UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1999       Commission File Number 0-22787

                             FOUR OAKS FINCORP, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

         North Carolina                                     56-2028446
------------------------------------              ----------------------------
(State or other jurisdiction of                   (IRS Employer Identification
 incorporation or organization)                   Number)

                               6144 U S 301 South
                            Four Oaks, North Carolina
                    ----------------------------------------
                    (Address of principal executive offices)

                                      27524
                                   ----------
                                   (Zip Code)

Issuer's telephone number:                           (919) 963-2177
                                                     --------------

Securities registered under Section 12(b) of the Act: NONE
                                                      ----
Securities registered under Section 12(g) of the Act:

                     Common Stock, par value $1.00 per share
                     ---------------------------------------
                                (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 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: (X) YES ( ) NO

Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. ( )

                                   $20,080,716
                         -----------------------------
               (Issuer's revenues for its most recent fiscal year)

                                  $19,435,528
                         -----------------------------
        (Aggregate value of voting and non-voting common equity held by
   nonaffiliates of the registrant based on book value (due to lack of public
                market) of Common Stock as of December 31, 1999)

                                    1,366,530
                         -----------------------------
          (Number of shares of Common Stock, par value $1.00 per share,
                        outstanding as of March 6, 2000)

Documents Incorporated by Reference                           Where Incorporated
-----------------------------------                           ------------------
(1)  Annual Report to Shareholders for                        Parts II and III
     Fiscal Year Ended December 31, 1999
(2)  Proxy Statement for the Annual                           Part III
     Meeting of Shareholders to be held April 24, 2000


<PAGE>


PART I

Item 1 - Business.
------------------

         On February 5, 1997, Four Oaks Bank & Trust Company (referred to herein
as the "bank") formed Four Oaks Fincorp, Inc. for the purpose of serving as a
holding company for the bank. We have no significant assets other than the
capital stock of the bank. Our corporate offices and those of the bank are
located at 6144 US 301 South, Four Oaks, North Carolina 27524.

         The bank was incorporated under the laws of the State of North Carolina
in 1912. The bank is not a member of the Federal Reserve System. In addition to
the main office, the bank has an additional branch in Four Oaks and a branch
office in Clayton, North Carolina at 102 East Main Street, two in Smithfield,
North Carolina at 128 North Second Street, and 403 South Bright Leaf Boulevard,
one in Garner, North Carolina at 200 Glen Road and one in Benson, North Carolina
at 200 E. Church Street.

         The bank is a community bank engaged in the general commercial banking
business in Johnston County, North Carolina which is located in Eastern North
Carolina. Johnston County is contiguous to Wake, Wayne, Wilson, Harnett, Sampson
and Nash counties.

         As of December 31, 1999, the bank had assets of $231,464,628, net loans
outstanding of $164,226,086 and deposits of $194,710,937. The bank has enjoyed
considerable growth over the past five years as evidenced by the 98% increase in
assets, the 22% increase in net loans outstanding, and the 91% increase in
deposits since December 31, 1994.

         The bank provides a full range of banking services, including such
services as checking accounts, savings accounts, NOW accounts, money market
accounts, certificates of deposit, a student checking and savings program; loans
for businesses, agriculture, real estate, personal uses, home improvement and
automobiles; equity lines of credit; credit cards; individual retirement
accounts; discount brokerage services; safe deposit boxes; bank money orders;
electronic funds transfer services, including wire transfers; traveler's checks;
and free notary services to all bank customers. In addition, the bank provides
automated teller machine access to its customers for cash withdrawals through
the services of the HONOR and CIRRUS networks which offer customers access to
automated teller machines nationwide. At present, the bank does not provide the
services of a trust department.

         The majority of the bank's customers are individuals and small to
medium-size businesses located in Johnston County and surrounding areas. The
deposits and loans are well diversified with no material concentration in a
single industry or group of related industries. There are no seasonal factors
that would have any material adverse effect on the bank's business, and the bank
does not rely on foreign sources of funds or income.

         From its headquarters located in Four Oaks and its six offices located
in Four Oaks, Clayton, Smithfield, Garner and Benson, the bank serves a major
portion of Johnston County. Johnston County has a diverse economy and is not
dependent on any one particular industry. The leading industries in the area
include electronics, pharmaceutical, textile, agriculture, livestock, and
poultry.

         Commercial banking in North Carolina is extremely competitive due in
large part to statewide branching. The bank competes in its market area with
some of the largest banking organizations in the state and other financial
institutions such as federally and state-chartered savings and loan institutions
and credit unions as well as consumer finance companies, mortgage companies and
other lenders engaged in the business of extending credit. Many of the bank's
competitors have broader geographic markets and higher lending limits than the
bank and are also able to provide more services and make greater use of media
advertising.

                                       2
<PAGE>


         Interstate banking in North Carolina and other Southeastern states has
greatly increased the size and financial resources of some of the bank's
competitors. In addition, as a result of interstate banking, out-of-state
commercial banks may compete in North Carolina by acquiring North Carolina banks
and thus increase the prospects for additional competition in North Carolina.
See "Holding Company Regulation" below.

         Despite the competition in its market area, the bank believes that it
has certain competitive advantages which distinguish it from its competition.
The bank believes that its primary competitive advantages are its strong local
identity and affiliation with the community and its emphasis on providing the
very best service possible at reasonable and competitive prices. The bank
believes that it offers customers modern, high-tech banking services without
forsaking community values such as prompt, personal service and friendliness.
Amounts spent on research activities relating to the development or improvement
of services have been immaterial over the past two years. At December 31, 1999,
the bank employed 93 full time equivalent employees.

         The following table sets forth certain financial data and ratios with
respect to the bank for the years ended December 31, 1999, 1998, and 1997. This
information should be read in conjunction with and is qualified in its entirety
by reference to the more detailed audited financial statements and notes thereto
which accompany this report:

                                             1999       1998       1997
                                             ----       ----       ----
                                            (In thousands, except ratios)

Net Income                                $  3,096    $  2,578    $  2,122
Average equity capital accounts           $ 20,827    $ 18,314    $ 15,495
Ratio of net income to average equity
    capital accounts                         14.87%      14.08%      13.69%
Average daily total deposits              $191,307    $180,763    $154,397
Ratio of net income to average daily
    total deposits                            1.62%       1.43%       1.37%
Average daily loans                       $164,863    $153,244    $130,376
Ratio of average daily loans to average
    daily total deposits                    86.189%      84.78%      84.44%

Governmental Regulation
-----------------------

         Holding companies, banks and many of their non-bank affiliates are
extensively regulated under both federal and state law. The following is a brief
summary of certain statutes, rules and regulations affecting us and the bank.
This summary is qualified in its entirety by reference to the particular
statutory and regulatory provisions referred to below and is not intended to be
an exhaustive description of the statutes or regulations applicable to our
business or the business of the bank. Supervision, regulation and examination of
us and the bank by bank regulatory agencies is intended primarily for the
protection of the bank's depositors rather than our shareholders.

         Holding Company Regulation
         --------------------------

         GENERAL. We are a holding company registered with the Board of
Governors of the Federal Reserve System under the Bank Holding Company Act of
1956 (the "BHCA"). As such, we are subject to the supervision, examination and
reporting requirements contained in the BHCA and the regulation of the Federal
Reserve. The bank is also subject to the BHCA. The BHCA requires that a bank
holding company obtain the prior approval of the Federal Reserve before (i)
acquiring direct or indirect ownership or control of more than five percent of
the voting shares of any bank, (ii) taking any action that causes a bank to
become a

                                       3

<PAGE>

subsidiary of the bank holding company, (iii) acquiring all or substantially all
of the assets of any bank or (iv) merging or consolidating with any other bank
holding company.

         The BHCA generally prohibits a bank holding company, with certain
exceptions, from engaging in activities other than banking, or managing or
controlling banks or other permissible subsidiaries, and from acquiring or
retaining direct or indirect control of any company engaged in any activities
other than those activities determined by the Federal Reserve to be closely
related to banking, or managing or controlling banks, as to be a proper incident
thereto. In determining whether a particular activity is permissible, the
Federal Reserve must consider whether the performance of such an activity can
reasonably be expected to produce benefits to the public, such as greater
convenience, increased competition or gains in efficiency, that outweigh
possible adverse effects, such as undue concentration of resources, decreased or
unfair competition, conflicts of interest or unsound banking practices. For
example, banking, operating a thrift institution, extending credit or servicing
loans, leasing real or personal property, conducting discount securities
brokerage activities, performing certain data processing services, acting as
agent or broker in selling credit life insurance and certain other types of
insurance underwriting activities have all been determined by regulations of the
Federal Reserve to be permissible activities.

         Pursuant to delegated authority, the Federal Reserve Bank of Richmond
has authority to approve certain activities of holding companies within its
district, including us, provided the nature of the activity has been approved by
the Federal Reserve. Despite prior approval, the Federal Reserve has the power
to order a holding company or its subsidiaries to terminate any activity or to
terminate its ownership or control of any subsidiary when it has reasonable
cause to believe that continuation of such activity or such ownership or control
constitutes a serious risk to the financial safety, soundness or stability of
any bank subsidiary of that bank holding company.

         RECENT DEVELOPMENTS. On November 12, 1999, the President of the United
States signed into law the Gramm-Leach-Bliley Act (the "GLB"), which alters the
regulatory framework for banking and other financial services companies. The GLB
creates a new type of holding company called a "financial holding company." The
new financial holding company structure allows banks, insurance companies, and
securities firms to affiliate within a single entity, provided that the
financial holding company satisfies and maintains certain new regulatory
standards. Bank holding companies that meet these standards may elect to become
financial holding companies.

         At the present time, we have elected to remain a bank holding company,
and therefore we remain subject to the same regulatory framework as before the
enactment of the GLB. However, the financial holding company structure created
by the GLB permits insurance companies or securities firms operating under the
financial holding company structure to acquire us, and, if we elect to become a
financial holding company in the future, we could acquire insurance companies or
securities firms.

         In addition to creating the more flexible financial holding company
structure, the GLB introduced several additional customer privacy protections
that will apply to us and the bank. Federal regulators have issued for comment a
draft of proposed privacy regulations implementing these protections. Pursuant
to the GLB's rulemaking provisions, regulations must be adopted by May 12, 2000,
and institutions must begin privacy disclosures under the GLB within six months
of adoption of such regulations. The GLB's privacy provisions require financial
institutions to, among other things, (i) establish and annually disclose a
privacy policy, (ii) give consumers the right to opt out of disclosures to
nonaffiliated third parties, with certain exceptions, (iii) refuse to disclose
consumer account information to third-party marketers and (iv) follow regulatory
standards to protect the security and confidentiality of consumer information.

         MERGERS AND ACQUISITIONS. The Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (the "IBBEA") permits interstate acquisitions
of banks and bank holding companies without geographic limitation, subject to
any state requirement that the bank has been organized for a minimum period of
time,

                                       4
<PAGE>

not to exceed five years, and the requirement that the bank holding company,
prior to, or following the proposed acquisition, controls no more than 10% of
the total amount of deposits of insured depository institutions in the U.S. and
no more than 30% of such deposits in any state (or such lesser or greater amount
set by state law).

         In addition, the IBBEA permits a bank to merge with a bank in another
state as long as neither of the states has opted out of the IBBEA prior to May
31, 1997. The state of North Carolina has "opted in" to such legislation,
effective June 22, 1995. In addition, a bank may establish and operate a DE NOVO
branch in a state in which the bank does not maintain a branch if that state
expressly permits DE NOVO interstate branching. As a result of North Carolina
having opted-in, unrestricted interstate DE NOVO branching is permitted in North
Carolina.

         ADDITIONAL RESTRICTIONS AND OVERSIGHT. Subsidiary banks of a bank
holding company are subject to certain restrictions imposed by the Federal
Reserve on any extensions of credit to the bank holding company or any of its
subsidiaries, investments in the stock or securities thereof and the acceptance
of such stock or securities as collateral for loans to any borrower. A bank
holding company and its subsidiaries are also prevented from engaging in certain
tie-in arrangements in connection with any extension of credit, lease or sale of
property or furnishing of services. An example of a prohibited tie-in would be
any arrangement that would condition the provision or cost of services on a
customer obtaining additional services from the bank holding company or any of
its other subsidiaries.

         The Federal Reserve may issue cease and desist orders against bank
holding companies and non-bank subsidiaries to stop actions believed to present
a serious threat to a subsidiary bank. The Federal Reserve also regulates
certain debt obligations, changes in control of bank holding companies and
capital requirements.

         Under the provisions of the North Carolina law, we are registered with
and subject to supervision by the North Carolina Commissioner of Banks.

         CAPITAL REQUIREMENTS. The Federal Reserve has established risk-based
capital guidelines for bank holding companies and state member banks. The
minimum standard for the ratio of capital to risk-weighted assets (including
certain off balance sheet obligations, such as standby letters of credit) is
eight percent. At least half of this capital must consist of common equity,
retained earnings and a limited amount of perpetual preferred stock and minority
interests in the equity accounts of consolidated subsidiaries, less certain
goodwill items ("Tier 1 capital"). The remainder ("Tier 2 capital") may consist
of mandatory convertible debt securities and a limited amount of other preferred
stock, subordinated debt and loan loss reserves.

         In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
leverage ratio of Tier 1 capital to adjusted average quarterly assets less
certain amounts ("Leverage Ratio") equal to three percent for bank holding
companies that meet certain specified criteria, including having the highest
regulatory rating. All other bank holding companies will generally be required
to maintain a Leverage Ratio of between four percent and five percent.

         The guidelines also provide that bank holding companies experiencing
significant growth, whether through internal expansion or acquisitions, will be
expected to maintain strong capital ratios substantially above the minimum
supervisory levels without significant reliance on intangible assets. The same
heightened requirements apply to bank holding companies with supervisory,
financial, operational or managerial weaknesses, as well as to other banking
institutions if warranted by particular circumstances or the institution's risk
profile. Furthermore, the guidelines indicate that the Federal Reserve will
continue to consider a "tangible Tier 1 Leverage Ratio" (deducting all
intangibles) in evaluating proposals for expansion or new activity. The Federal
Reserve has not advised us of any specific minimum Leverage Ratio or tangible
Tier 1 Leverage Ratio applicable to us.

                                       5
<PAGE>

         As of December 31, 1999, we had Tier 1 risk-adjusted, total regulatory
capital and leverage capital of approximately 12.70%, 13.95% and 9.79%,
respectively, all in excess of the minimum requirements.

         Bank Regulation
         ---------------

         The bank is subject to numerous state and federal statutes and
regulations that affect its business, activities, and operations, and is
supervised and examined by the North Carolina Commissioner of Banks and the
Federal Reserve. The Federal Reserve and the North Carolina Commissioner of
Banks regularly examine the operations of banks over which they exercise
jurisdiction. They have the authority to approve or disapprove the establishment
of branches, mergers, consolidations, and other similar corporate actions, and
to prevent the continuance or development of unsafe or unsound banking practices
and other violations of law. The Federal Reserve and the North Carolina
Commissioner of Banks regulate and monitor all areas of the operations of banks
and their subsidiaries, including loans, mortgages, issuances of securities,
capital adequacy, loss reserves, and compliance with the Community Reinvestment
Act of 1977 (the "CRA") as well as other laws and regulations. Interest and
certain other charges collected and contracted for by banks are also subject to
state usury laws and certain federal laws concerning interest rates.

         The deposit accounts of the bank are insured by the Bank Insurance Fund
(the "BIF") of the Federal Deposit Insurance Corporation (the "FDIC") up to a
maximum of $100,000 per insured depositor. The FDIC issues regulations and
conducts periodic examinations, requires the filing of reports and generally
supervises the operations of its insured banks. This supervision and regulation
is intended primarily for the protection of depositors. Any insured bank that is
not operated in accordance with or does not conform to FDIC regulations,
policies, and directives may be sanctioned for noncompliance. Civil and criminal
proceedings may be instituted against any insured bank or any director, officer
or employee of such bank for the violation of applicable laws and regulations,
breaches of fiduciary duties or engaging in any unsafe or unsound practice. The
FDIC has the authority to terminate insurance of accounts pursuant to procedures
established for that purpose.

         Under the North Carolina Business Corporation Act, we may not pay a
dividend or distribution, if after giving it effect, we would not be able to pay
our debts as they become due in the usual course of business or our total assets
would be less than our liabilities. In general, our ability to pay cash
dividends is dependent upon the amount of dividends paid by the bank. The
ability of the bank to pay dividends to us is subject to statutory and
regulatory restrictions on the payment of cash dividends, including the
requirement under the North Carolina banking laws that cash dividends be paid
only out of undivided profits and only if the bank has surplus of a specified
level. The Federal Reserve also imposes limits on the bank's payment of
dividends.

         Like us, the bank is required by federal regulations to maintain
certain minimum capital levels. The levels required of the bank are the same as
those required of us. At December 31, 1999, the bank had Tier 1 risk-adjusted,
total regulatory capital and leverage capital of approximately 12.14%, 13.39%
and 9.33%, respectively, all in excess of the minimum requirements.

         The bank is subject to insurance assessments imposed by the FDIC.
Effective January 1, 1997, the FDIC adopted a risk-based assessment schedule
providing for annual assessment rates ranging from 0% to .27% of an
institution's average assessment base, applicable to institutions insured by
both the BIF and the Savings Association Insurance Fund ("SAIF"). The actual
assessment to be paid by each insured institution is based on the institution's
assessment risk classification, which focuses on whether the institution is
considered "well capitalized," "adequately capitalized" or "under capitalized,"
as such terms are defined in the applicable federal regulations. Within each of
these three risk classifications, each institution will be assigned to one of
three subgroups based on supervisory risk factors. In particular, regulators
will assess supervisory risk based on whether the institution is financially
sound with only a few minor weaknesses (Subgroup A), whether it has weaknesses
which, if not corrected, could result in an increased risk of loss to the BIF


                                       6

<PAGE>

(Subgroup B) or whether such weaknesses pose a substantial risk of loss to the
BIF unless corrective action is taken (Subgroup C). The FDIC also is authorized
to impose one or more special assessments in an amount deemed necessary to
enable repayment of amounts borrowed by the FDIC from the United States Treasury
Department and, beginning in 1997, all banks are required to pay additional
annual assessments. The current rate for this additional assessment is .021%.

         Banks are also subject to the CRA, which requires the appropriate
federal bank regulatory agency, in connection with its examination of a bank, to
assess such bank's record in meeting the credit needs of the community served by
that bank, including low and moderate-income neighborhoods. Each institution is
assigned one of the following four ratings of its record in meeting community
credit needs: "outstanding," "satisfactory," "needs to improve" or "substantial
noncompliance." The regulatory agency's assessment of the bank's record is made
available to the public. Further, such assessment is required of any bank which
has applied to (i) charter a national bank, (ii) obtain deposit insurance
coverage for a newly chartered institution, (iii) establish a new branch office
that will accept deposits, (iv) relocate an office or (v) merge or consolidate
with, or acquire the assets or assume the liabilities of, a federally regulated
financial institution. In the case of a bank holding company applying for
approval to acquire a bank or other bank holding company, the Federal Reserve
will assess the record of each subsidiary bank of the applicant bank holding
company, and such records may be the basis for denying the application.

         Effective May 12, 2000, the GLB's "CRA Sunshine Requirements" call for
financial institutions to disclose publicly certain written agreements made in
fulfillment of the CRA. Banks that are parties to such agreements also must
report to federal regulators the amount and use of any funds expended under such
agreements on an annual basis, along with such other information as regulators
may require. This annual reporting requirement is effective for any agreements
made after May 12, 2000.

         Monetary Policy and Economic Controls
         -------------------------------------

         Both us and the bank are directly affected by governmental policies and
regulatory measures affecting the banking industry in general. Of primary
importance is the Federal Reserve Board, whose actions directly affect the money
supply which, in turn, affects banks' lending abilities by increasing or
decreasing the cost and availability of funds to banks. The Federal Reserve
Board regulates the availability of bank credit in order to combat recession and
curb inflationary pressures in the economy by open market operations in United
States government securities, changes in the discount rate on member bank
borrowings, changes in reserve requirements against bank deposits, and
limitations on interest rates that banks may pay on time and savings deposits.

         Deregulation of interest rates paid by banks on deposits and the types
of deposits that may be offered by banks have eliminated minimum balance
requirements and rate ceilings on various types of time deposit accounts. The
effect of these specific actions and, in general, the deregulation of deposit
interest rates has generally increased banks' cost of funds and made them more
sensitive to fluctuations in money market rates. In view of the changing
conditions in the national economy and money markets, as well as the effect of
actions by monetary and fiscal authorities, no prediction can be made as to
possible future changes in interest rates, deposit levels, loan demand, or our
business and earnings of or that of the bank. As a result, banks, including the
bank, face a significant challenge to maintain acceptable net interest margins.


                                       7

<PAGE>

         Our Executive Officers
         ----------------------

         The following table sets forth certain information with respect to our
executive officers:

<TABLE>
<CAPTION>

                                             POSITIONS AND OFFICES WITH FOUR OAKS FINCORP,
                               YEAR FIRST    INC. AND BUSINESS EXPERIENCE
NAME                   AGE     EMPLOYED      DURING PAST FIVE YEARS
----                   ---     --------      ----------------------
<S>                  <C>       <C>           <C>

Ayden R. Lee, Jr.      51      1980          Chief Executive Officer, President and
                                             Director of Four Oaks Fincorp, Inc. and Four
                                             Oaks Bank & Trust Company

Clifton L. Painter     50      1986          Senior Executive Vice President, Chief
                                             Operating Officer of Four Oaks Fincorp, Inc.
                                             and Four Oaks Bank & Trust Company

Nancy S. Wise          44      1991          Senior Vice President, Chief Financial Officer
                                             of Four Oaks Fincorp, Inc. and Four Oaks Bank
                                             & Trust Company

W. Leon Hiatt, III     32      1994          Senior Vice President of Four Oaks Fincorp,
                                             Inc. and Four Oaks Bank & Trust Company, Loan
                                             Administrator of Four Oaks Bank & Trust
                                             Company.  From March 1990 until joining the
                                             bank, Mr. Hiatt served as a Financial
                                             Institutions Examiner for the FDIC

</TABLE>

Item 2 - Properties.
--------------------

         The bank owns its main office which is located at 6144 U S 301 South,
Four Oaks, North Carolina. The main office which was constructed by the Bank in
1985 is a 12,000 square foot facility on 1.64 acres of land. The bank leases an
additional branch office in downtown Four Oaks located at 111 North Main Street
from M.S. Canaday, who is one of our directors as well as a director of the
bank. Under the terms of the lease, which the bank believes to be arms-length,
the bank paid $806 per month in rent in 1999. The term of the lease is currently
six years beginning January 1, 1994 with annual increases based on the Consumer
Price Index. The bank owns a 5,000 square foot facility renovated in 1992 on
1.15 acres of land located at 5987 U S 301 South, Four Oaks, North Carolina
which houses the training center and the bank's wide area network central link.
In addition, the bank owns the following:

LOCATION                       YEAR BUILT     PRESENT FUNCTION       SQUARE FEET
--------                       ----------     ----------------       -----------
102 East Main Street           1986           Branch Office              4,200
Clayton, North Carolina

200 E. Church Street           1987           Branch Office              2,000
Benson, North Carolina

128 North Second Street        1991           Branch Office              3,400
Smithfield, North Carolina

403 S. Bright Leaf Blvd.       1995           Limited-Service Facility     720
Smithfield, North Carolina

200 Glen Road                  1996           Branch Office              3,600
Garner, North Carolina


                                       8
<PAGE>

Item 3 - Legal Proceedings.
---------------------------

         We are not involved in any material legal proceedings at the present
time.

Item 4 - Submission of Matters to a Vote of Security Holders.
-------------------------------------------------------------

         None.

PART II

Item 5 - Market for Registrant's Common Equity and Related Stockholder Matters.
-------------------------------------------------------------------------------

         This information is incorporated by reference from Page 39, "Corporate
Information" of our Annual Report to Shareholders included as Exhibit 13.1.

Item 6 - Management's Discussion and Analysis or Plan of Operation.
-------------------------------------------------------------------

         This information is incorporated by reference from Pages 11-17,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," of our Annual Report to Shareholders included as Exhibit 13.1.

Item 7 - Financial Statements.
------------------------------

         This information is incorporated by reference from Pages 18-33, of our
Annual Report to Shareholders included as Exhibit 13.1.

Item 8 - Changes In and Disagreements With Accountants on Accounting and
------------------------------------------------------------------------
Financial Disclosure.
---------------------

         None.


PART III

Item 9 - Directors, Executive Officers, Promoters and Control Persons;
----------------------------------------------------------------------
Compliance With Section 16(a) of the Exchange Act.
--------------------------------------------------

         Director information is incorporated by reference from Pages 5 and 6,
"Election of Directors" and Pages 9 and 10, "Section 16(a) Beneficial Ownership
Reporting Compliance," in our Proxy Statement for the Annual Meeting of
Shareholders to be held April 24, 2000. Information on our executive officers is
included under the caption "Our Executive Officers" on Page 8 of this report.

Item 10 - Executive Compensation.
---------------------------------

         This information is incorporated by reference from Pages 7-10,
"Executive Compensation," in our Proxy Statement for the Annual Meeting of
Shareholders to be held April 24, 2000.

Item 11 - Security Ownership of Certain Beneficial Owners and Management.
-------------------------------------------------------------------------

         This information is incorporated by reference from Pages 3 and 4,
"Security Ownership of Management and Certain Beneficial Owners," in our Proxy
Statement for the Annual Meeting of Shareholders to be held April 24, 2000.

                                       9
<PAGE>

Item 12 - Certain Relationships and Related Transactions.
---------------------------------------------------------

         This information is incorporated by reference from Page 9, "Executive
Compensation-Certain Transactions," in our Proxy Statement for the Annual
Meeting of Shareholders to be held April 24, 2000.

Item 13 - Exhibits and Reports on Form 8-K.
-------------------------------------------

(a)      Financial Statements and Schedules.

         The following financial statements are incorporated by reference herein
         from our Annual Report to Shareholders included as Exhibit 13.1 to this
         Form 10-KSB.

<TABLE>
<CAPTION>
                                                                                 ANNUAL
                                                                               REPORT PAGE
                                                                               -----------
        <S>      <C>                                                          <C>

         (i)      Report of Independent Accountants.                                   18

         (ii)     Consolidated Balance Sheets, December 31, 1999 and 1998.             19

         (iii)    Consolidated Statements of Operations for the years ended            20
                  December 31, 1999, 1998 and 1997.

         (iv)     Consolidated Changes in Shareholders' Equity for the years           21
                  ended December 31, 1999, 1998 and 1997.

         (v)      Consolidated Statements of Cash Flows for the years ended            22
                  December 31, 1999, 1998 and 1997.

         (vi)     Notes to Consolidated Financial Statements.                         23-33

</TABLE>


(b)      Reports on Form 8-K.

         No reports on Form 8-K were filed during the quarter ending December
         31, 1999.

(c)      Exhibits. The following exhibits are filed as part of this annual
         report. Management contracts or compensatory plans or arrangements are
         listed in Exhibits 10.1, 10.2, 10.3, 10.4 and 10.6 below:

<TABLE>
<CAPTION>
         EXHIBIT NO.       DESCRIPTION OF EXHIBIT
         -----------       ----------------------
       <S>                <C>

         2(1)              Agreement and Plan of Reorganization and Merger by and between Four Oaks Bank & Trust
                           Company and Four Oaks Fincorp, Inc. dated February 24, 1997

         3.1(1)            Articles of Incorporation of Four Oaks Fincorp, Inc.

         3.2(1)            Bylaws of Four Oaks Fincorp, Inc.

         4(1)              Specimen of certificate for Four Oaks Fincorp, Inc. Common Stock

         10.1(2)           Employment Agreement with Ayden R. Lee, Jr.

         10.2(2)           Severance Compensation Agreement with Ayden R. Lee, Jr.

         10.3(1)           Nonqualified Stock Option Plan


                                       10
<PAGE>

         10.4(1)           Employee Stock Purchase and Bonus Plan

         10.5(1)           Dividend Reinvestment and Stock Purchase Plan

         10.6(3)           Four Oaks Bank & Trust Company Supplemental Executive Retirement Plan

         13                Portions of the Annual Report to Shareholders for the fiscal year ended December 31,
                           1999, which are incorporated herein by reference.

         21                Subsidiaries of Four Oaks Fincorp, Inc.

         23                Consent of PricewaterhouseCoopers LLP

         27                Financial Data Schedule

</TABLE>

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

(1)   Filed as an exhibit to the Form 8-K12G3 filed with the SEC on July 1, 1997
      and incorporated herein by reference.
(2)   Filed as an exhibit to the Quarterly Report on Form 10-Q for the period
      ended June 30, 1997 and incorporated herein by reference.
(3)   Filed as an exhibit to the Annual Report on Form 10-KSB for the period
      ended December 31, 1998 and incorporated herein by reference.


                           FORWARD LOOKING INFORMATION

         Information set forth in this Annual Report on Form 10-KSB under the
caption "Business" and incorporated by reference herein from our Annual Report
to Shareholders 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 possible 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 documents incorporated by reference in this Annual Report on Form 10-KSB.



                                       11
<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                  FOUR OAKS FINCORP, INC.

Date:  March 19, 2000             By:               /s/ Ayden R. Lee, Jr.
                                           -------------------------------------
                                           Ayden R. Lee, Jr.
                                           President and Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Date:  March 19, 2000                               /s/ Ayden R. Lee, Jr.
                                           -------------------------------------
                                           Ayden R. Lee, Jr.
                                           President, Chief Executive Officer
                                            and Director

Date:  March 19, 2000                               /s/ Nancy S. Wise
                                           -------------------------------------
                                           Nancy S. Wise
                                           Senior Vice President and Chief
                                            Financial Officer

Date:  March 19, 2000                               /s/ William J. Edwards
                                           -------------------------------------
                                           William J. Edwards
                                           Director

Date:  March 19, 2000                               /s/ Warren L. Grimes
                                           -------------------------------------
                                           Warren L. Grimes
                                           Director

Date:  March 19, 2000                               /s/ R. Max Raynor, Jr.
                                           -------------------------------------
                                           Dr. R. Max Raynor, Jr.
                                           Director

Date:  March 19, 2000                               /s/ Percy Y. Lee
                                           -------------------------------------
                                           Percy Y. Lee
                                           Director

Date:  March 19, 2000                               /s/ Merwin S. Canaday
                                           -------------------------------------
                                           Merwin S. Canaday
                                           Director

Date:  March 19, 2000                               /s/ Paula C. Bowman
                                           -------------------------------------
                                           Paula C. Bowman
                                           Director


<PAGE>


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

EXHIBIT NO.       DESCRIPTION OF EXHIBIT
-----------       ----------------------
<S>              <C>

2(1)              Agreement and Plan of Reorganization and Merger by and between Four Oaks Bank & Trust
                  Company and Four Oaks Fincorp, Inc. dated February 24, 1997
3.1(1)            Articles of Incorporation of Four Oaks Fincorp, Inc.
3.2(1)            Bylaws of Four Oaks Fincorp, Inc.
4(1)              Specimen of certificate for Four Oaks Fincorp, Inc. Common Stock
10.1(2)           Employment Agreement with Ayden R. Lee, Jr.
10.2(2)           Severance Compensation Agreement with Ayden R. Lee, Jr.
10.3(1)           Nonqualified Stock Option Plan
10.4(1)           Employee Stock Purchase and Bonus Plan
10.5(1)           Dividend Reinvestment and Stock Purchase Plan
10.6(3)           Four Oaks Bank & Trust Company Supplemental Executive Retirement Plan
13                Portions of the Annual Report to Shareholders for the fiscal year ended December 31,
                  1999, which are incorporated herein by reference.
21                Subsidiaries of Four Oaks Fincorp, Inc.
23                Consent of PricewaterhouseCoopers LLP
27                Financial Data Schedule

</TABLE>

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

(1)   Filed as an exhibit to the Form 8-K12G3 filed with the SEC on July 1, 1997
      and incorporated herein by reference.
(2)   Filed as an exhibit to the Quarterly Report on Form 10-Q for the period
      ended June 30, 1997 and incorporated herein by reference.
(3)   Filed as an exhibit to the Annual Report on Form 10-KSB for the period
      ended December 31, 1998 and incorporated herein by reference.