Ecb Bancorp (ECBE) 8-K ECB Bancorp, Inc. Reports 2012 Third Quarter Results

Exhibit 99.1

PRESS RELEASE

October 30, 2012

CONTACT:	ECB Bancorp, Inc.
	Thomas M. Crowder, EVP/Chief Financial Officer
	(252) 925-5520
	(252) 925-8491 facsimile

FOR IMMEDIATE RELEASE

ECB Bancorp, Inc. Reports 2012 Third Quarter Results

ENGELHARD, N.C.-ECB Bancorp, Inc. (NYSE-Amex:ECBE) (“ECB” or the “Company”) today reported its financial results for the three and nine months ended September 30, 2012.

2012 Third Quarter Financial Highlights

For the three months ended September 30, 2012, net income totaled $1,649,000 compared to net income of $527,000 for the three months ended September 30, 2011. After adjustments for $267,000 in TARP preferred stock dividends and the accretion of warrant discount, net income available to common shareholders for the three months ended September 30, 2012 was $1,382,000 or $0.48 per diluted share compared to net income of $260,000 or $0.09 per diluted share for the three months ended September 30, 2011. For the nine months ended September 30, 2012 net income totaled $2,614,000 compared to $588,000 for the nine months ended September 30, 2011. Income available to common shareholders was $1,817,000 or $0.64 per diluted share compared to a net loss of ($209,000) or ($0.07) per share for the nine months ended September 30, 2011.

Other Financial Highlights include:

• Consolidated assets have increased 0.7% or $6,300,000 to $927,592,000 at September 30, 2012 from $921,277,000 at December 31, 2011.

• Gross outstanding loans have increased 4.1% or $20,392,000 to $516,934,000 at September 30, 2012 from $496,542,000 at December 31, 2011.

• Deposits have decreased (2.3%) to $779,413,000 at September 30, 2012 from $797,645,000 at December 31, 2011.

• Net interest income increased 6.8% to $7,075,000 for the three months ended September 30, 2012 from $6,623,000 for the previous three-month period ending June 30, 2012.

• Net interest margin increased 9 basis points to 3.32% for the quarter ended September 30, 2012 up from 3.23% for the previous quarter ended June 30, 2012.

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The provision for loan loss totaled $1,917,000 for the three months ended September 30, 2012 up 86.4% from $1,028,000 for the same period in 2011. The year to date loan loss provision as of September 30, 2012 totaled $2,783,000 down (55.3%) from $6,231,000 for the nine months ended September 30, 2011. The decrease in the loan loss provision for the nine month period ending September 30, 2012 is primarily a result of a decrease (51.9%) in net charge-offs, and adjustments for loan loss migrations within the portfolio as previously announced.

A. Dwight Utz, President and Chief Executive Officer, stated, “As was announced in September ECB Bancorp has executed a definitive agreement to merge with Crescent Financial Bancshares, Inc. We believe the combination of these two well positioned banks will create a strong high performing bank in the North Carolina market. The transaction is expected to close in the first quarter of 2013 subject to receiving regulatory and shareholder approvals. With respect to ECB Bancorp earnings, the economy of our coastal markets in North Carolina have strengthened due to a good tourist season with many of our business clients reporting positive 2012 earnings to date. While some markets in our footprint are still experiencing some economic weakness, many appear to be stabilizing as 2012 progresses. As we have commented earlier this year, we see 2012 as transitional year for ECB Bancorp and our earnings are beginning to transition to a more normalized operating environment.”

Thomas M. Crowder, Executive Vice President and Chief Financial Officer stated: “We have increased our net interest margin through continued lower funding cost in the third quarter and have increased our non-interest income, excluding security gains, by 29.5% in the third quarter compared to the same period in 2011. These operating improvements combined with lower credit costs are supporting our earnings growth in 2012.”

Mr. Utz concluded, “As we enter the fourth quarter of 2012, we are focused on continuing to manage our operations in a profitable manner while looking forward to our future partnership with Crescent State Bank and eventually our new VantageSouth brand.”

About ECB Bancorp, Inc.

ECB Bancorp, Inc. is a bank holding company, headquartered in Engelhard, North Carolina, whose wholly-owned subsidiary, The East Carolina Bank, is a state-chartered, independent community bank insured by the FDIC. The Bank provides a full range of financial services through its 25 offices covering eastern North Carolina from Currituck to Ocean Isle Beach and Greenville to Hatteras. The Bank also provides mortgages, insurance services through the Bank’s licensed agents, and investment and brokerage services offered through a third-party broker-dealer. The Company’s common stock is listed on The NYSE-Amex Market under the symbol “ECBE”. More information can be obtained by visiting ECB’s web site atwww.myecb.com.

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“Safe Harbor Statement” Under the Private Securities Litigation Reform Act of 1995

Statements in this Press Release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, expectations or beliefs about future events or results, and other statements that are not descriptions of historical facts, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors discussed in the Company’s 2011 Annual Report on Form 10-K and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “feels”, “believes”, “estimates”, “predicts”, “forecasts”, “potential” or “continue”, or similar terms or the negative of these terms, or other statements concerning opinions or judgments of the Company’s management and Board of Directors about future events. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to: pressures on the Company’s earnings, capital and liquidity resulting from current and future conditions in the credit and equity markets; the financial success or changing strategies of the Company’s customers; actions of government regulators or changes in laws, regulations or accounting standards that adversely affect our business; changes in the interest rate environment and the level of market interest rates that reduce our net interest margins and/or the values of loans we make and securities we hold; weather and similar conditions, particularly the effect of hurricanes on the Company’s banking and operations facilities and on the Company’s customers and the communities in which it does business; continued or unexpected increases in credit losses in the Company’s loan portfolio; continued adverse economic conditions and real estate values in our banking market (particularly as those conditions affect our loan portfolio, the abilities of our borrowers to repay their loans, and the values of loan collateral); and other developments or changes in our business that we do not expect. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. All forward-looking statements attributable to the Company are expressly qualified in their entirety by the cautionary statements in this paragraph. The Company has no obligation, and does not intend, to update these forward-looking statements.

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See 3 pages of financial information attached

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets

September 30, 2012 (unaudited), December 31, 2011 and September 30, 2011 (unaudited)

(Dollars in thousands, except per share data)

	September 30, 2012			December 31, 2011*			September 2011
Assets
Non-interest bearing deposits and cash	$	15,411		$	18,363		$	13,123
Interest bearing deposits		61			63			61
Overnight investments		51,195			6,305			4,055
Total cash and cash equivalents		66,667			24,731			17,239
Investment securities
Available-for-sale, at market value (cost of $280,327, $338,685, and $325,023 at September 30, 2012, December 31, 2011 and September 30, 2011, respectively)		284,963			339,450			327,066
Loans held for sale		2,379			2,866			2,338
Loans		516,934			496,542			521,626
Allowance for loan losses		(11,385	)		(12,092	)		(12,214	)
Loans, net		505,549			484,450			509,412
Real estate and repossessions acquired in settlement of loans, net		7,118			6,573			6,223
Federal Home Loan Bank common stock, at cost		4,150			3,456			3,768
Bank premises and equipment, net		25,773			26,289			26,137
Accrued interest receivable		4,928			5,308			4,972
Bank owned life insurance		12,082			11,778			11,676
Other assets		13,983			16,376			14,864
Total	$	927,592		$	921,277		$	923,695
Liabilities and Shareholders’ equity
Deposits
Demand, noninterest bearing	$	152,495		$	135,732		$	123,783
Demand, interest bearing		288,829			270,119			257,115
Savings		59,016			55,517			46,879
Time		279,073			336,277			368,832
Total deposits		779,413			797,645			796,609
Accrued interest payable		510			519			630
Short-term borrowings		41,827			11,679			13,528
Long-term obligations		16,000			25,500			25,500
Other liabilities		5,005			5,491			4,180
Total liabilities		842,755			840,834			840,447
Shareholders’ equity
Preferred stock, Series A		17,578			17,454			17,412
Common stock, par value $3.50 per share		10,167			9,974			9,974
Capital surplus		25,753			25,873			25,868
Warrants		878			878			878
Retained earnings		27,743			25,926			27,946
Accumulated other comprehensive income		2,718			338			1,170
Total shareholders’ equity		84,837			80,443			83,248
Total	$	927,592		$	921,277		$	923,695
Common shares outstanding		2,904,841			2,849,841			2,849,841
Common shares authorized		50,000,000			50,000,000			50,000,000
Preferred shares outstanding		17,949			17,949			17,949
Preferred shares authorized		2,000,000			2,000,000			2,000,000
Non-voting common shares authorized		2,000,000			2,000,000			—

* Derived from audited consolidated financial statements.

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Results of Operations

For the three and nine months ended September 30, 2012 and 2011 (unaudited)

(Dollars in thousands, except per share data)

	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012		2011
Interest income:
Interest and fees on loans	$	6,741	$	7,096		$	19,514	$	21,782
Interest on investment securities:
Interest exempt from federal income taxes		246		106			730		351
Taxable interest income		1,743		1,961			5,399		6,061
Dividend income		15		9			40		27
Other interest income		6		17			12		38
Total interest income		8,751		9,189			25,695		28,259
Interest expense:
Deposits:
Demand accounts		358		511			1,154		1,573
Savings		50		85			205		212
Time		1,090		1,751			3,526		5,352
Short-term borrowings		104		73			280		215
Long-term obligations		74		146			269		471
Total interest expense		1,676		2,566			5,434		7,823
Net interest income		7,075		6,623			20,261		20,436
Provision for loan losses		1,917		1,028			2,783		6,231
Net interest income after provision for loan losses		5,158		5,595			17,478		14,205
Noninterest income:
Service charges on deposit accounts		902		836			2,704		2,429
Other service charges and fees		541		410			1,388		984
Mortgage origination fees		446		255			1,228		1,033
Net gain on sale of securities		3,220		998			3,544		1,882
Income from bank owned life insurance		101		74			304		222
Other operating (expense) income		44		(5	)		46		(12	)
Total noninterest income		5,254		2,568			9,214		6,538
Noninterest expenses:
Salaries		2,922		2,737			8,706		8,127
Retirement and other employee benefits		782		638			2,700		2,098
Occupancy		538		528			1,586		1,533
Equipment		587		550			1,780		1,622
Professional fees		271		240			833		782
Supplies		28		49			143		178
Communications/Data lines		170		179			552		537
FDIC insurance		204		236			611		763
Other outside services		279		94			471		437
Data processing and related expenses		421		408			1,163		561
Net cost of real estate and repossessions acquired in settlement of loans		321		645			1,468		742
Other operating expenses		1,419		1,235			3,104		3,060
Total noninterest expenses		7,942		7,539			23,117		20,440
Income before income taxes		2,470		624			3,575		303
Income tax expense (benefit)		821		97			961		(285	)
Net income		1,649		527			2,614		588
Preferred stock dividends		225		225			673		673
Accretion of discount		42		42			124		124
Income (loss) available to common shareholders	$	1,382	$	260		$	1,817	($	209	)
Net income (loss) per share - basic	$	0.48	$	0.09		$	0.64	($	0.07	)
Net income (loss) per share - diluted	$	0.48	$	0.09		$	0.64	($	0.07	)
Weighted average shares outstanding - basic		2,849,841		2,849,841			2,849,841		2,849,841
Weighted average shares outstanding - diluted		2,851,408		2,849,841			2,850,367		2,849,841

ECB Bancorp, Inc.

Supplemental Quarterly Financial Data (Unaudited)

(Dollars in thousands, except per share data)

	9/30/2012			6/30/2012			3/31/2012			12/31/2011			9/30/2011
Income Statement Data:
Interest income	$	8,751		$	8,445		$	8,499		$	8,818		$	9,189
Interest expense		1,676			1,787			1,971			2,283			2,566
Net interest income		7,075			6,658			6,528			6,535			6,623
Provision for loan losses		1,917			866			—			2,252			1,028
Net after provision expense		5,158			5,792			6,528			4,283			5,595
Noninterest income		5,254			2,221			1,739			2,262			2,568
Noninterest expense		7,942			7,257			7,918			9,416			7,539
Income (loss) before income taxes		2,470			756			349			(2,871	)		624
Income tax expense (benefit)		821			168			(28	)		(1,259	)		97
Net income (loss)		1,649			588			377			(1,612	)		527
Preferred stock dividend & accretion of discount		267			266			265			266			267
Net income (loss) available to common shareholders	$	1,382		$	322		$	112		$	(1,878	)	$	260
Per Share Data and Shares Outstanding:
Net income - basic	$	0.48		$	0.11		$	0.04		$	(0.66	)	$	0.09
Net income - diluted		0.48			0.11			0.04			(0.66	)		0.09
Cash dividends		—			—			—			0.05			—
Book value at period end		23.15			23.06			22.34			22.10			23.10
Dividend payout ratio		0.00	%		0.00	%		0.00	%		-7.58	%		0.00	%
Weighted-average number of common shares outstanding:
Basic		2,849,841			2,849,841			2,849,841			2,849,841			2,849,841
Diluted		2,851,408			2,849,841			2,849,841			2,849,841			2,849,841
Shares outstanding at period end		2,904,841			2,849,841			2,849,841			2,849,841			2,849,841
Balance Sheet Data:
Total assets	$	927,592		$	944,266		$	916,274		$	921,277		$	923,695
Loans - gross		516,934			506,257			491,383			496,542			521,626
Allowance for loan losses		11,385			10,780			11,385			12,092			12,214
Investment securities		284,963			350,779			348,810			339,450			327,066
Interest earning assets		859,682			871,725			847,893			848,682			858,914
Premises and equipment, net		25,773			26,111			26,286			26,289			26,137
Total deposits		779,413			795,488			772,597			797,645			796,609
Short-term borrowings		41,827			42,101			39,218			11,679			13,528
Long-term obligations		16,000			18,000			18,000			25,500			25,500
Shareholders’ equity		84,837			83,260			81,168			80,443			83,248
Selected Performance Ratios (quarterly, annualized):
Return on average assets		0.70	%		0.26	%		0.16	%		-0.70	%		0.22	%
Return on average shareholders’ equity		7.82	%		2.87	%		1.86	%		-7.85	%		2.56	%
Net interest margin		3.32	%		3.23	%		3.22	%		3.10	%		3.06	%
Efficiency ratio		63.3	%		79.8	%		93.4	%		105.3	%		81.0	%
Asset Quality Ratios:
Non-accruing loans to period-end loans		3.49	%		3.60	%		3.82	%		3.08	%		3.98	%
Performing TDR’s loans to period-end loans		2.16	%		2.06	%		2.34	%		2.07	%		1.51	%
Nonperforming loans to period-end loans		5.64	%		5.66	%		6.17	%		5.15	%		5.49	%
Allowance for loan losses to period-end loans		2.20	%		2.13	%		2.32	%		2.44	%		2.34	%
Allowance for loan losses to nonperforming loans		39.0	%		37.6	%		37.6	%		47.3	%		42.7	%
Net charge-offs to average loans (annualized)		1.02	%		1.18	%		0.57	%		1.85	%		3.18	%
Capital Ratios:
Tangible equity to total assets		7.25	%		6.96	%		6.95	%		6.84	%		7.13	%
Equity-to-assets ratio		9.15	%		8.82	%		8.86	%		8.73	%		9.01	%
Leverage Capital Ratio		8.27	%		8.25	%		8.23	%		8.25	%		8.34	%
Tier 1 Capital Ratio		12.36	%		12.09	%		12.39	%		12.59	%		12.59	%
Total Capital Ratio		13.62	%		13.35	%		13.65	%		13.85	%		13.85	%