EXHIBIT 99.01

PRESS RELEASE

For Immediate Release

Bank of the Carolinas Corporation Reports

Second Quarter Financial Results

MOCKSVILLE, NORTH CAROLINA, August 6, 2009 — Bank of the Carolinas Corporation (Nasdaq: BCAR) today reported financial results for the three and six months ended June 30, 2009.

For the three month period ended June 30, 2009, the Company reported a net loss of $1,479,000, as compared to a net loss of $259,000 in the second quarter of 2008. The net loss available to common shareholders for the three months ended June 30, 2009 was $1,534,000. Diluted loss per share was $0.38 for the second quarter of 2009 compared to $0.07 per diluted share for the same period in 2008. For the six month period ended June 30, 2009, the Company reported a net loss of $2,134,000 or $.55 per diluted share compared to a net loss of $264,000 or $.07 per diluted share for the same six month period of 2008. The net year to date loss available to common shareholders at June 30, 2009 was $2,189,000. As with the last several quarters, our second quarter results were largely impacted by continued pressure on the net interest margin as well as significant provisions for loan loss expense. Second quarter results also were affected by a sizeable increase in other non-interest expense, including a substantial increase in FDIC expense due to the one-time special assessment imposed on all banks and a significant write-down on OREO properties.

For the six months ended June 30, 2009, the Company’s net interest margin continued to decline; due in part to a continuing increase in non-accrual loans as well as a special Money Market rate the Company began in July 2008; which was guaranteed through June 30, 2009. The Company expects to see improvement in our net interest margin throughout the rest of the year since the rate guarantee has expired.

The Company’s non-performing assets increased during the quarter. Non-performing assets at June 30, 2009 were $20.0 million or 3.27% of total assets as compared to $12.3 million or 2.20% of total assets at December 31, 2008 and $14.4 million or 2.82% of total assets at June 30, 2008. The Company’s non-performing loans as a percentage of total loans also increased from the previous quarter end. These ratios were 3.17% at June 30, 2009, 1.66% at December 31, 2008 and 2.95% at June 30, 2008. Of our non-performing loans, two loans with a combined balance of $3.4 million have a 75% USDA guarantee on the remaining balance.

The provision for loan losses totaled $720,000 for the quarter ended June 30, 2009 versus $781,000 for the second quarter in 2008; however the year to date expense increased to $1,420,000 from $1,095,000 in the previous year. The allowance for loan losses was 1.66% of total loans as of June 30, 2009, and year to date annualized net charge-offs were 0.50% of average loans outstanding. As with many other banks in our industry we continue to face credit challenges. As always, we remain committed to helping our customers weather the current economic storm to the best of our ability while being aggressive in identifying troubled assets in our portfolio.

In comparison to 2008, non-interest expense increased approximately $2,299,000 for the first six months of 2009. Salaries and benefits decreased $242,000; while occupancy expense increased $114,000 and other expenses increased $2,427,000. The decrease in salary and benefits are the result of the Bank’s efforts to reduce expense. The increase in other expenses was largely attributable to a $1,231,000 valuation allowance on OREO properties as well as an increase of $555,000 in our premiums for FDIC deposit insurance. Non-interest income remained relatively flat for the three and six month periods.

In late March 2009, the Company was approved for participation in the Capital Purchase Program (CPP) by the United States Department of the Treasury (“Treasury”), and on April 17, 2009, the Company accepted a $13,179,000 capital infusion from the Treasury. The Series A Preferred Stock issued to the Treasury in conjunction with this capital infusion is considered Tier 1 capital for regulatory purposes. The stock will pay cumulative dividends of 5% per annum for the first five years and 9% per annum thereafter. The Treasury was also issued warrants to purchase 475,024 shares of the Company’s common stock at a price of $4.16 per share and with a term of ten years.

The Company’s Board of Directors has chosen not to pay a dividend on our outstanding common stock for the second quarter of 2009 nor did they pay one during the first quarter of 2009. The Bank will continue to evaluate on a quarterly basis whether payment of a dividend on common stock is warranted.

Total assets at June 30, 2009 amounted to $611.2 million, an increase of 8.8% when compared to the prior year end amount of $562.0 million. Net loans remained virtually flat from year end, while deposits grew to $485.2 million, a 9.1% increase over the prior year end amount of $444.5 million.

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, Cleveland, Concord, Harrisburg, King, Landis, Lexington and Winston-Salem. Common stock of the Company is traded on the NASDAQ Global 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:

Michelle L. Clodfelter

Principal Financial Officer

Bank of the Carolinas

(336) 998-1799 x 207

Bank of the Carolinas Corporation

Consolidated Balance Sheets

(In Thousands Except Share Data)

	June 30, 2009			December 31, 2008*
	(Unaudited)
Assets
Cash and Due from Banks	$	8,282		$	8,271
Interest-Bearing Deposits in Banks		174			2,220
Federal Funds Sold		30,075			—
Securities Available for Sale		127,607			108,639
Securities Held to Maturity		4,370			4,500
Loans		405,364			405,402
Less, Allowance for Loan Losses		(6,714	)		(6,308	)
Total Loans, Net		398,650			399,094
Properties and Equipment		14,491			15,324
Other Assets		27,518			23,959
Total Assets	$	611,167		$	562,007
Liabilities
Non-interest Bearing Demand Deposits	$	29,925		$	27,507
Interest Bearing Demand Deposits		29,076			28,173
Money Market Deposits		266,673			210,378
Savings Deposits		20,009			21,903
Time Deposits		139,467			156,579
Total Deposits		485,150			444,540
Other Borrowings		30,855			32,855
Repurchase Agreements		46,111			46,557
Other Liabilities		1,986			1,464
Total Liabilities		564,102			525,416
Shareholders’ Equity
Preferred Stock, No Par Value:
Authorized 10,000,000 Shares: Issued and Outstanding (liquidation preference $1,000 per share) 13,179 at June 30, 2009 and None at December 31, 2008		13,179			—
Common Stock, Par Value $5 Per Share:
Authorized 15,000,000 Shares; Issued 3,891,841 Shares in 2009 and 3,920,752 Shares in 2008		19,456			19,456
Additional Paid-In Capital		11,602			11,625
Preferred Stock Discount		(1,366	)		—
Warrants Outstanding		1,414			—
Retained Earnings		1,834			4,067
Accumulated Other Comprehensive Income (Loss)		946			1,443
Total Shareholders’ Equity		47,065			36,591
Total Liabilities and Shareholders’ Equity	$	611,167		$	562,007

* Derived from audited information

Bank of the Carolinas Corporation

Consolidated Statements of Income

(In Thousands Except Share and Per Share Data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
Interest Income
Interest and Fees on Loans	$	5,977		$	6,603		$	12,029		$	13,694
Interest on Securities		1,435			710			2,898			1,436
Federal Funds Sold		13			38			19			114
Deposits in Other Banks		8			2			24			6
Total Interest Income		7,433			7,353			14,970			15,250
Interest Expense
Deposits		3,644			3,808			7,186			8,194
Borrowed Funds		777			388			1,588			661
Total Interest Expense		4,421			4,196			8,774			8,855
Net Interest Income		3,012			3,157			6,196			6,395
Provision for Loan Losses		720			781			1,420			1,095
Net Interest Income After Provision for Loan Losses		2,292			2,376			4,776			5,300
Other Income
Customer Service Fees		307			347			593			639
Mortgage Loan Broker Fees		34			31			56			67
Investment Services		1			6			2			15
Income from Bank Owned Life Insurance		91			92			180			180
Other Income		177			42			117			69
Total Other Income		610			518			948			970
Noninterest Expense
Salaries and Benefits		1,736			1,802			3,454			3,696
Occupancy and Equipment		532			481			1,094			980
FDIC Expense		380			80			715			160
OREO Valuation Allowance		1,231			—			1,231			—
OREO Expense		204			20			204			43
Data Processing Expense		211			212			451			422
Other Noninterest Expense		885			696			1,822			1,371
Total Noninterest Expense		5,179			3,291			8,971			6,672
Loss Before Income Taxes		(2,277	)		(397	)		(3,247	)		(402	)
Income Taxes		(798	)		(138	)		(1,113	)		(138	)
Net loss	$	(1,479	)	$	(259	)	$	(2,134	)	$	(264	)
Dividend and accretion on preferred stock		(55	)		—			(55	)		—
Net income available to common shareholders	$	(1,534	)	$	(259	)	$	(2,189	)	$	(264	)
Loss Per Common Share
Basic	$	(0.38	)	$	(0.07	)	$	(0.55	)	$	(0.07	)
Diluted	$	(0.38	)	$	(0.07	)	$	(0.55	)	$	(0.07	)
Weighted Average Shares Outstanding
Basic		3,891,423			3,967,400			3,891,299			3,944,205
Diluted		3,891,423			3,967,400			3,891,299			3,944,205

Bank of the Carolinas Corporation

Performance Ratios

	As of or for the Six Months Ended June 30,
	2009		2008		Change*
Financial Ratios
Return On Average Assets **	-0.73	%	-0.10	%	(63	)BP
Return On Average Shareholders’ Equity **	9.14	%	-1.33	%	1,047
Net Interest Margin **	2.31	%	2.75	%	(44	)
Asset Quality Ratios
Net-chargeoffs to Average Loans **	0.50	%	0.40	%	10	BP
Nonperforming Loans To Total Loans	3.17	%	2.95	%	22
Nonperforming Assets To Total Assets	3.27	%	2.82	%	45
Allowance For Loan Losses To Total Loans	1.66	%	1.12	%	54

* BP denotes basis points.

** Ratio annualized.