UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-K/A

Amendment No.
1



(Mark One)



|x | Annual
    Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | 
|- | ---------------------------------------------------------------------------------------- | 

For the fiscal
year ended December 31, 2019



or



|o | Transition
    Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | 
|- | -------------------------------------------------------------------------------------------- | 

For the transition
period from  to



Commission file
number 001-10897



|Carolina
    Financial Corporation
|----------------------------------

(Exact name of
registrant as specified in its charter)



|Delaware                 |  | 57-1039673                              
|------------------------ |  | ----------------------------------------
|(State of Incorporation) |  | (I.R.S. Employer Identification
    No.)



|288
    Meeting Street, Charleston, South Carolina |  | 29401     
|-------------------------------------------------- |  | ----------
|(Address of principal
    executive offices)       |  | (Zip Code)



|(843)
    723-7700             
|-------------------------------
|(Issuer’s
    Telephone Number)



Securities
registered pursuant to Section 12(b) of the Exchange Act:



|Title
    of Each Class                     |  | Trading
    Symbol |  | Name
    of each exchange on which registered
|------------------------------------------- |  | ------------------ |  | ---------------------------------------------
|Common Stock, $0.01
    par value per share |  | CARO               |  | The Nasdaq Capital
    Market®               



Securities
registered under Section 12(g) of the Exchange Act: None



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x  No
o



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes o  No
x



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

Yes x  No
o



Indicate
by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files).

Yes x  No
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  x                                                                 | Accelerated
    filer  o                                                                 
|---------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------
|                                                                                               |                                                                                          
|Non-accelerated
        filer  o
        (Do
        not check if a smaller reporting company) | Smaller
        reporting company   o
        
        Emerging
        growth company  o



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

o



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o  No
x



The
aggregate market value of the voting and nonvoting common equity held by non-affiliates of the registrant (computed by reference
to the price at which the stock was most recently sold) was $738,763,981 as of the last business day of the registrant’s
most recently completed second fiscal quarter.



Indicate
the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.



|Class                                      |  | Outstanding
    at April 20, 2020
|------------------------------------------ |  | ---------------------------------
|Common
    Stock, $.01 par value per share |  | 24,847,938
    shares            







DOCUMENTS
INCORPORATED BY REFERENCE



Some of the information required
by Part I and Part III is incorporated by reference from the prospectus and joint proxy statement filed by United Bankshares,
Inc. and the registrant on February 13, 2020 pursuant to Rule 424(b) under the Securities Act of 1933 and Rule 14a-6 under the
Securities Exchange Act of 1934.

2







EXPLANATORY
NOTE



Unless
this Amendment No. 1 to the Annual Report on Form 10-K/A (this “Amendment”) indicates otherwise, or the context otherwise
requires, the terms “we,” “our,” “us,” and “the Company,” as used herein refer
to Carolina Financial Corporation and its subsidiaries, including CresCom Bank.



This Amendment
amends our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as filed with the Securities and Exchange Commission
(“SEC”) on March 2, 2020 (the “Original Filing”). This Amendment is being filed solely to include the
information required by Part III (Items 10 through 14) of Form 10-K. The information required by Part III was previously omitted
from the Original Filing in reliance on General Instruction G, which provides that registrants may incorporate by reference certain
information from a definitive proxy statement that is filed with the SEC no later than 120 days after the end of the fiscal year
covered by the Form 10-K, otherwise the Items comprising Part III
information must be filed as an amendment to the Form 10-K not later than the end of the 120-day period. We are filing this Amendment
to include the Part III information in our Form 10-K.



In accordance
with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Part III, Items 10 through
14 of the Original Filing are hereby amended and restated in their entirety, and Part IV, Item 15 of the Original Filing is hereby
amended and restated in its entirety, with the only changes to Part IV, Item 15 being the addition of new certifications by our
principal executive officer and principal financial officer filed herewith. This Amendment does not amend or otherwise update
any other information in the Original Filing. Accordingly, this Amendment should be read in conjunction with the Original Filing
and with our filings with the SEC subsequent to the Original Filing.



Except as described
above, no other changes have been made to the Original Filing. The Original Filing continues to speak as of the date of the Original
Filing, and we have not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to
the filing of the Original Filing.

3





TABLE
OF CONTENTS

|              |                                                                                                |              
|------------- | ---------------------------------------------------------------------------------------------- | -------------
|              |                                                                                                | Page

    No.
|              |                                                                                                |              
|PART
    III. |                                                                                                |              
|              |                                                                                                |              
|Item 10.      | Directors, Executive Officers and Corporate Governance                                         | 5            
|              |                                                                                                |              
|Item 11.      | Executive Compensation                                                                         | 11           
|              |                                                                                                |              
|Item 12.      | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 37           
|              |                                                                                                |              
|Item 13.      | Certain Relationships and Related Transactions, and Director Independence                      | 39           
|              |                                                                                                |              
|Item 14.      | Principal Accountant Fees and Services                                                         | 40           
|              |                                                                                                |              
|PART
    IV.  |                                                                                                |              
|              |                                                                                                |              
|Item 15.      | Exhibits, Financial Statement Schedules                                                        | 42           
|              |                                                                                                |              
|Exhibit Index | 43                                                                                            
|              |                                                                                               
|Signatures    | 45                                                                                            





4







PART III



Item 10. Directors, Executive
Officers and Corporate Governance.



Biographical
Information for Each Director



Set
forth below is information about each of the Company’s directors and executive officers, including their age, the period
they have served as a director or executive officer, their business experience for at least the past five years, the names of
other companies where they currently serve as a director or served as a director during the past five years, and additional information
about the specific experience, qualifications, attributes, or skills that led to the board’s conclusion that such person
should serve as a director for the Company.



W.
Scott Brandon, 56, has served as a member of the Company’s Board of Directors since 2001. Mr. Brandon is owner and Chief
Executive Officer of The Brandon Agency. He is also owner of Intellistrand, a company that buys, sells and monetizes intuitive
domain names on the internet as well as Fuel Travel, a firm that specializes in digital marketing and software for hotels. He
holds a Bachelor of Science degree in Economics from Davidson College and a Juris Doctor degree from the University Of South Carolina
School Of Law. Mr. Brandon is a 2012 recipient of The American Advertising Federation’s Silver Medal Award for his outstanding
contributions to advertising and creative excellence and in the same year was awarded the Myrtle Beach Chamber of Commerce Citizen
of the Year award. Mr. Brandon currently serves on the Board of Directors for Waterside Brands (a private company and owner of
the Fish Hippie apparel brand), Guntersville Breathables Inc. (a private company and owner of the Frogg Toggs outerwear brand),
Springs Creative Products Group, LLC (an independently owned and operated textile and creative service business), the Charleston
Metro Chamber of Commerce and the Myrtle Beach Area Recovery Council and is a member of the Board of Trustees for Brookgreen Gardens.
He is a past member of the Horry-Georgetown Technical College Board of Visitors, past board member of The E. Craig Wall School
of Business Administration Board of Visitors, past board member of the American Heart Association (Coastal Chapter), past board
member of the Better Business Bureau, past board member of the Salvation Army Horry County as well as the Myrtle Beach Haven.
He is a current member of World Presidents Organization, YPO Gold and Chief Executives Organization. Mr. Brandon has substantial
leadership and financial experience as founder of several successful businesses and is extensively involved in the local community,
both of which enhance his ability to serve on the Company’s Board of Directors.





Robert
G. Clawson, Jr., 77,has served as a member of the Company’s Board of Directors since 1996. Mr. Clawson is a founding
member of the law firm of Clawson and Staubes, LLC, and is a member of the South Carolina State Bar, the American Bar Association,
the Metropolitan Exchange Club, and The Hibernian Society. Mr. Clawson is admitted to practice law before the South Carolina Supreme
Court, the U.S. District Court for the District of South Carolina, the U.S. Court of Appeals for the Fourth Circuit, the U.S.
Court of Federal Claims, the U.S. Tax Court, and the U.S. Court of International Trade. Mr. Clawson previously served as President
of the South Carolina Municipal Attorneys Association and the College of Charleston Cougar Club. He is a graduate of the University
of North Carolina and the University Of South Carolina School Of Law. Mr. Clawson’s qualification as a member of the Board
of Directors is primarily attributed to his experience in founding a successful law practice and his extensive legal experience.



Lindsey
A. Crisp, 48, served as a member of the First South Bancorp, Inc. (“First South”) board from 2015 to 2017. He
also served as the Chairman of the Audit Committee, the Asset/Liquidity Management Committee and the Director’s Loan Committee
of the First South board from 2015 to 2017. He joined the Company’s board following its acquisition of First South in November
2017. Since 2005, Mr. Crisp has serviced as President, Chief Executive Officer and as a Director of Carver Machine Works, Inc.,
a private company located in Washington, North Carolina. He was previously employed with Dixon Hughes, LLP, Certified Public Accountants
from 2001 to 2005 as a Manager and a Senior Manager. Mr. Crisp is a graduate of East Carolina University, with a Bachelor of Science
degree in Accounting, and is a Certified Public Accountant. He is also a Chartered Global Management Accountant. He is a member
of the American Institute of Certified Public Accountants and the North Carolina Association of Certified Public Accountants.
Mr. Crisp serves on the Beaufort County Directors’ Council for Vidant Health and was Chairman from 2014 through 2017. He
has previously served as an Advisory Board Member of Wells Fargo Bank in Washington, North Carolina, and a Board Member of the
Beaufort County Committee of 100. He is a former Commissioner of the Greenville Housing Authority in Greenville, North Carolina;
a former Treasurer of the North Carolina Aerospace Alliance; a former Board Member of the East Carolina University Engineering
Advisory Board, and was previously a Certified Valuation Analyst. Mr. Crisp’s finance and accounting expertise and business
skills qualifies him to serve on the Company’s Board of Directors.



5





Jeffery
L. Deal, M.D. 65, has served as a member of the Company’s Board of Directors since 1996. Dr. Deal is an anthropologist
and physician and served as Director of Health Studies for Water Missions International, a non-profit non-governmental organization
that provides water and sanitation for developing areas. Dr. Deal is a founding partner of Charleston ENT, and previously served
as President of the Medical Staff of Bon Secours-St. Francis Hospital, Medical Director of a startup medical facility in South
Sudan, and several other related positions. Dr. Deal is the inventor of the Tru-D room decontamination system, a Fellow in the
American College of Surgeons, a Fellow in the American Academy of Otolaryngology - Head and Neck Surgery, and a Fellow in the
Royal Society of Tropical Medicine. Dr. Deal is a graduate of the Medical University of South Carolina and completed his residency
at the National Naval Medical Center in Bethesda, Maryland. He brings to the Board of Directors insights relative to the challenges
and opportunities facing small businesses and healthcare professionals within our market areas.



Gary
M. Griffin, 65, a native of Greer, South Carolina, served as a director of Greer Bancshares Incorporated and Greer State Bank
(collectively, “Greer”) from 1992 until March 2017 when they were acquired by the Company. He was appointed to the
Company’s Board of Directors immediately following the Greer acquisitions. During his tenure as a Greer director, Mr. Griffin
served two terms as Chairman of the Board of Directors. He is a graduate of Furman University and has served as Vice-President
and part owner of Mutual Home Stores, a group of retail home furnishings stores in the upstate region of South Carolina, where
he has over 40 years of work experience in all aspects of the business. Mr. Griffin is a past president of the Greer Lions Club.
He has served as a board member and treasurer of Greer Community Ministries, which provides a Meals on Wheels program in the region.
He also served as a board member of The Greer Relief and Resources Agency. Mr. Griffin’s qualification to serve on the Company’s
Board of Directors is primarily attributed to his previous experience serving as a director of Greer, as well as his successful
business experience in the upstate region of South Carolina.



Frederick
N. Holscher, 72, served as a member of First South board of directors from 1985 to 2017. He joined the Company’s board
following its acquisition of First South in November 2017. At the time of the acquisition, Mr. Holscher was serving as Chairman
of the First South board. Mr. Holscher is a graduate of the University of North Carolina at Chapel Hill, with a degree in Political
Science. He is also a graduate of the UNC School of Law and is currently an attorney and president of the law firm of Rodman,
Holscher, Peck & Edwards, P.A. located in Washington, North Carolina and has been with the firm since 1973. He is an active
member of the Beaufort County Bar Association, the Second Judicial District Bar Association and the North Carolina Bar Association.
He has served on the boards of many local and statewide civic and service organizations including the Salvation Army, Washington
Board of Realtors, Washington/Beaufort County Chamber of Commerce and the Eastern Region of Friends of the Institute of Government.
Mr. Holscher’s experience serving as a member of the First South board, as well as his professional expertise, are the primary
attributes qualifying him to serve on the Company’s Board of Directors.





Daniel
H. Isaac, Jr., 68, has served as a member of the Company’s Board of Directors since 2016 and has served as a member
of the Board of Directors of the Company’s wholly-owned subsidiary, CresCom Bank, since 2001. Mr. Isaac is founder and owner
of A&I Fire and Water Restoration. He holds a Bachelor of Science degree from The Citadel in Charleston, South Carolina. Mr.
Isaac has been involved in numerous local and state organizations. He previously served as Chairman of the Myrtle Beach Chamber
of Commerce and the South Carolina Department of Transportation. Mr. Isaac’s qualification to serve on the Company’s
Board of Directors is attributable primarily to his experience of founding a successful business and his involvement in many leadership
positions.

6







Beverly
Ladley, 53, has served as a member of the Company’s Board of Directors since March 2018. She currently the Head of Consumer
and Small Business Financing, Loyalty and Healthcare for Fiserv. Prior to joining Fiserv, she was a Senior Advisor to McKinsey
and Company, a global management consulting firm. Before joining McKinsey and Company, Mrs. Ladley was the Executive Vice President
and Head of Retail Products and Consumer Lending position at SunTrust Banks Inc. from 2012 to 2016. Her position included responsibility
for the Deposits, Retail Lending, Consumer Credit Card, and National Lending Businesses, as well as Retail and Small Business
Segment Strategy. During the two decades before joining SunTrust, Mrs. Ladley held various positions of increasing responsibility
with Bank of America. These positions included Executive, Deposit Growth (2000 - 2005), Senior Vice President and Executive, Small
Business Strategy and Deposits, Executive, Customer Segment (2009 - 2010), Executive, U.S. Credit Card and Small Business Products
(2010-2011), Executive, Global Sourcing (2011 - 2012). Ms. Ladley earned a Bachelor of Arts degree in Economics and Public Policy
from Duke University in 1988 and a Masters in Business Administration from the University of Virginia’s Darden Graduate
School of Business Administration in 1992. Ms. Ladley’s qualification as a member of the Board of Directors is primarily
attributed to her extensive financial services, banking and consulting experience.



Robert
M. Moïse, 71, has served as a member of the Company’s Board of Directors since 1996. Mr. Moïse recently retired
as a partner with WebsterRogers LLP in Charleston, South Carolina and serves as a consultant to that firm. He holds Bachelor of
Science in Accounting and Master of Accountancy degrees from the University of South Carolina and has been admitted to practice
before the United States Tax Court. He serves as the Immediate Past President of the Coastal Council Boy Scouts of America, is
a member of the Coastal Boys Council Board and currently serves as the Sea Scout Commodore for the Council. He is a volunteer
at Camp Happy Days, a summer camp for children with cancer. He is a member of the American Institute of Certified Public Accountants,
having served on their national Tax Practice Responsibilities Committee and is a member of the South Carolina Association of Certified
Public Accountants. Mr. Moïse also served as Chairman of the Charleston County Business License Appeals Board. In his professional
practice, Mr. Moïse has, after leaving the Internal Revenue Service, worked with national and local accounting firms and
has concentrated his practice in the tax area with an emphasis on tax controversy matters and complicated mergers, acquisitions
and liquidations for many clients around the state. Mr. Moïse brings to the board his 40 years of financial expertise and
business skills. His finance and accounting expertise also qualify him to serve as Chairman of the Company’s Audit Committee
and is considered as an “audit committee financial expert.”



David
L. Morrow, 69, has served as an Executive Vice President of the Company since 2004 and has served as a member of the Company’s
Board of Directors since 2001. Mr. Morrow is a graduate of Clemson University with a Bachelor of Science degree and has more than
46 years of experience in banking and financial institution management in South Carolina. Prior to founding Crescent Bank, a predecessor
to CresCom Bank, he served as President of Carolina First Savings Bank and also as Executive Vice President and member of the
Board of Directors of Carolina First Bank. Mr. Morrow is the immediate past Chairman of the South Carolina Bankers Association,
a member of the Board of Advisors of the Hollings Cancer Center at MUSC, a member of the Clemson University Foundation Board and
a member of the Charleston Metro Chamber of Commerce Board. Most recently, Mr. Morrow served on the Clemson University Board of
Visitors, the Federal Reserve Community Depository Institutions Advisory Council, as well as the ABA Community Bankers Council.
He is also a past Board member of the Storm Eye Institute at MUSC, a past member of the Board of Directors of Leadership South
Carolina and a past member of the Board of Directors for the South Carolina Museum Foundation. His years of experience in financial
institution management, including previous service as a director of a state-wide financial institution and Chief Executive Officer
of both predecessor banks of CresCom Bank, provide a valuable perspective as a director.



Thompson
E. “Thom” Penney, 69,has served as a member of the Company’s Board of Directors since 2013. Mr. Penney
is the Chairman of the Board and President/CEO (a position he has held since 1989) of LS3P, a multi-disciplinary firm offering
architecture, planning, and interior architecture services to clients throughout the United States. With more than 320 personnel
throughout eight offices in the Carolinas and Georgia, he is responsible for overall firm management, organizational vision, and
successful integration of professional services, marketing, and operations of the firm. Mr. Penney has more than 45 years of experience
in the architectural field and under his leadership, LS3P has grown to become a firm consistently recognized by Engineering News
and Record as one of the Top 200 Design Firms and Top 20 Architectural Firms in the United States. A graduate of Clemson University
with a bachelor’s degree (1972) and master’s degree (1974) in architecture, Mr. Penney has received the Alumni Distinguished
Service Award from Clemson University, was a 2019 inductee in the College of Architecture, Arts and Humanities Hall of Fame, received
the AIA South Carolina Medal of Distinction, its highest honor, received the Joseph P. Riley Leadership Award from the Charleston
Metro Chamber and was honored with the Award for Ethics and Civic Responsibility from The Free Enterprise Foundation. Mr. Penney
generously volunteers his time to his profession and community, having served as National President of The American Institute
of Architects (2003); Chairman of the Charleston Metro Chamber of Commerce (2008), and Co-Chair of the National AIA-AGC Joint
Committee. He is also on the Boards of the Charleston Regional Development Alliance, the AIA Large Firm Roundtable, and is Vice
Chair of the Trident CEO Council. His qualification as a member of the Board of Directors is attributed to his business expertise
within our market areas.





Jerold
L. Rexroad, 59, joined the Company in May 2008 as Executive Vice President, and he has served as the Company’s President
and Chief Executive Officer and a director since 2012. Mr. Rexroad also serves as Executive Chairman of the Board of CresCom Bank
and Executive Chairman of the Board of Crescent Mortgage Company, a subsidiary of CresCom Bank. Mr. Rexroad is a graduate of Bob
Jones University, cum laude. He began his career in 1982 with Peat, Marwick, Mitchell and Co., a predecessor to the international
accounting firm KPMG LLP, and is a Certified Public Accountant. He became a KPMG partner in 1994 with responsibilities for all
financial institutions in South Carolina. In 1995, Mr. Rexroad joined Coastal Financial Corporation as Executive Vice President
and Chief Financial Officer. Under his oversight, the bank grew organically from $375 million in total assets to over $1.8 billion
in total assets. Coastal Financial Corporation was sold to BB&T Bank in 2007. Mr. Rexroad is a member of the American Institute
of Certified Public Accountants. His leadership experience, including over 30 years of experience in public accounting and financial
institution management, as well as his service as the chief financial officer and chief executive officer of a public bank holding
company, enhance his ability to serve on the Company’s Board of Directors. These roles have required industry expertise
combined with operational and global management expertise.



Johnathan
L. Rhyne, Jr., 64, served as a member of the Carolina Trust BancShares, Inc. (“Carolina Trust”) board of directors
from 2016-2019 and joined the Company’s board following the acquisition of Carolina Trust in December 2019. At the
time of the acquisition, Mr. Rhyne was serving as Chairman of the Carolina Trust board. Mr. Rhyne is an attorney in Lincolnton,
North Carolina and from 2009 to 2011, he was a member of the North Carolina General Assembly where he served as chairman of the
House Banking Committee. He previously served four terms in the General Assembly, from 1985 through 1992, which included service
as the minority leader. Mr. Rhyne also serves as chair of the board of directors of a public foundation and on the board of directors
of one local non-profit organization. Mr. Rhyne also previously served from 2015 to 2017 on the North Carolina State Banking Commission.
Mr. Rhyne’s background as an attorney and a legislator give him the leadership and consensus building skills to serve on
the Company’s Board. He also has previous experience as a director for another bank in Lincoln County, which gives
him a deep knowledge of the markets in which we operate.

7







Claudius
E. “Bud” Watts IV, 58, has served as a member of the Company’s Board of Directors since 2015. Mr. Watts
is a private investor and a Senior Advisor to The Carlyle Group. Mr. Watts also serves as the Lead Independent Director on the
Board of Directors of CommScope (NASDAQ: COMM), where he has served as Director since 2011. Mr. Watts joined The Carlyle Group
in 2000 and was a Partner and Managing Director until his retirement in late 2017. Mr. Watts established Carlyle’s Technology
Buyout Group in 2004 and led it until 2014. He also led The Carlyle Group’s investments in and served on the Boards of SS&C
Technologies (NASDAQ: SSNC), Open Link Financial, Open Solutions, Freescale Semiconductor (previously NYSE: FSL), and Jazz Semiconductor,
as well as aerospace companies Firth Rixon, Sippican, and CPU Technology. Prior to joining The Carlyle Group, Mr. Watts was a
Managing Director in the Mergers & Acquisitions group of First Union Securities, Inc. He joined First Union when it acquired
Bowles Hollowell Conner & Co., where Mr. Watts was a principal. Prior to joining Bowles Hollowell, Mr. Watts was a fighter
pilot in the U.S. Air Force. During his service, he was qualified as an instructor pilot in both the F-16 and A-10 aircraft and
served in a number of leadership and operations management positions in the United States and abroad. In addition to his current
business activities, Mr. Watts serves as the Chairman of the Board of The Citadel Trust and on the board of The Citadel Foundation,
which together manage the primary endowment funds supporting The Citadel. He also serves on the boards of The Roper St. Francis
Foundation and The Belle W. Baruch Foundation. Mr. Watts earned a Bachelor of Science in electrical engineering cum laude from
The Citadel in Charleston, South Carolina, and a Masters of Business Administration from the Harvard Graduate School of Business
Administration. His qualifications as a member of the Board of Directors are attributed to his business expertise with public
companies.



Biographical
Information for Executive Officers



Other
than Messrs. Morrow and Rexroad, for which disclosure is provided above, the following provides information regarding our other
executive officers:



William
A. Gehman III, 59, has served as the Company’s Executive Vice President and Chief Financial Officer since 2012. Prior
to being promoted to Chief Financial Officer, Mr. Gehman was the Company’s Controller from 2008 to 2012. Mr. Gehman is also
the Chief Financial Officer of the Bank, Crescent Mortgage Company and Carolina Services Corporation. Mr. Gehman, a Certified
Public Accountant with over 16 years of experience in financial institutions, spent over nine years with Peat, Marwick, Mitchell
& Co, predecessor to KPMG LLP. He joined Coastal Financial Corporation in 2002 as Senior Vice President and Corporate Controller,
where his responsibilities included public and regulatory reporting. Mr. Gehman is a member of the American Institute of Certified
Public Accountants and the South Carolina Association of Certified Public Accountants. Mr. Gehman is a graduate of Liberty Baptist
College.



M.
J. Huggins, III, 57, has served as the Company’s Executive Vice President since 2010 and Secretary since 2012. Mr. Huggins
is also President and Secretary of CresCom Bank and a founding board member. He was also the former President, Chief Credit Officer
and Secretary of Crescent Bank, predecessor to CresCom Bank. Prior to joining the Company and assisting in the founding of Crescent
Bank, Mr. Huggins served as Area Executive and Senior Vice President of Carolina First Bank, responsible for commercial and retail
operations from Georgetown to Myrtle Beach, South Carolina. Prior to his tenure with Carolina First Bank, Mr. Huggins worked for
C&S Bank. Mr. Huggins is an executive board member of the Wall College Board of Visitors at Coastal Carolina University. He
is a graduate of Coastal Carolina University (Wall College Alumnus of the Year in 2003) and The Graduate School of Banking at
Louisiana State University.



Fowler
Williams, 45, has served as President, as well as a Director of Crescent Mortgage Company since 2011. In 2016, Mr. Williams
was promoted to CEO and President of Crescent Mortgage Company. In his 20 years at Crescent Mortgage Company, Mr. Williams has
previously worked as National Sales Manager and Executive Vice President over Sales and Operations. Mr. Williams holds the highest
designation in the mortgage industry as a Certified Mortgage Banker. Mr. Williams serves on the Board of Directors for the national
Mortgage Bankers Association where he also is Governor on the Residential Board (RESBOG), past Chairman of the Community Bank
and Credit Union Network, and Mortgage Action Alliance, the grassroots policy, advocacy, and lobbying network for the real estate
finance industry. Mr. Williams also has been named to the Customer Advisory Board of Freddie Mac and Mortgage Cadence. He has
twice been named to the 40 most influential mortgage professionals under 40 by National Mortgage Professional magazine. In 2017
he was awarded the Schumacher-Bolduc Award for political advocacy in real estate finance.



Family Relationships



No
director has a family relationship with any other director or executive officer of the Company.

8







Section
16(a) Beneficial Ownership Reporting Compliance

Section
16(a) of the Exchange Act of 1934 requires directors, executive officers, and 10% stockholders to file reports of holdings and
transactions in the Company’s stock with the SEC. Based on a review of Section 16(a) reports, amendments thereto, and written
representations from the Company’s directors and executive officers, the Company believes that all of its directors, executive
officers, and 10% stockholders have made all filings required under Section 16(a) in a timely manner, with the following exceptions:

| | · | Mr.
                                         Deal filed a late Form 4 to report two transactions in which shares directly owned were
                                         disposed; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Mr.
                                         Morrow filed two late Forms 4 to report five transactions in which shares directly owned
                                         were disposed.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Code
of Ethics

We
expect all of our employees to conduct themselves honestly and ethically. We have adopted a Code of Ethics that reflects our policy
of responsible and ethical business practices, and applies to all directors, officers, and employees of the Company and its subsidiaries.
Stockholders and other interested persons may view our Codes of Ethics on the Investor Relations section under the Governance
Documents section of the Corporate Information tab of our website, https://www.haveanicebank.com.

Board Leadership Structure and
Role in Risk Oversight



The
Board of Directors is focused on the Company’s corporate governance practices and values independent board oversight as
an essential component of strong corporate performance to enhance stockholder value. The Board of Directors’ commitment
to independent oversight is demonstrated by the fact that the majority of the Company’s directors are independent.



The
Company believes that it is preferable for an independent director to serve as Chairman of the Board of Directors. Claudius E.
“Bud” Watts IV, a director of the Company since 2015 and a long-time resident of the Company’s primary market
area, has served as Chairman of the Board of Directors since 2016. The Company believes it is the Chief Executive Officer’s
responsibility to run the Company and the Chairman’s responsibility to run the Board of Directors. As directors continue
to have more oversight responsibility than ever before, the Company believes it is beneficial to have an independent Chairman
whose sole job is leading the Board of Directors. The Company believes this structure provides strong leadership for the Board
of Directors, while also positioning the Chief Executive Officer as the leader of the Company in the eyes of the Company’s
customers, employees, and other stakeholders.



Risk
oversight is the responsibility of the Board of Directors, collectively and individually. The Board of Directors fulfills this
responsibility through a combination of oversight with respect to direct board reports from management and the delegation of specific
risk monitoring to its committees, which in turn provide reports to the full Board of Directors at each regular meeting. Notwithstanding
the foregoing, the Board of Directors believes that its role is one of oversight, recognizing that management is responsible for
executing the Company’s risk management policies.



At
each regular meeting, the Board of Directors’ standing agenda requires reports from the Chief Financial Officer and other
executive officers, who collectively are responsible for all risk areas. Their agenda items are designed to elicit information
with respect to each of these areas. The Board of Directors does not concentrate the delegation of its responsibility for risk
oversight in a single committee. Instead, each of the Board of Directors’ committees concentrates on specific risks for
which its members have an expertise, and each committee is required to regularly report to the Board of Directors on its findings.
The Company believes this division of responsibility is the most effective approach for addressing the risks it faces and that
the Board of Directors leadership structure supports this approach.



The
Company recognizes that different board leadership structures may be appropriate for companies in different situations. The Company
will continue to reexamine its corporate governance policies and leadership structures on an ongoing basis to ensure that they
continue to meet the Company’s needs.



Meetings
and Committees of the Board of Directors



During
2019, the Board of Directors held ten regular and special meetings. Each of the current directors attended at least 75% of the
aggregate of such board meetings and meetings of each committee on which they served for the periods during which they served.
The Board of Directors has not implemented a formal policy regarding director attendance at the Company’s Annual Meeting
of Stockholders, although each director is expected to attend all Annual Meetings of Stockholders absent unusual or extenuating
circumstances. All but one of the Company’s directors attended the 2019 Annual Meeting of Stockholders.



The
Board of Directors has standing Audit, Compensation/Benefits and Corporate Governance and Nominating committees, each of which
is described in more detail below.



Audit
Committee



The
Audit Committee is responsible for the review of the Company’s annual audit report prepared by its independent registered
public accounting firm. The Audit Committee is composed of five members: Messrs. Moïse, Crisp, Deal, Griffin, and Isaac,
each of whom is a non-management director. The Audit Committee met five times during 2019.

9







The
Audit Committee’s review includes a detailed discussion with the independent registered public accounting firm and recommendation
to the full Board of Directors concerning any action to be taken regarding the audit. The Audit Committee also has the authority
to conduct or authorize investigations into any matters within its scope of responsibility. The Audit Committee is empowered to:



| | • | appoint,
                                         compensate, retain, and oversee the work of any registered public accounting firm employed
                                         by the Company for the purpose of preparing or issuing an audit report or performing
                                         other audit, review, or attest services for the Company, with any such registered public
                                         accounting firm reporting directly to the Audit Committee;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | resolve
                                         any disagreements between management and the independent registered public accounting
                                         firm regarding financial reporting;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | pre-approve
                                         all external audit services;
| | - | ---------------------------------------------------------------------------------



| | • | retain
                                         independent counsel, accountants, or others to advise the committee or assist in the
                                         conduct of an investigation; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | meet
                                         with the Company’s officers, employees, independent registered public accounting
                                         firm, or outside counsel as deemed necessary.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Under
its charter, all members of the Audit Committee must be independent members. Each of the current Audit Committee members is independent
under NASDAQ rules. The Audit Committee Charter provides that at least one member of the committee shall be a “financial
expert.” The financial expert on the Audit Committee is Robert M. Moïse.



The
Audit Committee functions are set forth in its charter, which was adopted on April 24, 2013 and revised December 16, 2015. A copy
of the Audit Committee Charter may be found under the Investor Relations section under the Governance Documents tab of the Company’s
website, https://www.haveanicebank.com.



Corporate
Governance and Nominating Committee



The
Corporate Governance and Nominating Committee is responsible for identifying potential directors and presenting them for nomination
to the Board of Directors. The Corporate Governance/ Nominating Committee is composed of five members: Messrs. Deal, Crisp, Moïse,
Penney and Mme. Ladley. The Corporate Governance/ Nominating Committee met two times during 2019.



Potential
director candidates may come to the attention of the Corporate Governance/ Nominating Committee through current members of the
Board of Directors, stockholders, or other persons. In evaluating such recommendations, the Corporate Governance and Nominating
Committee uses the qualifications and standards discussed below and seeks to achieve a balance of knowledge, experience, and capability
on the Board of Directors. The Company does not pay a third party to assist in identifying and evaluating potential director candidates.



The
Corporate Governance and Nominating Committee recommends to the Board of Directors criteria for the selection of new directors,
evaluates the qualifications and independence of potential candidates for directors, including any nominees submitted by stockholders,
in accordance with the provisions of the Company’s certificate of incorporation and bylaws, and recommends to the Board
of Directors a slate of nominees for election by the stockholders at the Annual Meeting of stockholders. The Corporate Governance
and Nominating Committee is also responsible for recommending to the Board of Directors any nominees to be considered to fill
a vacancy or a newly created directorship resulting from any increase in the authorized number of directors. When considering
a person to be recommended for nomination as a director, the Corporate Governance and Nominating Committee considers, among other
factors, the skills and background needed by the Company and possessed by the person, diversity of the Board of Directors, and
the ability of the person to devote the necessary time to service as a director. Each director must represent the interests of
our stockholders.



Any
stockholder may nominate persons for election to the Board of Directors by complying with the procedures set forth in our bylaws,
which require that timely written notice be provided to the Secretary of the Company in advance of the meeting of stockholders
at which directors are to be elected. To be timely, such notice must be delivered or received not less than 90 days prior to the
date of the Meeting; provided, that if less than 100 days’ notice or prior disclosure of the date of the Meeting is given
or made to stockholders, such notice must be received not later than the close of business on the 10th day following the day on
which such notice was given or made to stockholders. Each notice must set forth: (i) all information relating to such person that
is required to be disclosed in solicitations of proxies for the election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934 (including such person’s written consent to being named
in the proxy statement as a nominee and to serving as a director if elected); and (ii) as to the stockholder giving notice of
(x) the name and address, as they appear on the Company’s books, of such stockholder and (y) the class and number of shares
of the Company’s capital stock that are beneficially owned by such stockholder. The officer of the Company or other person
presiding at the meeting may determine that a nomination was not made in accordance with the foregoing procedure and disregard
the defective nomination.

10







The
Corporate Governance and Nominating Committee annually reviews the adequacy of, and the Company’s compliance with, the corporate
governance principals of the Company and recommends any proposed changes to the Board of Directors for approval. The Corporate
Governance and Nominating Committee also administers the annual self-evaluation process for the Board of Directors and each of
its committees.



The
Corporate Governance and Nominating Committee functions are set forth in its charter, which was adopted on April 24, 2013 and
revised on June 18, 2014. A copy of the Corporate Governance and Nominating Charter may be found under the Investor Relations
section under the Governance Documents tab of the Company’s website, https://www.haveanicebank.com.



Compensation/Benefits
Committee



The
Compensation/Benefits Committee is responsible for evaluating the performance of the Company’s principal officers and employees
and determining the compensation and benefits to be paid to such persons. The Compensation/Benefits Committee is composed of four
members: Messrs. Penney, Clawson, Holscher, and Isaac. The Compensation/Benefits Committee met seven times during the 2019 fiscal
year.



The
Compensation/Benefits Committee is authorized to (i) review and approve annually the corporate goals and objectives relevant to
the compensation of the chief executive officers of the Company and the Bank, (ii) conduct an annual evaluation of the performance
of the Chief Executive Officer of the Company, and (iii) annually review and establish the base salary and incentive bonus levels
and payments to the Chief Executive Officer and all other executive officers of the Company and the Bank. The Compensation/Benefits
Committee has oversight of the Corporation’s incentive plans, including equity-based incentive plans, and for reviewing
and granting equity awards to all eligible employees. The Compensation/Benefits Committee may delegate to one or more officers
of the Company who are also directors the authority to designate officers and employees of the Company or its subsidiaries to
receive equity awards and to determine the number of such awards to be granted to them; provided, that such delegation shall include
the total number of equity awards that may be granted under such authority and that no officer may be delegated the power to designate
himself or herself the recipient of such awards. In addition, the Compensation/Benefits Committee may engage compensation consultants
or other advisors as it deems appropriate to assist it in performing its duties and responsibilities.



In
determining the compensation for executive officers, the Compensation/Benefits Committee’s objectives are to encourage the
achievement of the Company’s long-range objectives by providing compensation that directly relates to the performance of
the individual and the achievement of internal strategic objectives. The Compensation/Benefits Committee believes that its executive
officers’ level of compensation is reasonable based upon the Company’s corporate goals and objectives, the business
plan of the Bank, normal and customary levels of compensation within the banking industry taking into consideration geographic
and competitive factors, the Bank’s asset quality, capital level, operations and profitability and the duties performed
and responsibilities held by the officer.



The
Compensation/Benefits Committee functions are set forth in its charter, which was adopted on June 18, 2014 and revised on February
17, 2016. A copy of the Compensation/Benefits Committee Charter may be found under the Investor Relations section under the Governance
Documents section of the Corporate Information tab of the Company’s website, https://www.haveanicebank.com.

Item 11.
Executive Compensation.





The
disclosure under the heading “The Merger — Interests of Certain Carolina Financial Directors and Executive
Officers in the Merger” in the prospectus and joint proxy statement filed by United Bankshares, Inc. and the Company on
February 13, 2020, is incorporated by herein by reference.

11







Director
Compensation



We
do not pay our “inside” employee-directors any additional compensation for their services as directors. During 2019,
non-employee directors of the Company received a retainer fee of $8,000 paid in cash and 677 shares of the Company’s common
stock. Those directors not employed by a subsidiary of the Company also received $750 for each audit committee meeting attended,
$500 for each Compensation/Benefits committee meeting and Corporate Governance and Nominating Committee meeting, and $300 for
each Board Loan Committee meeting attended. The annual fee, paid monthly to the Chairman of the Board of Directors, runs from
Annual Stockholder Meeting to Annual Stockholder Meeting. Accordingly, in 2019, the Chairman of the Company’s Board of Directors
received an annual fee of $75,000 in cash and $24,998 paid in stock. Additionally, the Chairman of the Company’s Audit Committee
received a fee of $9,000 per year, the Chairman of the Compensation/Benefits Committee received a fee of $6,000 per year and the
Chairman of the Corporate Governance and Nominating Committee received a fee of $5,000, while the Board Loan Committee Chairman
received $2,500 per year.



As
directors of CresCom Bank, Messrs. Brandon, Clawson, Crisp, Deal, Griffin, Holscher, Isaac, Moïse, Penney and Mrs. Ladley
received $1,250 per meeting. As a director of Crescent Mortgage Company, Mr. Clawson received $1,250 per meeting.

The
following table presents all compensation paid by the Company to current and former directors during the year ended December 31,
2019.



Director Compensation
Table for Fiscal Year 2019





|Director Name            |  | Fees
    Earned or  Paid in Cash1 |        |  | Stock 
Awards4 |   |        | Total | 
|------------------------ |  | --------------------------------- | ------ |  | -------------- | - | ------ | ----- | 
|W. Scott Brandon         |  | $                                 | 35,625 |  |                | $ | 24,988 |       | 
|Robert G. Clawson, Jr.   |  | $                                 | 39,750 |  |                | $ | 24,988 |       | 
|Lindsey A. Crisp         |  | $                                 | 35,000 |  |                | $ | 24,988 |       | 
|Jeffery L. Deal, M.D.    |  | $                                 | 38,500 |  |                | $ | 24,988 |       | 
|Gary M. Griffin          |  | $                                 | 36,750 |  |                | $ | 24,988 |       | 
|Frederick N. Holscher    |  | $                                 | 35,000 |  |                | $ | 24,988 |       | 
|Daniel H. Isaac, Jr.     |  | $                                 | 43,300 |  |                | $ | 24,988 |       | 
|Beverly Ladley           |  | $                                 | 33,000 |  |                | $ | 24,988 |       | 
|Michael P. Leddy2        |  | $                                 | 14,000 |  |                | $ | —      |       | 
|Robert M. Moïse, CPA     |  | $                                 | 42,250 |  |                | $ | 24,988 |       | 
|Thompson E. Penney       |  | $                                 | 48,550 |  |                | $ | 24,988 |       | 
|Johnathan L. Rhyne, Jr.3 |  | $                                 | —      |  |                | $ | —      |       | 
|Claudius E. Watts IV     |  | $                                 | 75,000 |  |                | $ | 24,988 |       | 
|                         |  |                                   |        |  |                |   |        |       | 





| | 1 | Includes
fees, if any, for serving on boards of the Company’s subsidiaries.
| | - | ---------------------------------------------------------------------------

| | 2 | Includes
                                         fees paid to Mr. Leddy prior to his retirement from the Board effective April
                                         24, 2019.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3 | Mr.
Rhyne joined the Company's board of directors effective December 31, 2019 following our acquisition of Carolina Trust. As such,
no director fees were earned by, or paid to, Mr. Rhyne in 2019.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4 | Stock
awards reflect 677 shares granted on April 25, 2019 with a fair value of $36.91.
| | - | --------------------------------------------------------------------------------------



12





Executive
Compensation

Compensation
Discussion and Analysis

This compensation
discussion and analysis (“CD&A”) explains our executive compensation philosophy, describes our compensation programs
and reviews compensation decisions for the following named executive officers (“NEOs”):



|NEOs                  |  | Title                                                                               
|--------------------- |  | ------------------------------------------------------------------------------------
|Jerold L. Rexroad     |  | Chief Executive Officer and President, Carolina Financial Corporation               
|William A. Gehman III |  | Executive Vice President and Chief Financial Officer, Carolina Financial Corporation
|M.J. Huggins, III     |  | Executive Vice President and Secretary, and President CresCom Bank                  
|David L. Morrow       |  | Executive Vice President and Chief Executive Officer, CresCom Bank                  
|Fowler Williams       |  | Chief Executive Officer and President, Crescent Mortgage Company                    



This CD&A is
composed of the following sections:



|Page 13 | Executive Summary                             
|------- | ----------------------------------------------
|Page 15 | Executive Compensation Principles and Strategy
|Page 15 | Compensation Determination Process            
|Page 17 | Components of Our Compensation Program        
|Page 26 | Additional Compensation Policies and Practices



Executive
Summary.The Company’s primary business is to serve as the holding company for CresCom Bank, a South Carolina state-chartered
commercial bank with 73 branches located in North Carolina and South Carolina. CresCom Bank operates five wholly-owned subsidiaries,
Crescent Mortgage Company, Carolina Services Corporation of Charleston, CresCom Leasing LLC, DTFS, Inc, and Western Carolina Holdings,
LLC. Beginning in fiscal year 2019, we no longer qualified as an “emerging growth company,” as defined in the Jumpstart
Our Business Startups Act of 2012.

Achievements.We have experienced significant growth and change in recent years, including our listing on NASDAQ in 2014, a functional
initial public offering of common stock in 2015 raising $32.2 million net proceeds, the acquisition of Congaree Bancshares Inc.
in 2016 ($104.2 million in assets), a secondary offering of common stock in 2017 raising $47.7 million net proceeds, the acquisition
of Greer Bancshares Inc. in 2017 ($384.5 million in assets), the acquisition of First South Bancorp, Inc. in 2017 ($1.1 billion
in assets), and the acquisition of Carolina Trust BancShares, Inc. in 2019 ($635.0 million in assets). These transactions, in
addition to strong organic growth, significantly expanded our geographic footprint in North Carolina and South Carolina. During
2018, we completed a secondary offering of shares of common stock, raising approximately $63.0 million in net proceeds to the
Company.

In
addition, 2019 reflected record earnings, driven primarily by organic growth, successful integration of strategic acquisitions,
and our presence in several of the fastest growing markets in the Southeast. The 2019 results reflect our achievement of earnings
and asset quality metrics. Our compensation philosophy is grounded in rewarding our executives achievement of financial goals
as well as their individual goals, which are similarly aligned to our basic corporate objective which is “to maximize the
value of our stockholders’ investment over both the short and long term.” Accordingly, the financial results for the
year serve as a background to the discussion of our compensation practices that follows.

2019
Financial Highlights

| | · | Net
                                         Income– our net income determined in accordance with generally accepted accounting
                                         principles (“GAAP”) for the year ended December 31, 2019 was $62.7 million,
                                         a 26.3% increase compared to $49.7 million for the year ended December 31, 2018.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Pre-Tax
                                         Operating Earnings– our pre-tax operating earnings for the year ended December
                                         31, 2019 were $86.5 million, an increase of 8.2% compared to $79.9 million for the year
                                         ended December 31, 2018.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Banking
                                         Segment Pre-Tax Operating Earnings– our banking segment pre-tax operating
                                         earnings for the year ended December 31, 2019 were $84.4 million, a 5.6% increase compared
                                         to $80.0 million for the year ended December 31, 2018.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13





Pre-tax
operating earnings and banking segment pre-tax operating earnings are non-GAAP financial measures used by management that exclude
gains or losses from securities, gains or losses on extinguishment of debt, gains or losses on bulk servicing, fair value adjustments
on interest rate swaps, other than temporary impairment, MSR impairment, and merger-related expenses. Please see Appendix “Item
7: Management’s Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAP Financial Measures”
in the Original Filing for reconciliations to the most directly comparable GAAP measures.

Components
of Compensation and Target Pay Mix.A meaningful portion of our executive pay program is variable and “at-risk.”
We consider compensation to be “at risk” if it is subject to performance-based payment or vesting conditions or its
value depends on share price appreciation.

The
charts below for our Chief Executive Officer (“CEO”) and our other NEOs illustrate the target compensation established
for 2019, consisting of base salary, annual incentive awards, and long-term equity-based compensation granted in 2019.



(Pie Chart)



(Pie Chart)





14





Compensation
Governance Practices.We have strong compensation governance practices that reinforce our principles, support sound risk
management and are stockholder-aligned:

| |                                                                                                                                                                                                                                                                     |                                                                                                                            | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | 
| | What
    We Do                                                                                                                                                                                                                                                      | What
    We Don’t Do                                                                                                       | 
| | Align
    pay and performance                                                                                                                                                                                                                                       | No
    guaranteed bonuses – incentive compensation may be reduced to zero if financial and/or personal metrics are not met | 
| | Engage
    an independent third-party compensation consultant for advice in making compensation decisions                                                                                                                                                           | No
    highly leveraged incentive plans that encourage excessive risk taking                                               | 
| | Review
    compensation data from peers whose industry, revenues, and footprint share similarities with Carolina Financial                                                                                                                                          | No
    uncapped incentive award payouts for our NEOs                                                                       | 
| | Effective
    as of January 23, 2019, adopted a Clawback Policy intended to recover certain incentive-based compensation if there is an
    accounting misstatement and the Board of Directors determines such restatement involved fraud or intentional misconduct | No
    excessive perquisites for our directors and executive officers                                                      | 
| |                                                                                                                                                                                                                                                                     |                                                                                                                            | 

Executive
Compensation Principles and Strategy.Our Board believes a well-designed compensation program should align executive interests
with the drivers of growth and stockholder returns, support achievement of our primary business goals, and attract, motivate and
retain executives whose talents, expertise, leadership and contributions are expected to maximize the value of our stockholders’
investment over both the short and long term. Consequently, our Board believes a meaningful portion of NEO compensation should
be performance-based and variable pay.

Our
philosophy does not specifically indicate a desired positioning level relative to the market or total compensation. Salaries have
historically been targeted near the median, with additional considerations given for each executive’s scope of responsibility,
performance in the role, special projects completed during the year, and any potential retention or internal equity concerns.

Compensation
Determination Process

Role
of the Compensation/Benefits Committee.Our Compensation/Benefits Committee is generally responsible for reviewing, modifying,
approving and otherwise overseeing the compensation policies and practices applicable to all of our NEOs and the administration
of equity plans available to all eligible employees. As part of this responsibility, the Compensation/Benefits Committee establishes,
reviews and modifies the compensation structure for our NEOs.

As
part of its deliberations, in any given year, the Compensation/Benefits Committee may review and consider materials such as studies
and reports prepared by a compensation consultant; financial reports and projections; operational data; tax and accounting information
that sets forth the total compensation that may become payable to executives in various hypothetical scenarios; executive and
director stock ownership information; our common stock performance data; analyses of historical executive compensation levels
and current Company-wide compensation levels; and the recommendations of the chief executive officer and the Compensation/Benefits
Committee’s independent compensation consultant.

Role
of Management.Our Compensation/Benefits Committee solicits and considers the performance evaluations and compensation
recommendations with respect to our NEOs submitted by our CEO. The Compensation/Benefits Committee conducts a formal performance
evaluation of our CEO annually, with informal commentary discussed as needed throughout the year. In addition, our CEO prepares
and presents the annual evaluations and recommendations for the NEOs to our Compensation/Benefits Committee outside of the presence
of any other NEO. However, our Compensation/Benefits Committee retains the final authority to make all compensation decisions.
Our Compensation/Benefits Committee meets in executive session after our CEO has presented the evaluations and reports back to
management on the results of their deliberations. No executive officer participated directly in the final determinations of the
Compensation/Benefits Committee regarding the amount of any component of his own compensation package for 2019.

15







Our
finance and human resources departments work with our CEO to make recommendations regarding compensation of our NEOs and other
senior executives, to recommend changes to existing compensation programs, to recommend financial and other performance targets
to be achieved under those programs, to prepare analyses of financial data, to prepare peer data comparisons and other briefing
materials, and ultimately to implement the decisions of the Compensation/Benefits Committee. Our CEO also meets separately with
the Compensation/Benefits Committee’s independent compensation consultant to convey information on proposals that management
may make to the Compensation/Benefits Committee, as well as to allow the consultant to collect information about our Company to
develop its own proposals.

Compensation
Consultant.Our Compensation/Benefits Committee decided to continue its engagement of McLagan, a part of the Rewards Solutions
practice of Aon plc, as its independent compensation consultant for compensation decisions for 2019. In 2016, our Compensation/Benefits
Committee engaged McLagan as its independent compensation consultant for a three-year period covering the fall of 2016 to the
fall of 2019. This arrangement includes the market analyses and advice that were considered for compensation decisions for 2019.
Our Compensation/Benefits Committee selected McLagan for its expertise in the banking industry, the recommendations of other clients
of McLagan, and the availability of the consultant to attend meetings.

McLagan
conducts in-depth reviews of the design and competitive positioning of our compensation programs for our CEO and other executive
officers in preparation for the Compensation/Benefits Committee making compensation decisions. In the fall of 2018, for use by
our Compensation/Benefits Committee for making 2019 compensation decisions, McLagan provided analyses of compensation levels and
opportunities, incentive plan design, long-term incentive practices and perquisites of our chief executive officer and other executive
officers using our 2019 peer group data.

Our
Compensation/Benefits Committee regularly reviews the services provided by McLagan and believes that it is independent from the
Company in providing executive compensation consulting services. Our Compensation/Benefits Committee has also assessed the independence
of McLagan consistent with SEC rules and NASDAQ listing standards and has concluded that the engagement of McLagan does not raise
any conflicts of interest. Our Compensation/Benefits Committee continues to monitor the independence of McLagan on a periodic
basis.

Compensation
Peer Group and Peer Selection Process.The Compensation/Benefits Committee and McLagan developed a compensation peer group
for 2019 that fairly represents the market for executive talent in which we compete and includes institutions that share our business
and market characteristics. The Compensation/Benefits Committee reviews the composition of the peer group annually and may change
it due to mergers, changes to banks within the group, or changes within the Company.

The
2019 compensation peer group includes publicly-traded financial institutions that were selected based on the following criteria:

| | · | total
                                         assets between $2.0 billion to $8.0 billion;
| | - | -------------------------------------------------------------------------------------------

| | · | headquarters
                                         in one of the following states: Alabama, Florida, Georgia, Kentucky, Mississippi, North
                                         Carolina, South Carolina, Tennessee, Virginia, or West Virginia;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | return
                                         on average tangible assets and return on average tangible equity greater than 0%:
| | - | ---------------------------------------------------------------------------------------------------------------------------------

| | · | no
                                         current TARP participants;
| | - | ----------------------------------------------------------------------

| | · | no
                                         recent mutual conversions; and
| | - | --------------------------------------------------------------------------

| | · | business
                                         model compatibility;
| | - | ----------------------------------------------------------------------



The
peer group was constructed, in part, such that our total assets are generally in the range of the median of the peer group companies.
The Compensation/Benefits Committee reviewed a group of 18 peers with median assets of $4.0 billion as of June 30, 2018. Our anticipated
2018 year-end total assets of $4.0 billion was used as the targeted asset size for the peer group utilized by the Compensation/Benefits
Committee for 2019 NEO compensation decisions.

2019
Peer Group.The peer group established for setting 2019 compensation consisted of the following companies:

|Access National Corp. (ANCX)            |  | First Community Bancshares Inc. (FCBC)
|--------------------------------------- |  | --------------------------------------
|Atlantic Capital Bancshares Inc. (ACBI) |  | Franklin Financial Network Inc. (FSB) 
|Capital City Bank Group Inc. (CCBG)     |  | HomeTrust Bancshares Inc. (HTBI)      
|Carter Bank & Trust (CARE)              |  | National Commerce Corp. (NCOM)        
|City Holding Co. (CHCO)                 |  | Republic Bancorp Inc. (RBCA.A)        
|Community Trust Bancorp Inc. (CTBI)     |  | Seacoast Banking Corp. of FL (SBCF)   
|FB Financial Corp. (FBK)                |  | ServisFirst Bancshares Inc. (SFBS)    
|Fidelity Southern Corp. (LION)          |  | Stock Yards Bancorp Inc. (SYBT)       
|First Bancorp (FBNC)                    |  | Summit Financial Group Inc. (SMMF)    



16







|                                      |  | Total Assets as of 6/30/2018  ($000) |          
|------------------------------------- |  | ------------------------------------ | ---------
|25thPercentile                        |  |                                      | 3,016,481
|50thPercentile                        |  |                                      | 4,127,375
|75thPercentile                        |  |                                      | 4,940,900
|Carolina Financial (anticipated 2018) |  |                                      | 4,000,000
|Percentile Rank                       |  |                                      | 41       
|                                      |  |                                      |          

Each
year, with assistance from McLagan, the Compensation/Benefits Committee reviews the compensation practices of our peers to assess
the competitiveness of the compensation arrangements of our NEOs. Although such benchmarking is an active tool used to measure
compensation structures among peers, it is only one of the tools used by the Compensation/Benefits Committee to determine total
compensation. Benchmarking is used primarily to ascertain competitive total compensation levels (including base salary, cash incentives,
equity awards, etc.) with comparable institutions.

Components
of our Compensation Program

2019
Components in General.The Compensation/Benefits Committee selected the components of compensation set forth in the chart
below to achieve our stated executive officer compensation program objectives. The Compensation/Benefits Committee reviews all
components of the compensation of executive officers in order to verify that the executive officer’s total compensation
is consistent with our compensation philosophy and objectives. Four primary components make up our executive pay program: base
salary, annual cash incentives, annual equity incentives and long-term equity incentives. The purpose and strategic role of each
of these elements paid and awarded in 2019 are summarized below.



|Element                                                   | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Strategic
    Role                                                                                                                   
|--------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------
|Base
    Salary                                           | Fixed
        cash compensation, reviewed and adjusted annually, as appropriate
        Based
        on each NEO’s individual skills, experience, performance, external market and internal equity                                                                                                                                                                                                                                                                                                                                                                                          | Attracts
    and rewards executives via market competitive pay and industry norms and reflects individual performance                
|Banking
    Segment Annual Cash Bonus Plan – Variable Pay | To
        be eligible for an annual cash bonus award under this plan, the Banking Segment must achieve a specified threshold of
        Pre-tax Operating Earnings
        In
        addition, the plan rewards NEOs for annual corporate performance based on a scorecard of financial and operational metrics
        Performance
        levels (threshold, target, maximum) are established for each metric
        An
        NEO’s award is subject to negative discretion by the Compensation/Benefits Committee based on failure to achieve
        individual performance targets | Motivate
    executives by linking variable cash compensation to key annual performance goals tied to the Company’s business strategy



17









|Element                                                         | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Strategic
    Role                                                                                                                                                                                                                               
|--------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Banking
    Segment Annual Supermax Bonus-Variable Pay          | Participants
        in the Banking Segment Annual Bonus Plan are eligible to receive a Supermax bonus if the Banking Segment achieves Operating
        Earnings Per Share (“EPS”) at or above a specified annual level that is above the maximum
        Supermax
        bonus for the CEO is equal to 20% of base salary, with any amounts earned paid out in the form of cash (15%) and equity
        (5%)
        Supermax
        bonus for all other NEOs is equal to 5% of base salary, with any amounts earned paid out in the form of equity                                                                                                                                                     | Motivate
    executives to achieve above-maximum level performance by linking incentive compensation to overachievement of a key annual
    performance metric that is tied to the Company’s business strategy                                   
|Crescent
    Mortgage Co. Annual Cash Bonus Plan – Variable Pay | To
        be eligible for the annual cash award under this plan, Crescent Mortgage Company must achieve positive Net Income After
        Taxes
        In
        addition, the plan rewards NEOs for annual corporate performance based on a scorecard of financial, operational and strategic
        metrics
        Performance
        levels (threshold, target low, target high, maximum) are established for each metric
        NEO’s
        award is subject to negative discretion by the Compensation/Benefits Committee based on failure to achieve individual
        performance targets                                                                                                   | Motivate
    executives by linking variable cash compensation to key annual performance goals tied to the Company’s business strategy                                                                                                            
|Long-Term
    Equity Incentives – Variable Pay                  | Variable
        equity-based compensation
        Performance
        Restricted Stock Units (RSUs):
        Restricted
        share units are earned only upon the attainment of a specified Pre-Tax Operating EPS measured over a two-year performance
        period
        Performance
        levels (Threshold - 50% of Target, Target and Maximum - 150% of Target), to be paid on a pro-rata achievement basis between
        performance levels
        There
is no award if the attainment of Pre-Tax Operating EPS is less than Threshold.
        Time-Based
        Restricted Stock Awards (RSAs):
        RSAs
        are time-based, generally vesting ratably over a three-year period | Equity-based
    compensation is used to foster a long-term link between executive officers’ interests and the interests of the Company
    and its stockholders, as well as to attract, motivate and retain executive officers for the long-term



18





Base
Salary

Purpose:Base salaries provide stable compensation to executive officers, allow us to attract and retain competent executive talent
and maintain a stable leadership team. Base salaries vary among executive officers, and are individually determined according
to each executive officer’s areas of responsibility, role and experience, based on a variety of considerations, including:

| | · | Professional
                                         Background:Factors such as education, skills, expertise, professional experience
                                         and achievements are considered.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Competitiveness:The base salary of executive officers is evaluated for competitiveness by considering
                                         external information with respect to our peer group that is selected based on such factors
                                         as our size, nature of activities and competitors for similar talent, as well as the
                                         relevant geographic location.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Internal
                                         Fairness:The variation in the relative base salary among executive officers is designed
                                         to reflect the differences in position, education, scope of responsibilities, location,
                                         previous experience in similar roles and contribution to the attainment of our goals.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Adjustments
to base salary:The Compensation/Benefits Committee reviews the base salaries of the NEOs on an annual basis as well as whenever
an NEO is promoted or there is a material change to his or her duties and responsibilities.

Decisions
regarding salary adjustments reflect a variety of factors including the NEO’s role and responsibilities, individual performance,
tenure, current base salary, the base salaries paid to similarly-situated executives in comparable positions in the market, internal
equity, and retention risk.

In
considering base salary adjustments for 2019, the Compensation/Benefits Committee reviewed the individual performance of the NEOs,
peer proxy and survey data gathered by McLagan, and the increases recommended by the CEO for each of the NEOs other than himself.
Effective January 1, 2019, the Compensation/Benefits Committee provided the base salary increases shown in the table below.

|         |  |             |         |  |             |   |         |          | 
|-------- |  | ----------- | ------- |  | ----------- | - | ------- | -------- | 
|Name     |  | 2018 Salary |         |  | 2019 Salary |   |         | % Change | 
|Rexroad  |  | $           | 540,000 |  |             | $ | 560,000 |          | 
|Gehman   |  | $           | 270,000 |  |             | $ | 280,000 |          | 
|Huggins  |  | $           | 293,000 |  |             | $ | 310,000 |          | 
|Morrow   |  | $           | 435,000 |  |             | $ | 448,000 |          | 
|Williams |  | $           | 329,000 |  |             | $ | 339,000 |          | 



These
increases reflect the outstanding contributions of the NEOs to our performance in 2018 as well as the increased scope and responsibility
of their respective roles due to our continued anticipated growth in 2019.

Annual
Incentive Plans.Messrs. Rexroad, Gehman, Huggins and Morrow are eligible to participate in the Banking Segment Annual
Cash Bonus Plan and the Banking Segment Supermax Bonus, while Mr. Williams is eligible to participate in the Crescent Mortgage
Company Annual Cash Bonus Plan. These annual bonus plans are performance-based plans designed to reward eligible employees for
the achievement of our specific Company financial goals and successful individual performance. The primary objective of these
plans is to provide our NEOs with a direct link between their compensation and their attainment of pre-established annual performance
goals. We believe that the performance required for rewards under the plans is challenging, but with effort, attainable, and will
contribute to the Company attaining its long-term strategic goals.

19







Annual
Incentive Opportunities.We set target incentive opportunities based on a percentage of base salary that reflects a market-level
target compensation opportunity for each NEO. The threshold and maximum percentages for the Banking Segment Annual Cash Bonus
Plan and the Crescent Mortgage Annual Cash Bonus Plan as well as the Supermax bonus percentages reflect both the Compensation/Benefits
Committee’s review of market practices and the Compensation/Benefits Committee’s judgment of the level of award opportunity
appropriate for the performance goals established. The differences in opportunity levels also reflect each NEO’s relative
influence on achieving performance goals based on his position.



Banking
Segment Annual Cash Bonus Plan Opportunity

|        |  | Percentage of Base Salary |   
|------- |  | ------------------------- | --
|Name    |  | Threshold                 |   
|Rexroad |  |                           | 30
|Gehman  |  |                           | 25
|Huggins |  |                           | 25
|Morrow  |  |                           | 25
|        |  |                           |   



Banking
Segment Supermax Bonus Opportunity.Participants in the Banking Segment Annual Cash Bonus Plan are also eligible to receive
a Supermax bonus if a certain level of Banking Segment Pre-Tax Operating Earnings is achieved that is greater than the defined
maximum level of performance. Any earned Supermax award is paid entirely in common stock for all the NEOs except Mr. Rexroad,
who would receive any payout in the following form: 5% in common stock and 15% in cash.



|Name    |  | Percentage of 
Base Salary |   
|------- |  | -------------------------- | --
|Rexroad |  |                            | 20
|Gehman  |  |                            | 5 
|Huggins |  |                            | 5 
|Morrow  |  |                            | 5 
|        |  |                            |   



Crescent
Mortgage Company Annual Cash Bonus Plan



|         |  | Percentage of Base Salary |   
|-------- |  | ------------------------- | --
|Name     |  | Threshold                 |   
|Williams |  |                           | 30
|         |  |                           |   



Company
Performance Goals and Results.Each of our annual cash incentive plans requires that a certain threshold level of performance
must be achieved for executives to receive an award under the plan:

| | · | Banking
                                         Segment Annual Cash Bonus Plan:We must have Banking Segment Pre-Tax Operating Earnings
                                         of at least $40.0 million for 2019.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Crescent
                                         Mortgage Company Annual Cash Bonus Plan:We must have positive Crescent Mortgage
                                         Company Net Operating Income for 2019, unless otherwise approved by the Board of Directors.
                                         In addition, 75% of the bonus is paid in the first quarter of 2020. In order for the
                                         remaining 25% to be paid, Crescent Mortgage Company must have income for the first six
                                         months of 2020 of at least $1.0 million.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20





For
2019, the Compensation/Benefits Committee utilized six performance goals in the Banking Segment Annual Cash Bonus Plan and five
performance goals in the Crescent Mortgage Company Annual Cash Bonus Plan. The goals for each performance measure are set based
on our performance expectations in the annual operating plan that our Board of Directors approved in early 2019. The Compensation/Benefits
Committee established the various threshold and maximum levels for each performance measure after analyzing the performance required
at each award level. The Compensation/Benefits Committee also established a Banking Segment Supermax Bonus that will pay out only
if Banking Segment Pre-Tax Operating EPS are at or above a specified level above the defined maximum level under the Banking
Segment Annual Cash Bonus Plan. These particular metrics were selected by the Compensation/Benefits Committee to link our annual
incentive plan for our leadership team to our internal strategic objectives that we believe drive stockholder value over both
the short and long term.

For
each respective annual cash incentive plan, the charts below show the 2019 performance goals and their respective weightings as
well as the actual results achieved during 2019.



Banking
Segment Annual Cash Bonus Plan & Supermax Bonus

|                                                                  |  | 2019 Performance
    Goals |                                                    |  | 2019
    Actual |  
|----------------------------------------------------------------- |  | -------------------------- | -------------------------------------------------- |  | --------------- | -
|Performance
    Measure                                           |  | Weighting1,3               |                                                    |  | Threshold       |  
|Consolidated
    Carolina Financial Operating Earnings Per Share2 |  |                            | 10%
                                         - 20% |  |                 | $
|                                                                  |  |                            |                                                    |  |                 |  
|Banking Segment Operating
    Earnings Per Share2,3               |  |                            | 40% - 50%                                          |  |                 | $
|                                                                  |  |                            |                                                    |  |                 |  

1For the Operating EPS, the weightings for Mr. Rexroad and Mr. Gehman are 20% consolidated Carolina Financial
and 40% banking segment due to their increased responsibility and focus at the holding company level. The weightings for Mr. Huggins
and Mr. Morrow are 10% consolidated Carolina Financial and 50% banking segment.

2Operating EPS excludes gains or losses from securities, gains or losses on extinguishment of debt, bulk servicing
sales gains or losses, fair value adjustments on interest rate swaps, other than temporary impairment, MSR impairment, and merger-related
expenses. Please see “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations
-- Non-GAAP Financial Measures” in the Original Filing for reconciliations to the most comparable GAAP measures.

3The Banking Segment also has other performance measures that include growth in loan and checking balances, increase in the
number of checking accounts and asset quality performance goals that comprise an aggregate of up to 40% of the overall weightings.
These individual performance targets are not presented herein as we believe these performance goals to be competitively sensitive
information. In 2019, the Banking Segment did not meet threshold for certain of these performance goals and, accordingly, the
annual incentive earned was adjusted.

21







Crescent
Mortgage Company Annual Cash Bonus Plan

|                                                                 |  |                            |    |   |                 |   |            |                |  |   |                 |  |  |         |              |  |         | 
|---------------------------------------------------------------- |  | -------------------------- | -- | - | --------------- | - | ---------- | -------------- |  | - | --------------- |  |  | ------- | ------------ |  | ------- | 
|                                                                 |  | 2019 Performance
    Goals |    |   | 2019
    Actual |  
|Performance
    Measure                                          |  | Weighting                  |    |   | Threshold       |   |            | Target
    Low |  |   | Target
    High |  |  | Maximum |              |  | Results | 
|Consolidated CarolinaFinancial
    Operating Earnings Per Share1 |  |                            | 10 | % |                 | $ | 2.70       |                |  | $ | 2.87            |  |  |         | 2.95         |  |         | 
|                                                                 |  |                            |    |   |                 |   |            |                |  |   |                 |  |  |         |              |  |         | 
|Crescent Mortgage
    Company Pre-tax Operating Earnings1,3      |  |                            | 55 | % |                 |   | $4 Million |                |  |   | $5.5 Million    |  |  |         | $7.5 Million |  |         | 
|                                                                 |  |                            |    |   |                 |   |            |                |  |   |                 |  |  |         |              |  |         | 



1Consolidated Carolina Financial Operating EPS and Crescent Mortgage Company Pre-tax Operating Earnings excludes
gains or losses from securities, gains or losses on extinguishment of debt, bulk servicing sales gains or losses, fair value adjustments
on interest rate swaps, other than temporary impairment, MSR impairment, and merger-related expenses. Please see the “Item
7: Management’s Discussion and Analysis of Financial Condition and Results of Operations -- Non-GAAP Financial Measures”
in the Original Filing for reconciliations to the most comparable GAAP measures.

2Participants are not eligible for the indicated level of performance unless the corresponding level of achievement for Crescent
Mortgage Company Pre-tax Operating Earnings has been attained.

3Crescent Mortgage Company also has other performance measures that include loan production, strategic projects and audit
and compliance ratings performance goals that comprise an aggregate of 35% of the weightings. These individual performance targets
are not presented herein as we believe these performance goals to be competitively sensitive information. In 2019, Crescent Mortgage
Company did not meet threshold for certain of these performance goals and, accordingly, the annual incentive earned was adjusted.



Individual
Performance.We measure individual job performance for our NEOs through an annual goal-setting process that aligns individual
goals with our annual operating plan and our long-term strategic plan. The Compensation/Benefits Committee assesses job performance
against these goals after the completion of the year. The overall funding of the Banking Segment Annual Cash Bonus Plan and the
Crescent Mortgage Company Annual Cash Bonus Plan are determined based on our performance on the quantitative performance measures
described above. Thirty-three percent of the total funded incentive for each NEO can then be decreased based on that NEO’s
individual performance against quantitative and qualitative goals established and approved by the Compensation/Benefits Committee
at the start of the year.

The
Compensation/Benefits Committee retains additional discretion to reduce a NEO’s annual cash incentive award to zero when
an NEO substantially underachieves in relation to their individual goals.

Awards
for 2019 Performance.Banking segment pre-tax operating earnings for 2019 were approximately $84.4 million and Crescent Mortgage
Company net operating income for 2019 was approximately $4.0 million. Thus, the Compensation/Benefits Committee determined that
the threshold performance for each of the respective plans was met and the NEOs were eligible to receive awards for 2019.

Banking
Segment Annual Cash Bonus Plan.Based on performance goal achievement (1) of maximum for Consolidated Carolina Financial
Operating EPS, and Banking Segment Operating EPS, (2) achievement of target for asset quality and
loan growth, (3) achievement of threshold for increase in the number of checking accounts, and (4) achievement below threshold
in checking balances, the Compensation/Benefits Committee determined that eligible participants, including Mr. Rexroad, Mr. Gehman,
Mr. Huggins, and Mr. Morrow, met their combined corporate performance goals above target. The total funded awards that would have
been earned based solely on financial performance results at above target are shown in the table below.

22







The
funded award is then subject to negative discretion by the Compensation/Benefits Committee based on an NEO’s individual
performance, up to a maximum of 33% of the amount of the award. As explained further below, the Compensation/Benefits Committee
negatively adjusted the portion of the funded award that was at risk by 9.1% of the 33% for Mr. Morrow.

| | · | Mr.
                                         Morrow is directly responsible for managing CresCom Bank. In 2019, CresCom Bank missed
                                         its performance goals for checking deposits growth (both number of accounts and dollars).
                                         Accordingly, the Compensation/Benefits Committee determined that it was appropriate to
                                         reduce the awards for Mr. Morrow due to these missed goals.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Banking
Segment Supermax Bonus.The Compensation/Benefits Committee also determined that the supermax performance achievement
for Banking Segment Operating EPS was not met and therefore resulted in no supermax bonuses being awarded.

The
final annual cash incentive awards earned by the NEOs for 2019 are shown in the table below.

|        |  |                          |      |   |                    |   |         |                    |  |   |                   |  |  |                |         |  |                                    |   |         |              |  |  |              |    |  |              |       
|------- |  | ------------------------ | ---- | - | ------------------ | - | ------- | ------------------ |  | - | ----------------- |  |  | -------------- | ------- |  | ---------------------------------- | - | ------- | ------------ |  |  | ------------ | -- |  | ------------ | ------
|        |  |                          |      |   |                    |   |         |                    |  |   |                   |  |  | Maximum        |         |  |                                    |   |         |              |  |  |              |    |  |              |       
|        |  |                          |      |   |                    |   |         |                    |  |   |                   |  |  | Proportion     |         |  |                                    |   |         |              |  |  |              |    |  |              |       
|        |  |                          |      |   |                    |   |         |                    |  |   |                   |  |  | Subject
    to |         |  | Negative
    Adjustment Related    |   |         |              |  |  |              |   
|        |  |                          |      |   |                    |   |         |                    |  |   |                   |  |  | Negative       |         |  | to
    the 33% Subject to Negative |   |         |              |  |  |              |   
|        |  |                          |      |   |                    |   |         |                    |  |   |                   |  |  | Discretion     |         |  | Discretion
    for Individual      |   |         |              |  |  |              |   
|        |  | Initial
    Funded Award |      |   | Supermax
    Award |   |         | Total              |  |   | (33%
    of Total |  |  | Performance    |         |  | Final
    Earned Award             |  
|Name    |  | %
    Salary             |      |   | $
    Amount       |   |         | (Cash
    Portion) |  |   | Award             |  |  | Award)         |         |  | Percentage                         |   |         | $
    Amount |  |  | %
    Salary |    |  | $
    Amount |       
|Rexroad |  |                          | 70.5 | % |                    | $ | 394,800 |                    |  | $ | —                 |  |  | $              | 394,800 |  |                                    | $ | 130,284 |              |  |  | —            |    |  | $            | —     
|Gehman  |  |                          | 58.8 | % |                    | $ | 164,500 |                    |  | $ | —                 |  |  | $              | 164,500 |  |                                    | $ | 54,285  |              |  |  | —            |    |  | $            | —     
|Huggins |  |                          | 58.8 | % |                    | $ | 182,125 |                    |  | $ | —                 |  |  | $              | 182,125 |  |                                    | $ | 60,101  |              |  |  | —            |    |  | $            | —     
|Morrow  |  |                          | 58.8 | % |                    | $ | 263,200 |                    |  | $ | —                 |  |  | $              | 263,200 |  |                                    | $ | 86,856  |              |  |  | (9.1         | %) |  | $            | (7,896



Crescent
Mortgage Company Bonus Plan.Consolidated Carolina Financial Operating EPS achieved “maximum.”
However, for Crescent Mortgage Company to participate in any target higher than “target low”, it must have Pre-tax
Operating Earnings of $7.5 million or higher. Crescent Mortgage Company did not achieve the required Pre-tax Operating Earnings.
Accordingly, Crescent Mortgage Company was limited to “target low.” Based on (1) achievement of “target low”
for audit and compliance ratings and strategic projects, and (2) threshold results for Crescent Mortgage Company Pre-Tax Operating
Earnings and loan production, the Compensation/Benefits Committee determined that eligible participants, including Mr. Williams,
partially met their combined corporate performance goals. The total funded award that would have been earned based solely on financial
performance results is shown in the table below.

A
portion of the total funded awards can then be adjusted negatively based on individual performance. Based on Mr. Williams’
2019 individual performance, the Compensation/Benefits Committee did not adjust the funded award. The final annual cash incentive
award earned by Mr. Williams for 2019 is shown in the table below.

| | · | 75%
                                         of the earned award was paid in the first quarter of 2020.
| | - | -------------------------------------------------------------------------------------------------------

| | · | the
                                         remaining 25% will be paid in the third quarter of 2020 subject to Crescent Mortgage
                                         Company having 2020 Year- To-Date Net Operating Income greater than $1.0 million as of
                                         June 30, 2020.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23







|         |  |                      |      |   |            |   |         |            |  |  |                    |   |  |          |     |  |          | 
|-------- |  | -------------------- | ---- | - | ---------- | - | ------- | ---------- |  |  | ------------------ | - |  | -------- | --- |  | -------- | 
|         |  |                      |      |   |            |   |         | Personal   |  |  |                    |   |  |          |     |  |          | 
|         |  | Initial Funded Award |      |   | Objectives |   |         | Negative   |  |  | Final Earned Award |  
|Name     |  | % Salary             |      |   | $ Amount   |   |         | % Achieved |  |  | Adjustment         |   |  | % Salary |     |  | $ Amount | 
|Williams |  |                      | 36.0 | % |            | $ | 122,040 | (1)        |  |  | 100                | % |  |          | n/a |  |          | 
|         |  |                      |      |   |            |   |         |            |  |  |                    |   |  |          |     |  |          | 



1$30,510 is subject to Crescent Mortgage Company meeting the operating earnings Threshold for the first six months of 2020.

Long-Term
Equity-Based Awards.The long-term incentive plan is designed to align the interests of the executives with stockholders by
increasing their ownership of the Company, strengthening the link between executive compensation and the long-term performance
of the Company, retaining and motivating key executive talent, and providing executives with incentive compensation opportunities
that are competitive with the market. The Compensation/Benefits Committee annually reviews and approves our long-term equity plan
design.

In
2018 and again in 2019, the Compensation/Benefits Committee determined it was appropriate to slightly revise our approach to our
long-term incentive plan awards from our historical practice. In previous years, we utilized performance-vested restricted stock
units (“RSUs”), time-vested restricted stock, and time-vested stock options for the annual equity awards to our NEOs.
For any given year, the mix of awards that were granted often varied from one NEO to another. Additionally, for each NEO, the
award mix often varied from one year to the next. Also, for our performance-vested RSUs, there were only two defined performance
levels that could be achieved for the Consolidated Carolina Financial Operating EPS goal on
which these awards were based: “Target” where 100% of the RSUs are vested and “Threshold” where 50% of
the RSUs are vested.

After
receiving input from McLagan, the Compensation/Benefits Committee determined to discontinue the use of stock options and grant
only RSU and restricted stock awards to the executives. The Compensation/Benefits Committee also determined to utilize a consistent
mix of performance-vested RSUs and time-based restricted stock for all the NEOs and have at least 50% of the total long-term incentive
awards vest based on our performance. Finally, for the RSU awards, the Compensation/Benefits Committee added another performance
level for the Consolidated Carolina Financial Pre-Tax Operating EPS goal: “Maximum” where 150% of the
RSUs are vested.

2019
Long-Term Incentive Awards.For the NEOs, the Compensation/Benefits Committee granted equity awards on January 23, 2019,
consisting of 50% performance-vested RSUs and 50% time-vested restricted stock.

| | · | The
                                         performance-vested RSUs are earned based on cumulative Consolidated Carolina Financial
                                         Operating EPS for the two-year performance period ending 12/31/2020 assuming
                                         the NEO remains employed by the Company through the vesting date.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Consolidated
                                         Carolina Financial Operating EPS excludes gains or losses from securities,
                                         gains or losses from the extinguishment of debt, other than temporary impairment (“OTTI”),
                                         fair value adjustments on swaps, bulk servicing sale gain or loss, MSR impairment, and
                                         merger-related expenses.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The
                                         Compensation/Benefits Committee conducted a thorough process in setting the Consolidated
                                         Carolina Financial Operating EPS target and deemed it to be rigorous and
                                         challenging with a reasonable likelihood of achievement, after taking into consideration
                                         macroeconomic conditions, the annual operating plan and historical performance.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | This
                                         measure was selected because this metric focuses management on items that align with
                                         our most critical strategic priorities of improving profitability and controlling expenses
                                         and gives recipients a clear line of sight into how executing on operating measures drives
                                         the achievement of performance and earning awards.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24





| | · | The
                                         performance-vested RSU awards are granted at the target level and the number of RSUs
                                         that will vest depends on our attainment of Consolidated Carolina Financial Operating
                                         EPS during the performance period on a pro-rata basis at the Threshold,
                                         Target or Maximum level.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The
                                         time-based restricted stock awards vest ratably subject to the NEO’s continuous
                                         employment with the Company through the third anniversary of the grant date.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|         |  | Time-Based       |         |  |                                    |  
|-------- |  | ---------------- | ------- |  | ---------------------------------- | -
|         |  | Restricted Stock |         |  | Performance-Based RSUs (GDFV $)(1) |  
|Name     |  | (GDFV $)(1)      |         |  | Threshold                          |  
|Rexroad  |  | $                | 168,000 |  |                                    | $
|Gehman   |  | $                | 57,000  |  |                                    | $
|Huggins  |  | $                | 40,000  |  |                                    | $
|Morrow   |  | $                | 50,000  |  |                                    | $
|Williams |  | $                | 75,000  |  |                                    | $
|         |  |                  |         |  |                                    |  
|         |  | Time-Based       |         |  |                                    |  
|         |  | Restricted Stock |         |  | Performance-Based RSUs (# Units)   |  
|Name     |  | (# Shares)       |         |  | Threshold                          |  
|Rexroad  |  |                  | 4,960   |  |                                    |  
|Gehman   |  |                  | 1,683   |  |                                    |  
|Huggins  |  |                  | 1,181   |  |                                    |  
|Morrow   |  |                  | 1,476   |  |                                    |  
|Williams |  |                  | 2,214   |  |                                    |  
|         |  |                  |         |  |                                    |  

(1)Grant date fair value.

Vesting
of 2018 Performance-Based Restricted Stock Unit Awards.On January 24, 2018, the Compensation/Benefits Committee granted
performance-vested RSUs to each of our NEOs. The vesting of these RSUs was dependent on achieving pre-determined levels of cumulative
Carolina Financial Pre-tax Operating EPS measured over the two-year performance period from January 1, 2018 through December 31,
2019. The Compensation/Benefits Committee believes a two-year performance period is appropriate for these awards. This approach
maintains multi-year goals, while reducing the impact of non-controllable events on the goal setting process.

Target
performance over the two-year period represented Consolidated Carolina Financial Operating EPS of $6.99, Threshold
performance represented Consolidated Carolina Financial Operating EPS of $6.29, and Maximum performance represented
Consolidated Carolina Financial Operating EPS of $7.26. Actual performance represented Consolidated Carolina Financial
Operating EPS of $7.50 which was above the Maximum performance guidelines established by the Compensation/Benefits
Committee. As a result, the performance RSUs granted in January 2018 with a two-year performance period ended December 31, 2019
vested 15,051 shares at $38.23 per share on January 30, 2020.

25







|                                                             |  |                             |      |  |        |   |      |         |  |   |                | 
|------------------------------------------------------------ |  | --------------------------- | ---- |  | ------ | - | ---- | ------- |  | - | -------------- | 
|                                                             |  | 2018-2019 Performance Goals |     
|                                                             |  | Threshold                   |      |  | Target |   |      | Maximum |  |   | Actual Results | 
|Consolidated Carolina Financial Operating Earnings Per Share |  | $                           | 6.29 |  |        | $ | 6.99 |         |  | $ | 7.26           | 
|                                                             |  |                             |      |  |        |   |      |         |  |   |                | 

Additional
Compensation Policies and Practices

401(k)
Plan.Other compensation to our NEOs consists primarily of the broad-based benefits that we provide to all employees,
including health and dental insurance, life and disability insurance and a 401(k) plan. Our 401(k) plan is a tax-qualified retirement
savings plan pursuant to which all eligible employees, including executive officers, are able to contribute up the limit prescribed
by the Internal Revenue Service on a before-tax or after-tax basis. We match 4.5% of the first 6% of the employee’s contribution,
subject to such IRS limitations. We may also provide an annual discretionary contribution to all employees equal to a certain
percentage of eligible pay. Company contributions are deposited into investment funds based on participants’ directions.

Elite
LifeComp Agreement.CresCom Bank entered into a split dollar life insurance agreement with Mr. Huggins in order to provide
Mr. Huggins with target retirement and death benefits following termination of employment. Under this agreement, referred to as
the LifeComp Agreement, Mr. Huggins is named as the policy owner, but CresCom Bank , until 2019 as explained below, paid the premiums
on his policy and was entitled to recover a death benefit of $1.8 million under the policy as key man insurance. While the agreement
was in place, CresCom Bank annually paid Mr. Huggins an amount that was deemed to be, initially, a partial premium payment, and
later, an incremental increase in Mr. Huggins’ interest in the policy’s cash surrender value. Also, while the agreement
was in place and during the term of Mr. Huggins employment, CresCom Bank paid to Mr. Huggins an amount sufficient to cover the
interest payments owed by Mr. Huggins to CresCom Bank on the loans, and also additional amounts to cover federal income taxes
to which Mr. Huggins becomes subject upon payment of bonuses.

In
February 2019, CresCom Bank terminated the split dollar life insurance agreement with Mr. Huggins. As a result, CresCom Bank no
longer makes premium payments on Mr. Huggins’ behalf for the split dollar life insurance policy.

Clawback
Policy.We adopted the Incentive Compensation Clawback Policy effective January 23, 2019. In the event that both (a) the
Company is required to prepare an accounting restatement for periods that end on or after the effective date of this policy due
to material noncompliance of the Company with any financial reporting requirement under the U.S. federal securities laws, and
(b) the Board of Directors, in its sole discretion, determines that an act or omission of a current or former executive officer
of the Company contributed to the circumstances requiring the restatement and that such act or omission involved fraud or intentional
misconduct, then the Company will use reasonable efforts to recover from such person up to 100% of any incentive-based compensation
from the Company during the three-year period preceding the date on which the Company is required to make such restatement.

Insider
Trading Policy.Our insider trading policy applies to all of our officers and Directors and expressly prohibits the unauthorized
disclosure of material nonpublic information regarding the Company and the use of such material nonpublic information to trade
in our securities. The policy also provides guidelines for blackout periods for trading in the Company’s securities related
to earnings and other specific events and requires all executive officers and Directors to obtain pre-clearance at least two days
prior to commencing any transactions related to the Company’s securities.

26







Tax
and Accounting Considerations. Section 162(m) of the Code limits our ability to deduct certain compensation in excess
of $1,000,000 paid to our chief executive officer and to certain other executives. Prior to 2018, this limitation generally did
not apply to compensation that qualified under applicable regulations as "performance-based." In line with this, we historically
aimed to design and approve the performance-based compensation paid to our named executive officers so that such compensation
would satisfy the requirements for deductibility under Section 162(m). Prior to 2018, the Compensation/Benefits Committee considered
Section 162(m) when making compensation decisions. However, other considerations, such as providing our named executive officers
with competitive and adequate incentives to remain with us and increase our business operations, financial performance and prospects,
as well as rewarding extraordinary contributions, also significantly factored into the Compensation/Benefits Committee's decisions.

In
December 2017, the Tax Cuts and Jobs Act was enacted. Under the Tax Cuts and Jobs Act, the qualified performance-based
compensation exception to Section 162(m) that generally provided for the continued deductibility of performance-based
compensation was repealed, effective for tax years commencing on or after January 1, 2018. Accordingly, commencing with our
fiscal year ended December 31, 2018, compensation to our named executive officers in excess of $1,000,000 will not be
deductible unless it is paid pursuant to a written binding contract that was in effect on November 2, 2017, and not modified
in any material respect on or after such date. Performance-based compensation awarded to our named executive officers for
periods prior to November 2, 2017, may potentially continue to qualify for the performance-based compensation exemption under
Section 162(m). The United States Treasury has not yet issued comprehensive final guidance on limitations on the continued
deductibility of these awards. Accordingly, the future deductibility of these grandfathered awards is uncertain and cannot be
guaranteed.

Compensation/Benefits
Committee Report.The members of our Compensation/Benefits Committee have reviewed and discussed the “Compensation
Discussion and Analysis” required by Item 402(b) of Regulation S-K with management. Based upon such review and discussions,
our Compensation/Benefits Committee approved such section be included in this Amendment No. 1 on Form 10-K for the year ended
December 31, 2019.

By
the Compensation/Benefits Committee of the board of directors of Carolina Financial Corporation,

| | Thompson E. Penney    
| | ----------------------
| | Frederick N. Holscher 
| | Robert G. Clawson, Jr.
| | Daniel H. Isaac, Jr.  



27







Summary
Compensation Table



The
following table shows the compensation we paid for the years ended December 31, 2019, 2018, and 2017 to our Chief Executive Officer,
Chief Financial Officer, and the three most highly compensated executive officers other than the Chief Executive Officer and Chief
Financial Officer during such periods.







|Name and Principal Position                        |  | Year |      |  | Salary |   |         | Bonus |  |   | Stock 
    Awards(1) |  |  | Option 
    Awards(2) |         |  | Non-Equity 
    Incentive Plan 
    Compensation(3) |   |        | All Other 
    Compensation(4) |  |   | Total   | 
|-------------------------------------------------- |  | ---- | ---- |  | ------ | - | ------- | ----- |  | - | -------------------- |  |  | --------------------- | ------- |  | --------------------------------------------------- | - | ------ | ------------------------------ |  | - | ------- | 
|Jerold L. Rexroad                                  |  |      | 2019 |  |        | $ | 560,000 |       |  | $ | —                    |  |  | $                     | 336,000 |  |                                                     | $ | —      |                                |  | $ | 394,800 | 
|Director, President and Chief                      |  |      | 2018 |  |        | $ | 540,000 |       |  | $ | —                    |  |  | $                     | 346,784 |  |                                                     | $ | —      |                                |  | $ | 407,300 | 
|Executive Officer                                  |  |      | 2017 |  |        | $ | 495,000 |       |  | $ | 35,000               |  |  | $                     | 194,747 |  |                                                     | $ | 85,001 |                                |  | $ | 437,766 | 
|                                                   |  |      |      |  |        |   |         |       |  |   |                      |  |  |                       |         |  |                                                     |   |        |                                |  |   |         | 
|David L. Morrow                                    |  |      | 2019 |  |        | $ | 448,000 |       |  | $ | —                    |  |  | $                     | 50,000  |  |                                                     | $ | —      |                                |  | $ | 255,304 | 
|Director, Executive Vice                           |  |      | 2018 |  |        | $ | 435,000 |       |  | $ | —                    |  |  | $                     | 150,108 |  |                                                     | $ | —      |                                |  | $ | 201,998 | 
|President; Chief Executive Officer of CresCom Bank |  |      | 2017 |  |        | $ | 404,000 |       |  | $ | 25,000               |  |  | $                     | 76,684  |  |                                                     | $ | 56,503 |                                |  | $ | 271,925 | 
|                                                   |  |      |      |  |        |   |         |       |  |   |                      |  |  |                       |         |  |                                                     |   |        |                                |  |   |         | 
|M. J. Huggins, III5                                |  |      | 2019 |  |        | $ | 337,000 |       |  | $ | —                    |  |  | $                     | 80,000  |  |                                                     | $ | —      |                                |  | $ | 182,125 | 
|Executive Vice President and                       |  |      | 2018 |  |        | $ | 293,000 |       |  | $ | —                    |  |  | $                     | 79,786  |  |                                                     | $ | —      |                                |  | $ | 141,134 | 
|Secretary; President of CresCom Bank               |  |      | 2017 |  |        | $ | 272,500 |       |  | $ | 7,500                |  |  | $                     | 38,606  |  |                                                     | $ | 25,004 |                                |  | $ | 186,492 | 
|                                                   |  |      |      |  |        |   |         |       |  |   |                      |  |  |                       |         |  |                                                     |   |        |                                |  |   |         | 
|William A. Gehman III                              |  |      | 2019 |  |        | $ | 280,000 |       |  | $ | —                    |  |  | $                     | 114,000 |  |                                                     | $ | —      |                                |  | $ | 164,500 | 
|Executive Vice President and                       |  |      | 2018 |  |        | $ | 270,000 |       |  | $ | 10,000               |  |  | $                     | 120,120 |  |                                                     | $ | —      |                                |  | $ | 137,072 | 
|Chief Financial Officer                            |  |      | 2017 |  |        | $ | 240,000 |       |  | $ | 20,000               |  |  | $                     | 72,027  |  |                                                     | $ | 39,998 |                                |  | $ | 164,250 | 
|                                                   |  |      |      |  |        |   |         |       |  |   |                      |  |  |                       |         |  |                                                     |   |        |                                |  |   |         | 
|Fowler Williams                                    |  |      | 2019 |  |        | $ | 339,000 |       |  | $ | —                    |  |  | $                     | 150,000 |  |                                                     | $ | —      |                                |  | $ | 122,040 | 
|President and Chief Executive                      |  |      | 2018 |  |        | $ | 329,000 |       |  | $ | —                    |  |  | $                     | 148,028 |  |                                                     | $ | —      |                                |  | $ | 57,575  | 
|Officer of Crescent Mortgage Company               |  |      | 2017 |  |        | $ | 319,000 |       |  | $ | —                    |  |  | $                     | 115,010 |  |                                                     | $ | 25,004 |                                |  | $ | 98,855  | 
|                                                   |  |      |      |  |        |   |         |       |  |   |                      |  |  |                       |         |  |                                                     |   |        |                                |  |   |         | 



28







(1) All 2019,
2018 and 2017 stock awards were issued from our 2013 Equity Incentive Plan. In 2019, 4,960 shares of restricted stock and 4,960
restricted stock units were awarded to Mr. Rexroad; 1,476 shares of restricted stock were awarded to Mr. Morrow, 1,181 shares
of restricted stock and 1,181 restricted stock units were awarded to Mr. Huggins, 1,683 shares of restricted stock and 1,683 restricted
stock units were awarded to Mr. Gehman, and 2,214 shares of restricted stock and 2,214 restricted stock units were awarded to
Mr. Williams.



In 2018, 4,178
shares of restricted stock and 4,178 restricted stock units were awarded to Mr. Rexroad; 1,677 shares of restricted stock and
1,677 restricted stock units were awarded to Mr. Morrow, 851 shares of restricted stock and 851 restricted stock units were awarded
to Mr. Huggins, 1,393 shares of restricted stock and 1,393 restricted stock units were awarded to Mr. Gehman, and 1,934 shares
of restricted stock and 1,934 restricted stock units were awarded to Mr. Williams. In addition, Mr. Rexroad, Mr. Morrow and Mr.
Huggins, and Mr. Gehman, were awarded 747, 602, and 405, and 373 shares of common stock, respectively, for meeting certain performance
thresholds related to their 2018 incentive compensation plans.



In 2017, 2,751
shares of restricted stock and 2,751 restricted stock units were awarded to Mr. Rexroad, 1,828 restricted stock units were awarded
to Mr. Morrow, 809 restricted stock units were awarded to Mr. Huggins, 971 shares of restricted stock and 971 restricted stock
units were awarded to Mr. Gehman, and 2,104 shares of restricted stock and 1,618 restricted stock units were awarded to Mr. Williams.
In addition, Mr. Rexroad, Mr. Morrow, Mr. Huggins, and Mr. Gehman were awarded 638, 521, 351, and 310 shares of common stock,
respectively, for meeting certain performance thresholds related to their 2017 incentive compensation plans



The value for
each of these awards is its grant date fair value calculated by multiplying the number of shares subject to the award by the closing
market price per share for the day prior to the date such award was granted, computed in accordance with Financial Accounting
Standards Board Accounting Standards Codification Topic 718.



(2) All 2017 options awards were
issued from the 2013 Equity Incentive Plan. No options have been issued in 2018 or 2019.



In 2017, Mr.
Rexroad was awarded 8,441 options, Mr. Morrow was awarded 5,611 options, Mr. Huggins was awarded 2,483 options, Mr. Gehman was
awarded 3,972 options, and Mr. Williams was awarded 2,483 options. Options granted to Mr. Rexroad, Mr. Morrow, Mr. Huggins, Mr.
Gehman, and Mr. Williams in 2017 vest over three years ratably.



The value for
each of these awards is its grant date fair value calculated by multiplying the number of shares subject to the award by the Black
Scholes fair value per share, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification
Topic 718.



(3) Amounts
awarded for each year under one or more of our cash incentive plans and related bonuses were paid in the subsequent fiscal year.
Bonus compensation for Messrs. Rexroad, Morrow, Huggins, Gehman and Williams was determined by the Compensation/Benefits Committee
of the Board for meeting certain performance thresholds related to their 2019 incentive compensation plans.



(4) All other
compensation includes the Company’s contributions under the 401(k) Plan, dividends on unvested restricted stock, car allowances
and amounts paid by the Company for health and dental insurance for the named executives. In 2019 Mr. Huggins received $52,572
in relocation payments. In addition, payments in connection with the LifeComp split dollar life insurance agreement were paid
for Mr. Huggins in 2018 and 2017. Under the agreement, CresCom paid, among other things, the premiums on each policy and additional
amounts to the executive to cover federal income taxes owed with respect to his deemed bonuses under the LifeComp Agreement. In
2018 and 2017, we allocated $24,000 in life insurance premiums to Mr. Huggins. In 2018 and 2017, we also paid $16,000 in other
compensation to Mr. Huggins to cover federal income taxes owed with respect to the deemed bonuses. In February 2019, CresCom Bank
terminated the split dollar life agreement with Mr. Huggins. As a result, beginning in 2019, CresCom Bank no longer made premium
payments on Mr. Huggins’ behalf for the split dollar life insurance policy.



(5) Mr. Huggins’
annual salary reflects an increase during 2019 related to a promotion, including the assumption of additional duties.

29





GRANTS
OF PLAN-BASED AWARDS

|         |  |                                                                        |  |                |  |                                              |         |  |                                           |   |         |                 |  |   |                   |  |  |             |       |  |                 |  |       |                  |  |  |                   |  |  |                 |       |  |                | 
|-------- |  | ---------------------------------------------------------------------- |  | -------------- |  | -------------------------------------------- | ------- |  | ----------------------------------------- | - | ------- | --------------- |  | - | ----------------- |  |  | ----------- | ----- |  | --------------- |  | ----- | ---------------- |  |  | ----------------- |  |  | --------------- | ----- |  | -------------- | 
|         |  |                                                                        |  |                |  | Estimated
    future payouts under nonequity |         |  | Estimated
    future payouts under equity |   |         |                 |  |   |                   |  |  |             |       |  |                 | 
|         |  |                                                                        |  |                |  | incentive
    plan awards                    |         |  | incentive
    plan awards                 |   |         |                 |  |   |                   |  |  |             |       |  |                 | 
|         |  |                                                                        |  |                |  |                                              |         |  |                                           |   |         | All
    other   |  |   | All
    other     |  |  |             |       |  |                 | 
|         |  |                                                                        |  |                |  |                                              |         |  |                                           |   |         | stock           |  |   | option            |  |  |             |       |  |                 | 
|         |  |                                                                        |  |                |  |                                              |         |  |                                           |   |         |                 |  |   |                   |  |  |             |       |  |                 |  |       | awards:          |  |  | awards:           |  |  | Exercise
    or |       |  | Grant
    date | 
|         |  |                                                                        |  |                |  |                                              |         |  |                                           |   |         |                 |  |   |                   |  |  |             |       |  |                 |  |       | Number           |  |  | Number            |  |  | base
    price  |       |  | fair
    value | 
|         |  |                                                                        |  |                |  |                                              |         |  |                                           |   |         |                 |  |   |                   |  |  |             |       |  |                 |  |       | of
    shares    |  |  | of
    securities |  |  | of
    option   |       |  | of
    stock   | 
|         |  |                                                                        |  |                |  |                                              |         |  |                                           |   |         |                 |  |   |                   |  |  |             |       |  |                 |  |       | of
    stock     |  |  | underlying        |  |  | awards          |       |  | and
    option | 
|Name     |  | Plan
    Description(4)                                                |  | Grant
    date |  | Threshold
    ($)                            |         |  | Target
    ($)                            |   |         | Maximum
    ($) |  |   | Threshold
    (#) |  |  | Target  (#) |       |  | Maximum
    (#) |  |       | or
    units (#) |  |  | options
    (#)   |  |  | ($/sh)          |       |  | awards         | 
|Rexroad  |  | Long-Term Equity
    Incentives-Variable Pay-Restricted Stock Grant    |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | 4,960 |  |                | 
|         |  | Long-Term Equity Incentives-Variable
    Pay-Restricted Stock Units(1) |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | 2,480 |  |                 |  | 4,960 |                  |  |  | 7,440             |  |  |                 | —     |  |                | 
|         |  | Banking Segment Annual
    Supermax Bonus-Variable Pay(2)              |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | 84,000            |  |  |             | —     |  |                 |  | 827   |                  |  |  | —                 |  |  |                 | —     |  |                | 
|         |  | Banking Segment Annual
    Cash Bonus Plan-Variable Pay(3)             |  | 1/23/2019      |  | $                                            | 168,000 |  |                                           | $ | 336,000 |                 |  | $ | 504,000           |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | —     |  |                | 
|Gehman   |  | Long-Term Equity Incentives-Variable
    Pay-Restricted Stock Grant    |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | 1,683 |  |                | 
|         |  | Long-Term Equity Incentives-Variable
    Pay-Restricted Stock Units(1) |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | 842   |  |                 |  | 1,683 |                  |  |  | 2,525             |  |  |                 | —     |  |                | 
|         |  | Banking Segment Annual
    Supermax Bonus-Variable Pay(2)              |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | —     |  |                 |  | 413   |                  |  |  | —                 |  |  |                 | —     |  |                | 
|         |  | Banking Segment Annual
    Cash Bonus Plan-Variable Pay(3)             |  | 1/23/2019      |  | $                                            | 70,000  |  |                                           | $ | 140,000 |                 |  | $ | 210,000           |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | —     |  |                | 
|Morrow   |  | Long-Term Equity Incentives-Variable
    Pay-Restricted Stock Grant    |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | 1,476 |  |                | 
|         |  | Long-Term Equity Incentives-Variable
    Pay-Restricted Stock Units(1) |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | —     |  |                | 
|         |  | Banking Segment Annual
    Supermax Bonus-Variable Pay(2)              |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | —     |  |                 |  | 661   |                  |  |  | —                 |  |  |                 | —     |  |                | 
|         |  | Banking Segment Annual
    Cash Bonus Plan-Variable Pay(3)             |  | 1/23/2019      |  | $                                            | 112,000 |  |                                           | $ | 224,000 |                 |  | $ | 336,000           |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | —     |  |                | 
|Huggins  |  | Long-Term Equity Incentives-Variable
    Pay-Restricted Stock Grant    |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | 1,181 |  |                | 
|         |  | Long-Term Equity Incentives-Variable
    Pay-Restricted Stock Units(1) |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | 591   |  |                 |  | 1,181 |                  |  |  | 1,772             |  |  |                 | —     |  |                | 
|         |  | Banking Segment Annual
    Supermax Bonus-Variable Pay(2)              |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | —     |  |                 |  | 458   |                  |  |  | —                 |  |  |                 | —     |  |                | 
|         |  | Banking Segment Annual
    Cash Bonus Plan-Variable Pay(3)             |  | 1/23/2019      |  | $                                            | 77,500  |  |                                           | $ | 155,000 |                 |  | $ | 232,500           |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | —     |  |                | 
|Williams |  | Long-Term Equity Incentives-Variable
    Pay-Restricted Stock Grant    |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | 2,214 |  |                | 
|         |  | Long-Term Equity Incentives-Variable
    Pay-Restricted Stock Units(1) |  | 1/23/2019      |  | $                                            | —       |  |                                           | $ | —       |                 |  | $ | —                 |  |  |             | 1,107 |  |                 |  | 2,214 |                  |  |  | 3,321             |  |  |                 | —     |  |                | 
|         |  | Crescent Mortgage Company
    Annual Cash Bonus Plan(3)                |  | 1/23/2019      |  | $                                            | 101,700 |  |                                           | $ | 169,500 |                 |  | $ | 339,000           |  |  |             | —     |  |                 |  | —     |                  |  |  | —                 |  |  |                 | —     |  |                | 

30







(1) RSUs are
earned on a pro-rata basis only upon the attainment of specified Consolidated Carolina Financial Operating EPS measured
over a two-year performance period. There is no award if the attainment of Consolidated Carolina Financial Operating EPS is less than Threshold. If performance is at least greater than Threshold, but less than Target, the award is 50% of
the Target number of RSUs. If performance is at least Target but less than Maximum, the award is 100% of the Target number of
RSUs. If Operating EPS equals or exceeds Maximum, the award is 150% of Target number of RSUs. We do not disclose forward-looking
goals for our incentive programs because we consider the information competitively sensitive and we do not provide forward-looking
guidance to our investors.



(2) The Banking
Segment Annual Supermax Bonus is earned only if the Banking Segment achieves specified Banking Segment Operating Earnings, as
defined. Upon attainment of this Operating Earnings threshold, the CEO earns 15% of base salary in cash and 5% of base salary
in common stock. All other NEOs, except Williams, earn 5% of base salary in common stock. Stock payouts consist of common stock
that is fully vested and free of restrictions when earned. The table above reflects the amounts to be earned and paid/granted
in early 2020 if the defined level of performance were achieved in 2019.



(3) The annual
bonus is based on achieving certain stated Company and Banking Segment (Messrs. Rexroad, Gehman, Morrow, Huggins) or Crescent
Mortgage Company (Mr. Williams) goals. Each of these goals is weighted based on importance. The NEO can achieve a Threshold, Target
and Maximum level. The goals primarily focus on Company and specified Banking Segment Operating EPS (Messrs. Rexroad,
Gehman, Morrow, Huggins) or Crescent Mortgage Company Pretax Operating Earnings (Mr. Williams), as defined. In addition, there
are goals for asset growth, asset quality and deposit growth metrics. The calculation of the achievement related to these goals
is the annual incentive amount before application of achievement of personal objectives. Up to one third of the annual incentive
amount can be reduced if the NEO does not achieve the stated personal objectives.



(4) Refer to
the Summary Compensation Table and the Compensation, Discussion and Analysis for detail of awards earned for 2019.

31







Outstanding
Equity Awards at Fiscal Year-End



The following table summarized
outstanding equity awards to our named executive officers at December 31, 2019:

|         |  | Equity
    Incentive Plan Awards |       
|-------- |  | -------------------------------- | ------
|         |  | Stock
    Options                |       
|         |  |                                  |       
|         |  |                                  |       
|         |  |                                  |       
|         |  |                                  |       
|         |  | Number
    of Vested Stock       |       
|         |  | Options(1)                       |       
|Name     |  | Exercisable                      |       
|Rexroad  |  |                                  | 78,902
|         |  |                                  | 24,590
|         |  |                                  | 16,613
|         |  |                                  | 3,000 
|         |  |                                  | 5,627 
|         |  |                                  |       
|Gehman   |  |                                  | —     
|         |  |                                  | —     
|         |  |                                  |       
|Morrow   |  |                                  | 26,299
|         |  |                                  | 14,052
|         |  |                                  | 9,229 
|         |  |                                  | 3,741 
|         |  |                                  |       
|Huggins  |  |                                  | 6,576 
|         |  |                                  | 6,576 
|         |  |                                  | 5,621 
|         |  |                                  | 3,584 
|         |  |                                  | 1,655 
|         |  |                                  |       
|Williams |  |                                  | —     

(1) Represents vested
stock options that have vested that are exercisable, or unexercisable due to some additional restriction.

(2) Market value is
based on the December 31, 2019 closing price of $43.23 per share.

32







OPTIONS
EXERCISED AND STOCK VESTED

|         |  |                                                  |        |  |                                     |   |           |                                                 |  |  |                                    | 
|-------- |  | ------------------------------------------------ | ------ |  | ----------------------------------- | - | --------- | ----------------------------------------------- |  |  | ---------------------------------- | 
|         |  | Option awards                                    |        |  | Stock awards                        |  
|Name     |  | Number of 
shares 
acquired on 
exercise (#) (1) |        |  | Value realized 
on exercise ($) (2) |   |           | Number of 
shares 
acquired on 
vesting (#) (3) |  |  | Value realized 
on vesting ($) (4) | 
|Rexroad  |  |                                                  | —      |  |                                     |   | —         |                                                 |  |  | 8,673                              | 
|Gehman   |  |                                                  | 37,210 |  |                                     | $ | 1,128,261 |                                                 |  |  | 2,635                              | 
|Morrow   |  |                                                  | —      |  |                                     |   | —         |                                                 |  |  | 1,497                              | 
|Huggins  |  |                                                  | —      |  |                                     |   | —         |                                                 |  |  | 2,989                              | 
|Williams |  |                                                  | 7,031  |  |                                     | $ | 154,303   |                                                 |  |  | 4,473                              | 
|         |  |                                                  |        |  |                                     |   |           |                                                 |  |  |                                    | 



(1) Reflects
the number of shares of stock exercised pursuant to the stock-based benefit plan by each NEO.

(2) Value realized
is based on the market value of the underlying shares on the exercise date, less the cost to exercise.

(3) Reflects the number of shares
of stock that have vested pursuant to the stock-based benefit plan by each NEO.

(4) Value
realized is based on the market value of the underlying shares on the vesting date.

33







POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL



The
Company has entered into an employment agreement with Mr. Rexroad, its President and Chief Executive Officer. CresCom Bank has
entered into employment agreements with Mr. Morrow, its Chief Executive Officer, Mr. Huggins, its President and Mr. Gehman, its
Chief Financial Officer. Crescent Mortgage Company has entered into an employment agreement with Mr. Williams, its Chief Executive
Officer.



The
employment agreements for Messrs. Rexroad, Morrow and Huggins provide that upon the occurrence of an “Event of Termination”,
as defined in the agreements, the Company or Bank, as applicable, will pay the executive, beneficiary, or estate three times the
average over the past three years of the executive’s annualized base salary, all other cash compensation and contributions
made on the executive’s behalf to Company-sponsored employee benefit plans.



The
employment agreement for Mr. Gehman provides that upon the occurrence of an “Event of Termination”, as defined in
the agreement, the Bank will pay Mr. Gehman one and one-half times the executive’s base salary at the rate in effect on
the date of termination. The employment agreement for Mr. Williams provides that upon the occurrence of an “Event of Termination”,
as defined in the agreement, Crescent Mortgage Company will pay Mr. Williams one times the executive’s base salary at the
rate in effect on the date of termination.



If
the executive’s employment is terminated without cause as an “Event of Termination”, the executive agrees that
for a period of one year the executive will not compete with the Company or Bank within 30 miles of the Company’s main office,
except for Mr. Williams where the non- compete is the Atlanta metropolitan statistical area.



The
employment agreements for Messrs. Rexroad, Morrow and Huggins also provide that upon the occurrence of a “Change in Control”,
as defined in the agreements, the Company or Bank as applicable, will pay the executive, beneficiary, or estate 2.99 times the
average over the past five years of the sum of the executive’s “annual compensation”, as defined in the agreements,
and contributions made on behalf of the executive for Company-sponsored employee benefit plans. The employment agreements for
Messrs. Gehman and Williams provide that upon the occurrence of a “Change in Control”, as defined in the agreements,
the Bank or Crescent Mortgage Company, as applicable, will pay the executive, beneficiary, or estate two times the average over
the preceding five calendar years of the executive’s “annual compensation”, as defined in the agreements.



The
disclosure under the heading “The Merger — Interests of Certain Carolina Financial Directors and Executive
Officers in the Merger” in the prospectus and joint proxy statement filed by United Bankshares, Inc. and the Company on
February 13, 2020, is incorporated by herein by reference.



Elite LifeComp Program



CresCom
Bank entered into a split dollar life insurance agreement with Mr. Huggins in order to provide Mr. Huggins with target retirement
and death benefits following termination of employment. Under this agreement, referred to as the LifeComp Agreement, Mr. Huggins
is named as the policy owner, but CresCom Bank, until 2019 as explained below, paid the premiums on his policy for a period of
years and was entitled to recover a death benefit of $1.8 million under the policy as key man insurance. While the agreement was
in place, CresCom Bank annually paid Mr. Huggins an amount that was deemed to be, initially, a partial premium payment, and later,
an incremental increase in Mr. Huggins’ interest in the policy’s cash surrender value. Also, while the agreement was
in place during the term of Mr. Huggins employment, CresCom Bank paid to Mr. Huggins an amount sufficient to cover the interest
payments owed by Mr. Huggins to CresCom Bank on the loans, and also additional amounts to cover federal income taxes to which
Mr. Huggins becomes subject upon payment of bonuses.



In
February 2019, CresCom Bank terminated the split dollar life insurance agreement with Mr. Huggins. As a result, CresCom Bank no
longer makes premium payments on Mr. Huggins’ behalf for the split dollar life insurance policy.



The
amounts of total compensation payable to each officer upon termination in accordance with the employment agreements are shown
in the table below. The amounts assume that such termination was effective as of December 31, 2019 (the last day of the fiscal
year), and thus include amounts earned through such time and are estimates of the amounts that would have been paid out to the
executives upon their termination as of such date. The actual amounts to be paid out can only be determined at the time of such
executive’s separation from the Company.

34







|         |  |                                                     |  | Voluntary |         |  | Death |   |           | Disability(3) |  |   | Non-CIC  Severance |  |  | Change inControl(4)(5) |           |  | Termination 
Subsequent toCIC(4)(5) |  
|-------- |  | --------------------------------------------------- |  | --------- | ------- |  | ----- | - | --------- | ------------- |  | - | ------------------ |  |  | ---------------------- | --------- |  | ----------------------------------- | -
|Rexroad  |  | Stock Options                                       |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|         |  | Restricted Stock Units                              |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|         |  | Performance Stock Units(1)                          |  | $         | 378,133 |  |       | $ | 378,133   |               |  | $ | 378,133            |  |  | $                      | 378,133   |  |                                     | $
|         |  | Salary Continuation/Cash Severance                  |  | $         | —       |  |       | $ | 560,000   |               |  | $ | 1,306,667          |  |  | $                      | 3,026,000 |  |                                     | $
|         |  | Pro-Rata Bonus(2)                                   |  | $         | 394,800 |  |       | $ | 394,800   |               |  | $ | 394,800            |  |  | $                      | 394,800   |  |                                     | $
|         |  | Welfare Benefits                                    |  | $         | —       |  |       | $ | 6,866     |               |  | $ | —                  |  |  | $                      | 16,278    |  |                                     | $
|         |  | Excise Tax Gross-Up                                 |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|Total    |  |                                                     |  | $         | 772,933 |  |       | $ | 1,339,799 |               |  | $ | 2,079,599          |  |  | $                      | 3,815,210 |  |                                     | $
|         |  |                                                     |  |           |         |  |       |   |           |               |  |   |                    |  |  |                        |           |  |                                     |  
|Morrow   |  | Stock Options                                       |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|         |  | Restricted Stock Units                              |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|         |  | Performance Stock Units(1)                          |  | $         | 108,745 |  |       | $ | 108,745   |               |  | $ | 108,745            |  |  | $                      | 108,745   |  |                                     | $
|         |  | Salary Continuation/Cash Severance                  |  | $         | —       |  |       | $ | 448,000   |               |  | $ | 1,335,413          |  |  | $                      | 2,187,877 |  |                                     | $
|         |  | Pro-Rata Bonus(2)                                   |  | $         | 255,304 |  |       | $ | 255,304   |               |  | $ | 255,304            |  |  | $                      | 255,304   |  |                                     | $
|         |  | Welfare Benefits                                    |  | $         | —       |  |       | $ | 6,866     |               |  | $ | —                  |  |  | $                      | 20,819    |  |                                     | $
|         |  | Excise Tax Gross-Up                                 |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|Total    |  |                                                     |  | $         | 364,049 |  |       | $ | 818,915   |               |  | $ | 1,699,462          |  |  | $                      | 2,572,744 |  |                                     | $
|         |  |                                                     |  |           |         |  |       |   |           |               |  |   |                    |  |  |                        |           |  |                                     |  
|Huggins  |  | Stock Options                                       |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|         |  | Restricted Stock Units                              |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|         |  | Performance Stock Units(1)                          |  | $         | 80,710  |  |       | $ | 80,710    |               |  | $ | 80,710             |  |  | $                      | 80,710    |  |                                     | $
|         |  | Salary Continuation/Cash Severance                  |  | $         | —       |  |       | $ | 310,000   |               |  | $ | 924,058            |  |  | $                      | 1,660,726 |  |                                     | $
|         |  | Pro-Rata Bonus(2)                                   |  | $         | 182,125 |  |       | $ | 182,125   |               |  | $ | 182,125            |  |  | $                      | 182,125   |  |                                     | $
|         |  | Welfare Benefits                                    |  | $         | —       |  |       | $ | 9,548     |               |  | $ | —                  |  |  | $                      | 28,810    |  |                                     | $
|         |  | Excise Tax Gross-Up                                 |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|Total    |  |                                                     |  | $         | 262,835 |  |       | $ | 582,383   |               |  | $ | 1,186,894          |  |  | $                      | 1,952,372 |  |                                     | $
|         |  |                                                     |  |           |         |  |       |   |           |               |  |   |                    |  |  |                        |           |  |                                     |  
|Gehman   |  | Stock Options                                       |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|         |  | Restricted Stock Units                              |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|         |  | Performance Stock Units(1)                          |  | $         | 126,707 |  |       | $ | 126,707   |               |  | $ | 126,707            |  |  | $                      | 126,707   |  |                                     | $
|         |  | Salary Continuation/Cash Severance                  |  | $         | —       |  |       | $ | 280,000   |               |  | $ | —                  |  |  | $                      | 420,000   |  |                                     | $
|         |  | Pro-Rata Bonus(2)                                   |  | $         | 164,500 |  |       | $ | 164,500   |               |  | $ | 164,500            |  |  | $                      | 164,500   |  |                                     | $
|         |  | Welfare Benefits                                    |  | $         | —       |  |       | $ | 9,548     |               |  | $ | —                  |  |  | $                      | 11,795    |  |                                     | $
|         |  | Cut-Back
    to prevent application of Section 280G |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|Total    |  |                                                     |  | $         | 291,207 |  |       | $ | 580,755   |               |  | $ | 291,207            |  |  | $                      | 723,002   |  |                                     | $
|         |  |                                                     |  |           |         |  |       |   |           |               |  |   |                    |  |  |                        |           |  |                                     |  
|Williams |  | Stock Options                                       |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|         |  | Restricted Stock Units                              |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|         |  | Performance Stock Units(1)                          |  | $         | 173,266 |  |       | $ | 173,266   |               |  | $ | 173,266            |  |  | $                      | 173,266   |  |                                     | $
|         |  | Salary Continuation/Cash Severance                  |  | $         | —       |  |       | $ | 339,000   |               |  | $ | —                  |  |  | $                      | 339,000   |  |                                     | $
|         |  | Pro-Rata Bonus(2)                                   |  | $         | 122,040 |  |       | $ | 122,040   |               |  | $ | 122,040            |  |  | $                      | 122,040   |  |                                     | $
|         |  | Welfare Benefits                                    |  | $         | —       |  |       | $ | 6,031     |               |  | $ | —                  |  |  | $                      | 9,046     |  |                                     | $
|         |  | Cut-Back
    to prevent application of Section 280G |  | $         | —       |  |       | $ | —         |               |  | $ | —                  |  |  | $                      | —         |  |                                     | $
|Total    |  |                                                     |  | $         | 295,306 |  |       | $ | 640,337   |               |  | $ | 295,306            |  |  | $                      | 643,352   |  |                                     | $

Note: The values reflected
for equity awards above are based on an end of year stock price of $43.23 which was the closing price on December 31, 2019.

35









(1)
Upon all terminations (other than for termination for Cause or following a Change in Control), the executive is entitled to a
pro rata portion of any incentives actually earned for the year. The amounts reported above include the full amounts earned for
the 2018 grant and 50% of the amounts for the 2019 grant (assuming target performance).

(2)
Upon all terminations (other than for termination for Cause), the executive is entitled to a pro rata amount of any incentives
actually earned for the year. The amounts reported above are the full amount earned for 2019 and reported in the Summary Compensation
Table.

(3)
Salary continuation amounts shown in this column are reduced by payments from our disability plan for all employees and any disability
payments from Social Security.

(4)
Upon a Change in Control, all equity awards vest in full.

(5) Upon a Change in Control and termination of the executive, the executive
is entitled to the sum of the amounts in the “Change in Control” and “Termination Subsequent to CIC” columns.



CEO Pay Ratio



Item
402(u) of Regulation S-K, implementing a requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act, requires
that we disclose a ratio that compares the annual total compensation of our median employee to that of our CEO.



In
order to determine the median employee, we prepared a list of all employees, other than our CEO, as of December 31, 2019, along
with their gross income as reported on IRS form W-2 for 2019. The gross income as reported on IRS form W-2 for 2019 was annualized
for those employees that were not employed for the full year.



After
identifying the median employee, we calculated that employee’s annual total compensation using the same methodology we use
for our NEOs as set forth in the 2019 Summary Compensation Tablein accordance with the requirements of Item 402(c)(2)(x)
of Regulation S-K. The annual total compensation for 2019 for the CEO was $1,338,912 and for the median employee was $41,495.
The resulting ratio of our CEO’s pay to that of our median employee for 2019 was 32 to 1.



Compensation/Benefits
Committee Interlocks and Insider Participation

The
members of the Compensation/Benefits Committee during 2019 were Messrs. Penney, Clawson, Holscher, and Isaac. No member of the
Compensation/Benefits Committee was at any time during 2019 or at any other time an officer or employee of the Company or any
of its subsidiaries, and no member of the Compensation/Benefits Committee had any relationship with the Company requiring disclosure
under Item 404 of Regulation S-K. No executive officer of the Company has served on the board of directors or Compensation/Benefits
Committee of any other entity that has or has had one or more executive officers who served as a member of the Compensation/Benefits
Committee during 2019.

36







Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.



Management
and Directors

The
following table shows how many shares of common stock are owned by the directors , the named executive officers, and all directors
and executive officers as a group as of April 9, 2020. Unless otherwise indicated, the mailing address for each beneficial owner
is care of Carolina Financial Corporation, 288 Meeting Street, Charleston, South Carolina 29401.

|Directors and Named Executive Officers                             |  |  | Age |  |  | Number of Shares 
Beneficially Owned
 (1)(2)(3)(4)(5) |           |  | Percent of
    Beneficial 
    Ownership(6)(7) | 
|------------------------------------------------------------------ |  |  | --- |  |  | ----------------------------------------------------- | --------- |  | ---------------------------------------------- | 
|W. Scott Brandon                                                   |  |  | 56  |  |  |                                                       | 156,613   |  |                                                | 
|Robert G. Clawson, Jr.(1)                                          |  |  | 77  |  |  |                                                       | 152,687   |  |                                                | 
|Lindsey A. Crisp                                                   |  |  | 48  |  |  |                                                       | 7,711     |  |                                                | 
|Jeffery L. Deal, M.D.                                              |  |  | 65  |  |  |                                                       | 16,709    |  |                                                | 
|William Gehman                                                     |  |  | 59  |  |  |                                                       | 46,233    |  |                                                | 
|Gary M. Griffin                                                    |  |  | 65  |  |  |                                                       | 22,262    |  |                                                | 
|Frederick N. Holscher                                              |  |  | 72  |  |  |                                                       | 64,914    |  |                                                | 
|M. J. Huggins, III                                                 |  |  | 57  |  |  |                                                       | 80,496    |  |                                                | 
|Daniel Isaac                                                       |  |  | 68  |  |  |                                                       | 79,649    |  |                                                | 
|Beverly Ladley                                                     |  |  | 53  |  |  |                                                       | 1,306     |  |                                                | 
|Robert M. Moïse, CPA                                               |  |  | 71  |  |  |                                                       | 118,270   |  |                                                | 
|David L. Morrow                                                    |  |  | 69  |  |  |                                                       | 165,510   |  |                                                | 
|Thompson E. Penney                                                 |  |  | 69  |  |  |                                                       | 32,197    |  |                                                | 
|Jerold L. Rexroad                                                  |  |  | 59  |  |  |                                                       | 388,165   |  |                                                | 
|Johnathan L Rhyne Jr                                               |  |  | 64  |  |  |                                                       | 47,561    |  |                                                | 
|Claudius E. Watts, IV                                              |  |  | 58  |  |  |                                                       | 71,143    |  |                                                | 
|Fowler Williams                                                    |  |  | 45  |  |  |                                                       | 36,342    |  |                                                | 
|All Directors and Named Executive Officers as a Group (17 persons) |  |  |     |  |  |                                                       | 1,487,768 |  |                                                | 



(1) Includes
shares for which the named person has sole voting and investment power, has shared voting and investment power with a spouse,
holds in an IRA or SEP, or holds in a trust as trustee for the benefit of himself or herself, unless otherwise indicated in these
footnotes.

(2)
Includes unvested shares of restricted stock, as to which the directors and executive officers have full voting privileges. The
shares are as follows: Mr. Gehman, 3,122 shares, Mr. Huggins, 2,149 shares; Mr. Morrow, 1,906 shares; Mr. Rexroad, 9,225 shares;
Mr. Williams 4,142 shares.

(3)
There were no shares included that may be acquired within 60 days of April 9, 2020 by exercising vested stock options or
unvested stock options that will vest within 60 days of April 9, 2020.

(4)
Excludes shares of common stock owned by or for the benefit of family members of the following director, who disclaims beneficial
ownership of such shares: Mr. Clawson, 13,272 shares.

(5)
Includes shares that have been pledged as security on loans: Mr. Brandon, 10,000 shares; Mr. Isaac, 74,787 shares; and Mr. Rexroad,
100,000 shares.

(6)
For each individual, this percentage is determined by assuming the named person exercises all options which he or she has the
right to acquire within 60 days, but that no other person exercises any options. For the directors and executive officers as a
group, this percentage is determined by assuming that each director and executive officer exercises all options which he or she
has the right to acquire within 60 days but that no other persons exercise any options.

(7)
Based on the Company’s shares outstanding as of April 9, 2020, which includes the shares issued to Carolina
Trust’s shareholders.

37







Security
Ownership of Certain Beneficial Owners

The
following table sets forth the number and percentage of shares of common stock that exceed 5% beneficial ownership (determined
in accordance with Rule 13d-3 under the Exchange Act) by any single person or group, as known by Carolina Financial:

|Name and Address of Beneficial |  | Number of |           |  | Percentage of | 
|------------------------------ |  | --------- | --------- |  | ------------- | 
|Owner                          |  | Shares    |           |  | Class(3)      | 
|BlackRock, Inc.(1)             |  |           | 1,750,152 |  |               | 
|55 East 52nd Street            |  |           |           |  |               | 
|New York, NY 10055             |  |           |           |  |               | 
|                               |  |           |           |  |               | 
|Janus Henderson Group PLC(2)   |  |           | 1,324,525 |  |               | 
|201 Bishopsgate EC2M 3AE       |  |           |           |  |               | 
|United Kingdom                 |  |           |           |  |               | 
|                               |  |           |           |  |               | 

(1) Beneficial ownership of
BlackRock, Inc. is based on its Schedule 13G/A filed with the U.S. Securities and Exchange Commission on February 5, 2020. BlackRock,
Inc. reported that it has sole voting power or to direct to vote 1,696,853 shares of common stock and sole power to dispose or
direct the disposition of 1,750,152 shares of common stock. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY
10055.

(2)
Beneficial ownership of Janus Henderson Group PLC is based on its Schedule 13G filed with the U.S. Securities and Exchange Commission
on February 13, 2020. Janus Henderson Group PLC reported that it has shared voting power to vote or to direct to vote 1,324,525
shares of common stock and shared power to dispose or direct the disposition of 1,324,525 shares of common stock. The address
of Janus Henderson Group PLC is 201 Bishopsgate EC2M 3AE, United Kingdom, Citizenship: Jersey, Channel Islands.

(3)
Based on the Company’s shares outstanding as of February 5, 2020, which includes the shares issued to Carolina Trust’s
shareholders.

38







Equity
Compensation Plans

|                                                               |  |                      |         |  |                   |   |       | Number of securities | 
|-------------------------------------------------------------- |  | -------------------- | ------- |  | ----------------- | - | ----- | -------------------- | 
|                                                               |  | Number of securities |         |  | Weighted-average  |   |       | remaining available  | 
|                                                               |  | to be issued upon    |         |  | exercise price    |   |       | for future issuance  | 
|                                                               |  | exercise of          |         |  | of outstanding    |   |       | under equity         | 
|                                                               |  | outstanding options, |         |  | options, warrants |   |       | compensation         | 
|                                                               |  | warrants and rights  |         |  | and rights        |   |       | plans                | 
|Equity compensation plans
    approved by security holders     |  |                      | 260,213 |  |                   | $ | 10.75 |                      | 
|Equity compensation
    plans not approved by security holders |  |                      | —       |  |                   | $ | —     |                      | 
|                                                               |  |                      | 260,213 |  |                   | $ | 10.75 |                      | 
|                                                               |  |                      |         |  |                   |   |       |                      | 



The equity compensation
plans included in the table above are the Carolina Financial Corporation 2013 Equity Incentive Plan and the First South Bancorp
Inc. 2008 Equity Incentive Plan.



Item 13.
Certain Relationships and Related Transactions, and Director Independence.



Certain
Relationships and Related Transactions

The
Bank has followed a policy of granting commercial and consumer loans, and loans secured by one-to-four family real estate to officers,
directors and employees. Loans to directors and executive officers are made in the ordinary course of business and on the same
terms and conditions as those of comparable transactions with the general public prevailing at the time, in accordance with the
Bank’s underwriting guidelines, and do not involve more than the normal risk of collectability or present other unfavorable
features.

All
loans by the Bank to its directors and executive officers are subject to federal regulations restricting loan and other transactions
with affiliated persons of the Bank. Federal law generally requires that all loans to directors and executive officers be made
on terms and conditions comparable to those for similar transactions with non-affiliates, subject to limited exceptions. Loans
to all directors, executive officers, and their associates totaled $19.1 million at December 31, 2019, which was 2.6% of the Company’s
stockholders’ equity at that date. There were no loans outstanding to any director, executive officer or their affiliates
at preferential rates or terms, which in the aggregate exceeded $100,000 during the year ended December 31, 2019. All loans to
directors and officers were performing in accordance with their terms at December 31, 2019.

In
addition, Brandon Advertising, Inc. is the marketing agency of record for the Bank. Mr. Brandon, one of the Company’s directors,
is the sole owner and chief executive officer of Brandon Advertising, Inc. During the year ended December 31, 2019, the total
payments made to Brandon Advertising, Inc. were $1.4 million, which included media buys paid by Brandon Advertising, Inc. on behalf
of the Company. Brandon Advertising, Inc. received revenues of approximately $573,000 from the Company as a result of these payments.

We
have a written policy that governs the identification, approval, ratification, and monitoring of transactions with related parties.
The Board of Directors of the Company must approve all such transactions under the policy. No member of the Board of Directors
may participate in any review or approval of a transaction with respect to which such member or any of his family members is a
related person. Transactions with related parties are reviewed annually by the Corporate Governance/Nominating Committee.

39







The
Board of Directors annually evaluates the independence of its members based on Item 407(a) of Regulation S-K and NASDAQ Rule
5605(a)(2). In addition, the Board of Directors annually evaluates the independence of its Audit Committee and
Compensation/Benefits Committee members based on NASDAQ Rules 5605(c)(2) and (d)(2), respectively. The Company’s
corporate governance guidelines and principles require that a majority of the Board of Directors be composed of directors who
meet the requirements for independence established by these standards. The Board of Directors has concluded that the Company
has a majority of independent directors and that the Board of Directors meets the standards of NASDAQ Rule 5605(a)(2). The
Board of Directors has also concluded that the members of the Audit Committee meet the standards of NASDAQ Rule 5605(c) and
that the members of the Compensation/Benefits Committee meet the standards of NASDAQ Rule 5605(d)(2).



The
Board of Directors has determined that directors Clawson, Crisp, Deal, Griffin, Holscher, Isaac, Ladley, Moïse, Penney,
Rhyne, and Watts are independent taking into account the matters discussed under “Certain Relationships and Related Transactions.”
Mr. Rexroad, the Company’s President and Chief Executive Officer, and Mr. Morrow, the Company’s Executive Vice President,
are not considered to be independent as they are also executive officers of the Company. Mr. Brandon is not considered independent
due to the extent of the Company’s vendor relationship with companies that he owns.





Item 14. Principal Accounting
Fees and Services.





Independent
Registered Public Accounting Firm.Elliott Davis, LLC was our independent registered public accounting firm during the fiscal
years ended December 31, 2019 and 2018 and provided Audit and Audit-related services. The following table shows the fees that
the Company paid for services performed in the fiscal year ended December 31, 2019 and 2018:

|                   |  |                   |         |  |                   |  
|------------------ |  | ----------------- | ------- |  | ----------------- | -
|                   |  | Year Ended        |         |  | Year Ended        |  
|                   |  | December 31, 2019 |         |  | December 31, 2018 |  
|Audit Fees         |  | $                 | 403,615 |  |                   | $
|Audit-Related Fees |  |                   | 34,315  |  |                   |  
|All Other Fees     |  |                   | —       |  |                   |  
|Total              |  | $                 | 437,930 |  |                   | $
|                   |  |                   |         |  |                   |  



Audit
Fees.This category includes the aggregate fees billed for professional services rendered by our independent registered public
accounting firm during the 2019 and 2018 fiscal years for the audit of our annual financial statements, internal financial reporting
controls, HUD audits, review of annual reports on Form 10-K, and review of quarterly reports on Form 10-Q.



Audit-Related
Fees.For 2019, audit-related fees consisted of services rendered in connection with the filing of our Registration Statement
on Form S-4 in connection with our merger with United Bankshares, Inc. and the audit procedures performed in connection with our
acquisition of Carolina Trust. For 2018, audit-related fees consisted of services rendered in connection with our 2018 capital
raise and our filings related to our acquisitions of Greer and First South. All audit-related fees incurred by us were approved
in advance by the Audit Committee as required by its charter.

40







Tax
Fees. This category includes the aggregate fees billed for services related to corporate tax compliance, as well as counsel
and advisory services. Elliott Davis, LLC did not bill us for any such services for the fiscal years ended December 31, 2019,
and 2018.



All Other
Fees. Elliott Davis, LLC did not bill us for any services for the fiscal years ended December 31, 2019 and 2018 other than
for the services described above.



Pre-Approval
Policy.In general, the Audit Committee is required to pre-approve all audit and non-audit services performed by the independent
auditor to assure that the provision of such services does not impair the auditor’s independence. The independent auditors
provide the Audit Committee with an annual engagement letter outlining the scope of the audit and permissible non-audit services
proposed for the fiscal year, along with a fee proposal. The scope and fee proposal is reviewed with the internal auditor, the
Audit Committee chair, and, when appropriate, our management for their input (but not their approval). Once approved by the Audit
Committee, the services outlined in the engagement letter will have specific approval. All other audit and permissible non-audit
services that have not been approved in connection with the independent auditor’s engagement letter for the applicable year
must be specifically pre-approved by the Audit Committee under the same process as noted above, where practicable. The independent
auditors shall not perform any prohibited non-audit services described in Section 10A(g) of the Exchange Act. The Audit Committee
must specifically pre-approve any proposed services that exceed pre-approved cost levels. All services provided by Elliott Davis,
LLC, and all fees related thereto, were approved pursuant to the pre-approval policy.



The Audit Committee
believes that the independent auditor can provide tax services to us, such as tax compliance, tax planning and tax advice, without
impairing the auditor’s independence. The Audit Committee will not permit the retention of the independent auditor in connection
with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment
of which may not be supported in the Internal Revenue Code and related regulations.

41







PART IV



Item 15. Exhibits, Financial
Statement Schedules



A list of financial statements
filed herewith is contained in Part II, Item 8, “Financial Statements and Supplementary Data,” of the Original Filing
and is incorporated by reference herein. The financial statement schedules have been omitted because they are not required, not
applicable or the information has been included in our consolidated financial statements. The exhibits required by this Item are
contained in the Exhibit Index of this Amendment and are incorporated herein by reference.

42







EXHIBIT INDEX



|Exhibit |  |                                                                                                                                                                         
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |  | Description                                                                                                                                                             
|2.1     |  | Agreement
    and Plan of Merger by and between Carolina Financial Corporation and Greer Bancshares Incorporated, dated November 7, 2016
    (1)†                       
|2.2     |  | Agreement
    and Plan of Merger by and between Carolina Financial Corporation, CBAC, Inc., and Congaree Bancshares, Inc., dated January
    5, 2016 (12) †             
|2.3     |  | Agreement
    and Plan of Merger and Reorganization by and between Carolina Financial Corporation and First South Bancorp, Inc., dated June
    9, 2017 (13) †          
|2.4     |  | Agreement
    and Plan of Merger by and between United Bankshares, Inc. and Carolina Financial Corporation, dated as of November 17, 2019(15)
    †                     
|3.1     |  | Restated Certificate
    of Incorporation filed on August 31, 2015 (2)                                                                                                  
|3.2     |  | Amendment to the Restated
    Certificate of Incorporation(3)                                                                                                           
|3.3     |  | Amendment to Restated
    Certificate of Incorporation (14)                                                                                                             
|3.4     |  | Amended and Restated
    Bylaws (4)                                                                                                                                     
|4.1     |  | Description of the
    Company’s Common Stock *                                                                                                                         
|4.2     |  | Form of certificate
    of common stock (6)                                                                                                                             
|10.1    |  | Amended and Restated
    Employment Agreement by and between Crescent Bank and M.J. Huggins, III dated as of December 24, 2008 (6)(7) **                                
|10.2    |  | First Amendment to
    the Amended and Restated Employment Agreement between CresCom Bank and M.J. Huggins, III dated September 21, 2012 (6)(7)
    **                  
|10.3    |  | Amended and Restated
    Supplemental Executive Agreement by and between Carolina Financial Corporation and M.J. Huggins, III dated as of December
    24, 2008 (6)(7)**
|10.4    |  | Amended and Restated
    Employment Agreement by and between Crescent Bank and David Morrow dated as of December 24, 2008 (6)(7)**                                      
|10.5    |  | First Amendment to
    the Amended and Restated Employment Agreement between CresCom Bank and David Morrow dated as of September 19, 2012 (6)(7)
    **                 
|10.6    |  | Amended and Restated
    Supplemental Executive Agreement by and between Carolina Financial Corporation and David Morrow dated as of December 24, 2008 (6)(7)           
|10.7    |  | Employment Agreement
    by and between Carolina Financial Corporation and Jerold L. Rexroad dated as of May 1, 2008 (6)(7)**                                           
|10.8    |  | First Amendment to
    the Employment Agreement between Carolina Financial Corporation and Jerold L. Rexroad dated as of September 19, 2012 (6)(7)
    **               
|10.9    |  | Carolina Financial
    Corporation 2002 Stock Option Plan (6)(7)**                                                                                                      
|10.10   |  | Carolina Financial
    Corporation 2006 Recognition and Retention Plan (6)(7) **                                                                                        
|10.11   |  | Carolina Financial
    Corporation 2013 Equity Incentive Plan (6)(7) **                                                                                                 
|10.12   |  | Form of Carolina Financial
    Corporation Elite LifeComp Agreement (6)(7) **                                                                                           
|10.13   |  | Subservicing Agreement
    by and between Cenlar FSB and Crescent Mortgage Company dated January 1, 2004 (6)                                                            
|10.14   |  | First Amendment to
    Subservicing Agreement by and between Cenlar FSB and Crescent Mortgage Company dated as of February 19, 2004 (6)                                 
|10.15   |  | Second Amendment to
    Subservicing Agreement by and between Cenlar FSB and Crescent Mortgage Company dated as of February 1, 2006 (6)                                 
|10.16   |  | Third Amendment to
    Subservicing Agreement by and between Cenlar FSB and Crescent Mortgage Company dated as of January 1, 2011 (6)                                   
|10.17   |  | Employment Agreement,
    dated January 21, 2015, by and between Crescent Mortgage Company and Fowler Williams (7)(8) **                                                
|10.18   |  | Amendment No. 1 to
    the Carolina Financial Corporation 2013 Equity Incentive Plan (7)(9) **                                                                          
|10.19   |  | First
    South Bancorp, Inc. 2008 Equity Incentive Plan, as assumed by the Company (7)(10) **                                                                          
|10.20   |  | First
    South Bancorp, Inc. 1997 Stock Option Plan, as amended, as assumed by the Company (7)(11) **                                                                  



43







|21   |  | Subsidiaries
    of Carolina Financial Corporation*                             
|---- |  | --------------------------------------------------------------------------------
|23   |  | Consent of Independent
    Registered Public Accounting Firm—Elliott Davis, LLC*
|31.1 |  | Rule 13a-14(a) Certification of the Chief Executive Officer                     
|31.2 |  | Rule 13a-14(a) Certification of the Chief Financial Officer                     
|32   |  | Section 1350 Certifications                                                     



|101 |  | The following
    materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in eXtensible
    Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets as December 31, 2019 and December 31, 2018; (ii) Consolidated
    Statements of Operations for the years ended December 31, 2019, 2018 and 2017; (iii) Consolidated Statements of Comprehensive
    Income for the years ended December 31, 2019, 2018 and 2017; (iv) Consolidated Statements of Changes in Stockholders’
    Equity for the years ended December 31, 2019, 2018 and 2017; (v) Consolidated Statements of Cash Flows for the years ended
    December 31, 2019, 2018 and 2017; and (vi) Notes to the Consolidated Financial Statements.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



* Previously
filed with the Original Filing

** Management
contract or compensatory plan or arrangement.

† Schedules and similar attachments
have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant will furnish supplementally a copy of any omitted
schedules or similar attachment to the SEC upon request.



|(1)  | Incorporated
    by reference from the Company’s Registration Statement on Form S-3 filed on December 23, 2016.                                                                  
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2)  | Incorporated by reference
    from the Company’s Registration Statement on Form S-3 filed on August 31, 2015.                                                                    
|(3)  | Incorporated by reference
    to Exhibit A of the Company’s Definitive Proxy Statement on Schedule 14A filed on March 31, 2016.                                                  
|(4)  | Incorporated by reference
    to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on May 5, 2016.                                                                   
|(5)  | Reserved.                                                                                                                                                                        
|(6)  | Incorporated by reference
    from the Company’s Registration Statement on Form 10 filed on February 26, 2014.                                                                   
|(7)  | Indicates management
    contracts or compensatory plans or arrangements.                                                                                                        
|(8)  | Incorporated by reference
    from the Company’s Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2016 filed on May 9, 2016.                                        
|(9)  | Incorporated by reference
    to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on January 22, 2015.                                                             
|(10) | Incorporated by reference
    to First South Bancorp, Inc.’s Registration Statement on Form S-8, filed on June 2, 2008 (Registration No. 333-151337).                            
|(11) | Incorporated by reference
    to First South Bancorp, Inc.’s Annual Report on Form 10-K for the year ended September 30, 1999, filed on December 27,
    1999 (File No. 0-22219).
|(12) | Incorporated by reference
    to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on January 11, 2016.                                                              
|(13) | Incorporated by reference
    to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on June 15, 2017.                                                                 
|(14) | Incorporated by reference
    to Exhibit A of the Company’s Definitive Proxy Statement on Schedule 14A filed on March 29, 2018.                                                  
|(15) | Incorporated by reference
    to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on November 18, 2019.                                                             



44







SIGNATURES



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused Amendment No.
1 to this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                         | CAROLINA
    FINANCIAL CORPORATION
|------------------------ | ----------------------------------
|                         |                                   
|Date:
    April 24, 2020 | By:                               
|                         |                                   
|                         |                                   
|                         |                                   
|                         |                                   
|Date:
    April 24, 2020 | By:                               
|                         |                                   
|                         |                                   
|                         |                                   

45