Carolina Financial Corporation (NasdaqCM:CARO) signed a letter of intent to acquire Carolina Trust BancShares, Inc. (NasdaqCM:CART) on June 6, 2019. As on July 15, 2019, Carolina Financial Corporation entered into a definitive merger agreement to acquire Carolina Trust BancShares, Inc. for $99.3 million. Subject to the terms of the merger agreement, Carolina Trust shareholders will receive 0.3 shares of Carolina Financial common stock, or $10.57 in cash for each share of Carolina Trust's common stock outstanding, subject to election and proration such that the aggregate consideration will consist of 90% of Carolina Financial stock and 10% cash based on Carolina Financial Corporation's closing stock price of $35.62 as of July 12, 2019. All unexercised Carolina Trust stock options outstanding immediately will either be assumed by Carolina Financial or replaced with substantially identical awards under Carolina Financial's existing equity plans. From and after the effective time, each Carolina Trust Option assumed or replaced by Carolina Financial may be exercised solely for shares of Carolina Financial Common Stock, the number of shares of Carolina Financial common stock subject to such Carolina Trust Option shall be equal to the number of shares of Carolina Trust common stock subject to such Carolina Trust Option immediately prior to the effective time multiplied by the exchange ratio (rounded down to the nearest whole share), and the per share exercise price under each such Carolina Trust Option shall be divided by the exchange ratio (rounded up to the nearest whole cent).

Pursuant to the terms and conditions set forth therein, Carolina Trust will merge with and into the Carolina Financial Corporation with Carolina Financial Corporation as the surviving corporation in the merger. The merger agreement provides that immediately following the merger, Carolina Trust's wholly owned bank subsidiary, Carolina Trust Bank, a North Carolina-chartered bank, will merge with and into Carolina Financial Corporation's wholly owned bank subsidiary, CresCom Bank, a South Carolina-chartered, with CresCom Bank as the surviving entity in the bank merger. Carolina Trust may be required to pay to Carolina Financial a termination fee of $4.71 million.

Jerry Ocheltree, President and Chief Executive Officer of Carolina Trust, will be named as President of CresCom Bank's North Carolina Commercial Banking Operations. Upon completion of the transaction, Johnathan Rhyne, Carolina Trust's current Chairman of the Board, will be appointed to the Carolina Financial and CresCom Bank's Boards of Directors. The transaction is subject to customary conditions, including regulatory approval, Carolina Trust shareholder approval, Registration Statement shall have been declared effective by the SEC, Carolina Financial shall have filed with the NASDAQ Stock Market a notification form for the listing of all shares, execution of employment agreement and the NASDAQ Stock Market shall not have objected to the listing of such shares of Carolina Financial Common Stock and execution of non-competition agreement. The merger agreement has been unanimously approved by the Boards of Directors of Carolina Financial Corporation and Carolina Trust BancShares. Carolina Trust's Board recommends that Carolina Trust shareholders vote for the approval of the merger agreement. The special meeting of shareholders of Carolina Trust BancShares, Inc. will be held on December 18, 2019 to approve the merger. Shareholders of Carolina Trust BancShares, Inc. approved the transaction in the shareholders' meeting held on December 18, 2019. The merger has received all required regulatory approvals. The transaction is expected to close in the first quarter of 2020. As of October 28, 2019, the merger is expected to be completed by the end of the first quarter of 2020. As of December 18, 2019, the transaction is expected to close on December 31, 2019 subject to satisfaction of other customary closing conditions. The transaction has EPS accretion of ~5% in 2021 and dilution to tangible book value is well maintained, tangible book value earn back period of 2.8 years.

Sandler O'Neill & Partners, LP acted as financial advisor and Neil E. Grayson of Nelson Mullins Riley & Scarborough LLP acted as legal advisor to Carolina Financial. Raymond James Financial, Inc. (NYSE:RJF) served as financial advisor (for a fee of $1 million) and fairness opinion provider and Todd H. Eveson of Wyrick Robbins Yates & Ponton LLP served as legal counsel to Carolina Trust. Raymond James Financial received a fee of $0.25 million upon delivery of its opinion. Computershare acted as transfer agent to Carolina Financial. Regan & Associates, Inc. acted as proxy solicitation agent to Carolina Trust and will be paid fee of $0.01 million.

Carolina Financial Corporation (NasdaqCM:CARO) completed the acquisition of Carolina Trust BancShares, Inc. (NasdaqCM:CART) on December 31, 2019.