Carolina Alliance Bank and Forest Commercial Bank Announce Shareholder Approval of Merger

Carolina Alliance Bank (“CAB”) (OTCBB:CRLN) (OTCQB:CRLN) and Forest Commercial Bank (“FCB”) jointly announced today that the previously announced merger under which FCB will merge with and into CAB, has been approved by both banks' shareholders. Special meetings of CAB shareholders and FCB shareholders were held on December 16, 2013 and December 10, 2013, respectively. The merger is expected to close in April of 2014, subject to receipt of regulatory approvals.

“Both Carolina Alliance and Forest Commercial are committed to serving the communities in which we operate through local bankers making local decisions,” said John Poole, President and Chief Executive Officer of CAB. “The core values both banks share will guide our operation as we grow throughout the markets we serve.” John Kimberly, President and Chief Executive Officer of FCB, noted, “The merger of Carolina Alliance and Forest Commercial creates a larger and stronger financial institution better able to compete in today’s challenging environment, with a significantly higher lending limit, expanded product offerings, and the ability to generate efficiencies, which we believe in turn will increase profitability.” Mr. Kimberly added, “Since there is no market overlap and since we both are growing, we anticipate no loss of personnel in either of the banks as a result of the merger.”

CAB began operations in January 2007 and is headquartered in Spartanburg, South Carolina. CAB has received regulatory approval to establish branch offices in Seneca and Anderson, South Carolina and expects the Seneca branch to open for business in December 2013 and the Anderson branch to open in the first quarter of 2014. More information about CAB can be found on its website at www.carolinaalliancebank.com.

Forest Commercial Bank opened for business in March 2008, is headquartered in Asheville, North Carolina, and serves western North Carolina from offices in Asheville and Hendersonville and a loan production office in Charlotte. For more information, please see FCB’s website at www.forestcommercialbank.com.

Note

Certain statements in this news release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties, and other factors, such as the businesses of Carolina Alliance Bank and Forest Commercial Bank may not be integrated successfully or such integration may take longer to accomplish than expected, the expected cost savings and any revenue synergies from the merger may not be fully realized within the expected timeframes, disruption from the merger may make it more difficult to maintain relationships with clients, associates, or suppliers, the required governmental approvals of the merger may not be obtained on the proposed terms and schedule, a continued downturn in the economy, competitive pressures among depository and other financial institutions, the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, and changes in the U.S. legal and regulatory framework, including the effect of recent financial reform legislation on the banking industry, any of which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.

Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by us or any person that the future events, plans, or expectations contemplated by us will be achieved. All subsequent written and oral forward-looking statements concerning us or any person acting on our behalf is expressly qualified in its entirety by the cautionary statements above. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, to reflect circumstances or events that occur after the date the forward-looking statements are made.