Carolina Financial : Form 8-K

Section 1: 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) December 31, 2019

CAROLINA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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

• Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
• Pre-commencementcommunications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
• Pre-commencementcommunications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

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 13(a) of the Exchange Act. ☐

Item 8.01 Other Events.

On December 31, 2019, Carolina Financial Corporation ("Carolina Financial") completed the merger contemplated by the Agreement and Plan of Merger and Reorganization (the "Merger Agreement") dated as of July 15, 2019, by and between Carolina Financial and Carolina Trust BancShares, Inc. ("Carolina Trust"). Pursuant to the Merger Agreement, on December 31, 2019, Carolina Trust merged with and into Carolina Financial (the "Merger"), with Carolina Financial as the surviving corporation in the Merger. Immediately following the consummation of the Merger, Carolina Trust Bank, a wholly owned subsidiary of Carolina Trust, merged with and into CresCom Bank, a wholly owned subsidiary of Carolina Financial (the "Bank Merger"), with CresCom Bank as the surviving bank in the Bank Merger. CresCom Bank will operate the former offices of Carolina Trust Bank under the name "Carolina Trust Bank" until the data processing system conversion, which is currently expected to occur in May 2020.

The foregoing description of the Merger Agreement does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 to Carolina Financial's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 18, 2019, and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

1. Exhibits.

Forward-Looking Statements

Certain statements in this report contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements include but are not limited to statements with respect to plans, objectives, expectations and intentions and other statements that are not historical facts, and other statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," and "projects," as well as similar expressions. Such statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although the parties making such statements believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, neither Carolina Financial nor Carolina Trust provides any assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by Carolina Financial, Carolina Trust or any other person that the future events, plans, or expectations contemplated will be achieved.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between Carolina Financial and Carolina Trust; the outcome of any legal proceedings that have been or may be instituted against Carolina Financial or Carolina Trust; the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Carolina Financial and Carolina Trust do business; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; Carolina Financial's ability to complete the acquisition and integration of Carolina Trust successfully; credit risk associated with commercial real estate, commercial business and construction lending; interest risk involving the effect of a change in interest rates on both of Carolina Financial's and Carolina Trust's earnings and the market value of the portfolio equity; liquidity risk affecting each bank's ability to meet its obligations when they come due; price risk focusing on changes in market factors that may affect the value of traded instruments; transaction risk arising from problems with service or product delivery; compliance risk involving risk to earnings or capital resulting from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards; strategic risk resulting from adverse business decisions or improper implementation of business decisions; reputation risk that adversely affects earnings or capital arising from negative public opinion; and cybersecurity risk related to the dependence of Carolina Financial and Carolina Trust on internal computer systems and the technology of outside service providers, as well as the potential impacts of third-party security breaches, which subjects each company to potential business disruptions or financial losses resulting from deliberate attacks or unintentional events. For a discussion of some of the other risks and factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to the filings made by Carolina Financial and Carolina Trust in their respective reports filed with the Securities and Exchange Commission (the "SEC"), including each company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K available at the SEC's Internet site (http://www.sec.gov). All subsequent written and oral forward-looking statements concerning Carolina Financial, Carolina Trust or any person acting on either company's behalf are expressly qualified in their entirety by the cautionary statements above. Neither Carolina Financial nor Carolina Trust undertakes any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

Additional Information About the Carolina Trust Acquisition and Where to Find It

Carolina Financial has filed a Registration Statement on Form S-4 (Registration No: 333-233640), which was declared effective on October 21, 2019, which includes a proxy statement of Carolina Trust and a prospectus of Carolina Financial, as well as other relevant documents concerning the proposed Carolina Trust transaction. Carolina Trust mailed the final proxy statement/prospectus to its shareholders on or about October 28, 2019.

BEFORE MAKING ANY ELECTION DECISION, SHAREHOLDERS OF CAROLINA TRUST ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Shareholders of Carolina Trust will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information about Carolina Financial and Carolina Trust, at the SEC's internet site (http://www.sec.gov). Copies of the proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the proxy statement/prospectus can also be obtained, without charge, by directing a request to: Carolina Financial Corporation, 288 Meeting Street, Charleston, South Carolina 29401, Attention: William A. Gehman, III, Executive Vice President and Chief Financial Officer or Carolina Trust BancShares, Inc., 901 East Main Street, Lincolnton, NC 28092, Attention: Edwin Laws, Chief Financial Officer.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

William A. Gehman, III

Executive Vice President and Chief Financial

Officer

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Section 2: EX-99.1

CAROLINA FINANCIAL CORPORATION COMPLETES MERGER WITH CAROLINA TRUST BANCSHARES, INC.

NEWS RELEASE - For Release Thursday, January 2, 2020, 8:00 AM

For More Information, Contact:

William A. Gehman III, EVP and CFO, 843.723.7700

Charleston, S.C., January 2, 2020- Carolina Financial Corporation (NASDAQ: CARO) ("Carolina Financial") announced today that its previously

announced merger with Carolina Trust BancShares, Inc. (NASDAQ: CART) ("Carolina Trust") was completed on December 31, 2019.

Under the terms of the merger agreement, Carolina Trust shareholders will have the right to receive $10.57 for each share of Carolina Trust common stock, payable, at their election and subject to certain limitations, in cash or in shares of Carolina Financial common stock based upon a fixed exchange ratio of 0.3000. Per the agreement, 10% of the consideration will be paid in cash and the balance (90%) will be in newly issued shares of Carolina Financial common stock.

As part of the merger agreement, Carolina Trust's bank subsidiary, Carolina Trust Bank, a North Carolina bank, has merged with CresCom Bank, a South Carolina bank and the wholly-owned banking subsidiary of Carolina Financial. Carolina Financial plans to complete systems integration in May 2020.

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About Carolina Financial Corporation

Carolina Financial is the holding company of CresCom Bank, which also owns and operates Atlanta-based Crescent Mortgage Company. As of September 30, 2019, Carolina Financial had approximately $4.0 billion in total assets and Crescent Mortgage Company was approved to originate loans in 48 states partnering with community banks, credit unions and mortgage brokers.

Additional Information About the Carolina Trust Acquisition and Where to Find It

Carolina Financial has filed a Registration Statement on Form S-4 (Registration No: 333-233640), which was declared effective on October 21, 2019, which includes a proxy statement of Carolina Trust and a prospectus of Carolina Financial, as well as other relevant documents concerning the proposed Carolina Trust transaction. Carolina Trust mailed the final proxy statement/prospectus to its shareholders on or about October 28, 2019.

BEFORE MAKING ANY ELECTION DECISION, SHAREHOLDERS OF CAROLINA TRUST ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Shareholders of Carolina Trust will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information

about Carolina Financial and Carolina Trust, at the SEC's internet site (http://www.sec.gov). Copies of the proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the proxy statement/prospectus can also be obtained, without charge, by directing a request to: Carolina Financial Corporation, 288 Meeting Street, Charleston, South Carolina 29401, Attention: William A. Gehman, III, Executive Vice President and Chief Financial Officer or Carolina Trust BancShares, Inc., 901 East Main Street, Lincolnton, NC 28092, Attention: Edwin Laws, Chief Financial Officer.

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