As filed with
the U.S. Securities and Exchange Commission on January 12, 2018
Registration Statement
No. 333-________
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES
ACT OF 1933
CAROLINA
FINANCIAL CORPORATION
(Exact
name of registrant as specified in its charter)
Delaware
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57-1039673
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer Identification
Number)
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288 Meeting
Street
Charleston,
South Carolina 29401
(843) 723-7700
(Address, including
zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Jerold L.
Rexroad
Chief Executive
Officer
Carolina Financial
Corporation
288 Meeting
Street
Charleston,
South Carolina 29401
(843) 723-7700
(Name, address,
including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Neil E. Grayson
B.T. Atkinson
Nelson Mullins Riley & Scarborough LLP
104 South Main Street, Suite 900
Greenville, South Carolina 29601
Phone: (864) 250-2235
Approximate
date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.
If the only securities
being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following
box.
o
If any of the
securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following
box.
x
If this Form
is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
If this Form
is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering.
o
If this Form
is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective
upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
x
If this Form
is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
o
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated
filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of
the Exchange Act. (Check one):
Large
accelerated filer
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o
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Accelerated
filer
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x
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Non-accelerated
filer
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o
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Smaller
reporting company
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o
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(Do
not check if a smaller reporting company)
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Emerging
growth company
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x
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If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
x
CALCULATION
OF REGISTRATION FEE
Title
of Each Class of Securities
to be Registered(1)
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Amount
to be Registered
Proposed Maximum Offering Price Per Unit
Proposed Maximum Offering (2)
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Amount
of
Registration Fee (3)
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Debt
Securities
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Preferred
Stock, par value $0.01 per share
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Depositary
Shares
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Common
Stock, par value $0.01 per share
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Purchase
Contracts
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Units
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Warrants
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Rights
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Total
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(1)
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The
securities covered by this Registration Statement may be sold or otherwise distributed
separately, together, or as units with other securities covered by this Registration
Statement.
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(2)
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An
unspecified number of securities of each identified class of securities is being registered
for possible issuance from time to time at indeterminate prices. Separate consideration
may or may not be received for securities that are issuable on exercise, conversion,
or exchange of other securities. Includes an indeterminate amount of securities as may
be issued upon conversion of or exchange for, as the case may be, any other securities
registered under this Registration Statement.
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(3)
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In
accordance with Rules 456(b) and 457(r) under the Securities Act, the Registrant is deferring
payment of the registration fee and will pay the registration fee subsequently in advance
or on a pay-as-you-go basis, except for $7,526 of fees that have already been
paid and may be offset pursuant to Rule 457(p) with respect to (i) the $50,000,000 aggregate
initial offering price of securities that were previously registered pursuant to the
Registrant’s Registration Statement on Form S-3 (No. 333-206676) initially filed
with the Securities and Exchange Commission on August 31, 2015 and that were not sold
thereunder, and (ii) the $100,000,000 aggregate initial offering price of securities
that were previously registered pursuant to the Registrant’s Registration Statement
on Form S-3 (No. 333-215312) initially filed with the Securities and Exchange Commission
on December 23, 2016 and that were not sold thereunder.
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PROSPECTUS
Debt Securities
Preferred
Stock
Depositary
Shares
Common Stock
Purchase Contracts
Units
Warrants
Rights
We may offer
and sell, from time to time, in one or more offerings, any combination of debt and equity securities that we describe in this
prospectus. We will provide the specific terms of these securities in supplements to this prospectus. You should read this prospectus
and the applicable prospectus supplement carefully before you invest in the securities described in the applicable prospectus
supplement. This prospectus may not be used to consummate sales of securities unless accompanied by a prospectus supplement.
Shares of our
common stock are traded on the NASDAQ Capital Market under the symbol “CARO”. The closing sale price of our common
stock as reported on the NASDAQ Capital Market on January 11, 2018 was $38.76 per share.
We may sell the
securities to underwriters or dealers, through agents, or directly to investors, or a combination of these methods. We will set
forth the names of any underwriters or agents in the applicable prospectus supplement.
Neither the
Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense in the United States.
These securities
are unsecured and are not deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental
agency.
Investing
in our securities involves a high degree of risk. See the section “Risk Factors” on page 3 of this prospectus, as
well as in any supplements to this prospectus.
This prospectus
is dated January 12, 2018.
TABLE
OF CONTENTS
ABOUT THIS
PROSPECTUS
This prospectus
is a part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using
a “shelf” registration process. Under this shelf registration statement, we may issue and sell to the public, either
separately or together, any part or all of the securities described in the registration statement, at any time and from time to
time, in one or more public offerings. We may also issue common stock or preferred stock upon conversion, exchange or exercise
of any of the securities mentioned above. This prospectus only provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a supplement to this prospectus that contains specific information about
the terms of the securities and the offering. A prospectus supplement may include a discussion of any risk factors or other special
considerations applicable to those securities or to us. The supplement also may add, update or change information contained in
this prospectus. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement,
you should rely on the information in the prospectus supplement. You should carefully read both this prospectus and any supplement,
together with the additional information described under the heading “Where You Can Find More Information” below.
The registration
statement containing this prospectus, including exhibits to the registration statement, provides additional information about
us and the securities offered under this prospectus. That registration statement can be read at the SEC website or at the SEC
office mentioned under the heading “Where You Can Find More Information” below.
We may sell the
securities (a) through agents; (b) through underwriters or dealers; (c) directly to one or more purchasers; or (d) through a combination
of any of these methods of sale. We and our agents reserve the sole right to accept and to reject in whole or in part any proposed
purchase of securities. See “Plan of Distribution” below. A prospectus supplement (or pricing supplement), which we
will provide to you each time we offer securities, will provide the names of any underwriters, dealers, or agents involved in
the sale of the securities, and any applicable fee, commission, or discount arrangements with them.
You should
rely only on the information contained in this prospectus, any prospectus supplement (or pricing supplement) and the documents
we have incorporated by reference. We will disclose any material changes in our affairs in an amendment to this prospectus, a
prospectus supplement (or pricing supplement) or a future filing with the SEC incorporated by reference in this prospectus. No
person has been authorized to give any information or to make any representations other than those contained or incorporated in
this prospectus and, if given or made, such information or representations must not be relied upon as having been authorized.
This prospectus does not constitute an offer to sell or a solicitation of an offer to sell or to buy any securities other than
those to which it relates, or an offer or solicitation with respect to those securities to which it relates to any persons in
any jurisdiction where such offer or solicitation would be unlawful. The delivery of this prospectus at any time does not imply
that the information contained or incorporated herein at its date is correct as of any time subsequent to its date.
Except where
the context otherwise requires, the “Company”, “we”, “us” and “our” refer to Carolina
Financial Corporation and its consolidated subsidiaries, and the “Bank” refers to our wholly-owned subsidiary bank,
CresCom Bank.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC allows
us to “incorporate by reference” into this prospectus the information we file with it, which means that we can disclose
important information to you by referring you to those documents. Information incorporated by reference is considered to be part
of this prospectus, except for any information that is superseded by information included directly in this prospectus. Any statement
contained in this prospectus or a document incorporated by reference in this prospectus will be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained in this prospectus or in any other subsequently filed
document that is incorporated by reference in this prospectus modifies or superseded the statement. Any statement so modified
or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We incorporate
by reference into this prospectus the documents listed below and any future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the date of the
filing of the registration statement on Form S-3, of which this prospectus is a part, and any such filings that we make after
the date of this prospectus but before the termination of the offering of the securities covered by it, except to the extent that
any information contained in such filings is deemed “furnished” in accordance with SEC rules (unless otherwise indicated
therein):
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Our Annual Report on Form
10-K for the year ended December 31, 2016, filed with the SEC on March 10, 2017;
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Our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017, June 30, 2017,
and September 30, 2017, filed with the SEC on May 5, 2017, August 9, 2017, and November
9, 2017, respectively;
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·
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Our
Current Reports on Form 8-K or Form 8-K/A filed with the SEC on January 18, 2017, January
19, 2017, January 20, 2017, January 25, 2017, March 13, 2017, March 20, 2017, March 23,
2017, March 30, 2017, April 27, 2017, June 12, 2017, June 15, 2017, July 21, 2017, October
19, 2017, October 24, 2017, October 27, 2017, November 1, 2017, and November 3, 2017
(except, with respect to each of the foregoing, for portions of such reports which are
deemed to be furnished and not filed); and
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The description of our common stock contained in our Registration Statement on Form 10,
filed with the SEC on February 26, 2014, including any amendment or report filed thereafter for the purpose of updating such information.
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We will provide
a copy of any and all of the information that is incorporated by reference in this prospectus to any person, including a beneficial
owner, to whom a prospectus is delivered, without charge, upon written or oral request. Written requests for copies should be
directed to Attn: William A. Gehman, III, Chief Financial Officer, Carolina Financial Corporation, 288 Meeting Street, Charleston,
South Carolina 29401. Telephone requests for copies should be directed to (843) 723-7700.
We maintain an
Internet website at www.haveanicebank.com where the incorporated reports listed above can be accessed. Neither this website nor
the information on this website is included or incorporated in, or is a part of, this prospectus.
RISK FACTORS
Investing in
the securities involves risk. Please see the “Risk Factors” section in the Company’s most recent Annual Report
on Form 10-K, along with the disclosure related to the risk factors contained in any of the Company’s subsequent Quarterly
Reports on Form 10-Q, which are incorporated by reference in this prospectus, as updated by our future filings with the SEC. Before
making an investment decision, you should carefully consider these risks as well as other information contained or incorporated
by reference in this prospectus and any prospectus supplement. The risks and uncertainties not presently known to the Company
or that the Company currently deems immaterial may also impair its business operations, its financial results and the value of
the securities. The prospectus supplement applicable to each type or series of securities we offer may contain a discussion of
additional risks applicable to an investment in us and the particular type of securities we are offering under that prospectus
supplement.
SPECIAL NOTE
REGARDING FORWARD-LOOKING STATEMENTS
Statements
included in this prospectus, including information incorporated herein by reference, which are not historical in nature are intended
to be, and are hereby identified as, forward-looking statements for purposes of the safe harbor provided by Section 21E of the
Exchange Act. The words “may,” “will,” “anticipate,” “should,” “would,”
“believe,” “contemplate,” “expect,” “estimate,” “continue,” “may,”
and “intend,” as well as other similar words and expressions of the future, are intended to identify forward-looking
statements. We caution readers that forward-looking statements are estimates reflecting our judgment based on current information,
and are subject to certain risks and uncertainties that could cause actual results to differ materially from anticipated results.
Such risks and uncertainties include, among others, the matters described in the “Risk Factors” of this prospectus
and the following:
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our ability to maintain
appropriate levels of capital and to comply with our capital ratio requirements;
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examinations by our regulatory
authorities, including the possibility that the regulatory authorities may, among other things, require us to increase our allowance
for loan losses or write-down assets or otherwise impose restrictions or conditions on our operations, including, but not limited
to, our ability to acquire or be acquired;
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changes in economic conditions,
either nationally or regionally and especially in our primary market areas, resulting in, among other things, a deterioration
in credit quality;
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changes in interest rates
or changes in the regulatory environment resulting in a decline in our mortgage production and a decrease in the profitability
of our mortgage banking operations;
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greater than expected losses
due to higher credit losses generally and specifically because losses in the sectors of our loan portfolio secured by real estate
are greater than expected due to economic factors, including, but not limited to, declining real estate values, increasing interest
rates, increasing unemployment, or changes in payment behavior or other factors;
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greater than expected losses
due to higher credit losses because our loans are concentrated by loan type, industry segment, borrower type, or location of the
borrower or collateral;
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changes in the amount of
our loan portfolio collateralized by real estate and weaknesses in the South Carolina, North Carolina, and national real estate
markets;
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the rate of delinquencies
and amount of loans charged-off;
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the adequacy of the level
of our allowance for loan losses and the amount of loan loss provisions required in future periods;
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the rate of loan growth
in recent or future years;
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our ability to attract and
retain key personnel;
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our ability to retain our
existing customers, including our deposit relationships;
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significant increases in
competitive pressure in the banking and financial services industries;
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adverse changes in asset
quality and resulting credit risk-related losses and expenses;
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changes in the interest
rate environment which could reduce anticipated or actual margins;
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changes in political conditions
or the legislative or regulatory environment, including, but not limited to, the Dodd-Frank Act and regulations adopted thereunder,
changes in federal or state tax laws, including, but not limited to, the Tax Cuts and Jobs Act signed into law by President Donald
J. Trump on December 22, 2017, or interpretations thereof by taxing authorities and other governmental initiatives affecting the
banking and financial service industries;
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changes occurring in business
conditions and inflation;
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increased funding costs
due to market illiquidity, increased competition for funding, or increased regulatory requirements with regard to funding;
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our business continuity
plans or data security systems could prove to be inadequate, resulting in a material interruption in, or disruption to, business
and a negative impact on results of operations;
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changes in deposit flows;
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changes in monetary and
tax policies;
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changes in accounting policies,
as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board and the Financial Accounting
Standards Board;
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loss of consumer confidence
and economic disruptions resulting from terrorist activities or other military actions;
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our expectations regarding
our operating revenues, expenses, effective tax rates and other results of operations;
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our anticipated capital
expenditures and our estimates regarding our capital requirements;
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our liquidity and working
capital requirements;
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competitive pressures among
depository and other financial institutions;
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the growth rates of the
markets in which we compete;
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our anticipated strategies
for growth and sources of new operating revenues;
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our current and future products,
services, applications and functionality and plans to promote them;
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anticipated trends and challenges
in our business and in the markets in which we operate;
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the evolution of technology
affecting our products, services and markets;
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our ability to retain and
hire necessary employees and to staff our operations appropriately;
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management compensation
and the methodology for its determination;
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our ability to compete in
our industry and innovation by our competitors;
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increased cybersecurity
risk, including potential business disruptions or financial losses;
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acquisition integration
risks, including potential deposit attrition, higher than expected costs, customer loss and business disruption, including, without
limitation, potential difficulties in maintaining relationships with key personnel and other integration related-matters, and
the inability to identify and successfully negotiate and complete additional combinations with potential merger or acquisition
partners or to successfully integrate such businesses into the Company, including the ability to realize the benefits and cost
savings from, and limit any unexpected liabilities associated with, any such business combinations;
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our ability to stay abreast
of new or modified laws and regulations that currently apply or become applicable to our business; and
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estimates and estimate methodologies
used in preparing our consolidated financial statements and determining option exercise prices.
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Some of the factors
that could cause actual results to differ from those expressed or implied in forward-looking statements are incorporated by reference
under “Risk Factors” in this prospectus and may be described in any prospectus supplement and in the “Risk Factors”
and other sections of the documents that we incorporate by reference into this prospectus, including our Annual Reports on Form
10-K and our Quarterly Reports on Form 10-Q and in our other reports filed with the SEC. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those anticipated.
All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified
in their entirety by reference to these risks and uncertainties. You should not place undue reliance on our forward-looking statements.
Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no duty to update any
forward-looking statement.
PROSPECTUS
SUMMARY
Under the shelf
registration statement of which this prospectus is a part, we may from time to time sell securities consisting of one or any combination
or combinations of securities described in this prospectus in one or more offerings. This prospectus provides you with a general
description of the securities we may offer. We may offer any of the following securities or any combination of these securities
from time to time:
This prospectus,
including the following summary, describes the general terms that may apply to the securities. The specific terms of any particular
securities that we may offer will be described in a separate supplement to this prospectus.
Debt Securities
We may offer
several different types of debt securities. For any particular debt securities we offer, the applicable prospectus supplement
will describe the terms of the debt securities, and will include for each series of debt securities, the initial public offering
price, designation, priority, aggregate principal amount (including whether determined by reference to an index), currency, denomination,
premium, maturity, interest rate (including whether fixed, floating or otherwise), time of payment of any interest, any terms
for mandatory or optional redemption and other terms. We will issue senior and subordinated debt under separate indentures to
be entered into by and between us and a bank or trust company, or other qualified trustee, that we select to act as trustee. Debt
securities may be convertible into shares of our common stock or preferred stock, as described in a prospectus supplement.
Preferred Stock and Depositary
Shares
We may offer
preferred stock in one or more series. The applicable prospectus supplement will describe for each offer of preferred stock the
specific designation of the series offered; the aggregate number of shares offered; the rate and periods, or manner of calculating
the rate and periods, for dividends, if any; the stated value and liquidation preference amount, if any; the redemption, liquidation
and voting rights, if any; and any other specific terms. We may also offer depositary shares, each of which would represent an
interest in a fractional share of preferred stock. We will issue the depositary shares under one or more deposit agreements to
be entered into between us and one or more depositaries.
Common Stock
We may also offer
shares of our common stock and the applicable prospectus supplement will describe the terms of any such offer.
Purchase Contracts
We also may issue
purchase contracts, including contracts obligating holders to purchase from us, and obligating us to sell to holders, a fixed
or varying number of shares of common stock, preferred stock, depositary shares or debt securities at a future date or dates.
The consideration per share of common stock, preferred stock, depositary shares or debt securities may be fixed at the time that
purchase contracts are issued or may be determined by reference to a specific formula set forth in the purchase contracts. Any
purchase contract may include anti-dilution provisions to adjust the number of shares issuable pursuant to such purchase contract
upon the occurrence of certain events.
The purchase
contracts may be issued separately or as a part of units with one or more other securities. These contracts, and the holders’
obligations to purchase shares of our common stock, preferred stock, depositary shares or debt securities under the purchase contracts
may be secured by cash, certificates of deposit, U.S. government securities that will mature prior to or simultaneously with,
the maturity of the purchase contract, standby letters of credit from an affiliated U.S. bank that is FDIC-insured or other collateral
satisfactory to the Federal Reserve. The purchase contracts may require us to make periodic payments to holders of the purchase
units, or vice versa, and such payments may be unsecured or prefunded and may be paid on a current or on a deferred basis.
Any one or more
of the above securities, common stock or the purchase contracts or other collateral may be pledged as security for the holders’
obligations to purchase or sell, as the case may be, the common stock, preferred stock, depositary shares or debt securities under
the purchase contracts.
Units
We also may offer
two or more of the securities described in this prospectus in the form of a “unit,” including pursuant to a unit agreement.
The unit may be transferable only as a whole, or the securities comprising a unit may, as described in the prospectus supplement,
be separated and transferred by the holder separately. There may or may not be an active market for units or the underlying securities,
and not all the securities comprising a unit may be listed or traded on a securities exchange or market.
Warrants
We may offer
warrants to purchase our senior debt securities, subordinated debt securities, preferred stock, depositary shares, common stock
or any combination of these securities, either independently or together with any other securities. For any particular warrants
we offer, the applicable prospectus supplement will describe:
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the underlying securities;
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the exercise price or the
manner of determining the exercise price;
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the amount and kind, or
the manner of determining the amount and kind, of securities to be delivered upon exercise;
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the date after which the
warrants are separately transferable;
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any provisions for adjustments
in the exercise price or the number of securities issuable upon exercise of the warrants; and
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any other specific terms.
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We may issue
the warrants under one or more warrant agreements between us and one or more warrant agents. The warrant agents will act solely
as our agents in connection with the warrants and will not assume any obligation or relationship of agency for or on behalf of
holders or beneficial owners of warrants.
Rights
We may offer
rights to our existing stockholders to purchase additional shares of our common stock or any series of our preferred stock. For
any particular subscription rights, the applicable prospectus supplement will describe the terms of such rights, including the
period during which such rights may be exercised, the manner of exercising such rights, the transferability of such rights and
the number of shares of common stock or preferred stock that may be purchased in connection with each right and the subscription
price for the purchase of such common stock or preferred stock. In connection with a rights offering, we may enter into a separate
agreement with one or more underwriters or standby purchasers to purchase any shares of our common stock or preferred stock not
subscribed for in the rights offering by existing stockholders, which will be described in the applicable prospectus supplement.
Listing
If any securities
are to be listed or quoted on a securities exchange or quotation system, the applicable prospectus supplement will so indicate.
Our common stock is listed on the NASDAQ Capital Market
and trades under the symbol “CARO”.
RATIO OF EARNINGS
TO COMBINED FIXED CHARGES AND PREFERENCE DIVIDENDS
Our consolidated
ratio of earnings to combined fixed charges and preference dividends for the period indicated is as follows:
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Nine Months
Ended
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Years
Ended December 31,
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September 30,
2017
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2016
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2015
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2014
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2013
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2012
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Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends:
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Excluding interest
on deposits:
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12.93
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x
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10.14
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x
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10.60
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x
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6.55
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x
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12.01
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x
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9.18
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x
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Including interest on deposits:
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4.51
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x
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3.90
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x
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4.25
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x
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3.10
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x
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5.58
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x
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4.63
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x
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For the purpose
of computing the ratios of earnings to combined fixed charges and preference dividends, earnings consist of consolidated income
from continuing operations before provision for income taxes, plus fixed charges, and combined fixed charges and preference
dividends consist of interest expense, excluding and including interest on deposits.
CAROLINA FINANCIAL
CORPORATION
Carolina Financial
Corporation is a Delaware corporation that was organized in February 1996 to serve as a bank holding company. It operates principally
through CresCom Bank, a South Carolina state-chartered bank. CresCom Bank operates two wholly-owned subsidiaries, Crescent Mortgage
Company and Carolina Services Corporation of Charleston.
We offer a variety
of traditional community banking services to individuals and businesses. Our product line includes loans to small and medium-sized
businesses, residential and commercial construction and development loans, commercial real estate loans, residential mortgage
loans, residential lot loans, home equity loans, consumer loans and a variety of commercial and consumer demand, savings and time
deposit products. We also offer online and bill payment services, wire transfer services, safe deposit box rentals, debit card
and ATM card services, and the availability of a network of ATMs for our customers.
Crescent Mortgage
Company, acquired by us in 2003, was founded in February 1993 as a wholesale and correspondent mortgage lender for community banks
in the Southeastern United States. Today, Crescent Mortgage Company is licensed to originate loans in 48 states partnering
with community banks, credit unions, and mortgage brokers. Crescent Mortgage Company is based in Atlanta, Georgia.
The Bank also
owns Carolina Services Corporation of Charleston, a Delaware financial services company incorporated in 2002 to provide financial
processing services to, and otherwise support the operations of, the Bank and Crescent Mortgage Company.
In December 2002
and October 2003, respectively, the Company formed Carolina Financial Capital Trust I and Carolina Financial Capital Trust II,
which are special purpose subsidiaries organized in Delaware for the sole purpose of issuing an aggregate of $15 million of trust
preferred securities.
On December 12,
2014, the Bank purchased 13 branches from First Community Bank located in South Carolina and southeastern North Carolina. In the
transaction, the Bank acquired approximately $215.1 million of deposits, approximately $70.9 million of performing loans, and
the bank facilities and certain other assets of the acquired branches.
On June 11, 2016,
the Company completed its acquisition of Congaree Bancshares, Inc. (“Congaree”), the holding company for Congaree
State Bank, pursuant to the Agreement and Plan of Merger, dated as of January 5, 2016. Under the terms of the merger agreement,
each share of Congaree common stock was converted into the right to receive $8.10 in cash or 0.4806 shares of the Company’s
common stock, or a combination thereof, subject to certain limitations.
On March 18,
2017, the Company completed its acquisition of Greer Bancshares Incorporated (“Greer”), the holding company for Greer
State Bank, pursuant to the Agreement and Plan of Merger, dated as of November 7, 2016. Under the terms of the merger agreement,
each share of Greer common stock was converted into the right to receive $18.00 in cash or 0.782 shares of the Company’s
common stock, or a combination thereof, subject to certain limitations. In connection with the acquisition, the Company acquired
all of the common equity of Greer Capital Trust I and Greer Capital Trust II, special purpose subsidiaries organized in Delaware
for the sole purpose of issuing an aggregate of $11.3 million of trust preferred securities.
On November 1,
2017, the Company completed its acquisition of First South Bancorp, Inc. (“First South”), the holding company for
First South Bank, pursuant to the Agreement and Plan of Merger and Reorganization, dated as of June 9, 2017. Under the terms of
the merger agreement, each share of First South common stock was converted into 0.5064 shares of the Company’s common stock.
In connection with the acquisition, the Company acquired all of the common equity of First South Preferred Trust I, a special
purpose subsidiary organized in Delaware for the sole purpose of issuing an aggregate of $10.3 million of trust preferred
securities, and the Bank acquired all of the common equity or ownership interests of DTFS, Inc., a North Carolina corporation,
First South Insurance, LLC, a North Carolina limited liability company, First South Investments, Inc., a North Carolina corporation,
and First South Leasing, LLC, a North Carolina limited liability company.
Our main office
is located at 288 Meeting Street, Charleston, South Carolina 29401.
USE OF PROCEEDS
Unless otherwise
specified in a prospectus supplement accompanying this prospectus, we currently intend to use the net proceeds from the sale of
the securities offered under this prospectus for general corporate purposes. General corporate purposes may include repayment
of debt or the interest payment thereon, capital expenditures, possible acquisitions, investments, and any other purposes that
we may specify in any prospectus supplement. We may invest the net proceeds temporarily until we use them for their stated purpose.
We cannot predict whether the proceeds invested will yield a favorable return.
PLAN OF DISTRIBUTION
We may sell securities
offered under this prospectus:
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through
underwriters, brokers, or dealers;
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directly to one or more
purchasers; or
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through a combination of
any of these methods for sale.
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The distribution
of the securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed
from time to time, or at negotiated prices. For each type and series of securities offered, the applicable prospectus supplement
will set forth the terms of the offering, including, without limitation:
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the initial public offering price;
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the
names of any underwriters, brokers, dealers, agents, or other third parties and
the amounts of securities underwritten or purchased by each of them, if any;
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the purchase price of the
securities;
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the use of proceeds to us
from the sale of the securities;
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any underwriting discounts,
agency fees, or other compensation payable to underwriters or agents;
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any discounts or concessions
allowed or re-allowed or repaid to dealers; and
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the securities exchanges
on which the securities will be listed, if any.
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If underwriters
are used in an offering, we will execute an underwriting agreement with such underwriters and will specify the name of each underwriter
and the terms of the transaction (including any underwriting discounts and other terms constituting compensation of the underwriters
and any dealers) in a prospectus supplement. If we use underwriters in any sale of securities offered under this prospectus, the
underwriters will buy the securities for their own account. The underwriters may then resell the securities in one or more transactions
at a fixed public offering price or at varying prices determined at the time of sale or thereafter. The underwriters may sell
the securities directly or through underwriting syndicates managed by managing underwriters. The obligations of the underwriters
to purchase the securities will be subject to certain conditions. The underwriters will be obligated to purchase all the securities
offered if they purchase any securities. The offering price and any discounts or concessions allowed or re-allowed or paid to
dealers may be changed from time to time. In connection with an offering, underwriters and their affiliates may engage in transactions
to stabilize, maintain or otherwise affect the market price of the securities in accordance with applicable law.
Underwriters
or agents may make sales in privately negotiated transactions and/or any other method permitted by law, including sales deemed
to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act, which includes sales
made directly on the NASDAQ Capital Market, the existing trading market for our common stock, or sales made to or through a market
maker other than on an exchange.
If we use dealers
in any sale of securities offered under this prospectus, the securities will be sold to such dealers as principals. The dealers
may then resell the securities to the public at varying prices to be determined by such dealers at the time of resale. If agents
are used in any sale of securities offered under this prospectus, they will generally use their reasonable best efforts to solicit
purchases for the period of their appointment. If securities offered under this prospectus are sold directly, no underwriters,
dealers or agents would be involved. We are not making an offer of securities in any state that does not permit such an offer.
Underwriters,
dealers and agents that participate in any distribution of securities may be deemed to be underwriters as defined in the Securities
Act. Any discounts, commissions or profit they receive when they resell the securities may be treated as underwriting discounts
and commissions under the Securities Act. We expect that any agreements we may enter into with underwriters, dealers and agents
will include provisions indemnifying them against certain civil liabilities, including certain liabilities under the Securities
Act, or providing for contributions with respect to payments that they may be required to make.
We may authorize
underwriters, dealers or agents to solicit offers from certain institutions whereby the institution contractually agrees to purchase
the securities offered under this prospectus from us on a future date at a specific price. This type of contract may be made only
with institutions that we specifically approve. Such institutions could include banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. The underwriters, dealers or agents will not be responsible for the validity
or performance of these contracts.
Sales of securities
offered under this prospectus also may be effected by us from time to time in one or more types of transactions (which may, without
limitation, include block transactions, special offerings, exchange distributions, secondary distributions, purchases by a broker
or dealer, or other direct sales by us to one or more purchasers) on the NASDAQ Capital Market or any other national securities
exchange or automated trading and quotation system on which our common stock or other securities are listed, in the over-the-counter
market, in transactions otherwise than on such exchanges and systems or the over-the-counter market, including privately
negotiated transactions, through options transactions relating to the shares, or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to the prevailing market prices, at negotiated prices or at fixed
prices (which may be changed). Such transactions may or may not involve brokers or dealers. Any shares of our common stock
offered under this prospectus will be listed on the NASDAQ Capital Market, subject to notice of issuance.
Each issue of
a new series of debt securities, preferred stock, depositary shares, purchase contracts, units, warrants and rights will be a
new issue of securities with no established trading market, except as indicated in the applicable prospectus supplement. It has
not been established whether the underwriters, if any, of the securities offered under this prospectus will make a market in these
securities. If a market in any series of debt securities, preferred stock, depositary shares, purchase contracts, units, warrants
and rights is made by any such underwriters, such market-making may be discontinued at any time without notice. We can give no
assurance as to the liquidity of the trading market of these securities.
In order to facilitate
the offering of any of the securities offered under this prospectus, the underwriters with respect to any such offering may, as
described in the prospectus supplement, engage in transactions that stabilize, maintain or otherwise affect the price of the securities
or any other securities the prices of which may be used to determine payments on these securities. Specifically, the underwriters
may over-allot in connection with the offering, creating a short position in these securities for their own accounts. In addition,
to cover over-allotments or to stabilize the price of these securities or of any other securities, the underwriters may bid for,
and purchase, these securities or any other securities in the open market. Finally, in any offering of the securities offered
under this prospectus through a syndicate of underwriters, the underwriting syndicate may reclaim selling concessions allowed
to an underwriter or a dealer for distributing these securities in the offering, if the syndicate repurchases previously distributed
securities in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of these securities above independent market levels. The underwriters are not required
to engage in these activities, and may end any of these activities at any time, all as described in the applicable prospectus
supplement.
If so indicated
in the applicable prospectus supplement, one or more firms, which we refer to as “remarketing firms,” acting as principals
for their own accounts or as agents for us, may offer and sell the securities offered under this prospectus as part of a remarketing
upon their purchase, in accordance with their terms. We will identify any remarketing firm, the terms of its agreement, if any,
with us and its compensation in the applicable prospectus supplement.
Remarketing firms,
agents, underwriters and dealers may be entitled under agreements with us to indemnification by or contribution from us against
some civil liabilities, including liabilities under the Securities Act, and may be customers of, engage in transactions with or
perform services for us in the ordinary course of business.
Any person participating
in the distribution of securities will be subject to applicable provisions of the Exchange Act and the rules and regulations under
the Exchange Act, including without limitation, Regulation M, which may limit the timing of transactions involving the securities
offered under this prospectus. Furthermore, Regulation M may restrict the ability of any person engaged in the distribution of
such securities to engage in market-making activities with respect to the particular securities being distributed. All of the
above may affect the marketability of the securities offered under this prospectus and the ability of any person or entity to
engage in market-making activities with respect to such securities.
Under the securities
law of various states, the securities offered under this prospectus may be sold in those states only through registered or licensed
brokers or dealers. In addition, in various states the securities offered under this prospectus may not be offered and sold unless
such state securities have been registered or qualified for sale in the state or an exemption from such registration or qualification
is available and is complied with.
There can
be no assurances that we will sell all or any of the securities offered by this prospectus.
SECURITIES
WE MAY OFFER
This prospectus
contains summary descriptions of the debt securities, the preferred stock, the depositary shares, the common stock, the purchase
contracts, the units, the warrants, and the rights that we may offer from time to time. These summary descriptions are not meant
to be complete descriptions of each security. The particular terms of any security will be described in the accompanying prospectus
supplement and other offering material. The accompanying prospectus supplement may add, update or change the terms and conditions
of the securities as described in this prospectus.
DESCRIPTION
OF DEBT SECURITIES
We may issue
senior debt securities or subordinated debt securities. The senior debt securities and the subordinated debt securities will be
issued under separate indentures to be entered into between us and a bank or trust company, or other trustee that is qualified
to act under the Trust Indenture Act of 1939, which we select to act as trustee. A copy of the form of each indenture has been
filed as an exhibit to the registration statement of which this prospectus forms a part. We use the term “indentures”
to refer to both the senior indenture and the subordinated indenture. The indentures may be modified by one or more supplemental
indentures, which we will incorporate by reference as an exhibit to the registration statement of which this prospectus is a part.
The following
description and any description in a prospectus supplement is a summary only and is subject to, and qualified in its entirety
by reference to the terms and provisions of the indentures and any supplemental indentures that we file with the SEC in connection
with an issuance of any series of debt securities. You should read all of the provisions of the indentures, including the definitions
of certain terms, as well as any supplemental indentures that we file with the SEC in connection with the issuance of any series
of debt securities. These summaries set forth certain general terms and provisions of the securities to which any prospectus supplement
may relate. The specific terms and provisions of a series of debt securities and the extent to which the general terms and provisions
may also apply to a particular series of debt securities will be described in the applicable prospectus supplement.
Since we are
a holding company, our right, and accordingly, the right of our creditors and stockholders, including the holders of the securities
offered by this prospectus and any prospectus supplement, to participate in any distribution of assets of any of our subsidiaries
upon its liquidation, reorganization or similar proceeding is subject to the prior claims of creditors of that subsidiary, except
to the extent that our claims as a creditor of the subsidiary may be recognized.
Terms of the Securities
Unless otherwise
described in a prospectus supplement, the following general terms and provisions will apply to the debt securities. The securities
will be not be secured by any of our assets. Neither the indentures nor the securities will limit or otherwise restrict the amounts
of other indebtedness which we may incur, or the amount of other securities that we may issue. The indentures do not limit the
principal amount of any particular series of securities. All of the securities issued under each of the indentures will rank equally
and ratably with any additional securities issued under the same indenture. The subordinated debt securities will be subordinated
as described below under “Subordination.”
Each prospectus
supplement will specify the particular terms of the securities offered. These terms may include:
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the title of the securities;
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any limit on the aggregate
principal amount of the securities;
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the priority of payments
on the securities;
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the issue price or prices
(which may be expressed as a percentage of the aggregate principal amount) of the securities;
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the date or dates, or the
method of determining the dates, on which the securities will mature;
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the interest rate or rates
of the securities, or the method of determining those rates;
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the interest payment dates,
the dates on which payment of any interest will begin and the regular record dates;
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whether the securities will
be issuable in temporary or permanent global form and, if so, the identity of the depositary for such global security, or the
manner in which any interest payable on a temporary or permanent global security will be paid;
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any terms relating to the
conversion of the securities into our common stock or preferred stock or other securities offered hereby, including, without limitation,
the time and place at which such securities may be converted, the conversion price and any adjustments to the conversion price
and any other provisions that may applicable;
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any covenants that may restrict
our ability to create, assume or guarantee indebtedness for borrowed money that is secured by a pledge, lien or other encumbrance,
that condition or restrict our ability to merge or consolidate with any other person or to sell, lease or convey all or substantially
all of our assets to any other person or that otherwise impose restrictions or requirements on us;
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any sinking fund or similar
provisions applicable to the securities;
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any mandatory or optional
redemption provisions applicable to the securities;
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the denomination or denominations
in which securities are authorized to be issued;
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whether any of the securities
will be issued in bearer form and, if so, any limitations on issuance of such bearer securities (including exchanges for registered
securities of the same series);
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information with respect
to book-entry procedures;
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whether any of the securities
will be issued as original issue discount securities;
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each office or agency where
securities may be presented for registration of transfer, exchange or conversion;
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the method of determining
the amount of any payments on the securities which are linked to an index;
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if other than U.S. dollars,
the currency or currencies in which payments on the securities will be payable, and whether the holder may elect payment to be
made in a different currency;
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if other than the trustee,
the identity of the registrar and/or paying agent;
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any defeasance of certain
obligations by us pertaining to the series of securities; and
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any other specific terms
of the securities, which terms may modify or delete any provision of the applicable indenture insofar as it applies to the securities
offered; provided, that no terms of the indentures may be modified or deleted if they are required under the Trust Indenture Act
of 1939 and that any modification or deletion of the rights, duties or immunities of an indenture trustee shall have been consented
to in writing by the trustee.
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Some of our debt
securities may be issued as original issue discount securities. Original issue discount securities bear no interest or bear interest
at below-market rates and will be sold at a discount below their stated principal amount. The prospectus supplement will also
contain any special tax, accounting or other information relating to original issue discount securities or relating to certain
other kinds of securities that may be offered, including securities linked to an index.
Acceleration of Maturity
If an event of
default in connection with any outstanding series of securities occurs and is continuing, the trustee or the holders of at least
25% in principal amount of the outstanding securities of that series may declare the principal amount due and payable immediately.
If the securities of that series are original issue discount securities, the holders of at least 25% in principal amount of those
securities may declare the portion of the principal amount specified in the terms of that series of securities to be due and payable
immediately. In either case, a written notice may be given to us, and to the trustee, if notice is given by the holders instead
of the trustee. Subject to certain conditions, the declaration of acceleration may be revoked, and past defaults (except uncured
payment defaults and certain other specified defaults) may be waived, by the holders of not less than a majority of the principal
amount of securities of that series.
You should refer
to the prospectus supplement relating to each series of securities for the particular provisions relating to acceleration of the
maturity upon the occurrence and continuation of an event of default.
Registration and Transfer
Unless otherwise
indicated in the applicable prospectus supplement, each series of the offered securities will be issued in registered form only,
without coupons. The indentures will also allow us to issue the securities in bearer form only, or in both registered and bearer
form. Any securities issued in bearer form will have interest coupons attached, unless they are issued as zero coupon securities.
Securities in bearer form will not be offered, sold, resold or delivered in connection with their original issuance in the United
States or to any United States person other than to offices of certain United States financial institutions located outside the
United States.
Unless otherwise
indicated in the applicable prospectus supplement, the senior debt securities and subordinated debt securities we are offering
will be issued in denominations of $1,000 or an integral multiple of $1,000. No service charge will be made for any transfer or
exchange of the securities, but we may require payment of an amount sufficient to cover any tax or other governmental charge payable
in connection with a transfer or exchange.
Payment and Paying Agent
We will pay principal,
interest and any premium on fully registered securities in the designated currency or currency unit at the office of a designated
paying agent. At our option, payment of interest on fully registered securities may also be made by check mailed to the persons
in whose names the securities are registered on the days specified in the indentures or any prospectus supplement.
We will pay principal,
interest and any premium on bearer securities in the designated currency or currency unit at the office of a designated paying
agent or agents outside of the United States. Payments will be made at the offices of the paying agent in the United States only
if the designated currency is U.S. dollars and payment outside of the United States is illegal or effectively precluded. If any
amount payable on a security or coupon remains unclaimed at the end of two years after such amount became due and payable, the
paying agent will release any unclaimed amounts, and the holder of the security or coupon will look only to us for payment.
The designated
paying agent in the United States for the securities we are offering is provided in the indentures that are or will be deemed
incorporated by reference into this prospectus.
Global Securities
The securities
of a series may be issued in whole or in part in the form of one or more global certificates (“Global Securities”)
that will be deposited with a depositary that we will identify in a prospectus supplement. Global Securities may be issued in
either registered or bearer form and in either temporary or permanent form. All Global Securities in bearer form will be deposited
with a depositary outside the United States. Unless and until it is exchanged in whole or in part for individual certificates
evidencing securities in definitive form represented thereby, a Global Security may not be transferred except as a whole by the
depositary to a nominee of that depositary or by a nominee of that depositary to a depositary or another nominee of that depositary.
The specific
terms of the depositary arrangements for each series of securities will be described in the applicable prospectus supplement.
Modification and Waiver
Each indenture
provides that modifications and amendments may be made by us and the trustee with the consent of the holders of a majority in
principal amount of the outstanding securities of each series affected by the amendment or modification. However, no modification
or amendment may, without the consent of each holder affected:
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change the stated maturity
date of the security;
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reduce the principal amount,
any rate of interest, or any additional amounts in respect of any security, or reduce the amount of any premium payable upon the
redemption of any security;
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change the time or place
of payment, currency or currencies in which any security or any premium or interest thereon is payable;
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impair the holders’
rights to institute suit for the enforcement of any payment on or after the stated maturity date of any security, or in the case
of redemption, on or after the redemption date;
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reduce the percentage in
principal amount of securities required to consent to any modification, amendment or waiver under the indenture;
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modify, except under limited
circumstances, any provision of the applicable indenture relating to modification and amendment of the indenture, waiver of compliance
with conditions and defaults thereunder or the right of a majority of holders to take action under the applicable indenture;
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adversely affect any rights
of conversion;
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in the case of the subordinated
indenture, alter the provisions regarding subordination of the subordinated debt securities in any way that would be adverse to
the holders of those securities;
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reduce the principal amount
of original issue discount securities which could be declared due and payable upon an acceleration of their maturity; or
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change our obligation to
pay any additional amounts.
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The holders of
a majority in principal amount of the outstanding securities of any series may waive compliance by us and the trustee with certain
provisions of the applicable indenture. The holders of a majority in principal amount of the outstanding securities of any series
may waive any past default under the applicable indenture with respect to that series, except a default in the payment of the
principal, or any premium, interest, or additional amounts payable on a security of that series or in respect of a covenant or
provision which under the terms of the applicable indenture cannot be modified or amended, without the consent of each affected
holder.
With the trustee,
we may modify and amend any indenture without the consent of any holder for any of the following purposes:
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to name a successor entity
to us;
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to add to our covenants
for the benefit of the holders of all or any series of securities;
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to add to the events of
default;
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to add to, delete from or
revise the conditions, limitations and restrictions on the authorized amount, terms or purposes of issue, authentication and delivery
of securities, as set forth in the applicable indenture;
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to establish the form or
terms of securities of any series and any related coupons;
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to provide for the acceptance
of appointment by a successor trustee;
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to make provision for the
conversion rights of the holders of the securities in certain events;
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to cure any ambiguity, defect
or inconsistency in the applicable indenture, provided that such action is not inconsistent with the provisions of that indenture
and does not adversely affect the interests of the applicable holders;
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to modify, eliminate or
add to the provisions of any indenture to conform our or the trustee’s obligations under the applicable indenture to the
Trust Indenture Act; or
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to make any other changes
that apply only to debt securities to be issued thereafter.
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Calculation of Outstanding Debt
Securities
To calculate
whether the holders of a sufficient principal amount of the outstanding securities have given any request, demand, authorization,
direction, notice, consent or waiver under any indenture:
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In the case of original
issue discount securities, the principal amount that may be included in the calculation is the amount of principal that would
be declared to be due and payable upon a declaration of acceleration according to the terms of that original issue discount security
as of the date of the calculation.
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Any securities owned by
us, or owned by any other obligor of the securities or any affiliate of ours or any other obligor, should be disregarded and deemed
not to be outstanding for purposes of the calculation.
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Additional Provisions
Other than the
duty to act with the required standard of care during an event of default, the trustee is not obligated to exercise any of its
rights or powers under the applicable indenture at the request or direction of any of the holders of the securities, unless the
holders have offered the trustee reasonable indemnification. Each indenture provides that the holders of a majority in principal
amount of outstanding securities of any series may, in certain circumstances, direct the time, method and place of conducting
any proceeding for any remedy available to the trustee, or exercising any trust or other power conferred on the trustee.
No holder of
a security of any series will have the right to institute any proceeding for any remedy under the applicable indenture, unless:
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the holder has provided
the trustee with written notice of a continuing event of default regarding the holder’s series of securities;
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the holders of at least
25% in principal amount of the outstanding securities of a series have made a written request, and offered indemnity satisfactory
to the trustee, to the trustee to institute a proceeding for remedy;
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the trustee has failed to
institute the proceeding within 60 days after its receipt of such notice, request and offer of indemnity; and
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the trustee has not received
a direction during such 60 day period inconsistent with such request from the holders of a majority in principal amount of the
outstanding securities of that series.
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However, the
holder of any security will have an absolute and unconditional right to receive payment of the principal, any premium, any interest
or any additional amounts in respect of such security on or after the date expressed in such security and to institute suit for
the enforcement of any such payment. We are required to file annually with the trustee a certificate of no default, or specifying
any default that exists.
Transactions with the Trustee
We and our subsidiaries
may maintain deposit accounts and conduct various banking and other transactions with an indenture trustee. The trustee and its
subsidiaries may maintain deposit accounts and conduct various banking transactions with us and our subsidiaries.
Conversion Rights
The applicable
prospectus supplement relating to any convertible debt securities will describe the terms on which those securities are convertible.
Events of Default
The following
will be events of default under the senior indenture with respect to the senior debt securities of a series:
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failure to pay any interest
or any additional amounts on any senior debt security of that series when due, and continuance of such default for 30 days;
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failure to pay principal
of, or any premium on, any senior debt security of that series when due;
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failure to deposit any sinking
fund payment for a senior debt security of that series when due;
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failure to perform any of
our other covenants or warranties in the senior indenture or senior debt securities (other than a covenant or warranty included
in that indenture solely for the benefit of a different series of senior debt securities), which has continued for 90 days after
written notice as provided in the senior indenture;
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acceleration of indebtedness
in a principal amount specified in a supplemental indenture for money borrowed by us under the senior indenture, and the acceleration
is not annulled, or the indebtedness is not discharged, within a specified period after written notice is given according to the
senior indenture;
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certain events in bankruptcy,
insolvency or reorganization of us or CresCom Bank; and
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any other event of default
regarding that series of senior debt securities.
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Unless otherwise
described in the prospectus supplement applicable to a particular series of subordinated debt securities, events of default under
the subordinated indenture are limited to certain events of bankruptcy, insolvency or reorganization of us or CresCom Bank.
There is no right
of acceleration of the payment of principal of a series of subordinated debt securities upon a default in the payment of principal
or interest, nor upon a default in the performance of any covenant or agreement in the subordinated debt securities of a particular
series or in the applicable indenture. In the event of a default in the payment of interest or principal, the holders of senior
debt will be entitled to be paid in full before any payment can be made to holders of subordinated debt securities. However, a
holder of a subordinated debt security (or the trustee under the applicable indenture on behalf of all of the holders of the affected
series) may, subject to certain limitations and conditions, seek to enforce overdue payments of interest or principal on the subordinated
debt securities.
Subordination
The senior debt
securities will be unsecured and will rank equally among themselves and with all of our other unsecured and non-subordinated debt,
if any.
The subordinated
debt securities will be unsecured and will be subordinate and junior in right of payment, to the extent and in the manner set
forth below, to the prior payment in full of all of the Company’s senior debt, as more fully described in the applicable
prospectus supplement.
If any of the
following circumstances has occurred, payment in full of all principal, premium, if any, and interest must be made or provided
for with respect to all outstanding senior debt before we can make any payment or distribution of principal, premium, if any,
any additional amounts or interest on the subordinated debt securities:
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any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar proceeding relating to us or to our property has been commenced;
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any voluntary or involuntary
liquidation, dissolution or other winding up relating to us has been commenced, whether or not such event involves our insolvency
or bankruptcy;
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any of our subordinated
debt security of any series is declared or otherwise becomes due and payable before its maturity date because of any event of
default under the subordinated indenture, provided that such declaration has not been rescinded or annulled as provided in the
subordinated indenture; or
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any default with respect
to senior debt which permits its holders to accelerate the maturity of the senior debt has occurred and is continuing, and either
(a) notice of such default has been given to us and to the trustee and judicial proceedings are commenced in respect of such default
within 180 days after notice in the case of a default in the payment of principal or interest, or within 90 days after notice
in the case of any other default, or (b) any judicial proceeding is pending with respect to any such default.
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DESCRIPTION
OF PREFERRED STOCK
For purposes
of this section, the terms “we,” “our” and “us” refer only to Carolina Financial Corporation
and not to its subsidiaries.
The following
outlines the general provisions of the shares of preferred stock, par value $0.01 per share, which we may offer from time to time.
The specific terms of a series of preferred stock will be described in the applicable prospectus supplement relating to that series
of preferred stock. The following description of the preferred stock and any description of preferred stock in a prospectus supplement
is only a summary and is subject to and qualified in its entirety by reference to the certificate of amendment to our certificate
of incorporation relating to the particular series of preferred stock, a copy of which we will file with the SEC in connection
with the sale of any series of preferred stock.
General
Under our certificate
of incorporation, our board of directors is authorized, without shareholder approval, to adopt resolutions providing for the issuance
of up to 1,000,000 shares of preferred stock, par value $0.01 per share, in one or more series. As of the date of this prospectus,
no shares of our preferred stock are issued and outstanding.
Our board of
directors may fix the voting powers, designations, preferences, rights, qualifications, limitations and restrictions of each series
of preferred stock that we may offer.
In addition,
as described under “Description of Depositary Shares,” we may, instead of offering full shares of any series of preferred
stock, offer depositary shares evidenced by depositary receipts, each representing a fraction of a share of the particular series
of preferred stock issued and deposited with a depositary. The fraction of a share of preferred stock which each depositary share
represents will be set forth in the prospectus supplement relating to such depositary shares.
The prospectus
supplement relating to a particular series of preferred stock will contain a description of the specific terms of that series,
including, as applicable:
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the title, designation,
number of shares and stated or liquidation value of the preferred stock;
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the dividend amount or rate
or method of calculation, the payment dates for dividends and the place or places where the dividends will be paid, whether dividends
will be cumulative or noncumulative, and, if cumulative, the dates from which dividends will begin to accrue;
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any conversion or exchange
rights;
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whether the preferred stock
will be subject to redemption and the redemption price and other terms and conditions relative to the redemption rights;
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any liquidation rights;
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any sinking fund provisions;
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the exchange or market,
if any, where the preferred stock will be listed or traded; and
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any other rights, preferences,
privileges, limitations and restrictions that are not inconsistent with the terms of the our certificate of incorporation.
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Upon the issuance
and payment for shares of preferred stock, the shares will be fully paid and nonassessable. Except as otherwise may be specified
in the prospectus supplement relating to a particular series of preferred stock, holders of preferred stock will not have any
preemptive or subscription rights to acquire any class or series of our capital stock and each series of preferred stock will
rank on a parity in all respects with each other series of our preferred stock and prior to our common stock as to dividends and
any distribution of our assets.
The authorization
of the preferred stock could have the effect of making it more difficult or time consuming for a third party to acquire a majority
of our outstanding voting stock or otherwise effect a change of control. Shares of the preferred stock may also be sold to third
parties that indicate that they would support the board of directors in opposing a hostile takeover bid. The availability of the
preferred stock could have the effect of delaying a change of control and of increasing the consideration ultimately paid to our
stockholders. The board of directors may authorize the issuance of preferred stock for capital-raising activities, acquisitions,
joint ventures or other corporate purposes that have the effect of making an acquisition of the Company more difficult or costly,
as could also be the case if the board of directors were to issue additional common stock for such purposes. See “Anti-Takeover
Effects of Certain Certificate of Incorporation Provisions.”
Redemption
If so specified
in the applicable prospectus supplement, a series of preferred stock may be redeemable at any time, in whole or in part, at our
option, and may be mandatorily redeemable or convertible. Restrictions, if any, on the repurchase or redemption by us of any series
of our preferred stock will be described in the applicable prospectus supplement relating to that series. Generally, any redemption
of our preferred stock will be subject to prior Federal Reserve approval. Any partial redemption of a series of preferred stock
would be made in the manner described in the applicable prospectus supplement relating to that series.
Upon the redemption
date of shares of preferred stock called for redemption or upon our earlier call and deposit of the redemption price, all rights
of holders of the preferred stock called for redemption will terminate, except for the right to receive the redemption price.
Dividends
Holders of each
series of preferred stock will be entitled to receive cash dividends only when, as and if declared by our board of directors out
of funds legally available for dividends. The rates or amounts and dates of payment of dividends will be described in the applicable
prospectus supplement relating to each series of preferred stock. Dividends will be payable to holders of record of preferred
stock on the record dates fixed by our board of directors. Dividends on any series of preferred stock may be cumulative or noncumulative,
as described in the applicable prospectus supplement.
Our board of
directors may not declare, pay or set apart funds for payment of dividends on a particular series of preferred stock unless full
dividends on any other series of preferred stock that ranks equally with or senior to such series of preferred stock with respect
to the payments of dividends have been paid or sufficient funds have been set apart for payment for either of the following:
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all prior dividend periods
of each such series of preferred stock that pay dividends on a cumulative basis; or
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the immediately preceding
dividend period of each such series of preferred stock that pays dividends on a noncumulative basis.
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Partial dividends
declared on shares of any series of preferred stock and other series of preferred stock ranking on an equal basis as to dividends
will be declared pro rata. A pro rata declaration means that the ratio of dividends declared per share to accrued dividends per
share will be the same for all series of preferred stock of equal priority.
Liquidation Preference
In the event
of the liquidation, dissolution or winding-up of us, holders of each series of preferred stock will have the right to receive
distributions upon liquidation in the amount described in the applicable prospectus supplement relating to each series of preferred
stock, plus an amount equal to any accrued but unpaid dividends. These distributions will be made before any distribution is made
on our common stock or on any securities ranking junior to such preferred stock upon liquidation, dissolution or winding-up.
However, holders
of the shares of preferred stock will not be entitled to receive the liquidation price of their shares until we have paid or set
aside an amount sufficient to pay in full the liquidation preference of any class or series of our capital stock ranking senior
as to rights upon liquidation, dissolution or winding up. Unless otherwise provided in the applicable prospectus supplement, neither
a consolidation or merger of the Company with or into another corporation nor a merger of another corporation with or into
the Company nor a sale or transfer of all or part of the Company’s assets for cash or securities will be considered a liquidation,
dissolution or winding up of the Company.
If the liquidation
amounts payable to holders of preferred stock of all series ranking on a parity regarding liquidation are not paid in full, the
holders of the preferred stock of these series will have the right to a ratable portion of our available assets up to the full
liquidation preference. Holders of these series of preferred stock or such other securities will not be entitled to any other
amounts from us after they have received their full liquidation preference.
Conversion and Exchange
The prospectus
supplement will indicate whether and on what terms the shares of any future series of preferred stock will be convertible into
or exchangeable for shares of any other class, series or security of the Company or any other corporation or any other property
(including whether the conversion or exchange is mandatory, at the option of the holder or our option, the period during which
conversion or exchange may occur, the initial conversion or exchange price or rate and the circumstances or manner in which the
amount of common or preferred stock or other securities issuable upon conversion or exchange may be adjusted). It will also indicate
for preferred stock convertible into common stock, the number of shares of common stock to be reserved in connection with, and
issued upon conversion of, the preferred stock (including whether the conversion or exchange is mandatory, the initial conversion
or exchange price or rate and the circumstances or manner in which the amount of common stock issuable upon conversion or exchange
may be adjusted) at the option of the holder or our option and the period during which conversion or exchange may occur.
Voting Rights
The holders of
shares of preferred stock will have no voting rights, except:
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as otherwise stated in the
applicable prospectus supplement;
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as otherwise stated in the
certificate of amendment to our certificate of incorporation establishing the series of such preferred stock; and
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as otherwise required by
applicable law.
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Transfer Agent and Registrar
The transfer
agent, registrar, dividend paying agent and depositary, if any, for any preferred stock offering will be stated in the applicable
prospectus supplement.
DESCRIPTION
OF DEPOSITARY SHARES
The following
briefly summarizes the general provisions of the depositary shares representing a fraction of a share of preferred stock of a
specific series, or “depositary shares,” and depositary receipts (as defined below) that we may issue from time to
time and which would be important to holders of depositary receipts. The specific terms of any depositary shares or depositary
receipts, including pricing and related terms, will be disclosed in the applicable prospectus supplement. The prospectus supplement
will also state whether any of the general provisions summarized below apply or not to the depositary shares or depositary receipts
being offered. The following description and any description in a prospectus supplement is a summary only and is subject to, and
qualified in its entirety by reference to the terms and provisions of the deposit agreement(s), which we will file with the SEC
in connection with an issuance of depositary shares.
Description of Depositary Shares
We may offer
depositary shares evidenced by receipts for such depositary shares, which we sometimes refer to as “depositary receipts.”
Each depositary receipt represents a fraction of a share of the particular series of preferred stock issued and deposited with
a depositary. The fraction of a share of preferred stock which each depositary share represents will be set forth in the applicable
prospectus supplement.
We will deposit
the shares of any series of preferred stock represented by depositary shares according to the provisions of a deposit agreement
to be entered into between us and a bank or trust company, which we will select as our preferred stock depositary, and which may
be the same institution that serves as an indenture trustee. The depositary must have its principal office in the United States
and have combined capital and surplus of at least $100,000,000. We will name the depositary in the applicable prospectus supplement.
Each owner of a depositary share will be entitled to all the rights and preferences of the underlying preferred stock in proportion
to the applicable fraction of a share of preferred stock represented by the depositary share. These rights include dividend, voting,
redemption, conversion and liquidation rights. The depositary will send the holders of depositary shares all reports and communications
that we deliver to the depositary and which we are required to furnish to the holders of depositary shares. We may issue depositary
receipts in temporary, definitive or book-entry form.
Withdrawal of Preferred Stock
A holder of depositary
shares may receive the number of whole shares of the series of preferred stock and any money or other property represented by
the holder’s depositary receipts after surrendering the depositary receipts at the corporate trust office of the depositary.
Partial shares of preferred stock will not be issued. If the surrendered depositary shares exceed the number of depositary shares
that represent the number of whole shares of preferred stock the holder wishes to withdraw, then the depositary will deliver to
the holder at the same time a new depositary receipt evidencing the excess number of depositary shares. Once the holder has withdrawn
the preferred stock, the holder will not be entitled to re-deposit such preferred stock under the deposit agreement or to receive
depositary shares in exchange for such preferred stock.
Dividends and Other Distributions
Holders of depositary
shares of any series will receive their pro rata share of cash dividends or other cash distributions received by the depositary
on the preferred stock of that series held by it. Each holder will receive these distributions in proportion to the number of
depositary shares owned by the holder. The depositary will distribute only whole United States dollars and cents. The depositary
will add any fractional cents not distributed to the next sum received for distribution to record holders of depositary shares.
In the event of a non-cash distribution, the depositary will distribute property to the record holders of depositary shares, unless
the depositary determines that it is not feasible to make such a distribution. If this occurs, the depositary, with our approval,
may sell the property and distribute the net proceeds from the sale to the holders.
Redemption of Depositary Shares
If a series of
preferred stock represented by depositary shares is subject to redemption, then we will give the necessary proceeds to the depositary.
The depositary will then redeem the depositary shares using the funds they received from us for the preferred stock. The depositary
will notify the record holders of the depositary shares to be redeemed not less than 30 days nor more than 60 days before the
date fixed for redemption at the holders’ addresses appearing in the depositary’s books. The redemption price per
depositary share will be equal to the redemption price payable per share for the applicable series of the preferred stock and
any other amounts per share payable with respect to that series of preferred stock multiplied by the fraction of a share of preferred
stock represented by one depositary share. Whenever we redeem shares of a series of preferred stock held by the depositary, the
depositary will redeem the depositary shares representing the shares of preferred stock on the same day. If fewer than all the
depositary shares of a series are to be redeemed, the depositary shares will be selected by lot, ratably or by such other equitable
method as we and the depositary may determine.
Upon and after
the redemption of shares of the underlying series of preferred stock, the depositary shares called for redemption will no longer
be considered outstanding. Therefore, all rights of holders of the depositary shares will then cease, except that the holders
will still be entitled to receive any cash payable upon the redemption and any money or other property to which the holder was
entitled at the time of redemption.
Voting Rights
Upon receipt
of notice of any meeting at which the holders of preferred stock of the related series are entitled to vote, the depositary will
notify holders of depositary shares of the upcoming vote and arrange to deliver our voting materials to the holders. The record
date for determining holders of depositary shares that are entitled to vote will be the same as the record date for the related
series of preferred stock. The materials the holders will receive will (1) describe the matters to be voted on and (2) explain
how the holders, on a certain date, may instruct the depositary to vote the shares of preferred stock underlying the depositary
shares. For instructions to be valid, the depositary must receive them on or before the date specified. The depositary will attempt,
as far as practical, to vote the shares as instructed by the holder. We will cooperate with the depositary to enable it to vote
as instructed by holders of depositary shares. If any holder does not instruct the depositary how to vote the holder’s shares,
the depositary will abstain from voting those shares.
Conversion or Exchange
The depositary
will convert or exchange all depositary shares on the same day that the preferred stock underlying the depositary shares is converted
or exchanged. In order for the depositary to do so, we will deposit with the depositary any other preferred stock, common stock
or other securities into which the preferred stock is to be converted or for which it will be exchanged.
The exchange
or conversion rate per depositary share will be equal to the exchange or conversion rate per share of preferred stock, multiplied
by the fraction of a share of preferred stock represented by one depositary share. All amounts per depositary share payable by
us for dividends that have accrued on the preferred stock to the exchange or conversion date that have not yet been paid shall
be paid in appropriate amounts on the depositary shares.
The depositary
shares, as such, cannot be converted or exchanged into other preferred stock, common stock, securities of another issuer or any
other of our securities or property. Nevertheless, if so specified in the applicable prospectus supplement, a holder of depositary
shares may be able to surrender the depositary receipts to the depositary with written instructions asking the depositary to instruct
us to convert or exchange the preferred stock represented by the depositary shares into other shares of preferred stock or common
stock or to exchange the preferred stock for securities of another issuer. If the depositary shares carry this right, we would
agree that, upon the payment of applicable fees and taxes, if any, we will cause the conversion or exchange of the preferred stock
using the same procedures as we use for the delivery of preferred stock. If a holder is only converting part of the depositary
shares represented by a depositary receipt, new depositary receipts will be issued for any depositary shares that are not converted
or exchanged.
Amendment and Termination of the
Deposit Agreement
We may agree
with the depositary to amend the deposit agreement and the form of depositary receipt without consent of the holder at any time.
However, if the amendment adds or increases fees or charges payable by holders of the depositary shares or prejudices an important
right of holders, it will only become effective with the approval of holders of at least a majority of the affected depositary
shares then outstanding. If an amendment becomes effective, holders are deemed to agree to the amendment and to be bound by the
amended deposit agreement if they continue to hold their depositary receipts.
The deposit agreement
will automatically terminate if:
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all outstanding depositary
shares have been redeemed and all amounts payable upon redemption have been paid;
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each share of preferred
stock held by the depositary has been converted into or exchanged for common stock, other preferred stock or other securities;
or
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a final distribution in
respect of the preferred stock held by the depositary has been made to the holders of depositary receipts in connection with our
liquidation, dissolution or winding-up.
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We may also terminate
the deposit agreement at any time. Upon such event, the depositary will give notice of termination to the holders not less than
30 days before the termination date. Once depositary receipts are surrendered to the depositary, it will send to each holder the
number of whole and fractional shares of the series of preferred stock underlying that holder’s depositary receipts, provided
that, at our election we may pay cash in lieu of fractional shares of preferred stock that may be issuable.
Charges of Depositary and Expenses
We will pay all
transfer and other taxes and governmental charges in connection with the establishment of the depositary arrangements. We will
pay all charges and fees of the depositary for the initial deposit of the preferred stock, the depositary’s services and
redemption of the preferred stock. Holders of depositary shares will pay transfer and other taxes and governmental charges and
the charges that are provided in the deposit agreement to be for the holder’s account.
Limitations on Our Obligations
and Liability to Holders of Depositary Receipts
The deposit agreement
will limit our obligations and the obligations of the depositary. It will also limit our liability and the liability of the depositary
as follows:
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We and the depositary will
only be obligated to take the actions specifically set forth in the deposit agreement in good faith;
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We and the depositary will
not be liable if either is prevented or delayed by law or circumstances beyond our or its control from performing our or its obligations
under the deposit agreement;
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We and the depositary will
not be liable if either exercises discretion permitted under the deposit agreement;
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We and the depositary will
have no obligation to become involved in any legal or other proceeding related to the depositary receipts or the deposit agreement
on behalf of the holders of depositary receipts or any other party, unless we and the depositary are provided with satisfactory
indemnity; and
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We and the depositary will
be permitted to rely upon any written advice of counsel or accountants and on any documents we believe in good faith to be genuine
and to have been signed or presented by the proper party.
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In the deposit
agreement, we will agree to indemnify the depositary under certain circumstances.
Resignation and Removal of Depositary
The depositary
may resign at any time by notifying us of its election to do so. In addition, we may remove the depositary at any time. Such resignation
or removal will take effect when we appoint a successor depositary and it accepts the appointment. We must appoint the successor
depositary within 60 days after delivery of the notice of resignation or removal and the new depositary must be a bank or trust
company having its principal office in the United States and having a combined capital and surplus of at least $100,000,000.
DESCRIPTION
OF COMMON STOCK
For purposes
of this section, the terms “we,” “our” and “us” refer only to Carolina Financial Corporation
and not its subsidiaries.
The following
description of shares of our common stock, par value $0.01 per share, is a summary only and is subject to, and is qualified by
reference to, applicable provisions of the Delaware General Corporation Law (the “DGCL”), our certificate of incorporation,
and our bylaws, which are incorporated by reference into this prospectus. You should refer to, and read this summary together
with, our certificate of incorporation and bylaws to review all of the terms of our common stock.
General
As of the date
of this prospectus, our certificate of incorporation provides that we may issue up to 25,000,000 shares of common stock, par value
of $0.01 per share. As of January 9, 2018, 21,058,891 shares of our common stock were issued and outstanding, and
we had 352,450 shares of our common stock reserved for issuance upon exercise of options that may or may not become
exercisable and upon vesting of restricted stock units. All outstanding shares of our common stock are fully paid and nonassessable.
Our common stock is listed on the NASDAQ Capital Market under the symbol “CARO”.
Voting Rights
Each outstanding
share of our common stock entitles the holder to one vote on all matters submitted to a vote of common stockholders, including
the election of directors. The holders of our common stock possess exclusive voting power, except as otherwise provided by law
or by a certificate of amendment establishing any series of our preferred stock.
There is no cumulative
voting in the election of directors. The holders of a majority of the votes cast by our common stockholders can elect all of the
directors then standing for election by the common stockholders. When a quorum is present at any meeting, questions brought before
the meeting will be decided by the vote of the holders of a majority of the shares present and voting on such matter, whether
in person or by proxy, except when the meeting concerns matters requiring the vote of a greater number of affirmative votes under
applicable Delaware law or our certificate of incorporation. Our certificate of incorporation contains certain provisions that
may limit stockholders’ ability to effect a change in control as described under the section below entitled “Anti-Takeover
Effects of Certain Certificate of Incorporation Provisions.”
Dividends, Liquidation and Other
Rights
Holders of shares
of common stock are entitled to receive dividends only when, as and if approved by our board of directors from funds legally available
for the payment of dividends. Our stockholders are entitled to share ratably in our assets legally available for distribution
to our stockholders in the event of our liquidation, dissolution or winding up, voluntarily or involuntarily, after payment of,
or adequate provision for, all of our known debts and liabilities. These rights are subject to the preferential rights of any
series of our preferred stock that may then be outstanding.
Holders of shares
of our common stock have no preference, conversion, exchange, sinking fund or redemption rights and have no preemptive rights
to subscribe for any of our securities. Our board of directors may issue additional shares of our common stock or rights to purchase
shares of our common stock without the approval of our stockholders.
Transfer Agent and Registrar
Subject to compliance
with applicable federal and state securities laws, our common stock may be transferred without any restrictions or limitations.
The transfer agent and registrar for shares of our common stock is Computershare Limited.
DESCRIPTION
OF PURCHASE CONTRACTS
For purposes
of this section, the terms “we,” “our” and “us” refer only to Carolina Financial Corporation
and not to its subsidiaries.
We also may issue
purchase contracts, including contracts obligating holders to purchase from us, and obligating us to sell to holders, a fixed
or varying number of shares of common stock, preferred stock, depositary shares or debt securities at a future date or dates.
The consideration per share of common stock, preferred stock, depositary shares or debt securities may be fixed at the time that
the purchase contracts are issued or may be determined by reference to a specific formula set forth in the purchase contracts.
Any purchase contract may include anti-dilution provisions to adjust the number of shares issuable pursuant to such purchase contract
upon the occurrence of certain events.
The purchase
contracts may be issued separately or as a part of units consisting of a purchase contract, debt securities and preferred securities.
These contracts, and the holders’ obligations to purchase shares of our common stock, preferred stock, depositary shares
or debt securities under the purchase contracts may be secured by cash, certificates of deposit, U.S. government securities that
will mature prior to or simultaneously with, the maturity of the purchase contract, standby letters of credit from an affiliated
U.S. bank that is FDIC-insured or other collateral satisfactory to the Federal Reserve. The purchase contracts may require us
to make periodic payments to holders of the purchase units, or vice versa, and such payments may be unsecured or prefunded and
may be paid on a current or on a deferred basis.
Any one or more
of the above securities, common stock or the purchase contracts or other collateral may be pledged as security for the holders’
obligations to purchase or sell, as the case may be, the common stock or preferred stock under the purchase contracts.
DESCRIPTION
OF UNITS
For purposes
of this section, the terms “we,” “our” and “us” refer only to Carolina Financial Corporation
and not to its subsidiaries.
We also may offer
two or more of the securities described in this prospectus in the form of a “unit”, including pursuant to a unit agreement.
The unit may be transferable only as a whole, or the securities comprising a unit may, as described in the prospectus supplement,
be separated and transferred by the holder separately. There may or may not be an active market for units or the underlying securities,
and not all the securities comprising a unit may be listed or traded on a securities exchange or market.
DESCRIPTION
OF WARRANTS
For purposes
of this section, the terms “we,” “our” and “us” refer only to Carolina Financial Corporation
and not to its subsidiaries.
General
We may issue
warrants in one or more series to purchase senior debt securities, subordinated debt securities, preferred stock, depositary shares,
common stock or any combination of these securities. Warrants may be issued independently or together with any underlying securities
and may be attached to or separate from the underlying securities. We will issue each series of warrants under a separate warrant
agreement to be entered into between us and a warrant agent. The warrant agent will act solely as our agent in connection with
the warrants of such series and will not assume any obligation or relationship of agency for or on behalf of holders or beneficial
owners of warrants. The following outlines some of the general terms and provisions of the warrants. Further terms of the warrants
and the applicable warrant agreement will be stated in the applicable prospectus supplement. The following description and any
description of the warrants in a prospectus supplement are not complete and are subject to and qualified in their entirety by
reference to the terms and provisions of the warrant agreement, which we will file with the SEC in connection with the issuance
of any warrants.
The applicable
prospectus supplement will describe the terms of any warrants, including the following, as may be applicable:
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the title of the warrants;
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the total number of warrants
to be issued;
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the consideration for which
we will issue the warrants, including the applicable currency or currencies;
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anti-dilution provisions
to adjust the number of shares of our common stock or other securities to be delivered upon exercise of the warrants;
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the designation and terms
of the underlying securities purchasable upon exercise of the warrants;
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the price at which and the
currency or currencies in which investors may purchase the underlying securities purchasable upon exercise of the warrants;
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the dates on which the right
to exercise the warrants will commence and expire;
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the procedures and conditions
relating to the exercise of the warrants;
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whether the warrants will
be in registered or bearer form;
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information with respect
to book-entry registration and transfer procedures, if any;
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the minimum or maximum amount
of warrants which may be exercised at any one time;
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the designation and terms
of the underlying securities with which the warrants are issued and the number of warrants issued with each underlying security;
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the date on and after which
the warrants and securities issued with the warrants will be separately transferable;
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a discussion of material
United States federal income tax considerations;
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the identity of the warrant
agent; and
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any other terms of the warrants,
including terms, procedures and limitations relating to the exchange, transfer and exercise of the warrants.
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Warrant certificates
may be exchanged for new warrant certificates of different denominations, and warrants may be exercised at the warrant agent’s
corporate trust office or any other office indicated in the applicable prospectus supplement. Prior to the exercise of their warrants,
holders of warrants exercisable for debt securities will not have any of the rights of holders of the debt securities purchasable
upon such exercise and will not be entitled to payments of principal (or premium, if any) or interest, if any, on the debt securities
purchasable upon such exercise. Prior to the exercise of their warrants, holders of warrants exercisable for shares of common
stock, preferred stock or depositary shares will not have any rights of holders of the common stock, preferred stock or depositary
shares purchasable upon such exercise, including any rights to vote such shares or to receive any distributions or dividends thereon.
Exercise of Warrants
A warrant will
entitle the holder to purchase for cash an amount of securities at an exercise price that will be stated in, or that will be determinable
as described in, the applicable prospectus supplement. Warrants may be exercised at any time during normal business hours
prior to the close of business on the expiration date and in accordance with the procedures set forth in the applicable prospectus
supplement. Upon and after the close of business on the expiration date, unexercised warrants will be void and have no further
force, effect or value.
Enforceability of Rights
The holders of
warrants, without the consent of the warrant agent, may, on their own behalf and for their own benefit, enforce, and may institute
and maintain any suit, action or proceeding against us to enforce their rights to exercise and receive the securities purchasable
upon exercise of their warrants.
DESCRIPTION
OF RIGHTS
For purpose of
this section, the terms “we”, “our”, “our” and “us” refer only to Carolina Financial
Corporation and not to its subsidiaries.
The following
briefly summarizes the general provisions of rights that we may offer to purchase additional shares of our common stock or any
series of preferred stock, which we may issue. The following description and any description in a prospectus supplement is a summary
only and is subject to, and qualified in its entirety by reference to the terms and provisions of the rights, which we will file
with the SEC in connection with an issuance of rights to holders of our common stock or any series of our preferred stock. The
specific terms of any rights, including the period during which the rights may be exercised, the manner of exercising such rights,
and the transferability of rights, will be disclosed in the applicable prospectus supplement. Although we may issue rights, in
our sole discretion, we have no obligation to do so.
General
We may distribute
rights, which may or may not be transferable, to the holders of our common stock or any series of our preferred stock as of a
record date set by our board of directors, at no cost to such holders. Each holder will be given the right to purchase a specified
number of whole shares of our common stock or preferred stock for every share of our common stock or a series of preferred stock
that the holder thereof owned on such record date, as set forth in the applicable prospectus supplement. Unless otherwise provided
in an applicable prospectus supplement, no fractional rights or rights to purchase fractional shares will be distributed in any
rights offering. The rights will be evidenced by rights certificates, which may be in definitive or book-entry form. Each right
will entitle the holder to purchase shares of our common stock or a series of preferred stock at a rate and price per share to
be established by our board of directors, as set forth in the applicable prospectus supplement. If holders of rights wish to exercise
their rights, they must do so before the expiration date of the rights offering, as set forth in the applicable prospectus supplement.
Upon the expiration date, the rights will expire and will no longer be exercisable, unless, in our sole discretion prior to the
expiration date, we extend the rights offering.
Exercise Price
Our board of
directors will determine the exercise price or prices for the rights based upon a number of factors, including, without limitation,
our business prospects; our capital requirements; the price or prices at which an underwriter or standby purchasers may be willing
to purchase shares that remain unsold in the rights offering; and general conditions in the securities markets, especially for
securities of financial institutions. The subscription price may or may not reflect the actual or long-term fair value of the
common stock or preferred stock offered in the rights offering. We provide no assurances as to the market values or liquidity
of any rights issued, or as to whether or not the market prices of the common stock or preferred stock subject to the rights will
be more or less than the rights’ exercise price during the term of the rights or after the rights expire.
Exercising Rights; Fees and Expenses
The manner of
exercising rights will be set forth in the applicable prospectus supplement. Any subscription agent or escrow agent will be set
forth in the applicable prospectus supplement. We will pay all fees charged by any subscription agent and escrow agent in connection
with the distribution and exercise of rights. Rights holders will be responsible for paying all other commissions, fees, taxes
or other expenses incurred in connection with their transfer of rights that are transferable. Neither we nor the subscription
agent will pay such expenses.
Expiration of Rights
The applicable
prospectus supplement will set forth the expiration date and time (“Expiration Date”) for exercising rights. If holders
of rights do not exercise their rights prior to such time, their rights will expire and will no longer be exercisable and will
have no value.
We will extend
the Expiration Date as required by applicable law and may, in our sole discretion, extend the Expiration Date. If we elect to
extend the Expiration Date, we will issue a press release announcing such extension prior to the scheduled Expiration Date.
Withdrawal and Termination
We may withdraw
the rights offering at any time prior to the Expiration Date for any reason. We may terminate the rights offering, in whole or
in part, at any time before completion of the rights offering if there is any judgment, order, decree, injunction, statute, law
or regulation entered, enacted, amended or held to be applicable to the rights offering that in the sole judgment of our board
of directors would or might make the rights offering or its completion, whether in whole or in part, illegal or otherwise restrict
or prohibit completion of the rights offering. We may waive any of these conditions and choose to proceed with the rights offering
even if one or more of these events occur. If we terminate the rights offering, in whole or in part, all affected rights will
expire without value, and all subscription payments received by the subscription agent will be returned promptly without interest.
Rights of Subscribers
Holders of rights
will have no rights as stockholders with respect to the shares of common stock or preferred stock for which the rights may be
exercised until they have exercised their rights by payment in full of the exercise price and in the manner provided in the prospectus
supplement, and such shares of common stock or preferred stock, as applicable, have been issued to such persons. Holders of rights
will have no right to revoke their subscriptions or receive their monies back after they have completed and delivered the materials
required to exercise their rights and have paid the exercise price to the subscription agent. All exercises of rights are final
and cannot be revoked by the holder of rights.
Regulatory Limitations
We will not be
required to issue any person or group of persons shares of our common stock or preferred stock pursuant to the rights offering
if, in our sole opinion, such person would be required to give prior notice to or obtain prior approval from, any state or federal
governmental authority to own or control such shares if, at the time the rights offering is scheduled to expire, such person has
not obtained such clearance or approval in form and substance reasonably satisfactory to us.
Standby Agreements
We may enter
into one or more separate agreements with one or more standby underwriters or other persons to purchase, for their own account
or on our behalf, any shares of our common stock or preferred stock not subscribed for in the rights offering. The terms of any
such agreements will be described in the applicable prospectus supplement.
ANTI-TAKEOVER
EFFECTS OF CERTAIN CERTIFICATE OF INCORPORATION PROVISIONS
General
Our certificate
of incorporation and bylaws, as well as Delaware General Corporation Law, contain certain provisions designed to enhance the ability
of our board of directors to deal with attempts to acquire control of us. These provisions may be deemed to have an anti-takeover
effect and may discourage takeover attempts which have not been approved by the board of directors (including takeovers which
certain stockholders may deem to be in their best interest). This summary does not purport to be complete and is qualified in
its entirety by reference to the laws and documents referenced. With respect to our charter documents, while such provisions might
be deemed to have some “anti-takeover” effect, the principal effect of these provisions is to protect our stockholders
generally and to provide our board and stockholders a reasonable opportunity to evaluate and respond to such unsolicited acquisition
proposals.
Authorized but Unissued
Stock
The authorized
but unissued shares of common stock and preferred stock will be available for future issuance without stockholder approval. These
additional shares may be used for a variety of corporate purposes, including future private or public offerings to raise additional
capital, corporate acquisitions, and employee benefit plans. The existence of authorized but unissued and unreserved shares of
common stock and preferred stock may enable the board of directors to issue shares to persons friendly to current management,
which could render more difficult or discourage any attempt to obtain control of us by means such as a proxy contest, tender offer,
or merger, and thereby protect the continuity of the Company’s management.
Number and Classification of Directors
Our certificate
of incorporation and bylaws provide that the number of directors shall be fixed from time to time exclusively by the board of
directors pursuant to a resolution adopted by a majority of the total number of authorized directorships (whether or not there
exist any vacancies in previously authorized directorships at the time any such resolutions is presented to the board), except
that in the absence of any such designation, the number shall be 11. The board of directors is divided into three classes
so that each director serves for a term expiring at the third succeeding annual meeting of stockholders after their election with
each director to hold office until his or her successor is duly elected and qualified. The classification of directors, together
with the provisions in our certificate of incorporation and bylaws described below that limit the ability of stockholders to remove
directors and that permit the remaining directors to fill any vacancies on the board of directors, have the effect of making it
more difficult for stockholders to change the composition of the board of directors. As a result, at least two annual meetings
of stockholders may be required for the stockholders to change a majority of the directors, whether or not a change in the board
of directors would be beneficial and whether or not a majority of stockholders believe that such a change would be desirable,
and three meetings, rather than one, would be required to replace the entire board.
Removal of Directors and Filling
Vacancies
Our certificate
of incorporation provides that any director, or the entire board of directors, may be removed from office at any time, but only
for cause and only by the affirmative vote of the holders of at least 80% of the voting power of all the then-outstanding shares
of capital stock entitled to vote generally in the election of directors, voting together as a separate class. Our bylaws provide
that all vacancies on the board may be filled only by a majority vote of the directors then in office, though less than a quorum,
and directors so chosen hold office for a term expiring at the annual meeting of stockholders at which the term of office of the
class to which they have been elected expires and until such director’s successor shall have been duly elected and qualified.
Advance Notice Requirements for
Stockholder Proposals
Our bylaws establish
advance notice procedures with regard to stockholder nominations for the election of directors and for business to be brought
by stockholders for any meeting of the stockholders of the Company. For stockholder nominations, written notice generally must
be received by the Company not less than 90 days prior to the meeting and must set forth certain information regarding the person
such stockholder proposes to nominate for election and regarding the stockholder himself. For business to be properly brought
before an annual meeting by a stockholder, the business must relate to a proper subject matter for stockholder action, and the
stockholder must have given timely notice in writing to the Secretary of the Company, which means that, generally, it must be
received by the Company not less than 90 days prior to the date of the meeting. The notice must also set forth a brief description
of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting,
as well as certain information regarding the stockholder. We may reject a stockholder proposal that is not made in accordance
with such procedures.
Stockholder Vote Required to Approve
Business Combinations with Interested Stockholders
Our certificate
of incorporation requires the affirmative vote of the holders of at least 80% of the voting power of all the then-outstanding
shares of capital stock entitled to vote generally in the election of directors, voting together as a separate class, to approve
certain business combinations involving an interested stockholder, except in the case of any business combination that does not
involve any cash or other consideration being received by the stockholders of the Company solely in their capacity as stockholders
of the Company, where the business combination has been approved a majority of the disinterested directors, or in the case of
any other business combination, where the business combination has been approved by a majority of the disinterested directors
or certain conditions with respect to the consideration to be received by some or all of the Company’s stockholders are
satisfied.
Factors to be Considered in Certain
Transactions
Our certificate
of incorporation grants the board of directors the discretion, when considering whether a proposed merger or similar transaction
is in the best interests of the Company and our stockholders, to give due consideration to all relevant factors, including, without
limitation, the social and economic effect of acceptance of such offer on the Company’s present and future customers and
employees and those of its subsidiaries, the communities in which the Company and its subsidiaries operate or are located, the
ability of the Company to fulfill its corporate objectives as a bank holding company, and on the ability of the Bank to fulfill
the objectives of a stock bank under applicable statutes and regulations.
VALIDITY OF
SECURITIES
Unless otherwise
indicated in the applicable prospectus supplement, certain legal matters with respect to the securities will be passed upon for
us by Nelson Mullins Riley & Scarborough LLP, counsel to the Company. Any underwriters will be represented by their own legal
counsel.
EXPERTS
The Company’s
consolidated financial statements
incorporated in this prospectus by reference to our Annual Report on Form 10-K for the year ended December 31, 2016, have been
audited by Elliott Davis, LLC (formerly Elliott Davis Decosimo, LLC), an independent registered public accounting firm, as stated
in their reports. Such reports are incorporated herein by reference in reliance upon such reports given on the authority of such
firm as experts in accounting and auditing.
First South’s
consolidated financial statements and management’s report on the effectiveness of internal control over financial reporting
incorporated in this prospectus by reference to the Company’s Current Report on Form 8-K filed on November 3, 2016, which
incorporate by reference First’s South’s consolidated financial statements and First South’s management’s
report on the effectiveness of internal control over financial reporting, have been audited by Cherry Bekaert LLP, an independent
registered public accounting firm, as stated in their reports. Such reports are incorporated herein by reference in reliance upon
such reports given on the authority of such firm as experts in accounting and auditing.
WHERE YOU
CAN FIND MORE INFORMATION
We are subject
to the informational requirements of the Exchange Act, and file with the SEC proxy statements, Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. You may read and copy any document we file at the SEC’s public reference
room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on
the public reference rooms. Our SEC filings are also available to the public from the SEC’s web site at www.sec.gov or on
our website at www.haveanicebank.com under the “Investor Relations” tab. Information on, or that can be accessible
through, our website does not constitute a part of, and is not incorporated by reference in, this prospectus.
This prospectus,
which is a part of a registration statement on Form S-3 that we have filed with the SEC under the Securities Act, omits certain
information set forth in the registration statement. Accordingly, for further information, you should refer to the registration
statement and its exhibits on file with the SEC. Furthermore, statements contained in this prospectus concerning any document
filed as an exhibit are not necessarily complete and, in each instance, we refer you to the copy of such document filed as an
exhibit to the registration statement.
PART II. INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance
and Distribution
The following
is an itemized statement of the estimated fees and expenses in connection with the issuance and distribution of the securities
registered hereby:
SEC registration fee
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$
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*
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Legal fees and expenses
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$
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**
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Printing and mailing
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$
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**
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Accounting fees and expenses
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$
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**
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Miscellaneous
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$
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**
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Total
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$
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**
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* The
Registrant is registering an indeterminate amount of securities under this Registration Statement and in accordance with Rules
456(b) and 457(r), the Registrant is deferring payment of any additional registration fee until the time the securities are sold
under this Registration Statement pursuant to a prospectus supplement, except for except for $7,526 of fees that have already
been paid and may be offset pursuant to Rule 457(p) with respect to (i) the $50,000,000 aggregate initial offering price of securities
that were previously registered pursuant to the Registrant’s Registration Statement on Form S-3 (No. 333-206676) initially
filed with the Securities and Exchange Commission on August 31, 2015 and that were not sold thereunder, and (ii) the $100,000,000
aggregate initial offering price of securities that were previously registered pursuant to the Registrant’s Registration
Statement on Form S-3 (No. 333-215312) initially filed with the Securities and Exchange Commission on December 23, 2016 and that
were not sold thereunder.
** Estimated
expenses are not presently known.
Item 15. Indemnification of Directors
and Officers
Article
Tenth of our certificate of incorporation provides that any person who was or is made a party or is threatened to be made a party
to or is otherwise involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “proceeding”),
by reason of the fact that he or she is or was a director or officer of the Company or is or was serving at the request of the
Company as a director, officer, employee, or agent of another corporation or of a partnership joint venture, trust, or other enterprise,
including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee, or agent or in any other capacity while serving as a director, officer, employee, or
agent, shall be indemnified and held harmless by the Company to the fullest extent authorized by the Delaware General Corporation
Law against all expense, liability, and loss reasonably incurred or suffered by such individual in connection therewith; provided,
however, that, generally, the Company shall indemnify any such individual in connection with a proceeding initiated by such individual
only if such proceeding (or part thereof) was authorized by the board of directors. The right to indemnification provided by our
certificate of incorporation includes the right to advancement of expenses consistent with Delaware General Corporation Law.
Section
145 of the Delaware General Corporation Law provides for permissible and mandatory indemnification of directors, officers, employees
and agents in certain circumstances. Section 145(a) provides that a corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that the person
is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another entity, against expenses (including attorneys’ fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding
if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s
conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith
and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
Section
145(b) provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another entity against expenses (including attorneys’ fees)
actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person
acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation
and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action
or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section
145(c) provides that to the extent that a present or former director or officer of a corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in Sections 145(a) and 145(b), or in defense of any claim,
issue or matter therein, that person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably
incurred by such person in connection therewith.
Section
145(d) provides that any indemnification under Sections 145(a) and 145(b) (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that indemnification of the present or former director, officer,
employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in Sections
145(a) and 145(b).
Section 145(e)
provides that expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition
of the action, suit or proceeding upon receipt of an undertaking to repay the amount if it is ultimately determined that the person
is not entitled to be indemnified by the corporation. Expenses (including attorneys’ fees) incurred by former directors
and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
Section 145(f)
provides that indemnification and advancement of expenses provided under Section 145 are not exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise. Section 145(g) provides that a corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s
status as such, whether or not the corporation would have the power to indemnify such person against such liability under this
section.
Item 16. Exhibits
The
exhibits to the Registration Statement are listed in the Exhibit Index attached hereto and incorporated by reference herein.
Item 17. Undertakings
The undersigned
Registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to
include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended;
(ii) to
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) to
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
Provided,
however
, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of the above do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by
the registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part
of the registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) That,
for the purpose of determining liability under the Securities Act of 1933, as amended, to any purchaser:
(i) Each
prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement
as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That,
for the purpose of determining liability of a Registrant under the Securities Act of 1933, as amended, to any purchaser in the
initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities
of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications,
the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to
such purchaser:
(i) Any
preliminary prospectus or prospectus of an undersigned Registrant relating to the offering required to be filed pursuant to Rule
424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of an undersigned Registrant or used or referred to
by an undersigned Registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing material information about an undersigned Registrant
or its securities provided by or on behalf of an undersigned Registrant; and
(iv) Any
other communication that is an offer in the offering made by an undersigned Registrant to the purchaser.
(6) That,
for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the Registrant’s
annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(7) To
file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the
Trust Indenture Act.
Insofar as indemnification
for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 15 above, or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Charleston, State of South Carolina, on January 12, 2018.
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CAROLINA FINANCIAL CORPORATION
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By:
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/s/ Jerold L. Rexroad
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Jerold L. Rexroad
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President and Chief Executive Officer
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KNOW
ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jerold L. Rexroad and William
A. Gehman, III, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-effective and post-effective
amendments) to this Registration Statement and to sign any registration statement (and any post-effective amendments thereto)
effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposed as he might or could do in person, hereby ratifying and confirming that said
attorney-in-fact, agent or his substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the
requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities
indicated as of the dates indicated.
Signature
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Title
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Date
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/s/ Jerold
L. Rexroad
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President and Chief
Executive
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January 12,
2018
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Jerold L. Rexroad
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Officer and Director
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(Principal Executive
Officer)
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/s/ William
A. Gehman, III
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(Principal Financial
Officer and
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January 12,
2018
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William A. Gehman, III
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Principal Accounting
Officer)
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Chief Financial Officer
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/s/ W.
Scott Brandon
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Director
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January 12,
2018
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W. Scott Brandon
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Director
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January 12,
2018
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Robert G. Clawson, Jr.
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/s/ Lindsey
A. Crisp
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Director
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January 12,
2018
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Lindsey A. Crisp
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/s/ Jeffrey
L. Deal
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Director
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January 12,
2018
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Jeffrey L. Deal, M.D.
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/s/ Gary
M. Griffin
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Director
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January
12, 2018
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Gary M. Griffin
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/s/ Frederick
N. Holscher
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Director
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January 12,
2018
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Frederick N. Holscher
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/s/ Daniel
H. Isasc
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Director
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January 12,
2018
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Daniel H. Isaac
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Director
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January 12,
2018
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Michael P. Leddy
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/s/ Robert
M. Moise
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Director
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January 12,
2018
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Robert M. Moise
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/s/ David
L. Morrow
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Director
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January 12,
2018
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David L. Morrow
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/s/ Thompson
E. Penney
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Director
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January 12,
2018
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Thompson E. Penney
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/s/ Claudius
E. Watts, IV
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Director
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January 12,
2018
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Claudius E. Watts, IV
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EXHIBIT INDEX
Exhibit
No.
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Exhibit
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1.1
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Form of Underwriting Agreement for Debt
Securities.**
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1.2
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Form of Underwriting Agreement for Preferred
Stock or Depositary Shares.**
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1.3
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Form of Underwriting Agreement for Common
Stock.**
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1.4
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Form of Underwriting Agreement for Purchase
Contracts.**
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1.5
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Form of Underwriting Agreement for Units.**
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1.6
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Form of Standby Underwriting Agreement
for Rights.**
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2.1
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Agreement and Plan of Merger by and between
Carolina Financial Corporation, CBAC, Inc., and Congaree Bancshares, Inc., dated January 5, 2016 (incorporated by reference
to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on January 11, 2016).
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2.2
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Agreement and Plan of Merger by and between
Carolina Financial Corporation and Greer Bancshares Incorporated, dated November 7, 2016 (incorporated by reference to Exhibit
2.2 of the Company’s Registration Statement on Form S-3 filed on December 23, 2016).
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2.3
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Agreement and Plan of Merger and Reorganization
by and between Carolina Financial Corporation and First South Bancorp, Inc., dated June 9, 2017 (incorporated by reference
to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on June 15, 2017).
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4.1
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Restated Certificate of Incorporation (incorporated
by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-3 filed on August 31, 2015).
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4.2
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Amendment to the Restated Certificate of
Incorporation (incorporated by reference to Exhibit A of the Company’s Definitive Proxy Statement on Schedule 14A filed
on March 31, 2016).
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4.3
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Amended and Restated Bylaws (incorporated
by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on May 5, 2016).
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4.4
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Specimen Common Stock Certificate (incorporated
by reference to Exhibit 4.2 of the Company’s Registration Statement on Form 10 filed on February 26, 2014).
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4.5
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See Exhibits 4.1, 4.2, and 4.3 for provisions
of the Restated Certificate of Incorporation and Amended and Restated Bylaws which define the rights of the stockholders.
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4.6
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Form of Certificate of Amendment Establishing
a Series of Preferred Stock.**
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4.7
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Form of Senior Indenture.
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4.8
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Form of Senior Note.**
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4.9
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Form of Subordinated Indenture.
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4.10
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Form of Subordinated Debt Security.**
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4.11
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Form of Unit Agreement.**
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4.12
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Form of Warrant Agreement.**
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4.13
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Form of Rights Agreement.**
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*
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To
be filed, if necessary, separately pursuant to Trust Indenture Act Section 305(b)(2).
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**
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To
be filed, if necessary, by amendment or as an exhibit to a report filed under the Securities
Exchange Act of 1934 and incorporated by reference.
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