8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 23, 2007

BANK OF THE CAROLINAS CORPORATION

(Exact name of registrant as specified in its charter)

North Carolina	000-52195	20-4989192
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

135 Boxwood Village Drive Mocksville, North Carolina	27028
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (336) 751-5755

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On April 23, 2007, we distributed a press release announcing our results of operations for the three months ended March 31, 2007. A copy of our press release is being furnished as Exhibit 99.1 to this Report.

Item 8.01. Other Events

The information under Items 2.02 and 9.01 is incorporated into this Item by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibits. The following Exhibit is being furnished with this Report.

Exhibit No.	Exhibit Description
99.1	Copy of our press release dated April 23, 2007

Disclosures About Forward Looking Statements

This Report and its exhibits contain statements relating to our financial condition, results of operations, plans, strategies, trends, results of specific activities or investments, expectations or beliefs about future events or results, and other statements that are not descriptions of historical facts. Those statements, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by terms such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “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. 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, risk 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 Commission’s website at www.sec.gov. Other factors that could influence the accuracy of such forward-looking statements include, but are not limited to, (a) changes in competitive pressures among depository and other financial institutions or in our ability to compete successfully against the larger financial institutions in our banking markets; (b) the financial success or changing strategies of our customers; (c) actions of government regulators, or changes in laws, regulations or accounting standards, that adversely affect our business; (d) changes in the interest rate environment and the level of market interest rates that reduce our net interest margins and/or the volumes and values of loans we make and securities we hold; (e) changes in general economic or business conditions and real estate values in our banking market (particularly changes that affect our loan portfolio, the abilities of our borrowers to repay their loans, and the values of loan collateral); and (f) our inability to successfully integrate the business of merger partners into our business without unexpected costs or difficulty, disruption, deposit attrition, or loss of revenue, or our inability to fully realize expected costs savings of any acquisition. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. 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.

Additional Information and Where To Find It

The proposed merger of Randolph Bank & Trust Company (“Randolph”) into Bank of the Carolinas will be submitted to the shareholders of Bank of the Carolinas Corporation (“BOC”) and Randolph for their consideration and approval. BOC will file a registration statement, a prospectus (which will be combined with Randolph’s and BOC’s joint proxy statements) and other related documents with the SEC concerning the proposed merger. The joint proxy statement/prospectus and other relevant materials, as well as any amendments or supplements to those documents and any other filings containing information about Randolph or BOC, will contain important information, and Randolph’s and BOC’s shareholders are urged to read those documents when they become available and before making any voting or investment decision with respect to the proposed merger. You will be able to obtain a free copy of the joint proxy statement/prospectus and other relevant materials (when they become available), and any other documents filed by BOC with the SEC, at the SEC’s Internet site ( Copies of the proxy statement and other reports Randolph files with the FDIC are available for inspection at the offices of the FDIC’s Accounting and Securities Disclosure Section located at Room F-6043, 550 17th Street, N.W., Washington, DC 20429. You also may obtain copies of Randolph’s reports by calling the FDIC’s Accounting and Securities Disclosure Section at (202) 898-8913, by facsimile at (202) 898-8505, or by email at mfields@fdic.gov. In addition, you may obtain copies of the joint proxy statement/prospectus, any SEC filings that will be incorporated by reference in the joint proxy statement/prospectus, and any other documents filed with the SEC by BOC, without charge, by directing a request to the President, Bank of the Carolinas Corporation, 135 Boxwood Village, Mocksville, N.C. 27028-2941 or P.O. Box 129, Mocksville, N.C. 27028-0129, telephone (336) 751-5755. You may obtain copies of any documents filed with the FDIC by Randolph, without charge, by directing a request to the President, Randolph Bank & Trust Company, 175 N. Fayetteville Street, Asheboro, N.C. 27203-5513, or P.O. Box 1888, Asheboro, N.C. 27204-1888, telephone (336) 625-1000.

The press release attached as Exhibit 99.1 to this Report does not constitute an offer of any securities for sale. Any offer will be made only by the joint proxy statement/prospectus.

Participants in the Solicitation

BOC and Randolph, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from the shareholders of BOC and Randolph in favor of the proposed merger. Information about BOC’s directors and executive officers and their ownership of BOC’s capital stock will be contained in the proxy statement that will be distributed by BOC in connection with the merger, which will be filed with the SEC. Information about Randolph’s directors and executive officers and their ownership of Randolph’s capital stock will be contained in the proxy statement that will be distributed by Randolph in connection with its 2007 annual meeting of shareholders and the merger, which will be filed with the FDIC. Additional information regarding the interests of those participants in the proposed merger may be obtained by reading the joint proxy statement/prospectus regarding the merger when it becomes available.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, we have duly caused this Report to be signed on our behalf by the undersigned thereunto duly authorized.

	BANK OF THE CAROLINAS CORPORATION
	(Registrant)
Date: April 24, 2007	By:	/s/ Eric E. Rhodes
		Eric E. Rhodes
		Chief Financial Officer

EX-99.1

Exhibit 99.1

PRESS RELEASE

For Immediate Release

Bank of the Carolinas Corporation Reports First Quarter Earnings

MOCKSVILLE, NORTH CAROLINA, April 23, 2007—— Bank of the Carolinas Corporation (Nasdaq Capital Market: BCAR), today reported financial results for the three months ended March 31, 2007.

For the three month period ended March 31, 2007, diluted earnings per share were $.20 which was unchanged from the first quarter of 2006. Net income for the first quarter of 2007 was $780,000, as compared to $804,000 in the first quarter of 2006.

Total assets at March 31, 2007 amounted to $472.8 million, an increase of 20.1% when compared to the March 31, 2006 amount of $393.7 million. Net loans increased 15.0% over the prior year to $353.2 million, while deposits grew to $407.2 million, a 22.5% increase. The allowance for loan losses was 1.05% of total loans as of March 31, 2007, and net year to date charge-offs were 0.07% of average loans outstanding.

Net interest income increased only slightly over the year ago quarter as an increase in earning assets was substantially offset by a decline in the Company’s net interest margin. However, the Company did experience significant growth of 20.2% in non-interest income for the first quarter of 2007 versus the comparable quarter in 2006. While non-interest expense rose 13.0% quarter over quarter, it decreased as a percentage of average assets.

As was previously announced on April 12, 2007, the Company has entered into a definitive agreement with Randolph Bank & Trust Company (Pink Sheets: RDBN) whereby Randolph Bank will be merged into Bank of the Carolinas. The transaction is subject to shareholder and regulatory approval and is expected to be consummated in the fourth quarter of 2007.

Bank of the Carolinas Corporation is the holding company for Bank of the Carolinas, a state chartered bank headquartered in Mocksville, NC with offices in Advance, Asheboro, Cleveland, Harrisburg, King, Landis, Lexington and Winston-Salem. Common stock of the Company is traded on the NASDAQ Capital Market under the symbol BCAR.

This press release contains forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections. Bank of the Carolinas Corporation undertakes no obligation to revise these statements following the date of this press release.

For further information contact:

Eric E. Rhodes

Chief Financial Officer

Bank of the Carolinas

(336) 751-5755

Bank of the Carolinas Corporation

Consolidated Balance Sheets

(In Thousands—Unaudited)

	March 31
	2007			2006
Assets
Cash and Due from Banks	$	5,594		$	4,486
Interest-Bearing Deposits in Banks		100			173
Federal Funds Sold		27,467			2,779
Securities Available for Sale		58,452			54,689
Loans		356,948			310,615
Less, Allowance for Loan Losses		(3,735	)		(3,410	)
Total Loans, Net		353,213			307,205
Properties and Equipment		11,391			11,266
Other Assets		16,626			13,144
Total Assets	$	472,843		$	393,742
Liabilities
Non-interest Bearing Demand Deposits	$	29,603		$	33,322
Interest Bearing Demand Deposits		64,377			61,105
Savings Deposits		11,428			12,071
Time Deposits		301,808			225,924
Total Deposits		407,216			332,422
Borrowings		23,000			24,000
Retail Repurchase Agreements		994			—
Other Liabilities		3,191			2,069
Total Liabilities		434,401			358,491
Shareholders’ Equity
Common Stock, Par Value $5 Per Share:
Authorized 15,000,000 Shares; Issued 3,831,692
Shares in 2007 and 3,825,192 Shares in 2006		19,158			19,126
Additional Paid-In Capital		11,471			11,421
Retained Earnings		7,881			5,196
Accumulated Other Comprehensive Loss		(68	)		(492	)
Total Shareholders’ Equity		38,442			35,251
Total Liabilities and Shareholders’ Equity	$	472,843		$	393,742

Bank of the Carolinas Corporation

Consolidated Statements of Income

(In Thousands, Except Share and Per Share Data)

(Unaudited)

	Three Months Ended March 31
	2007		2006
Interest Income
Interest and Fees on Loans	$	7,309	$	5,805
Interest on Securities		614		477
Federal Funds Sold		177		138
Deposits in Other Banks		4		1
Total Interest Income		8,104		6,421
Interest Expense
Deposits		4,250		2,676
Borrowed Funds		285		271
Total Interest Expense		4,535		2,947
Net Interest Income		3,569		3,474
Provision for Loan Losses		62		117
Net Interest Income After Provision for
Loan Losses		3,507		3,357
Other Income
Customer Service Fees		236		221
Mortgage Loan Broker Fees		31		59
Investment Services		43		—
Increase in CSV of Life Insurance		82		49
Other Income		37		28
Total Other Income		429		357
Noninterest Expense
Salaries and Benefits		1,517		1,355
Occupancy and Equipment		418		337
Other Noninterest Expense		852		774
Total Noninterest Expense		2,787		2,466
Income Before Income Taxes		1,149		1,248
Income Taxes		369		444
Net Income	$	780	$	804
Earnings Per Share
Basic	$	0.20	$	0.21
Diluted	$	0.20	$	0.20
Weighted Average Shares Outstanding
Basic		3,826,706		3,825,192
Diluted		3,949,095		3,964,428

Bank of the Carolinas Corporation

Performance Ratios

	Three Months Ended March 31
	2007		2006		Change*
Financial Ratios
Return On Average Assets	0.69	%	0.84	%	(15	) BP
Return On Average Shareholders’ Equity	8.27	%	9.26	%	(99	)
Net Interest Margin	3.31	%	3.86	%	(55	)
Asset Quality Ratios
Net-chargeoffs to Average Loans	0.07	%	0.03	%	4	BP
Nonperforming Loans To Total Loans	0.70	%	0.42	%	28
Nonperforming Assets To Total Assets	0.72	%	0.60	%	12
Allowance For Loan Losses To Total Loans	1.05	%	1.10	%	(5	)

* BP denotes basis points.