Privacy Policy

First Federal Bank is committed to providing to its customers financial products and services that are useful, convenient and economically competitive. To effectively and efficiently provide such products and services, it is necessary for First Federal Bank to obtain certain information from our customers and from other sources. Technology, marketing practices, safety and soundness requirements, underwriting standards, and state and federal laws and regulations are but a few of the many reasons that it is necessary to accumulate information about individuals when they establish a relationship with First Federal Bank.

Respect of Right to Privacy

As a customer of First Federal Bank, or of any financial institution, you have the expectation that information about your personal and financial circumstances will be treated with appropriate confidentiality. That expectation and the trust that customer information will not be improperly disclosed or otherwise misused are fundamental to First Federal Bank's relationships with our customers. At First Federal Bank, we recognize and are sensitive to your privacy concerns. We therefore assure you that we will take all reasonable steps, consistent with state and federal laws and regulations and normal business practices, to protect your privacy.

Collection, Use and Retention of Customer Information

Information about our customers is collected, used and retained only where it is reasonably necessary and useful in administering our business and in providing financial products and services to our customers. Customer information is obtained directly from the customer, is collected when recording customer activity and related transactions, or is requested with your permission from outside sources (such as credit reports, etc.).

Information Accuracy

We have procedures intended to assure that customer information is accurate, current and complete in accordance with commercial standards and applicable laws and regulations. The maintenance of accurate, complete and current account information is essential to the efficient administration of the relationships with our customers. Under the Fair Credit Reporting Act, you have the right to notify us if you believe we have reported inaccurate consumer information about your account to any credit reporting agency. If you find that our records are inaccurate, incomplete or not current please contact us at your nearest branch office. We will review your concerns and make any necessary corrections to your records.

Employee Access to Customer Information

We restrict access to nonpublic personal information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. In addition, employees are informed of and trained in their responsibility to protect confidential customer information.

Maintaining Customer Privacy with Third Party Business Partners

First Federal Bank follows strict privacy procedures in regard to protecting your personal information. The Bank requires all third party business partners to adhere to similar and equally stringent privacy policies. Personal information may be supplied to a third party business partner to process a customer transaction; in response to a customer request; to comply with legal requirements (subpoena, or the investigation of fraudulent activity, etc.); to facilitate the exchange of information with reputable reporting agencies; or for joint marketing purposes.

Disclosure of Nonpublic Personal Information

We collect nonpublic personal information about you from the following sources:

• Information we receive from you on applications or other forms;
• Information about your transactions with us, our affiliates, or others; and
• Information we receive from a consumer reporting agency.

Nonpublic personal information does not include information that is available from public sources, such as telephone directories or government records.

We may disclose nonpublic personal information about you to the following types of third parties:

• Financial service providers, such as mortgage bankers, securities broker-dealers and insurance agents; and
• Non-financial companies, such as direct marketers.

We may also disclose nonpublic personal information about you to nonaffiliated third parties as permitted by law.

Federal law allows us to share certain types of information about our customers with our affiliates. Affiliates are companies that are related to us by common ownership or control. We may disclose the following kinds of nonpublic personal information about you:

• Information we receive from you on applications or other forms such as your name, address, social security number, assets, and income;
• Information about your transactions with us, our affiliates, or others such as your account balance, payment history, parties to transactions, and credit card usage; and
• Information we receive from a consumer reporting agency, such as your creditworthiness and credit history.

If you prefer that we not share application information, account information, or credit related information obtained from you or others with companies that are our affiliates or that we not disclose nonpublic personal information about you to nonaffiliated third parties, except as permitted by law, you may opt out of those disclosures, that is, you may direct us not to make those disclosures (other than permitted by law). If you wish to opt out, you may call us at 910-892-7187 or toll free at 1-866-871-7926 or by mailing us your request to: First Federal Bank, Compliance Department, PO Box 1049, Dunn, NC 28335. If you prefer, you may send us an email through our website at www.firstfederalbanknc.com. Please indicate "Privacy" as the subject of your communication.

If you are opting out on a joint account, you are opting out on behalf of all owners. If you have previously given us an opt out notice, you do not have to notify us again.

Nonpublic Personal Information and Former Customers

If you decide to close your account(s) or become an inactive customer, we will adhere to the privacy policies and practices as described in this notice.

Authorized Sharing

We may disclose the following information to companies that perform marketing services on our behalf or to other financial institution with whom we have joint marketing agreements:

• Information we receive from you on applications or other forms, such as your name, address, social security number, assets, and income;
• Information about your transactions with us, our affiliates, or others such as your account balance, payment history, parties to transactions, and credit card usage; and
• Information we receive from a consumer reporting agency, such as your creditworthiness and credit history.

Federal law does not allow you the right to opt out of the information disclosed under such joint marketing agreement. A joint marketing agreement is an agreement entered into by the Bank and another financial institution in order to offer products and services jointly. A financial institution is defined as any institution the business of which is engaging in activities that are financial in nature or incidental to such financial activities. Such activities include lending, exchanging, transferring, investing for others, or safeguarding money or securities; underwriting and selling insurance; providing financial, investment, or advisory services; selling pools of assets; underwriting, dealing in, or making a market in securities; merchant banking; and any other activities prescribed by the Federal Reserve Board.

Fair Credit Reporting Act

In accordance with the Fair Credit Reporting Act, the Bank does not share or disclose any information derived from a third party, a credit report, any credit application, or other source which may divulge the consumer's creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living. The Bank will provide only information about its own dealings relating to any credit inquiry, including the status of any loans or deposits. Consumer information is any record about an individual, whether in paper, electronic, or other form, that is a consumer report or is derived from a consumer report and that is maintained or otherwise possessed by or on behalf of the bank for a business purpose.

We Handle Medical Information with Special Care

In connection with insurance transactions, we may gather medical record and health information about you, privileged information relating to insurance claims or court proceedings, and information about your character, personal habits, mode of living, or general reputation. This information is used to process, underwrite, and administer insurance applications, products, accounts and claims, and for other permissible business purposes. This information is not shared with affiliates or others except as required or permitted by law. In addition, we do not share health or medical record information in connection with insurance transactions for marketing purposes.

Network Security Practices Protect Your Information

The rapidly increasing complexities of computer networks and their relationships to banking and bank records present a myriad of security and privacy issues and concerns. First Federal Bank will ensure its electronic data is secured to the fullest extent possible, with ongoing monitoring of security devices and access controls.

Internet and Electronic Privacy

With the rapid expansion of technological capability in our industry and in our institution, First Federal Bank is committed to maintaining and expanding effective systems to facilitate the convenient delivery of services, regardless of the method of delivery. We value our customers and recognize the importance of your trust and confidence in us. Information gathered via the Internet or other electronic means will be used only for appropriate purposes such as evaluation of our web pages' effectiveness, designing new products or services for the benefit of our customers or estimating system capacity needed to conveniently service our customers.

This notice is provided on behalf of the following companies, each of which is owned or controlled by First Federal Financial Corporation, Inc., a financial holding company:

First Federal Bank

Diversified Growth and Development Corporation