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): July 18, 2006

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 July 18, 2006, we announced our results of operations for the three and six months periods ended June 30, 2006. 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 being furnished with this Report.

Exhibit No.	Exhibit Description
99.1	Copy of our press release dated July 18, 2006

Disclosures About Forward Looking Statements

Statements in this Report and its exhibits 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 our Annual Report on Form 10-K and in other documents we file with the Securities and Exchange Commission from time to time. 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. 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 our 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 our customers, actions of government regulators, the level of market interest rates, weather and similar conditions, particularly the effect of hurricanes on our banking and operations facilities and on our customers and the communities in which we do business, and general economic conditions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. All forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statements in this paragraph. We have no obligation, and do not intend, to update these forward-looking statements.

2

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: July 19, 2006	By:	/S/ Gary M. Adams
		Gary M. Adams
		Chief Financial Officer

3

EX-99.1

Exhibit 99.1

July 18, 2006

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 2006 First Half Financial Results

ENGELHARD, N.C.-ECB Bancorp, Inc. (NASDAQ:ECBE) (“ECB” or the “Company”) today announced its results for the three and six months ended June 30, 2006.

2006 First Half Financial Highlights

Net income for the 2006 first half was $2,513,000, or $0.99 per diluted share, generating an annualized ROAA of 0.89% and an annualized ROAE of 10.29% compared to net income for the 2005 first half of $2,218,000, or $1.08 per diluted share, generating an annualized ROAA of 0.87% and an annualized ROAE of 13.64%. Net income for the 2006 second quarter was $1,415,000, or $0.49 per diluted share, generating an annualized ROAA of 0.99% and an annualized ROAE of 9.52%, compared to net income for the 2005 second quarter of $1,266,000, or $0.62 per diluted share, generating an annualized ROAA of 0.98% and an annualized ROAE of 15.50%.

Arthur H. Keeney, III, President and CEO stated: “The Company successfully sold an additional 862,500 shares of common equity in late March 2006 for $26.5 million to support the Bank’s various strategic initiatives for expansion and growth over the next several years. The full impact of the sale of these shares on the Company’s per share (basic and diluted) and ROAE results were realized in the 2006 second quarter and first half financial results.”

-MORE-

1

Other Financial Highlights include:

• Net interest income rose 12.6% to $10,129,000 in the first six months of 2006 from the year ago period. For the 2006 second quarter, net interest income rose 13.8% to $5,262,000 compared to the second quarter of 2005.

• Consolidated assets increased 7.0% to $579,137,000 at June 30, 2006 from $541,136,000 at June 30, 2005.

• Loans increased 14.3% to $413,432,000 at June 30, 2006 from $361,665,000 at June 30, 2005.

• Deposits increased 5.0% to $478,254,000 at June 30, 2006 from $455,622,000 at June 30, 2005.

• Non-interest income increased 1.3% to $2,864,000 in the first six months in 2006. For the 2006 second quarter, non-interest income decreased 4.3% to $1,549,000 from the 2005 second quarter.

• Declared quarterly dividend of $0.17 per share, or $0.68 per share on an annualized basis, representing a 6.3% increase over our 2005 annualized dividend.

Keeney continued: “We are pleased with our profitable growth and steady progress during the first half of 2006. We have continued to acquire properties in several of our key existing markets which we expect will become full-service ECB branches over the next year or two. Several announcements with more specific information will be made in the near future. Coastal eastern North Carolina continues to grow and we believe ECB is well positioned to take advantage of the opportunities presented to us. While our non-performing loans have increased modestly, our credit underwriting remains sound and our credit standards have remained consistent. We look forward to the balance of 2006.”

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 covering eastern NC from Currituck to Wilmington and Greenville to Hatteras. ECB 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 Nasdaq Global Market under the symbol “ECBE”. More information can be obtained by visiting ECB’s web site at www.ecbbancorp.com.

-MORE-

2

“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. 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 obligations, and does not intend, to update these forward-looking statements.

###

See 3 pages of financial information attached

3

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets

June 30, 2006, December 31, 2005 and June 30, 2005

(Dollars in thousands, except per share data)

	June 30, 2006			December 31, 2005*			June 30, 2005
	(unaudited)						(unaudited)
Assets
Non-interest bearing deposits and cash	$	20,980		$	17,927		$	29,626
Interest bearing deposits		933			912			908
Overnight investments		—			—			10,575
Total cash and cash equivalents		21,913			18,839			41,109
Investment securities
Available-for-sale, at market value (cost of $108,826, $107,084 and $105,008 at June 30, 2006, December 31, 2005, and June 30, 2005, respectively)		104,672			104,723			104,448
Loans		413,432			386,786			361,665
Allowance for loan losses		(4,999	)		(4,650	)		(4,449	)
Loans, net		408,433			382,136			357,216
Real estate & repossessions acquired in settlement of loans, net		—			—			39
Federal Home Loan Bank common stock, at cost		1,814			1,948			2,083
Bank premises and equipment, net		21,452			18,859			17,539
Accrued interest receivable		3,723			3,562			2,862
Bank owned life insurance		7,593			7,436			7,306
Other assets		9,537			10,183			8,534
Total	$	579,137		$	547,686		$	541,136
Liabilities and Shareholders’ Equity
Deposits
Demand, noninterest bearing	$	104,407		$	98,890		$	106,672
Demand interest bearing		94,615			94,423			96,833
Savings		21,674			22,818			22,943
Time		257,558			249,077			229,174
Total deposits		478,254			465,208			455,622
Accrued interest payable		2,049			1,524			1,273
Short-term borrowings		17,052			23,598			15,399
Long-term obligations		18,310			18,310			31,310
Other liabilities		4,132			4,481			3,895
Total liabilities		519,797			513,121			507,499
Shareholders’ equity
Common stock, par value $3.50 per share; authorized 10,000,000 shares; issued and outstanding 2,902,242 at June 30, 2006 and 2,040,042 at December 31, 2005 and June 30, 2005.		10,119			7,140			7,140
Capital surplus		26,526			5,408			5,408
Retained earnings		25,250			23,724			21,741
Deferred compensation - restricted stock		—			(255	)		(312	)
Accumulated other comprehensive loss		(2,555	)		(1,452	)		(340	)
Total shareholders’ equity		59,340			34,565			33,637
Total	$	579,137		$	547,686		$	541,136

* Derived from audited consolidated financial statements.

4

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Income Statements

For the three months ended June 30, 2006 and 2005

(Dollars in thousands, except per share data)

	Three months ended June 30,
	2006		2005
	(unaudited)		(unaudited)
Interest income:
Interest and fees on loans	$	7,687	$	5,719
Interest on investment securities:
Interest exempt from federal income taxes		266		284
Taxable interest income		852		744
Dividend income		—		18
FHLB stock dividends		26		21
Other interest		98		55
Total interest income		8,929		6,841
Interest expense:
Deposits:
Demand accounts		301		126
Savings		28		29
Time		2,793		1,541
Short-term borrowings		104		132
Long-term obligations		441		388
Total interest expense		3,667		2,216
Net interest income		5,262		4,625
Provision for loan losses		200		90
Net interest income after provision for loan losses		5,062		4,535
Noninterest income:
Service charges on deposit accounts		820		839
Other service charges and fees		613		599
Net gain on sale of securities		—		90
Income from bank owned life insurance		92		56
Other operating income		24		35
Total noninterest income		1,549		1,619
Noninterest expenses:
Salaries		1,847		1,655
Retirement and other employee benefits		670		697
Occupancy		415		349
Equipment		450		414
Professional fees		30		84
Supplies		75		79
Telephone		130		132
Postage		55		59
Other operating expenses		834		900
Total noninterest expenses		4,506		4,369
Income before income taxes		2,105		1,785
Income taxes		690		519
Net Income	$	1,415	$	1,266
Net income per share – basic	$	0.49	$	0.63
Net income per share – diluted	$	0.49	$	0.62
Weighted average shares outstanding - basic		2,886,208		2,014,872
Weighted average shares outstanding - diluted		2,916,743		2,044,091

5

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Income Statements

For the six months ended June 30, 2006 and 2005

(Dollars in thousands, except per share data)

	Six months ended June 30,
	2006		2005
	(unaudited)		(unaudited)
Interest income:
Interest and fees on loans	$	14,747	$	10,865
Interest on investment securities:
Interest exempt from federal income taxes		532		573
Taxable interest income		1,650		1,497
Dividend income		—		36
FHLB stock dividends		76		33
Other interest		221		78
Total interest income		17,226		13,082
Interest expense:
Deposits:
Demand accounts		544		238
Savings		56		58
Time		5,426		2,801
Short-term borrowings		216		234
Long-term obligations		855		752
Total interest expense		7,097		4,083
Net interest income		10,129		8,999
Provision for loan losses		400		190
Net interest income after provision for loan losses		9,729		8,809
Noninterest income:
Service charges on deposit accounts		1,613		1,634
Other service charges and fees		1,043		923
Net gain on sale of securities		—		90
Income from bank owned life insurance		157		125
Other operating income		51		54
Total noninterest income		2,864		2,826
Noninterest expenses:
Salaries		3,618		3,249
Retirement and other employee benefits		1,332		1,314
Occupancy		810		680
Equipment		868		869
Professional fees		79		271
Supplies		158		162
Telephone		237		265
Postage		114		106
Other operating expenses		1,692		1,619
Total noninterest expenses		8,908		8,535
Income before income taxes		3,685		3,100
Income taxes		1,172		882
Net Income	$	2,513	$	2,218
Net income per share – basic	$	1.00	$	1.10
Net income per share - diluted	$	0.99	$	1.08
Weighted average shares outstanding - basic		2,507,085		2,014,861
Weighted average shares outstanding - diluted		2,536,105		2,045,074

6

ECB Bancorp, Inc.

Supplemental Quarterly Financial Data

(Unaudited)

	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05
	Actual			Actual			Actual			Actual			Actual
Income Statement Data:
Interest income	$	8,929		$	8,297		$	7,989		$	7,532		$	6,841
Interest expense		3,667			3,430			3,003			2,565			2,216
Net interest income		5,262			4,867			4,986			4,967			4,625
Provision for loan losses		200			200			417			150			90
Net after provision expense		5,062			4,667			4,569			4,817			4,535
Noninterest income		1,549			1,315			1,862			1,538			1,618
Noninterest expense		4,506			4,402			4,575			4,355			4,369
Income before income taxes		2,105			1,580			1,856			2,000			1,784
Income taxes		690			482			587			633			519
Net income	$	1,415		$	1,098		$	1,269		$	1,367		$	1,265
Per Share Data and Shares Outstanding:
Net income – basic	$	0.49		$	0.51		$	0.63		$	0.68		$	0.63
Net income – diluted		0.49			0.51		$	0.62		$	0.67			0.62
Cash dividends		0.17			0.17			0.16			0.16			0.16
Book value at period end		20.45			20.43			16.94			16.86			16.49
Dividend payout ratio		34.69	%		33.33	%		25.40	%		23.53	%		25.40	%
Weighted-average number of common shares outstanding:
Basic		2,886,208			2,133,275			2,014,874			2,014,874			2,014,872
Diluted		2,916,743			2,150,583			2,045,044			2,047,098			2,044,091
Shares outstanding at period end		2,902,242			2,902,542			2,040,042			2,040,042			2,040,042
Balance Sheet data:
Total assets	$	579,137		$	581,771		$	547,686		$	542,782		$	541,136
Loans - gross		413,432			394,986			386,786			370,875			361,665
Allowance for loan losses		4,999			4,852			4,650			4,588			4,449
Investments		104,672			104,241			104,723			113,285			104,448
Interest earning assets		520,851			526,576			494,369			486,108			478,770
Premises and equipment, net		21,452			19,509			18,859			18,193			17,539
Total deposits		478,254			482,487			465,208			457,059			455,622
Short-term borrowings		17,052			16,238			23,598			27,513			15,399
Long-term obligations		18,310			18,310			18,310			18,310			31,310
Shareholders’ equity		59,340			59,286			34,565			34,395			33,637
Selected Performance Ratios: (annualized)
Return on average assets		0.99	%		0.79	%		0.93	%		1.02	%		0.98	%
Return on average shareholders’ equity		9.52	%		11.51	%		14.72	%		16.18	%		15.50	%
Net interest margin		4.19	%		4.06	%		4.16	%		4.20	%		4.14	%
Efficiency ratio		64.41	%		69.30	%		65.17	%		65.13	%		67.52	%
Asset Quality Ratios:
Nonperforming loans to period-end loans		0.12	%		0.02	%		0.02	%		0.04	%		0.28	%
Allowance for loan losses to period-end loans		1.21	%		1.23	%		1.20	%		1.24	%		1.23	%
Allowance for loan losses to nonperforming loans		1,013	%		7,960	%		7,154	%		2,753	%		433	%
Net charge-offs to average loans (annualized)		0.05	%		0.00	%		0.23	%		0.01	%		0.02	%
Capital Ratios:
Equity-to-assets ratio		10.25	%		10.19	%		6.31	%		6.34	%		6.22	%
Leverage Capital ratio		12.54	%		12.69	%		8.43	%		8.35	%		8.50	%
Tier 1 Capital ratio		15.12	%		15.46	%		10.32	%		10.46	%		10.38	%
Total Capital ratio		16.17	%		16.51	%		11.36	%		11.53	%		11.43	%

# # #

7