Four Oaks Bank & Trust (fka FOFN)

[Enterprising Investor]

Four Oaks Bank keeps pushing for stock liquidity (4/29/17)

By Lauren K. Ohnesorge

Four Oaks CEO David Rupp says the move could be good for the bank, however, as it will allow for “a little more liquidity” in the stock.

Currently, more than half of the bank is owned by insiders.

“It would be nice if there was more flow out in the market,” he says, adding that there’s been interest – particularly since the reverse stock split Four Oaks finalized in March, where every five shares of stock were automatically combined into one share. At the time, it was hoped that a higher stock price would give the bank options should the board decide to apply for a national securities exchange such as the Nasdaq, which requires an initial bid price of $4 per share.

Rupp says this week the plan is to keep its options open.

Lehman, who owns nearly half of the company, entered into a $16 million stock purchase agreement with Four Oaks in 2014.

“He’s very patient and a big supporter of the bank and this is just a natural evolution for him,” Rupp says. “It gives him flexibility if he wants to sell a portion of his holdings.”

Rupp cautions that the filing doesn’t mean that he has to sell shares – just that Lehman, a former attorney, now has that flexibility.

In addition to Four Oaks, Lehman has served as a director of several banks, including Village Bank & Trust Financial Corporation, Firsst Capital Bancorp, Virginia Commerce Bancorp and Tower Bancorp.

Earlier this week, Four Oaks declared a cash dividend of one cent per share to shareholders of record as of May 8. It’s the first dividend for the bank since it suspended the practice in the fourth quarter of 2010 following the economic crisis. And Rupp says it’s a sign of a turnaround.

“We had a really good quarter and wanted to pay it back,” he says.

Last week the bank reported a net income of $1.2 million, or 18 cents per diluted share, for its first quarter. Gross loans increased $6 million in the quarter for an annualized growth rate of 4.7 percent.

While Four Oaks Fincorp, which had $736.7 million in total assets as of the end of March, was incorporated as a bank holding company in 1997, its bank subsidiary dates back to 1912.

Four Oaks has about 175 employees and has 15 offices across Four Oaks, Clayton, Smithfield, Garner, Benson, Fuquay-Varina, Wallace, Holly Springs, Harrells, Zebulon, Dunn, Raleigh and Apex.

Four Oaks Fincorp trades Over The Counter under the ticker FOFN, with shares selling at about $14 a share.

http://www.bizjournals.com/triangle/news/2017/04/29/four-oaks-bank-keeps-pushing-for-stock-liquidity.html