EXHIBIT 10.12 TO FORM 10-KSB

                         FOUR OAKS BANK & TRUST COMPANY

                        SEVERANCE COMPENSATION AGREEMENT

         THIS AGREEMENT is entered into as of this 26 day of January, 1995, by

and between FOUR OAKS BANK & TRUST COMPANY, a North Carolina banking corporation

(the "Bank"), and NANCY S. WISE, ("Employee").WITNESSETH

         WHEREAS, the Bank considers the maintenance of a vital management group

to be essential to protecting and enhancing the best interests of the Bank and

its shareholders;

         WHEREAS, the Bank recognizes that, as is the case with many publicly

held corporations, there is a possibility of a change in control of the Bank,

and that the uncertainty and questions which such a possibility raise may result

in the departure or distraction of management personnel to the detriment of the

Bank and its shareholders;

         WHEREAS, the Bank's Board of Directors has determined that appropriate

steps should be taken (1) to reinforce and encourage the continued attention and

dedication of members of the Bank's management to their assigned duties without

distraction arising from the possibility of a change in control of the Bank and

(2) to dispel any concerns that Employee may have about taking an active part in

the defense against an inappropriate attempt to bring about a change in control

of the Bank; and

         WHEREAS, the purpose of this Agreement to assure Employee that, in the

event of termination of employment after a change of control (to the extent set

forth this Agreement), Employee will continue to receive compensation for a

period which should be sufficient for Employee to find other employment.

         NOW, THEREFORE, in consideration of the mutual agreements set forth in

this Agreement, the legal sufficiency and adequacy of which are hereby

acknowledged, the parties agree as follows:

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         1. Employment. Employee agrees that so long as she is employed by the

Bank, Employee shall devote her full-time efforts during normal business hours

to the business and affairs of the Bank and shall support decisions and

determinations of the Board of Directors and Bank policy including, but not

limited to, any decision or determination with respect to responding to an

approach or attempt to effect a Change in Control (as later defined).

         2. Term.

(a)     The term of this Agreement shall be for two (2) years from the Effective

Date unless sooner terminated upon:

                      (i) Employee's written notice to the Bank that he is

terminating this Agreement effective upon a specified date

not less than one month after his notice is given;

                      (ii) Employee's death;

                      (iii) Employee's illness or other disability

incapacitating Employee from performing her duties for six (6)

consecutive months as determined in good faith by Chief Executive Officer, the

Board of Directors of the Bank or a committee of the Board;

         (iv) A determination by the Chief Executive Officer or the Board of

Directors of the Bank that Employee is no longer a key executive employee and

the delivery of notice to Employee of such determination and the termination of

this Agreement. Such termination shall be effective upon the delivery of the

notice or at a later date specified in the notice, provided, however, such

determination shall not be made, and if made, shall have no effect, after a

Change in Control.

(b)      Unless this Agreement is terminated in accordance with

subparagraph 2(a), on each anniversary of the Effective Date of this Agreement,

the term of this Agreement automatically shall be extended for an additional

successive period of one year, unless either the Employee or the Bank shall give

written notice to the other at least three (3) months before such anniversary

date that the term of this Agreement shall not be extended.

(c)     In the event of a Change in Control of the Bank at any time before the

termination of this

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Agreement, the term of this Agreement shall be automatically extended to the

earlier of (i) a date two (2) years after the date such Change in Control

occurred and (ii) the occurrence of an event of termination described in clause

2(a)(ii) or (iii).

(d)     In the event of a Termination (as later defined) of Employee's

employment during the term of this Agreement, the term of this Agreement shall

be automatically extended until all obligations under the Agreement are fully

performed.

         3. Change in Control. For purposes of this Agreement, a "Change in

Control" means one or more of the following occurrences: (a) A corporation,

person or group acting in concert as described in Section 14(d)(2) of the

Securities Exchange Act of 1934, as amended ("Exchange Act"), holds or acquires

beneficial ownership within the meaning of Rule 13d-3 promulgated under the

Exchange Act of a number of shares of voting capital stock of the Bank which


constitutes either (i) more than fifty percent (50%) of the shares which voted

in the election of directors of the Bank at the shareholders' meeting

immediately preceding such determination, or (ii) more than thirty-three percent

(33%) of the Bank's then outstanding shares entitled to vote.

(b) A merger or consolidation to which the Bank is a party (other than a pro

forma transaction for a purpose such as changing the state of incorporation or

name of the Bank), if either (i) the Bank is not the surviving corporation, or

(ii) the directors of the Bank immediately before the merger or consolidation

constitute less than a majority of the Board of Directors of the surviving

corporation; provided, however, the occurrence described in clause (i) shall not

constitute a Change in Control if the holders of the Bank's voting capital stock

immediately before the merger or consolidation have the same proportional

ownership of voting capital stock of the surviving corporation immediately after

the merger or consolidation.

(c) All or substantially all of the assets of the Bank are sold, leased, or

disposed of in one transaction or a series of related transactions.

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(d) An agreement, plan, contract, or other arrangement is entered into providing

for any occurrence which, as defined in this Agreement, would constitute a

Change in Control.

         4. Termination Following Change in Control.

(a) Termination of Employee's employment after the occurrence of a Change in

Control ("Termination") entitles Employee to the benefits described in

Paragraphs 5 and 6, unless such Termination is (i) by the Bank for cause or

because of disability or (ii) because of Employee's death.

(b) "Cause" means: (i) the willful and continued failure by Employee for a

significant period of time to substantially perform her duties with the Bank

(other than any such failure resulting from her disability) after a demand for

substantial performance is delivered to Employee by the Bank's Chief Executive

Officer, Board of Directors, or a committee of the Board which specifically

identifies the manner in which the Chief Executive Officer or Board or Directors

believes that Employee has not substantially performed her duties; (ii) the

willful engaging by Employee in gross misconduct materially and demonstrably

injurious to the Bank or (iii) the conviction of Employee of any crime involving

fraud or dishonesty. No act, or failure or act, on Employee's part shall be

considered "willful" unless done, or omitted to be done, by Employee, not in

good faith and without reasonable belief that her action or omission was in the

best interests of the Bank. The burden of establishing the validity of any

Termination for cause shall rest upon the Bank.

         5. Benefits. In the event of Employee's Termination for any reason

except those set forth in clauses 4(a)(i) or (ii), the Bank shall pay Employee

as severance pay an amount equal to two (2) times Employee's most recent annual

compensation, including the amount of her most recent annual bonus at the time

of termination ("Severance Pay"). The Severance Pay shall be paid in twenty-four

(24) equal monthly installments without interest, commencing one month after

termination, unless and until the Employee obtains other full-time employment,

at which time the balance of the Severance Pay shall be paid within thirty (30)

days in a lump sum amount.

         6. Other Benefits. In addition, in the event of Employee's Termination,

the Bank shall:

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(a) Maintain in full force and effect, for twenty-four (24) months after the

date of Termination, or unless and until Employee obtains other full-time

employment, all life insurance, health (medical and dental), accidental death

and dismemberment and disability plans or programs in which Employee is entitled

to participate immediately prior to the date of Termination and include Employee

as a participant in such plans on the same terms as he participated before

Termination; provided that Employee's continued participation is possible under

the general terms and provisions of such plans and programs. In the event that

Employee's participation in any such plan or program is barred, the Bank shall

arrange upon comparable terms to provide Employee with benefits substantially

similar to those which she would be entitled to receive under such plans and

programs. At the end of the period of coverage, Employee shall have the option

to have assigned to her, at no cost and with no apportionment of prepaid

premiums, any assignable insurance policy owned by the Bank and relating

specifically to Employee.

(b) To the extent permitted by the applicable plan, pay Employee in a lump sum

(or otherwise as specified by Employee to the extent permitted by the applicable

plan) any and all amounts contributed to a Bank pension or retirement plan

(other than any nonqualified deferred compensation plan) to which Employee is

entitled under the terms of any such plan.

         7. No Duty to Mitigate. Employee shall not be required to mitigate the

amount of any payment provided for in this Agreement by seeking other employment

or otherwise, nor shall the amount of any payment or benefit as provided for be

reduced by any compensation earned by Employee as the result of employment by

another employer or by retirement benefits after the date of Termination, or

otherwise except as specifically provided in this Agreement.

         8. Miscellaneous.

(a) Limit on Effect. This Agreement shall have no effect on any termination of

Employee's employment before a Change in Control or after the termination of

this Agreement, or upon any termination of employment at any time as a result of

Employee's voluntary termination of this Agreement and, in such event, Employee

shall receive only those benefits to which Employee would

<PAGE>

have become entitled before a Change in Control. After a Change in Control and

during its term, this Agreement is in lieu of any other Bank severance policy

involving cash payments, but not in lieu of other Bank severance policies

including, but not limited to, those items provided in Paragraph 6. This

Agreement does not entitle Employee to employment for any term whatsoever.

(b) Successors.

                      (i) The Bank will require any successor (whether direct or

indirect, by purchase, merger, consolidation or

otherwise) to all or substantially all of the business or assets of the Bank to

assume and agree to perform this Agreement in the same manner and to the same

extent that the Bank would be required to perform if no such succession had

taken place, Failure of the Bank to obtain such agreement before the

effectiveness of any such succession shall entitle the Employee immediately to

the benefits provided in Paragraphs 5 and 6 hereof.

                      (ii) Employee may not assign this Agreement, but this

Agreement shall inure to the benefit of and be

enforceable by Employee's personal or legal representatives, executors,

administrators, heirs, distributees, devisees and legatees. If Employee should

die while any amounts would still be payable to Employee under this Agreement if

Employee had continue to live, all such amounts, unless otherwise provided in

this Agreement, shall be paid in accordance with the terms of this Agreement to

Employees' devisee, legatee or other designee or, if there be no such designee,

to her estate.

(c) Expenses. The Bank agrees that if Employee is entitled to

Severance Pay or other benefits under this Agreement and the Bank or its

survivor disputes the obligation to pay Severance Pay or other benefits and

Employee prevails, in whole or in part, the Bank or its survivor shall then

promptly pay or reimburse Employee for all expenses incurred by Employee in such

dispute, including, but not limited to, attorneys' fees and associated costs.

(d) Notice. All necessary notices, demands, or requests required or permitted

under this Agreement shall be in writing and shall be deemed to have been duly

given when delivered in person or mailed by United States certified mail,

postage prepaid, to the parties at the addresses set forth below or to such

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other address as either party may have furnished to the other.

             If to Bank:               Four Oaks Bank & Trust Company

                                       6144 US 301 South

                                       Four Oaks, North Carolina 27524

             If to Employee:           Nancy S. Wise

                                       79 Vinson Road

                                       Clayton, North Carolina 27520

(e) Modifications. No provisions of this Agreement may be modified, waived or

discharged unless such modification, waiver or discharge is agreed to in writing

signed by the Employee and the Bank. No waiver by either party at any time of

any breach by the other party of, or compliance with, any condition or provision

of this Agreement to be performed by such other party shall be deemed a waiver

of similar or dissimilar provisions or conditions at the same or at any prior or

subsequent time.

(f) Counterparts; Interpretation. This Agreement may be executed in several

identical counterparts, each of which when so executed shall be deemed an

original, but all such counterparts shall constitute one and the same

instrument. The validity, interpretation, construction, and performance of

this Agreement shall be governed by the laws of the State of North Carolina. The

invalidity or unenforceability of any provision of this Agreement shall not

affect the validity or enforceability of any other provision of this Agreement,

which shall remain in full force and effect.

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of

the day and year first above written.



<PAGE>

                                FOUR OAKS BANK & TRUST COMPANY

                                         By:   /s/ Ayden R. Lee, Jr. President
                                               & CEO
                                               --------------------------------
                                               Authorized Officer

      ATTEST:

          /s/ Wanda C. Jones
          ------------------
          Secretary
      [SEAL]


                                    /s/ Nancy S. Wise
                                    ------------------------------
                                    NANCY S. WISE
                                    Employee