8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 19, 2005

ECB BANCORP, INC.

(Exact name of registrant as specified in its charter)

North Carolina	000-24753	56-2090738
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Post Office Box 337 Engelhard, North Carolina	27824
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (252) 925-9411

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On October 19, 2005, we announced our financial condition and results of operations at, and for the three and nine months ended, September 30, 2005. A copy of our press release is being furnished as Exhibit 99.1 to this Report.

Item 9.01. Financial Statements and Exhibits.

Exhibits. The following exhibit is furnished with this Report:

Exhibit No.	Exhibit Description
99.1	Copy of our press release dated October 19, 2005

Disclosures About Forward Looking Statements

The discussions included in this Report and its exhibits may contain statements that could be considered to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act. Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results or otherwise are not statements of historical fact. Those statements often are characterized by the use of qualifying words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” or other statements concerning opinions or judgments of our management about future events. Those statements are inherently subject to risks, uncertainties and other factors that may cause our actual results, or the actual outcome of the matters discussed in the statements, to be materially different from historical results or any future results or outcome expressed or implied by the statements themselves. Factors that could influence the accuracy of those forward-looking statements include, but are not limited to, customer acceptance of our services, products and fee structure, the financial success or changing strategies of our customers, the competitive nature of the financial services industry and our ability to compete effectively against other financial institutions, weather and similar conditions, particularly the effect of hurricanes on our banking, loan production and operations facilities and on our customers and the communities in which we do business, actions of government regulators, the level of market interest rates, and general economic conditions. Further information about factors and risks that could affect our business, financial condition and results of operations are included in the reports we file with the Securities and Exchange Commission. Copies of those reports are available through our Internet website at www.ecbbancorp.com or directly through the Commission’s website at www.sec.gov.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, we have duly caused this Report to be signed on our behalf by the undersigned thereunto duly authorized.

	ECB BANCORP, INC.
	(Registrant)
Date: October 20, 2005	By:	/S/ Gary M. Adams
		Gary M. Adams
		Chief Financial Officer

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EX-99.1

Exhibit 99.1

PRESS RELEASE

October 19, 2005

CONTACT:	ECB Bancorp, Inc.
	Gary M. Adams, Chief Financial Officer
	(252) 925-5525
	(252) 925-8491 facsimile
	Gary.Adams@ecbbancorp.com

FOR IMMEDIATE RELEASE

ECB Bancorp, Inc. Reports 17.1% Increase in Third Quarter Earnings

ENGELHARD, N.C.- ECB Bancorp, Inc. (NASDAQ: ECBE) (“ECB” or the “Company”) today announced its results for the three and nine months ended September 30, 2005.

Net income rose 17.07% for the three months ended September 30, 2005 to $1,367,000, or $0.67 per diluted share, generating an annualized Return on Average Assets (ROAA) of 1.02% and an annualized Return on Average Equity (ROAE) of 16.18%, compared to net income for the 2004 third quarter of $1,168,000, or $0.57 per diluted share, generating an annualized ROAA of 0.94% and an annualized ROAE of 15.20%.

For the nine months ended September 30, 2005, net income rose 6.58% to $3,585,000, or $1.75 per diluted share, generating an annualized ROAA of 0.92% and an annualized ROAE of 14.51%, compared to net income for the nine months ended September 30, 2004 of $3,363,000, or $1.65 per diluted share, generating an annualized ROAA of 0.94% and an annualized ROAE of 14.55%.

• For the 2005 third quarter, net interest income rose 14.68% to $4,967,000 from the year ago period. Net interest income rose 13.05% to $13,966,000 in the first nine months of 2005 from the year ago period.

• Consolidated assets increased 7.23% to $542,782,000 at September 30, 2005 from $506,168,000 at September 30, 2004.

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• Loans increased 11.59% to $370,876,000 at September 30, 2005 from $332,355,000 at September 30, 2004.

• Deposits increased 10.09% to $457,059,000 at September 30, 2005 from $415,185,000 at September 30, 2004.

• For the 2005 third quarter, non-interest income increased 3.58% to $1,538,000 from the 2004 third quarter. Non-interest income decreased 9.28% to $4,363,000 in the first nine months of 2005 from the year ago period (due in part to a $316,924 (pre-tax) gain in the first quarter of 2004 on insurance proceeds for the property damage sustained during Hurricane Isabel in the fall of 2003).

• Declared quarterly dividend of $0.16 per share, a 12.3% increase, or $0.64 per share on an annualized basis.

Arthur H. Keeney, III, President and Chief Executive Officer, stated: “Our core earnings this quarter continue to be supported by solid growth in our net interest income reflecting the continued growth in both the loan portfolio and in deposits. Recent rate increases implemented by the Federal Reserve also assisted in easing the pressure on the Bank’s net interest margin. Loan portfolio quality statistics remain above our peer averages.

“During the third quarter, construction began on a full-service branch facility in Hertford on Harvey Point Road to replace our small branch office in a shopping center on Highway 17. Construction also began on a new branch facility to replace our existing branch in Southern Shores to meet the ever-growing needs of our customers in that market.

“Looking ahead, we remain optimistic that 2005 will be another good year for ECB as we continue to focus on organic growth. Our efforts to date have been centered around building strong customer relationships and hiring and motivating exceptional people. Our company is positioned to take advantage of opportunities in the various markets we serve. It is our conviction that our proven emphasis on high asset quality, strong capital, prudent reserves and solid profitability will continue to be the bedrock of our success in building shareholder value.”

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 20 offices in eastern North Carolina, including new full-service branches in Morehead City and Wilmington. The Bank also provides mortgages, insurance services through the Bank’s licensed agents and investment and brokerage

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services offered through a third-party broker-dealer. ECB’s common stock is listed on The Nasdaq Capital Market under the symbol “ECBE”. More information can be obtained by visiting ECB’s web site at www.ecbbancorp.com.

“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 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”, “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 about future events. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, the financial success or changing strategies of the Company’s customers, actions of government regulators, the level of market interest rates, 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, and general economic conditions. 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. The Company has no obligation to update these forward-looking statements.

See financial attachments (3 pages)

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets

September 30, 2005, December 31 and September 30, 2004

	September 30, 2005			December 31, 2004*			September 30, 2004
	(unaudited)						(unaudited)
Assets
Non-interest bearing deposits and cash	$	23,619,266		$	28,263,268		$	24,831,437
Total cash and cash equivalents		23,619,266			28,263,268			24,831,437
Investment securities
Available-for-sale, at market value (cost of $114,344,554 $112,787,121 and $119,457,884 at September 30, 2005, December 31, 2004 and September 30, 2004, respectively		113,285,447			112,321,137			118,645,661
Loans		370,875,529			329,530,355			332,355,166
Allowance for loan losses		(4,588,172	)		(4,300,000	)		(4,101,299	)
Loans, net		366,287,357			325,230,355			328,253,867
Real estate acquired in settlement of loans, net		—			34,500			34,500
Federal Home Loan Bank common stock, at cost		1,947,700			1,946,500			1,200,000
Bank premises and equipment, net		18,192,677			16,939,045			15,604,361
Accrued interest receivable		3,543,006			2,758,558			2,961,701
Bank owned life insurance		7,370,934			6,691,215			6,622,116
Other assets		8,535,921			7,705,252			8,014,683
Total Assets	$	542,782,308		$	501,889,830		$	506,168,326
Liabilities and Shareholders’ Equity
Deposits
Demand, noninterest bearing	$	105,792,176		$	86,215,997		$	93,172,055
Demand interest bearing		89,383,805			94,924,075			94,456,550
Savings		23,162,553			23,178,796			23,335,073
Time		238,720,669			206,814,091			204,221,441
Total deposits		457,059,203			411,132,959			415,185,119
Accrued interest payable		1,408,639			970,081			733,320
Short-term borrowings		27,512,892			23,006,740			23,200,471
Long-term obligations		18,310,000			31,310,000			31,310,000
Other liabilities		4,096,753			3,392,837			3,525,114
Total liabilities		508,387,487			469,812,617			473,954,024
Shareholders’ equity
Common stock, par value $3.50 per share; authorized 10,000,000 shares; issued and outstanding 2,040,042 at September 30, 2005 and 2,038,242 at December 31, 2004 and September 30, 2004		7,140,148			7,133,848			7,133,848
Capital surplus		5,407,703			5,360,003			5,360,003
Retained earnings		22,781,831			20,176,100			20,550,174
Deferred compensation - restricted stock		(283,510	)		(306,157	)		(330,206	)
Accumulated other comprehensive loss		(651,351	)		(286,581	)		(499,517	)
Total shareholders’ equity		34,394,821			32,077,213			32,214,302
Total Liabilities and Shareholders’ Equity	$	542,782,308		$	501,889,830		$	506,168,326

* Derived from audited consolidated financial statements.

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Income Statements

For three and nine months ended September 30, 2005 and 2004

(unaudited)

	Three months ended September 30,				Nine months ended September 30,
	2005		2004		2005		2004
Interest income:
Interest and fees on loans	$	6,315,425	$	4,716,671	$	17,180,594	$	13,122,337
Interest on investment securities:
Interest exempt from federal income taxes		287,952		259,194		860,812		804,980
Taxable interest income		794,115		825,904		2,290,694		2,474,453
Dividend income		—		18,956		36,551		71,912
FHLB stock dividends		23,921		12,123		56,899		32,480
Interest on federal funds sold		110,913		21,619		188,654		52,572
Total interest income		7,532,326		5,854,467		20,614,204		16,558,734
Interest expense:
Deposits:
Demand accounts		134,669		102,376		372,668		275,794
Savings		29,215		29,205		87,043		83,972
Time		1,887,749		977,621		4,688,461		2,636,753
Short-term borrowings		108,379		53,031		342,678		157,046
Long-term obligations		405,376		361,048		1,157,411		1,051,534
Total interest expense		2,565,388		1,523,281		6,648,261		4,205,099
Net interest income		4,966,938		4,331,186		13,965,943		12,353,635
Provision for loan losses		150,000		175,000		340,000		575,000
Net interest income after provision for loan losses		4,816,938		4,156,186		13,625,943		11,778,635
Noninterest income:
Service charges on deposit accounts		837,123		849,515		2,471,044		2,548,735
Other service charges and fees		600,345		530,666		1,523,260		1,261,331
Net gain on sale of securities		—		3,977		90,075		296,116
Income from bank owned life insurance		65,019		69,099		190,209		219,198
Other operating income		35,208		31,360		88,797		484,523
Total noninterest income		1,537,695		1,484,617		4,363,385		4,809,903
Noninterest expenses:
Salaries		1,712,653		1,498,522		4,961,713		4,375,107
Retirement and other employee benefits		662,094		609,745		1,975,615		1,809,091
Occupancy		381,093		318,222		1,060,928		978,503
Equipment		430,175		415,794		1,298,954		1,280,281
Professional fees		113,934		70,098		385,278		221,214
Supplies		89,825		100,138		252,098		253,991
Telephone		121,568		75,130		386,569		284,389
Postage		51,466		47,253		157,197		166,242
Other operating expenses		792,167		838,096		2,411,123		2,431,301
Total noninterest expenses		4,354,975		3,972,998		12,889,475		11,800,119
Income before income taxes		1,999,658		1,667,805		5,099,853		4,788,419
Income taxes		632,560		500,000		1,515,189		1,425,000
Net Income	$	1,367,098	$	1,167,805	$	3,584,664	$	3,363,419
Net income per share – basic	$	0.68	$	0.58	$	1.78	$	1.67
Net income per share - diluted	$	0.67	$	0.57	$	1.75	$	1.65
Weighted average shares outstanding - basic		2,014,874		2,014,874		2,014,878		2,017,286
Weighted average shares outstanding - diluted		2,047,098		2,041,232		2,047,607		2,043,932

See accompanying notes to consolidated financial statements.

ECB Bancorp, Inc.

Supplemental Quarterly Financial Data

(Unaudited)

	9/30/2005			6/30/2005			3/31/2005			12/31/2004			9/30/2004
	(Dollars in thousands, except per share data)
Income Statement Data:
Interest income	$	7,532		$	6,841		$	6,241		$	6,184		$	5,854
Interest expense		2,565			2,216			1,867			1,715			1,523
Net interest income		4,967			4,625			4,374			4,469			4,331
Provision for loan losses		150			90			100			229			175
Noninterest income		1,538			1,618			1,207			(9	)		1,485
Noninterest expense		4,355			4,369			4,166			3,715			3,973
Income taxes		633			519			363			600			500
Net income	$	1,367		$	1,265		$	952		$	(84	)	$	1,168
Per Share Data and Shares Outstanding:
Basic net income	$	0.68		$	0.63		$	0.47		$	(0.04	)	$	0.58
Diluted net income		0.67			0.62			0.47			(0.04	)		0.57
Cash dividends declared		0.16			0.16			0.16			0.1425			0.1425
Book value at period end		16.86			16.49			15.66			15.74			15.80
Dividend payout ratio		23.53	%		25.40	%		34.04	%		N/M			24.57	%
Weighted-average number of common shares outstanding:
Basic		2,014,874			2,014,872			2,014,874			2,014,874			2,014,874
Diluted		2,047,098			2,044,091			2,044,430			2,042,498			2,041,232
Shares outstanding at period end		2,040,042			2,040,042			2,038,242			2,038,242			2,038,242
Balance Sheet data:
Total assets	$	542,782		$	541,136		$	516,335		$	501,890		$	506,168
Loans - gross		370,876			361,665			336,429			329,530			332,355
Allowance for loan losses		4,588			4,449			4,380			4,300			4,101
Investments		113,285			104,448			109,093			112,321			118,646
Premises and equipment, net		18,193			17,539			17,464			16,939			15,604
Total deposits		457,059			455,622			420,959			411,133			415,185
Short-term borrowings		27,513			15,399			27,983			23,007			23,200
Long-term obligations		18,310			31,310			31,310			31,310			31,310
Shareholders’ equity		34,395			33,637			31,919			32,077			32,214
Selected Performance Ratios: (annualized)
Return on average assets		1.02	%		0.98	%		0.76	%		(0.07	)%		0.94	%
Return on average shareholders’ equity		16.18	%		15.50	%		11.77	%		(1.03	)%		15.20	%
Net interest margin		4.23	%		4.14	%		4.15	%		4.07	%		3.99	%
Efficiency ratio		65.13	%		67.52	%		72.18	%		79.97	%		66.31	%
Asset Quality Ratios:
Nonperforming loans to period-end loans		0.04	%		0.28	%		0.03	%		0.03	%		0.03	%
Allowance for loan losses to period-end loans		1.24	%		1.23	%		1.30	%		1.30	%		1.23	%
Allowance for loan losses to nonperforming loans		2,753	%		433	%		5,022	%		4,175	%		4,324	%
Net charge-offs to average loans (annualized)		0.01	%		0.02	%		0.02	%		0.04	%		0.03	%
Capital Ratios:
Equity-to-assets ratio		6.34	%		6.22	%		6.18	%		6.39	%		6.36	%
Leverage Capital ratio		8.35	%		8.50	%		8.64	%		8.43	%		8.29	%
Tier 1 Capital ratio		10.46	%		10.38	%		10.81	%		10.86	%		10.78	%
Total Capital ratio		11.53	%		11.43	%		11.94	%		11.96	%		11.84	%