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): June 19, 2008

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:

¨ 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 8.01 Other Events.

On June 19, 2008, we distributed a letter to our shareholders addressing various matters related to our business, including the recent market price of our shares. A copy of the letter is included as an exhibit to this Report.

Item 9.01. Financial Statements and Exhibits.

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

Exhibit No.	Exhibit Description
99.1	A copy of the letter to our shareholders dated June 16, 2008

Disclosures About Forward Looking Statements

Statements in this Report and its exhibits 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 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 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 through our Internet website at www.ecbbancorp.com or directly through the Commission’s website at www.sec.gov. 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. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, (a) the financial success or changing strategies of our customers; (b) actions of government regulators, or changes in laws, regulations or accounting standards, that adversely affect our business; (c) 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; (d) changes in competitive pressures among depository and other financial institutions or in our ability to compete effectively against other financial institutions in our banking market; (e) changes in general economic and business conditions and changes in 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) other developments or changes in our business that we do not expect. 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.

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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: June 24, 2008	By:	/s/ Robert E. Marziano
		Robert E. Marziano
		Chairman and Chief Executive Officer

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EX-99.1

Exhibit 99.1

June 16, 2008

Dear Bank of the Carolinas Corporation Shareholder:

With the uncertainty created by non-stop media coverage of financial institutions, your Board and Management would like to share some information and thoughts with you. We believe that a balanced discussion of some issues might be helpful to you.

First and foremost, we do not presently and have never engaged in subprime lending at Bank of the Carolinas. However, we are prudently involved in a continuous assessment of the ability of our loan customers to meet their financial obligations. As you are aware, many individuals and businesses have been challenged by difficult economic circumstances associated with a decline in home values and the resulting declines in consumer confidence and spending. Customers of Bank of the Carolinas have not been wholly exempt from these challenges, but the vast majority of those persons and businesses are successfully dealing with those economic changes. For those few having less success in adapting, generally the Bank is protected from significant losses through its collateral and other loan security positions.

Secondly, we are concerned about the recent price of our stock and are sensitive to the impact it has on all shareholders. Our shares closed on Friday, June 13, 2008 at $7.67, which is only 74% of their March 31, 2008 book value of $10.31. While earnings have recently been challenging, North Carolina banks under $1 billion in size presently average trading at approximately 1.1 times their book value. Based on our knowledge of Bank of the Carolinas, we are not aware of a valid reason why our shares should trade at approximately two-thirds of that multiple. We believe that our confidence in the Bank is demonstrated by the actions of individual members of our Board and Management who, as reflected in their reports to the SEC, in recent months have significantly increased their own personal investments in Bank of the Carolinas Corporation stock.

Finally, we are continuously evaluating each major function, department and activity of the Bank relative to their contribution to our safe and profitable operation. Changing economic circumstances periodically require changes in our approach to various solutions. We want you to know that your Board and Management are leaving no stone unturned in looking for opportunities to improve safety, profits and capital retention.

In closing, we want to remind you that Bank of the Carolinas Corporation is a well capitalized, well managed, community focused institution whose mission has never changed. Our mission is to provide second-to-none service for our customers, ultimate value for our shareholders, and inspiration for our employees and community.

We hope that you are as proud of your Bank as we are. We welcome your comments and questions.

Sincerely,

/s/ Robert E. Marziano

Robert E. Marziano,

Chairman, President and CEO

/s/ Michael D. Larrowe

Michael D. Larrowe,

Executive Vice Chairman and COO