Bank Of The Carolinas Corp fka BCAR

[illegal_alias]

So let's discuss it - Ron wants to know the rumor, anyway. Merger is one of the options on the table, I believe, to raise capital to get Tier 1 ratios up. PR from June 23, 2011 when BCAR was trading around $0.90

http://www.reuters.com/article/2011/06/24/idUS182110+24-Jun-2011+PRN20110624

There was no discussion of whether this arrangement is still current during the recent shareholders meeting, but article is still only 1 of 2 items on the Hutchinson website.

http://www.hutchisoncompany.com/news.php

So, FWIW, the "rumor"

As some of us discussed via PMs, there is a rumor (unsubstantiated) by a poster on the Yahoo boards suggesting BNCN as a potential merger partner. Posted July 23, which might be another potential explanation of the recent spike in the pps.

First, if you check the Yahoo Boards, that poster may be off his meds. He was calling it a scam about 10 days before. He is either delusional, sharp when on his meds spotting this, drunk at the time, etc.

But, the funny thing is, everything else fits when you look at the history of the two banks.

1. BNCN has been buying surrounding small banks and also acquired 3 failed banks. It fits their acquisition strategy

2. BCAR actually offered to takeover Randolph a few years ago, which BNCN just announced it was acquiring.

3. BCAR needs a capital infusion and is looking at all options. Everything they are doing is the right stuff, but won't be enough to raise capital ratios. Especially after this quarter, where they need to be profitable to retain earnings to increase capital ratios.

4. The geography is right. Google the locations of BCAR branches and the locations of BNCN branches.

If not BNCN, then someone else. CLBH is in a position to do it and their service area is just to the east. NBBC is adjacent to the north and just acquired a small savings bank. There have been a lot of recent small bank mergers over the last year in NC.

This past quarter puts pressure on BCAR to seriously look at all options. My guess is that if the next few quarters don't look rosy from here, it probably puts itself up for sale and gets bought out within the year. Not bad since some of these sales have been at a 3X or more premium, but pps needs to be higher than it is now.

So, that's it, unsubstantiated rumor FWIW.