates as a group, amounted to a
maximum of approximately $922,220, or 4.15% of the equity capital of the bank.
All outstanding loans and commitments included in such transactions are made
substantially on the same terms, including rate and collateral, as those
prevailing at the time in comparable transactions with other customers. In the
opinion of management, these loans do not involve more than normal risk of
collectability, or contain other unfavorable features.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our officers, directors, and persons who own more than ten percent (10%) of our
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission. Officers, directors, and ten percent
(10%) shareholders are required by SEC regulations to furnish us with copies of
all Section 16(a) reports they file. Based solely on a review of the copies of
such reports furnished to us, or representations by such persons that no Form 5s
were required, we believe that during the fiscal year ended December 31, 2000,
all Section 16(a) filing requirements applicable to our officers, directors, and
ten percent (10%) shareholders, were satisfied, except William J. Edwards, Paula
Bowman and Warren Grimes, who each inadvertently failed to timely file one (1)
required report. Mr. Edwards failed to report two (2) transactions which
occurred in the month of August. Mr. Edwards's transactions were reported late
on Form 5 for the year ended December 31, 2000. Ms. Bowman failed to report one
(1) transaction which occurred in the month of May. Ms. Bowman's transaction was
reported late on Form 5 for the year ended December 31, 2000. Mr. Grimes failed
to report two (2) transactions which occurred in December 2000. Mr. Grimes'
transactions were reported late on Form 5 for the year ended December 31, 2000
(which form was filed with the SEC on March 7, 2001).

SELECTION OF INDEPENDENT ACCOUNTANTS

Our board of directors approved the engagement of Dixon Odom PLLC as our
independent public accountants for the year ended December 31, 2000, to replace
PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP was terminated effective
September 5, 2000.

The reports of PricewaterhouseCoopers LLP on our consolidated financial
statements for the past two (2) fiscal years ended December 31, 1999 and 1998
did not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting principles.

In connection with the audits of our financial statements for each of the
two (2) most recent fiscal years ended December 31, 1999 and 1998 and in the
subsequent interim period through September 5, 2000, there were no disagreements
with PricewaterhouseCoopers LLP on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope and procedures
which, if not resolved to the satisfaction of PricewaterhouseCoopers LLP would
have caused PricewaterhouseCoopers LLP to make reference to the matter in their
report on the financial statements for such years.

At our request, PricewaterhouseCoopers LLP furnished us with a letter to
the Securities and Exchange Commission, dated September 12, 2000, a copy of
which was filed as an exhibit to our Current Report on Form 8-K, dated September
12, 2000, pursuant to which PricewaterhouseCoopersLLP agreed with the above
statements.

During the last two (2) fiscal years and the subsequent interim period
preceding September 5, 2000, we did not consult Dixon Odom PLLC regarding any of
the matters or events set forth in Regulation S-K Item 304(a)(2)(i) and (ii).

PricewaterhouseCoopers LLP served as our independent accountants from
January 1, 2000 through September 5, 2000. Since September 5, 2000, Dixon Odom
PLLC has served as our independent accountants. PricewaterhouseCoopers LLP's
services to us for 2000 included consultation on various accounting, tax and
other matters. Dixon Odom PLLC's services to us for 2000 included the audit of
our annual consolidated financial statements, reviews of certain of our income
tax returns and consultation on various accounting, tax and other matters. A
representative of Dixon Odom PLLC is expected to be present at the annual
meeting. This representative will have an opportunity to make a statement if
desired and will be available to respond to shareholder questions. A
representative of PricewaterhouseCoopers LLP is not expected to be present at
the annual meeting. There were no non-audit services provided by either
PricewaterhouseCoopers LLP or Dixon Odom PLLC during 2000.

Audit Firm Fee Summary

From January 1, 2000 until September 5, 2000, we retained
PricewaterhouseCoopers LLP to provide services in the following categories and
amounts:

Audit Fees $ 32,000
Financial Information Systems Design
And Implementation Fees $ 0
All Other Fees $ 11,487

On September 5, 2000, we retained our independent accountant, Dixon Odom
PLLC, to provide services in the following categories and amounts:

Audit Fees $ 27,800
Financial Information Systems Design
And Implementation Fees $ 0
All Other Fees $ 9,000

ADDITIONAL INFORMATION

A copy of our Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2000, including the financial statements and schedules thereto, as
filed with the SEC will be furnished on written request, without charge to any
of our shareholders. Such requests should be addressed to Wanda J. Blow, Four
Oaks Fincorp, Inc., P.O. Box 309, Four Oaks, North Carolina 27524 ((919) 963-
2177).

SUBMISSION OF SHAREHOLDER PROPOSALS FOR 2002 ANNUAL MEETING

Any proposals that shareholders intend to present for a vote of
shareholders at the 2002 Annual Meeting of Shareholders, and that such
shareholders desire to have included in our proxy statement and form of proxy
relating to that meeting, must be sent to our principal executive office, marked
to the attention of Ayden R. Lee, Jr., and received at such office on or before
December 4, 2001 (120 calendar days prior to the anniversary of the date of this
proxy statement). Proposals received after December 4, 2001 will not be
considered for inclusion in our proxy materials for our 2002 annual meeting. A
determination as to whether we will oppose inclusion of any proposal in our
proxy statement and form of proxy will be made on a case-by-case basis in
accordance with our judgment and the rules and regulations promulgated by the
SEC.

In addition, if a shareholder intends to present a matter for a vote at the
2002 annual meeting, other than by submitting a proposal for inclusion in our
proxy statement for that meeting, the shareholder must give timely notice in
accordance with SEC rules. To be timely, a shareholder's notice must be sent to
our principal executive office, marked to the attention of Ayden R. Lee, Jr.,
and received at such office on or before February 18, 2002 (45 calendar days
prior to the anniversary of the mailing date of this proxy statement). Such
notice should set forth (a) as to each matter the shareholder proposes to bring
before the meeting, a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting,
and (b) the name and record address of the shareholder, the class and number of
shares of our capital stock that are beneficially owned by the shareholder, and
any material interest of the shareholder in such business. For notices that are
not timely filed, we retain discretion to vote proxies we receive. For notices
that are timely filed, we retain discretion to vote proxies we receive provided:
(i) we include in our proxy statement advice on the nature of the proposal and
how we intend to exercise our voting discretion; and (ii) the proponent fails to
(x) provide us with a written statement, on or before February 18, 2002, that
the proponent intends to deliver a proxy statement and form of proxy to holders
of at least the percentage of our voting shares required under applicable law to
carry the proposal, (y) include the same statement in its proxy materials filed
with the SEC and (z) immediately after soliciting the percentage of shareholders
required to carry the proposal, provide us with a statement from any solicitor,
or other person with knowledge, that the necessary steps have been taken to
deliver a proxy statement and form of proxy to holders of such percentage of
shares.

OTHER MATTERS; DISCRETIONARY AUTHORITY

As of the date of this proxy statement, we know of no business that will be
presented for consideration at the annual meeting other than the items referred
to above. The enclosed proxy confers discretionary authority to vote with
respect to any and all of the following matters that may come before the annual
meeting: (i) matters for which we did not receive timely notice; (ii) approval
of the minutes of a prior meeting of shareholders, if such approval does not
amount to ratification of the action taken at the meeting; (iii) the election of
any person to any office for which a bona fide nominee is named in this proxy
statement and such nominee is unable to serve or for good cause will not serve;
(iv) any proposal omitted from this proxy statement and the form of proxy
pursuant to Rule 14a-8 or Rule 14a-9 under the Securities Exchange Act of 1934,
as amended; and (v) matters incidental to the conduct of the annual meeting. If
any such matters come before the annual meeting, the proxy agents named in the
accompanying proxy card will vote in accordance with their judgment.

All shareholders are encouraged to sign, date, and return their proxy
submitted with this proxy statement as soon as possible in the envelope
provided. If a shareholder attends the annual meeting, then he or she may
revoke his or her proxy and vote in person.

By Order of the Board of Directors
April 2, 2001
Ayden R. Lee, Jr.
Chief Executive Officer and President

APPENDIX A
Audit Committee Charter

AUDIT COMMITTEE CHARTER

I. PURPOSE

The primary function of the Audit Committee (the "Committee") of the Board of
Directors of Four Oaks Fincorp, Inc. (the "Company") is to fulfill the oversight
responsibilities of the Board by reviewing the financial information which will
be provided to shareholders and others, the systems of internal controls which
management and the Board of Directors have established, and the audit process.

II. RESPONSIBILITIES AND DUTIES

In meeting its responsibilities, the Audit Committee is expected to:

1. Provide an open avenue of communication between the internal auditors, the
independent accountants, and the Board itself.

2. Obtain the full Board's approval of the Audit Committee Charter. Review and
update the Committee's Charter annually or more frequently as conditions
dictate. Propose any changes to the Board and receive approval of any
changes from the full Board.

3. Select the Company's independent accountant, approve the compensation of the
independent accountant, and review performance of independent accountant
annually, and where appropriate, approve the discharge of the independent
accountant.

4. Review and concur in the appointment, replacement, reassignment, or
dismissal of the internal auditor.

5. Confirm and assure the independence of the internal auditor and of the
independent accountant, including a review of management consulting and
related services provided by the independent accountant to the bank. To
assure the independence of the accountant, the Committee shall receive,
review and actively discuss, on an annual basis, a written statement from
the independent accountant delineating all relationships between the
accountant and the Company (including a listing of all non-audit services
rendered and related fees) consistent with Independence Standards Board
Standard No. 1, as modified or supplemented.

6. Inquire of management, of the internal auditor, and of the independent
accountant, about significant exposures and risks, then assess the steps
management has taken to minimize such exposures and to mitigate such risks
to the company.

7. Consider, in consultation with the independent accountant and with the
internal auditor, the audit scope and plan of the internal auditor and of
the independent accountant.

8. Consider, with management, with the internal auditor, and with the
independent accountant, the rationale for employing audit firms other than
the principal independent accountant.

9. Review with the internal auditor and with the independent accountant the
coordination of audit effort to assure completeness of coverage, reduction
of redundant efforts, and effective use of audit resources.

10. Record minutes of each meeting and comply with requirements in the
Company's bylaws regarding committees of the Board.

11. Comply with SEC and NASD requirements governing proxy statement disclosure
regarding audit committees, including (i) the requirement to disclose
whether the members are independent as defined in the NYSE's, AMEX's, or
NASD's listing standards and which definition was used and (ii) the
inclusion of an audit committee report.

12. Review and discuss with the independent accountant any matters described in
Statement of Auditing Standards No. 61, as modified or supplemented.

13. Consider and review with the independent accountant and with the internal
auditor the adequacy of (i) the Company's internal controls, including
computerized information system controls and security and (ii) any related
significant findings and recommendations of the independent accountant and
of the internal auditor, together with management's responses thereto.

14. Approve any changes in accounting principles.

15. Review with management and with the independent accountant at the
completion of the annual examination:

A. The company's annual financial statements and related footnotes,
including the completeness of its financial disclosures.

B. The independent accountant's audit of the financial statements and his
or her report thereon.

C. Any significant changes required in the independent accountant's audit
plan.

D. Any serious difficulties or disputes with management encountered by the
independent accountant during the course of the annual audit.

E. Other matters related to the conduct of the annual audit which are
communicated to the Committee under generally accepted auditing
standards.

16. Consider and review with management and with the internal auditor:

A. Significant findings during the year and management's responses
thereto.

B. Any difficulties encountered in the course of their audits, including
any restrictions on the scope of their work or access to required
information.

C. Any changes required in the planned scope of their audit plan.

D. The Internal Audit Charter. Approve the Internal Audit Charter.

E. Internal Auditor's compliance with The Institute of Internal Auditors'
Standards for the Professional Practice of Internal Auditing
(Standards) and the general effectiveness of the Internal Auditor.

17. Review and discuss with management and the independent accountant filings
with the SEC (prior to filing) and other published documents containing the
Company's financial statements and consider whether the information
contained in these documents is consistent with the information contained
in the financial statements presented during Board Meetings.

18. Review with management, with the independent accountant, and with the
internal auditor, interim financial statements and the results of the
independent accountant's review, before they are filed with the SEC or
other regulators.

19. Review policies and procedures with respect to officers' expense accounts
and prerequisites, including their use of corporate assets, executive
travel and entertainment, and consider the results of any review of these
areas by the internal auditor or by the independent accountant.

20. Review with the internal auditor and with the independent accountant the
results of their review(s) of the Company's monitoring of the compliance
with the Company's Code of Conduct.

21. Perform a self-assessment of the Committee's performance as compared to the
Charter annually.

22. Review legal and regulatory matters identified by management or counsel
that may have a material impact on the financial statements, related
Company compliance policies, and programs and reports received from
regulators and evaluate whether such matters have been considered in the
preparation of the financial statements.

23. Review the effectiveness of the Company's system for monitoring compliance
with laws and regulations relating to financial reporting and the results
of management's investigation and follow-up (including disciplinary action)
on any suspected fraudulent acts or accounting irregularities.

24. Periodically obtain updates from management regarding actions taken to
ensure compliance with applicable financial reporting laws and regulations
and the Company's operating procedures and corporate policies.

25. Review the findings of any examination by regulatory agencies such as the
SEC.

26. Meet with the internal auditor, with the independent accountant, and with
management in separate executive sessions, to discuss any matters that the
Committee or these groups believe should be discussed privately.

27. Prepare a letter for inclusion in the Annual Report that describes the
Committee's composition and responsibilities, and how they were discharged.

28. Determine whether, based on the Audit Committee's review and discussion
with management and the independent auditors, the Audit Committee will
recommend that the annual financial statements be included in the Company's
annual report on Form 10-KSB (or Form 10-K, if applicable) for the previous
fiscal year.

29. The Audit Committee shall have the power to conduct or authorize
investigations into any matters within the Committee's scope of
responsibilities. The Committee shall be empowered to retain independent
counsel, accountants, or others to assist it in the conduct of any
investigation.

30. The Committee may ask members of management or others to attend their
meetings, to provide pertinent information as necessary.

31. The Committee will perform such other functions as assigned by law, by the
Company's Articles of Incorporation, or by the Company's Bylaws.

III. COMPOSITION

The membership of the Audit Committee shall consist of three or more members of
the Board of Directors, each of whom shall be independent directors, meaning
that they shall be free from any relationship that, in the opinion of the Board,
would interfere with the exercise of his or her independent judgment as a member
of the Committee. All members of the Committee shall be able to read and
understand fundamental financial statements and at least one member of the
Committee shall have past employment experience in finance or accounting,
professional certification in accounting, or other comparable experience which
results in the person's financial sophistication, such as having been a CEO,
CFO, or other senior officer with financial oversight responsibilities. The
Bank's President/Chief Executive shall participate as a non-voting member of the
Committee. The Chairman of the Board of Directors shall be a member of, and
shall at all times act as Chairman of, the Committee.

Notwithstanding the above, the Committee may include one non-independent
director who is not a current employee of the Company if the Board, in
exceptional and limited circumstances, determines that it would be in the best
interests of the Company and the shareholders, and the Board discloses the
nature of this relationship and the reasons for the determination in its next
annual proxy statement after such appointment.

IV. MEETINGS

The Committee shall meet at least 2 times annually, and may meet more frequently
if necessary. The Committee shall meet separately at least annually with
management, the internal auditor, and the independent accountant, to discuss any
matters the Committee or they believe should be discussed privately with the
Committee.

PAGE>

APPENDIX B

PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOUR OAKS FINCORP, INC.
FOR THE 2001 ANNUAL MEETING OF SHAREHOLDERS.

The undersigned hereby appoints Ayden R. Lee, Jr. and M. S. Canaday as proxies,
each with the full power of substitution to represent the undersigned and to
vote all of the shares of stock in Four Oaks Fincorp, Inc. which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of said Company to be
held at the main office of Four Oaks Fincorp, Inc. located at 6144 US 301 South,
Four Oaks, North Carolina on Monday, April 23, 2001 at 8:00 p.m., and any
adjournments thereof (1) as hereinafter specified upon the proposal listed below
as more particularly described in the Company's proxy statement, receipt of
which is hereby acknowledged; and (2) in their discretion upon such other
matters as may properly come before the meeting and any adjournments thereof. In
order to vote for the proposal, place an X in the appropriate box provided
below. The Board recommends a vote "FOR" the proposal listed below.

1. To elect the following nominees as directors of a one year term: M. S.
Canaday; Ayden R. Lee, Jr.; William J. Edwards; Paula Canaday Bowman; Dr. R. Max
Raynor, Jr.; Percy Y. Lee; Warren L. Grimes

[_] FOR all nominees (except as marked to the contrary below.)

[_] WITHHOLD AUTHORITY to vote for all nominees.

(INSTRUCTION: To withhold authority to vote for any individual nominee(s) write
that nominee(s) name on the line provided below.)

________________________________________________________________________________
PLEASE MARK, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE

(continued from other side)

THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ABOVE PROPOSAL AND UNLESS
INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED, THIS PROXY
WILL BE SO VOTED.

Please date and sign this Proxy and return promptly.

Dated: _______________________________________, 2001

____________________________________________________
Signature

NOTE: Please sign your name exactly as it appears on
this card. When signing for a corporation or
partnership, or as agent, attorney, trustee,
executor, administrator, or guardian, please
indicate the capacity in which you are signing. In
the case of joint tenants, each joint owner must
sign.