-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DVaxzwnqjtUdrTGonHezWP/++5FLW3V7zjVUXlycOryDWcX+hY54p9dAR6Qg4vQF ZfiXbzazGiAuq0bMOsTh3A== 0000950168-00-001334.txt : 20000515 0000950168-00-001334.hdr.sgml : 20000515 ACCESSION NUMBER: 0000950168-00-001334 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ECB BANCORP INC CENTRAL INDEX KEY: 0001066254 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 562090738 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-24753 FILM NUMBER: 628411 BUSINESS ADDRESS: STREET 1: P O BOX 337 STREET 2: HWY 264 CITY: ENGELHARD STATE: NC ZIP: 27824 BUSINESS PHONE: 2529259411 10QSB 1 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2000 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to _____________________ Commission File No. 2017-6 ECB Bancorp, Inc. ----------------------------- (Exact name of registrant as specified in its charter) North Carolina 56-0215930 --------------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Post Office Box 337, Engelhard, North Carolina 27824 --------------------------------------------------------- (Address of principal executive offices) (Zip Code) (252) 925-9411 ------------------------- (Registrant's telephone number, including area code) 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 [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of May 8, 2000, 2,117,154 shares of the registrant's common stock, $3.50 par value, were outstanding. This Form 10-QSB has 13 pages. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ECB BANCORP, INC. AND SUBSIDIARY Consolidated Balance Sheets March 31, 2000 and December 31, 1999 (dollar amounts in thousands)
March 31, December 31, ASSETS 2000 1999* - ------------------------------------------------------------------------------------- ----------- (unaudited) Non-interest bearing deposits and cash $13,739 $11,139 Federal funds sold 6,025 6,650 - ------------------------------------------------------------------------------------- ----------- Total cash and cash equivalents 19,764 17,789 - ------------------------------------------------------------------------------------- ----------- INVESTMENT SECURITIES Available-for-sale, at market value (cost of $61,042 and $59,797 at March 31, 2000 and December 31, 1999, respectively) 59,940 58,939 LOANS 153,870 147,676 Allowance for probable loan losses (2,698) (2,700) - ------------------------------------------------------------------------------------- ----------- Loans, net 151,172 144,976 - ------------------------------------------------------------------------------------- ----------- Real estate acquired in settlement of loans, net 83 183 Federal Home Loan Bank common stock, at cost 633 633 Bank premises and equipment, net 6,663 6,727 Accrued interest receivable 2,389 2,259 Other assets 1,841 1,607 - ------------------------------------------------------------------------------------- ----------- TOTAL $242,485 $233,113 - ------------------------------------------------------------------------------------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------------------------------------------------------- ----------- Deposits Demand, noninterest bearing $44,784 $43,638 Demand interest bearing 62,064 60,623 Savings 13,659 14,823 Time 93,000 84,217 - ------------------------------------------------------------------------------------- ----------- Total deposits 213,507 203,301 - ------------------------------------------------------------------------------------- ----------- Short-term borrowings 1,653 2,738 Long-term obligations 3,000 3,000 Accrued interest payable 918 817 Other liabilities 1,190 1,195 - ------------------------------------------------------------------------------------- ----------- Total liabilities 220,268 211,051 - ------------------------------------------------------------------------------------- ----------- SHAREHOLDERS' EQUITY Common stock, par value $3.50 per share; authorized 10,000,000 shares; issued and outstanding 2,118,554 and 2,121,529 in 2000 and 1999, respectively. 7,416 7,425 Capital surplus 6,211 6,229 Retained earnings 9,350 9,009 Deferred compensation - restricted stock (33) (35) Accumulated other comprehensive loss (727) (566) - ------------------------------------------------------------------------------------- ----------- Total shareholders' equity 22,217 22,062 - ------------------------------------------------------------------------------------- ----------- Commitments - ------------------------------------------------------------------------------------- ----------- TOTAL $242,485 $233,113 - ------------------------------------------------------------------------------------- -----------
See accompanying notes to consolidated financial statements. * Derived from auditied consolidated financial statements. 2 ECB BANCORP, INC. AND SUBSIDIARY Consolidated Income Statements For the three months ended March 31, 2000 and 1999 (unaudited - dollar amounts in thousands, except net income per share)
Three months ended March 31 -------------------------------- 2000 1999 - -------------------------------------------------------- ----------- ----------- INTEREST INCOME: Interest and fees on loans $3,367 $2,980 Interest on investment securities: Interest exempt from federal income taxes 171 197 Taxable interest income 749 546 Interest on federal funds sold 65 42 - -------------------------------------------------------- ----------- ----------- Total interest income 4,352 3,765 - -------------------------------------------------------- ----------- ----------- INTEREST EXPENSE: Deposits: Demand accounts 329 239 Savings 56 56 Time 1,167 1,032 Short-term borrowings 29 6 Long-term obligations 36 28 - -------------------------------------------------------- ----------- ----------- Total interest expense 1,617 1,361 - -------------------------------------------------------- ----------- ----------- NET INTEREST INCOME 2,735 2,404 Provision for probable loan losses 60 60 - -------------------------------------------------------- ----------- ----------- Net interest income after provision for probable loan losses 2,675 2,344 - -------------------------------------------------------- ----------- ----------- NON-INTEREST INCOME: Service charges on deposit accounts 342 322 Other service charges and fees 105 105 Other operating income 17 18 - -------------------------------------------------------- ----------- ----------- Total other income 464 445 - -------------------------------------------------------- ----------- ----------- NON-INTEREST EXPENSE: Salaries 921 828 Retirement and other employee benefits 296 260 Occupancy 210 181 Equipment 256 237 Professional fees 54 65 Supplies 99 64 Telephone 96 61 Postage 49 46 Other operating expenses 462 410 - -------------------------------------------------------- ----------- ----------- Total other expenses 2,443 2,152 - -------------------------------------------------------- ----------- ----------- INCOME BEFORE INCOME TAXES 696 637 INCOME TAXES 180 155 - -------------------------------------------------------- ----------- ----------- Net income $516 $482 - -------------------------------------------------------- ----------- ----------- Net income per share (basic and diluted) $0.24 $0.23 Weighted average common shares outstanding 2,117,504 2,125,254 - -------------------------------------------------------- ----------- -----------
See accompanying notes to consolidated financial statements. 3 ECB BANCORP, INC. AND SUBSIDIARY Consolidated Statements of Shareholders' Equity Three months ended March 31, 2000 and 1999 (unaudited - dollar amounts in thousands)
Accumulated Other Common Capital Retained Comprehensive Comprehensive Stock Surplus Earnings Income Income Total ------ ------- -------- ---------- ---------- --------- Balance January 1, 1999 $7,438 $6,261 $7,481 $673 $21,853 Unrealized losses, net of income taxes of $138 (270) ($270) (270) Net income 482 482 482 ----- Total comprehensive income $212 ===== Cash dividends ($.0725 per share) (155) (155) ------- ------- ------- ----- ------- Balance March 31, 1999 $7,438 $6,261 $7,808 $403 $21,910 ======= ======= ======= ===== =======
Deferred Accumulated Compensation Other Common Capital Retained Restricted Comprehensive Comprehensive Stock Surplus Earnings Stock Income (Loss) Income Total ------- -------- -------- ---------- ------------ --------- ---------- Balance January 1, 2000 $7,425 $6,229 $9,009 ($35) ($566) $22,062 Unrealized losses, net of income taxes of $83 (161) ($161) (161) Net income 516 516 516 Recognition of deferred compensation - restricted stock 2 2 ------ Total comprehensive income $355 ======= Repurchase of common stock (9) (18) (27) Cash dividends ($.0825 per share) (175) (175) ------ ------ ------ ---- ----- ------- Balance March 31, 2000 $7,416 $6,211 $9,350 $(33) $(727) $22,217 ====== ====== ====== ==== ===== =======
See accompanying notes to consolidated financial statements. 4 ECB BANCORP, INC. AND SUBSIDIARY Consolidated Statements of Cash Flows Three months ended March 31, 2000 and 1999 (Unaudited - dollar amounts in thousands)
Three Months Ended March 31, -------------------------------- Cash flows from operating activities: 2000 1999 ----------- ---------- Net income $516 $482 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 169 172 Amortization of investment securities, net (9) 12 Provision for probable loan losses 60 60 Deferred compensation - restricted stock 2 - Decrease (increase) in accrued interest receivable (130) 15 Gain on sale of real estate acquired in settlement of loans (9) - Increase in other assets (150) (354) Increase (decrease) in accrued interest payable 101 (4) Increase in postretirement benefit liability 25 25 Increase (decrease) in other liabilities, net (52) 200 - ---------------------------------------------- ----------- ---------- Net cash provided by operating activities 523 608 - ---------------------------------------------- ----------- ---------- Cash flows from investing activities: Proceeds from maturities of investment securities classified as available-for-sale 4,153 6,880 Purchases of investment securities classified as available-for-sale (5,389) (380) Purchase of Federal Home Loan Bank common stock - (68) Purchases of premises and equipment (105) (594) Proceeds from disposal of real estate acquired in settlement of loans and real estate held for sale 109 - Net loan originations (6,256) (6,164) - ---------------------------------------------- ----------- ---------- Net cash used by investing activities (7,488) (326) - ---------------------------------------------- ----------- ---------- Cash flows from financing activities: Net increase in deposits 10,206 2,173 Net decrease in short term borrowings (1,085) (2,725) Proceeds from long term borrowings - 3,000 Dividends paid (154) - Repurchase of common stock (27) - - ---------------------------------------------- ----------- ---------- Net cash provided by financing activities 8,940 2,448 - ---------------------------------------------- ----------- ---------- Increase in cash and cash equivalents 1,975 2,730 Cash and cash equivalents at beginning of period 17,789 11,787 ----------- ---------- Cash and cash equivalents at end of period $19,764 $14,517 =========== ========== Cash paid during the period: Interest $ 1,516 $ 1,365 Taxes 52 - Supplemental disclosures of noncash financing and investing activities: Cash dividends declared but not paid $ 175 $ 155 Unrealized losses on available-for-sale securities, net of deferred taxes (161) (270)
See accompanying notes to consolidated financial statements. 5 ECB BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements (1) BASIS OF PRESENTATION The consolidated financial statements include the accounts of ECB Bancorp, Inc. ("Bancorp") and its wholly-owned subsidiary, The East Carolina Bank (the "Bank") (collectively referred to hereafter as the "Company"). The Bank has two wholly-owned subsidiaries, Carolina Financial Courier, Inc. and Carolina Financial Realty, Inc. All intercompany transactions and balances are eliminated in consolidation. The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements, as well as the amounts of income and expenses during the reporting period. Actual results could differ from those estimates. All adjustments considered necessary for a fair presentation of the results for the interim periods presented have been included (such adjustments are normal and recurring in nature). The footnotes in Bancorp's annual report on Form 10-KSB should be referenced when reading these unaudited interim financial statements. Operating results for the three month period ended March 31, 2000, are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. (2) CASH AND CASH EQUIVALENTS For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks (with original maturities of ninety days or less) and federal funds sold. Generally, federal funds are purchased and sold for one-day periods. (3) ALLOWANCE FOR PROBABLE LOAN LOSSES The following summarizes the activity in the allowance for probable loan losses for the three months ended March 31, 2000 and 1999, respectively.
Three months ended March 31, ----------------------------- 2000 1999 ----------- ----------- Balance at the beginning of the period $ 2,700,000 2,750,000 Provision for probable loan losses 60,000 60,000 Charge-offs (78,000) (24,000) Recoveries 16,000 13,000 ----------- ----------- Net charge-offs (62,000) (11,000) ----------- ----------- Balance at the end of the period $ 2,698,000 2,799,000 =========== ===========
(4) NET INCOME PER SHARE The Company adopted SFAS No. 128, "Earnings Per Share", in 1997, which requires net income per share to be calculated on both a basic and diluted basis. The stock options granted in 1998 had no dilutive effect on net income per share for the three months ended March 31, 2000 and 1999. 6 ECB BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements, continued (5) RECLASSIFICATIONS Certain items in the prior period consolidated financial statements have been reclassified to conform with the current presentation. Such reclassifications had no impact on net income or shareholders' equity as previously reported. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL ECB Bancorp, Inc. ("Bancorp") is a bank holding company headquartered in Engelhard, North Carolina. Bancshares' wholly-owned subsidiary, The East Carolina Bank (the "Bank") (collectively referred to hereafter as the "Company"), is a state-chartered community bank which was founded in 1919. The Bank offers a full range of banking services through 15 branches serving eastern North Carolina, including the communities of Engelhard, Swan Quarter, Columbia, Creswell, Fairfield, Nags Head, Manteo, Southern Shores, Barco, Avon, Hatteras, Ocracoke, Washington and Greenville (two branches). The operations of the Company and depository institutions in general are significantly influenced by general economic conditions and by related monetary, fiscal and other policies of depository institution regulatory agencies, including the Federal Reserve Board, the Federal Deposit Insurance Corporation (the "FDIC") and the North Carolina State Banking Commission. Deposit flows and costs of funds are influenced by interest rates on competing investments and general market rates of interest. Lending activities are affected by the demand for financing of real estate and other types of loans, which in turn are affected by the interest rates at which such financing may be offered and other factors affecting local demand and availability of funds. COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2000 AND 1999 SUMMARY For the three months ended March 31, 2000, the Company had net income of $516,000, or $0.24 basic and diluted earnings per share, compared to $482,000, or $0.23 basic and diluted earnings per share, for the three months ended March 31, 1999. For the quarter ended March 31, 2000, net interest income increased 13.77% and non-interest income increased 4.27% when compared to the same period last year. Non-interest expense increased $291,000 or 13.52% for the three month period ended March 31, 2000 as compared to the same period in 1999, principally attributable to general increases in salary and employee benefits expense of $129,000. NET INTEREST INCOME Total interest income increased $587,000 for the three months ended March 31, 2000 compared to the three months ended March 31, 1999, principally due to an increase in the average volume of loans of $17.1 million. Total interest expense increased $256,000 for the three months ended March 31, 2000 compared to the three months ended March 31, 1999, as a result of average balances of interest-bearing demand deposits increasing by $12.4 million. The cost of funds for the Company during the first three months of 2000 increased 18 basis points when compared to the three months ended March 31, 1999. The Company's increase in cost of funding was a result of increased money market deposit average balances of $11.4 million and a general increase in rates paid on certificates of deposits since the first quarter of 1999. Net interest income for the three months ended March 31, 2000 was $2,735,000, an increase of $331,000 or 13.77% when compared to net interest income of $2,404,000 for the three months ended March 31, 1999. Yield on average earning assets, on a tax-equivalent basis, for the three months ended March 31, 2000 was 8.14% compared to 8.08% in 1999. The Company's net interest margin, on a tax-equivalent basis, for the three months ended March 31, 2000 was 5.18% compared to 5.24% in 1999. This modest decrease in the Company's net interest margin is attributable to an increased cost of funding certificates of deposit of 41 basis points as a result of a higher interest rate environment compared to first quarter of 1999 and increased money market balances. 8 PROVISION FOR PROBABLE LOAN LOSSES The provision for probable loan losses charged to operations was $60,000 during the first three months of 2000 and the first three months of 1999. Net charge-offs for the three months ended March 31, 2000 totaled $62,000, compared to net charge-offs of $11,000 during the same period of 1999. The provision for probable loan losses is the result of management's review and evaluation of the portfolio, which considers current conditions, past due loans, and prior past loan loss experience. NON-INTEREST INCOME Non-interest income increased $19,000 to $464,000 for the three months ended March 31, 2000 compared to the same period in 1999. This is principally due to an increase of approximately $16,000 in service charge fees on personal checking accounts. NON-INTEREST EXPENSE Non-interest expense increased $291,000 or 13.52% to $2,443,000 for the three months ended March 31, 2000 from $2,152,000 in the same period of 1999. This increase is principally due to general increases in salary and employee benefits expense of $129,000 of which $53,000 is related to the new Washington office. Occupancy expense increased $29,000 over the prior year period as the Bank's building rental expense increased $35,000 as a result of expanding the Avon office during the first quarter of 2000 and opening of the Washington office in June of 1999. Bank supply expense increased during the first quarter of 2000 due to approximately $35,000 of nonrecurring expenses related to the implementation of the Bank's check image statement. Telephone and communications expense increased $35,000 over the prior year period due to voice and data equipment upgrades. Equipment expense increased $19,000 as the Company began paying for its newly implemented image check processing system. Other operating expenses increased $52,000 from $410,000 for the three months ended March 31, 1999 to $462,000 for the three months ended March 31, 2000. This increase is partially due to increased expense related to the Bank's Best Checking Account products of approximately $35,000 and increased advertising expense of $19,000 compared to the first quarter of 1999. These increases were partially off-set by the reduction of Club 7 credit card program expense of $24,000 as the Bank completed its two year co-branding obligation with a local television station. INCOME TAXES Income tax expense for the three months ended March 31, 2000 and 1999 was $180,000 and $155,000, respectively, and effective tax rates were 25.86% and 24.33%, respectively. The increase in the effective tax rate during the three months ended March 31, 2000 as compared to the same period last year is due to lower tax exempt interest income resulting from the sale of approximately $3.2 million of certain municipal obligations during the third quarter of 1999. COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2000 AND DECEMBER 31, 1999 Total assets increased $9.4 million to $242.5 million, an increase of 4.02% when compared to $233.1 million at December 31, 1999. Increased certificate of deposits of $8.8 million and interest-bearing demand deposits of $1.4 million funded asset growth. Certificates of deposits of $100,000 or greater increased approximately $7 million during the first quarter of 2000 as the Bank obtained municipal deposits from within its new market in Washington, North Carolina. Loan receivables increased $6.2 million from $147.7 million at December 31, 1999 to $153.9 million at March 31, 2000. The Company experiences seasonal loan growth during the first and second quarters of each year as farm production loans and commercial lines of credit are used by the Company's agricultural base and tourist related businesses on the "Outer Banks". During the first quarter of 2000, lines of credit increased $5.6 million and real estate related loans increased $2.7 million. Shareholders' equity increased by $155,000 from December 31, 1999 to March 31, 2000, as the Company generated net income of $516,000 and experienced an increase of net unrealized losses on available-for-sale securities of 9 $161,000. The Company declared a dividend of $175,000, or 8.25 cents per share, during the first quarter of 2000 compared to dividends of $155,000 or 7.25 cents per share declared during the first quarter of 1999. ASSET QUALITY Management continuously analyzes the growth and risk characteristics of the total loan portfolio under current conditions in order to evaluate the adequacy of the allowance for probable loan losses. The factors that influence management's judgment in determining the amount charged to operating expense include past loan loss experience, composition of the loan portfolio, evaluation of probable losses inherent in the portfolio and current economic conditions. The Company's watch committee, which includes three members of senior management as well as regional managers and other credit administration personnel, conducts a quarterly review of all credits classified as substandard. This review follows a re-evaluation by the account officer who has primary responsibility for the relationship. Various regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for probable loan losses. Such agencies may require the Company to recognize additions to the allowance for probable loan losses based on their judgments about information available to them at the time of their examination. Nonperforming assets, which consist of loans not accruing interest, restructured debt and real estate acquired in settlement of loans, were $649,000 and $672,000 at March 31, 2000 and December 31, 1999, respectively. The decrease in nonperforming assets is the result of a reduction in foreclosed properties of $100,000 partially offset by an increase of non-accrual loans of $81,000 during the first quarter of this year. At March 31, 2000, the recorded investment in loans that are considered to be impaired under SFAS No. 114 was $446,192 compared to $367,000 at December 31, 1999. These loans are on a non-accrual basis and their entire balance has been reserved in the allowance for probable loan losses. REGULATORY MATTERS Management is not presently aware of any current recommendation to the Company by regulatory authorities which, if they were to be implemented, would have a material effect on the Company's liquidity, capital resources or operations. LIQUIDITY The Company relies on the investment portfolio, as a source of liquidity, with maturities designed to provide needed cash flows. Further, retail deposits generated throughout the branch network has enabled management to fund asset growth and maintain liquidity. These sources have allowed limited dependence on short-term borrowed funds for liquidity or for asset expansion. External sources of funds include the ability to access advances from the Federal Home Loan Bank of Atlanta and Fed Fund lines with correspondent banks. CAPITAL RESOURCES Bancorp and the Bank are subject to the capital requirements of the Federal Reserve, the FDIC and the State Banking Commission. The FDIC requires the Bank to maintain minimum ratios of Tier I capital to total risk-weighted assets and total capital to risk-weighted assets of 4% and 8%, respectively. To be "well capitalized," the FDIC requires ratios of Tier I capital to total risk-weighted assets and total capital to risk-weighted assets of 6% and 10%, respectively. Tier I capital consists of total stockholders' equity calculated in accordance with generally accepted accounting principles excluding unrealized gains or losses, net of income taxes, on securities available-for-sale, and total capital is comprised of Tier I capital plus certain adjustments, the only one of which is applicable to the Bank is the allowance for probable loan losses. Risk-weighted assets reflect the Banks' on- and off-balance sheet exposures after such exposures have been adjusted for their relative risk levels using formulas set forth in FDIC regulations. As of March 31, 2000, the Bank was in compliance with all of the aforementioned capital requirements and satisfies the "well-capitalized" definition that is used by the FDIC in its evaluation of member banks. Additionally, at March 31, 2000, Bancorp was also in compliance with the applicable capital requirements set forth by the Federal Reserve. 10 CURRENT ACCOUNTING ISSUES In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Standards (SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. This statement is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. Earlier application of all of the provisions of this statement is encouraged. The Company plans to adopt this statement at January 1, 2001 and does not anticipate any material effect on its consolidated financial statements. The FASB also issues exposure drafts for proposed statements of financial accounting standards. Such exposure drafts are subject to comment from the public, to revisions by the FASB and to final issuance by the FASB as statements of financial accounting standards. Management considers the effect of the proposed statements on the consolidated financial statements of the Company and monitors the status of changes to issued exposure drafts and to proposed effective dates. MANAGEMENT AWARENESS Management is not aware of any known trends, events, uncertainties, or current recommendations by regulatory authorities that will or that are reasonably likely to have a material effect on the Company's liquidity, capital resources or other operations. 11 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-KSB (a) Exhibits: Exhibit 27 - Financial Data Schedule. (b) Reports on Form 8-KSB On March 30, 2000, Registrant filed a Current Report on Form 8-KSB announcing that its Board of Directors has authorized management to repurchase shares of Bancorp's outstanding common stock. The Board's authorization extends for a period of one year and for up to 5% of Bancorp's outstanding shares. 12 SIGNATURES Under the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ECB BANCORP, INC. ----------------- (Registrant) Date: 5/8/2000 By: /s/ Arthur H. Keeney, III - -------------- ------------------------- Arthur H. Keeney, III (President & CEO) Date: 5/8/2000 By: /s/ Gary M. Adams - -------------- ------------------------- Gary M. Adams (Senior Vice President & CFO) 13 EX-27.1 2 FINANCIAL DATA SCHEDULE
9 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 13,729 0 6,025 0 59,940 000 000 153,870 2,698 242,485 213,507 1,653 2,108 3,000 0 0 7,416 14,801 242,485 3,367 985 0 4,352 1,552 1,617 2,735 60 0 2,443 696 696 0 000 516 .24 .24 5.18 489 0 77 0 2700 78 16 2,698 2,643 0 55
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