Bank of the Carolinas Corporation Completes $45.8 Million Private Placement

 Bank of the Carolinas Corporation Completes $45.8 Million Private Placement

PR Newswire

MOCKSVILLE, N.C., July 16, 2014

MOCKSVILLE, N.C., July 16, 2014 /PRNewswire/ --Bank of the Carolinas
Corporation (the "Company") (OTCQB: BCAR) announced the successful completion
of the private placement of 458,132,991 shares of newly issued common stock at
a price of 10 cents per share to institutional and accredited investors. The
Company intends to use the proceeds of the private placement to repurchase
preferred stock and other obligations of the Company, and to restore its
banking subsidiary to well-capitalized status.

The Company plans to use approximately $34.8 million of the proceeds from the
private placement to inject new capital into its bank subsidiary, Bank of the
Carolinas. After the capital infusion, the bank's regulatory leverage capital
ratio is expected to be approximately 10%, which is considered
well-capitalized. The new capital will satisfy a requirement of the consent
order issued by the Federal Deposit Insurance Corporation and the North
Carolina Commissioner of Banks in 2011.

In connection with the private placement, the Company plans to repurchase all
of its Series A Cumulative Perpetual Preferred Stock issued through the
Troubled Asset Relief Program ("TARP") from the U.S. Treasury. The Company
also plans to repurchase all of its Floating Rate Trust Preferred Securities
and a subordinated note from the holders of those securities. Following the
private placement and the planned repurchase of TARP, trust preferred
securities and the subordinated note, Bank of the Carolinas Corporation would
no longer have any preferred stock or debt obligations outstanding.

Stephen R. Talbert, Chief Executive Officer of the Company, commented, "The
private placement is the culmination of four years of effort by many
individuals working tirelessly on behalf of the Company. We are pleased that
the capital raised in the private placement will enable Bank of the Carolinas
to continue to fulfill its mission to provide banking services to the
customers and communities it serves."

FIG Partners, LLC served as placement agent for the transaction, and The
Hutchison Company served as the Company's financial advisor. Wyrick Robbins
Yates & Ponton LLP acted as legal counsel to the Company, and Alston + Bird
LLP acted as legal counsel to FIG Partners.

ABOUT BANK OF THE CAROLINAS CORPORATION

Bank of the Carolinas Corporation is the holding Company for Bank of the
Carolinas, a North Carolina chartered bank headquartered in Mocksville, NC
with offices in Advance, Asheboro, Concord, Harrisburg, Landis, Lexington and
Winston-Salem. The common stock of the Company is quoted under the symbol
"BCAR" on the OTCQB marketplace operated by OTC Markets Group Inc.

For further information contact:

Stephen R. Talbert
President and Chief Executive Officer
Bank of the Carolinas Corporation
(336) 751-5755

DISCLOSURES ABOUT FORWARD LOOKING STATEMENTS

Statements in this press release relating to plans, strategies, economic
performance and trends, projections of results of specific activities or
investments, expectations or beliefs about future events or results, and other
statements that are not descriptions of historical facts, may be
forward-looking statements as defined in Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking
information is inherently subject to risks and uncertainties, and actual
results could differ materially from those currently anticipated due to a
number of factors which include, but are not limited to, factors discussed in
our Annual Report on Form 10-K and in other documents we file with the
Securities and Exchange Commission from time to time. Copies of those reports
are available directly through the SEC's Internet website at www.sec.gov.
Forward-looking statements may be identified by terms such as "may," "will,"
"should," "could," "expects," "plans," "intends," "anticipates," "feels,"
"believes," "estimates," "predicts," "forecasts," "potential" or "continue,"
or similar terms or the negative of these terms, or other statements
concerning opinions or judgments of our management about future events.
Factors that could influence the accuracy of forward-looking statements
include, but are not limited to (a) pressures on our earnings, capital and
liquidity resulting from current and future conditions in the credit and
capital markets, (b) continued or unexpected increases in nonperforming loans
and credit losses in our loan portfolio, (c) continued adverse conditions in
the economy and in the real estate market in our banking markets (particularly
those conditions that affect our loan portfolio, the abilities of our
borrowers to repay their loans, and the values of collateral that secures our
loans), (d) the financial success or changing strategies of our customers, (e)
actions of government regulators, or change in laws, regulations or accounting
standards, that adversely affect our business, (f) changes in the interest
rate environment and the level of market interest rates that reduce our net
interest margins and/or the values of loans we make and securities we hold,
(g) changes in competitive pressures among depository and other financial
institutions or in our ability to compete effectively against other financial
institutions in our banking markets, and (h) other developments or changes in
our business that we do not expect. Although we believe that the expectations
reflected in the forward-looking statements included in this press release are
reasonable, they represent our management's judgments only as of the date they
are made, and we cannot guarantee future results, levels of activity,
performance or achievements. As a result, readers are cautioned not to place
undue reliance on these forward-looking statements. All forward-looking
statements attributable to us are expressly qualified in their entirety by the
cautionary statements in this paragraph. We have no obligation, and do not
intend, to update these forward-looking statements.

SOURCE Bank of the Carolinas Corporation
 
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