Exhibit 99.1

PRESS RELEASE

For Immediate Release

BANK OF THE CAROLINAS CORPORATION REPORTS

SECOND QUARTER FINANCIAL RESULTS

MOCKSVILLE, NORTH CAROLINA, July 27, 2012 - Bank of the Carolinas Corporation (OTCQB: BCAR) today reported financial results for the three- and six-month periods ended June 30, 2012.

For the three-month period ended June 30, 2012, the Company reported a net loss available to common shareholders of $170,000 as compared to a net loss of $2.7 million for the first quarter of 2012 and a net loss of $9.9 million for the second quarter of 2011. Prior to the dividends and accretion accrual, the Company had a net income of $68,000 for the three-month period ended June 30, 2012. The net loss per diluted common share was $0.04 for the second quarter of 2012 compared with a net loss per share of $0.70 for the first quarter of 2012 and a net loss per share of $2.53 for the second quarter of 2011.

During the second quarter of 2012, the Company realized gains on investment securities of $1.4 million, which resulted in income tax expense of $424,000. The Company also had a non-recurring gain on bank owned life insurance of $415,000 during the second quarter of 2012. The Company continues to reevaluate and maintain its foreclosed real estate resulting in expenses of $252,000 in the second quarter 2012 as compared to $2.7 million in the second quarter of 2011.

For the six-month period ended June 30, 2012, the Company reported a net loss available to common shareholders of $2.9 million or $0.74 per common share, compared to a net loss of $13.3 million or $3.41 per common share for the six month period ended June 30, 2011.

The Company’s net interest margin was 2.51% in the second quarter of 2012, which is a decrease from 2.69% in the second quarter of 2011. Noninterest expense through June 30, excluding the costs related to foreclosed real estate, only increased 6.0% in 2012 versus 2011 and for the three month periods decreased 1.1% in the second quarter of 2012 versus 2011. The increase year over year was mainly driven by increased FDIC premiums, legal expenses, and costs related to the Company’s compliance with the regulatory consent order put in place in the second quarter of 2011.

The Company continues with significant improvement in the levels of nonperforming assets for the fifth consecutive quarter. As of June 30, 2012, the Company’s nonperforming assets decreased to $16.9 million and amounted to 3.58% of total assets as compared to $23.4 million or 4.87% of total assets as of the previous sequential quarter-end and compared to $33.1 million, or 6.35% of total assets as of June 30, 2011. The allowance for loan losses was 2.64% of total loans as of June 30, 2012. Net loan charge-offs amounted to $740,000 for the second quarter of 2012, a decrease from $1.4 million in the first quarter of 2012 and $8.2 million in the second quarter of 2011.

Total assets at June 30, 2012 amounted to $473.6 million, a decrease of 9.1% when compared to $521.0 million as of June 30, 2011. Loans totaled $285.2 million at June 30, 2012, a decline of 17.5% from a year earlier, and deposits decreased 4.4% over the prior year to $407.4 million. The Company’s deposit mix has improved by decreasing non-core brokered deposits by 43.5% since June 30, 2011.

The Company’s banking subsidiary had a Tier 1 leverage capital ratio and Tier 1 capital to risk-weighted assets ratio of 3.80% and 5.33% respectively, while its total capital to risk-weighted assets ratio was 6.59% as of June 30, 2012.

Bank of the Carolinas Corporation is the holding company for Bank of the Carolinas, a North Carolina chartered bank headquartered in Mocksville, NC with offices in Advance, Asheboro, Cleveland, Concord, Harrisburg, King, Landis, Lexington and Winston-Salem. The common stock of the Company is quoted under the symbol “BCAR” on the OTCQB marketplace operated by the OTC Markets Groups Inc.

For further information contact:

Stephen R. Talbert

President and Chief Executive Officer

Bank of the Carolinas Corporation

(336) 751-5755

DISCLOSURES ABOUT FORWARD LOOKING STATEMENTS

Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, expectations or beliefs about future events or results, and other statements that are not descriptions of historical facts, may be forward-looking statements as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors which include, but are not limited to, factors discussed in our Annual Report on Form 10-K and in other documents we file with the Securities and Exchange Commission from time to time. Copies of those reports are available directly through the SEC’s Internet website at www.sec.gov. Forward-looking statements may be identified by terms such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “feels,” “believes,” “estimates,” “predicts,” “forecasts,” “potential” or “continue,” or similar terms or the negative of these terms, or other statements concerning opinions or judgments of our management about future events. Factors that could influence the accuracy of forward-looking statements include, but are not limited to (a) pressures on our earnings, capital and liquidity resulting from current and future conditions in the credit and capital markets, (b) continued or unexpected increases in nonperforming loans and credit losses in our loan portfolio, (c) continued adverse conditions in the economy and in the real estate market in our banking markets (particularly those conditions that affect our loan portfolio, the abilities of our borrowers to repay their loans, and the values of collateral that secures our loans), (d) the financial success or changing strategies of our customers, (e) actions of government regulators, or change in laws, regulations or accounting standards, that adversely affect our business, (f) changes in the interest rate environment and the level of market interest rates that reduce our net interest margins and/or the values of loans we make and securities we hold, (g) changes in competitive pressures among depository and other financial institutions or in our ability to compete effectively against other financial institutions in our banking markets, and (h) other developments or changes in our business that we do not expect. Although we believe that the expectations reflected in the forward-looking statements included in this press release are reasonable, they represent our management’s judgments only as of the date they are made, and we cannot guarantee future results, levels of activity, performance or achievements. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statements in this paragraph. We have no obligation, and do not intend, to update these forward-looking statements.

Bank of the Carolinas Corporation

Consolidated Balance Sheets

(In Thousands Except Share Data)

(Unaudited)

Bank of the Carolinas Corporation

Consolidated Statements of Income

(In Thousands Except Share Data)

(Unaudited)

Bank of the Carolinas Corporation

Other Financial Data

(Dollars in thousands except per share amounts)

Bank of the Carolinas Corporation

Other Financial Data (continued)

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