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): February 21, 2007

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 February 21, 2007, we announced our results of operations for the three and twelve months periods ended December 31, 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 February 21, 2007

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 changes in general economic conditions and real estate values in our banking market (particularly changes that affect our loan portfolio, the abilities of our borrowers to repay their loans, and the values of loan collateral). 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: February 21, 2007	By:	/S/ Gary M. Adams
		Gary M. Adams
		Chief Financial Officer

3

EX-99.1

Exhibit 99.1

PRESS RELEASE

February 21, 2007

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 Record 2006 Year-End Results

ENGELHARD, N.C.-ECB Bancorp, Inc. (NASDAQ:ECBE) (“ECB” or the “Company”) today announced its results for the three and twelve months ended December 31, 2006.

Net income rose 15.0% for the twelve months ended December 31, 2006 to $5,582,000 or $2.05 per diluted share, which compares to net income for the year ended December 31, 2005 of $4,853,000 or $2.37 per diluted share.

For the three months ended December 31, 2006, net income rose 8.4% to $1,374,000, or $0.47 per diluted share, which compares to net income for the three months ended December 31, 2005 of $1,268,000 or $0.62 per diluted share.

The Company successfully sold an additional 862,500 shares of common equity in late March 2006 for $26.5 million to support ECB’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 earnings per share (basic and diluted) is reflected in the 2006 fourth quarter and fiscal year end results.

Other financial highlights include:

• Net interest income rose 9.2% to $20,697,000 in the twelve months ended December 31, 2006 from $18,952,000 a year ago. For the 2006 fourth quarter, net interest income rose 3.5% to $5,163,000 compared to $4,986,000 for the fourth quarter of 2005.

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• Consolidated assets increased 13.9% to $624,070,000 at December 31, 2006 from $547,686,000 at December 31, 2005.

• Loans increased 8.1% to $417,943,000 at December 31, 2006 from $386,786,000 at December 31, 2005.

• Deposits increased 10.1% to $512,249,000 at December 31, 2006 from $465,208,000 at December 31, 2005.

• Non-interest income decreased 0.7% to $6,183,000 for the year ended December 31, 2006. For the 2006 fourth quarter, non-interest income decreased 15.9% to $1,566,000 from the 2005 fourth quarter. The Company sold its credit card portfolio in the fourth quarter of 2005 and realized a gain of $375,000 in that 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.

Arthur H. Keeney III, President and CEO stated: “We are pleased to report that 2006 was another good year for ECB Bancorp, Inc., however, our net interest earnings were challenged throughout 2006. Interest rates rose significantly, loan demand softened, and we experienced a modest slowdown in the generation of deposits in our markets. While short term rates have remained high, variable rate loans have not repriced since late June when the Federal Reserve Board last increased short term rates. These together have resulted in continued pressure on our net interest margin. We see this continuing into 2007.

Mr. Keeney continued: “Nevertheless, asset quality remains a top priority and our loan portfolio continues to be in excellent shape. For the year, net loan charge-offs were 0.01% of average loans and non-performing loans represent only 0.04% of total loans at December 31, 2006. We believe these loan portfolio quality statistics will keep us above our peer averages.

“We currently have two additional branches under construction in the rapidly expanding community of Greenville, NC which will give us four locations when they open later in 2007. We have also recently completed the acquisition of properties in fast growing Brunswick County, NC and will soon begin converting an existing loan production office in Ocean Isle Beach, NC (Brunswick County) to a full-service branch. In addition, we are currently in the planning stages to bring branches on stream over the next several years on properties we have acquired in Currituck County, Craven County, New Hanover County and Onslow County.

Looking ahead, we remain optimistic that 2007 will be another good year for ECB notwithstanding the possible continued impact of the economic issues touched on earlier. We will continue to focus on organic growth, and we are committed to the goals of high asset quality, strong capital and profitability which are all designed to leverage the ECB reputation and build long-term shareholder value. We are confident we have the strategy, the management and the people to meet the new challenges.”

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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.

“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 changes in general economic conditions and the real estate values in our banking market (particularly changes that affect our loan portfolio, the abilities of our borrowers to repay their loans, and the values of loan collateral). 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.

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See 3 pages of financial information attached

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets

December 31, 2006 and 2005

(Dollars in thousands, except per share data)

	December 31, 2006			December 31, 2005*
	(unaudited)
Assets
Non-interest bearing deposits and cash	$	15,591		$	17,927
Interest bearing deposits		891			912
Overnight investments		23,575			—
Total cash and cash equivalents		40,057			18,839
Investment securities
Available-for-sale, at market value (cost of $128,005 and
$107,084 at December 31, 2006 and 2005, respectively)		125,860			104,723
Loans		417,943			386,786
Allowance for loan losses		(4,725	)		(4,650	)
Loans, net		413,218			382,136
Real estate and repossessions acquired in settlement of loans, net		240			—
Federal Home Loan Bank common stock, at cost		1,229			1,948
Bank premises and equipment, net		23,042			18,859
Accrued interest receivable		4,619			3,562
Bank owned life insurance		7,741			7,436
Other assets		8,064			10,183
Total	$	624,070		$	547,686
Liabilities and Shareholders’ Equity
Deposits
Demand, noninterest bearing	$	96,890		$	98,890
Demand, interest bearing		94,569			94,423
Savings		19,809			22,818
Time		300,981			249,077
Total deposits		512,249			465,208
Accrued interest payable		2,363			1,524
Short-term borrowings		31,105			23,598
Long-term obligations		10,310			18,310
Other liabilities		5,250			4,481
Total liabilities		561,277			513,121
Shareholders’ equity
Common stock, par value $3.50 per share, authorized
10,000,000 shares; issued and outstanding 2,902,242 at
December 31, 2006 and 2,040,042 at December 31, 2005		10,119			7,140
Capital surplus		26,680			5,408
Retained earnings		27,333			23,724
Deferred compensation - restricted stock		—			(255	)
Accumulated other comprehensive loss		(1,339	)		(1,452	)
Total shareholders’ equity		62,793			34,565
Total	$	624,070		$	547,686

* Derived from audited consolidated financial statements.

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Income Statements

For three and nine months ended December 31, 2006 and 2005

(unaudited)

	Three months ended December 31,					Twelve months ended December 31,
	2006			2005		2006		2005
Interest income:
Interest and fees on loans	$	8,354		$	6,831	$	31,277	$	24,012
Interest on investment securities:
Interest exempt from federal income taxes		293			274		1,088		1,135
Taxable interest income		1,093			814		3,598		3,104
Dividend income		—			—		—		37
FHLB stock dividends		26			17		126		74
Other Interest		227			53		497		241
Total interest income		9,993			7,989		36,586		28,603
Interest expense:
Deposits:
Demand accounts		353			163		1,254		536
Savings		26			29		109		116
Time		3,610			2,304		12,007		6,992
Short-term borrowings		388			125		765		468
Long-term obligations		453			382		1,754		1,539
Total interest expense		4,830			3,003		15,889		9,651
Net interest income		5,163			4,986		20,697		18,952
Provision for loan losses		(99	)		417		351		757
Net interest income after provision for loan losses		5,262			4,569		20,346		18,195
Noninterest income:
Service charges on deposit accounts		758			852		3,027		3,323
Other service charges and fees		565			534		2,377		2,057
Net gain on sale of securities		—			17		—		107
Income from investment in SBIC’s		140			—		375		—
Income from bank owned life insurance		78			65		305		255
Gain on sale of credit card portfolio		—			375		—		375
Other operating income		25			19		99		108
Total noninterest income		1,566			1,862		6,183		6,225
Noninterest expenses:
Salaries		1,990			1,689		7,509		6,651
Retirement and other employee benefits		740			648		2,753		2,624
Occupancy		403			498		1,621		1,559
Equipment		435			402		1,727		1,701
Professional fees		199			84		356		469
Supplies		105			78		341		330
Telephone		136			111		506		497
Postage		51			63		218		220
Other operating expenses		979			1,003		3,506		3,414
Total noninterest expenses		5,038			4,576		18,537		17,465
Income before income taxes		1,790			1,855		7,992		6,955
Income taxes		416			587		2,410		2,102
Net Income	$	1,374		$	1,268	$	5,582	$	4,853
Net income per share – basic	$	0.48		$	0.63	$	2.07	$	2.41
Net income per share – diluted	$	0.47		$	0.62	$	2.05	$	2.37
Weighted average shares outstanding - basic		2,886,459			2,014,874		2,700,663		2,014,879
Weighted average shares outstanding - diluted		2,910,743			2,047,098		2,724,717		2,046,129

ECB Bancorp, Inc.

Supplemental Quarterly Financial Data (unaudited)

(Dollars in thousands, except per share data)

	12/31/06			9/30/2006			6/30/2006			3/31/2006			12/31/2005
Income Statement Data:
Interest income	$	9,993		$	9,367		$	8,929		$	8,297		$	7,989
Interest expense		4,830			3,962			3,667			3,430			3,003
Net interest income		5,163			5,405			5,262			4,867			4,986
Provision for loan losses		(99	)		50			200			200			417
Net after provision expense		5,262			5,355			5,062			4,667			4,569
Noninterest income		1,566			1,753			1,549			1,315			1,862
Noninterest expense		5,038			4,591			4,506			4,402			4,576
Income before income taxes		1,790			2,517			2,105			1,580			1,856
Income taxes		416			822			690			482			587
Net income	$	1,374		$	1,695		$	1,415		$	1,098		$	1,268
Per Share Data and Shares Outstanding:
Net income – basic	$	0.48		$	0.59		$	0.49		$	0.51		$	0.63
Net income – diluted		0.47			0.58			0.49			0.51			0.62
Cash dividends		0.17			0.17			0.17			0.17			0.16
Book value at period end		21.64			21.28			20.45			20.43			16.94
Dividend payout ratio		35.42	%		28.81	%		34.69	%		33.33	%		25.40	%
Weighted-average number of common shares outstanding:
Basic		2,886,459			2,886,440			2,885,988			2,133,275			2,014,874
Diluted		2,910,743			2,910,721			2,910,804			2,150,583			2,045,044
Shares outstanding at period end		2,902,242			2,902,242			2,902,242			2,902,542			2,040,042
Balance Sheet data:
Total assets	$	624,070		$	599,534		$	579,137		$	581,771		$	547,686
Loans - gross		417,943			422,975			413,432			394,986			386,786
Allowance for loan losses		4,725			4,858			4,999			4,852			4,650
Investments		125,860			114,449			104,672			104,241			104,723
Interest earning assets		569,498			547,431			520,851			526,576			494,369
Premises and equipment, net		23,042			21,181			21,452			19,509			18,859
Total deposits		512,249			474,232			478,254			482,487			465,208
Short-term borrowings		31,105			46,184			17,052			16,238			23,598
Long-term obligations		10,310			10,310			18,310			18,310			18,310
Shareholders’ equity		62,793			61,773			59,340			59,286			34,565
Selected Performance Ratios: (annualized) :
Return on average assets		0.89	%		1.16	%		0.99	%		0.79	%		0.93	%
Return on average shareholders’ equity		8.83	%		11.16	%		9.54	%		11.51	%		14.72	%
Net interest margin		3.77	%		4.21	%		4.19	%		4.06	%		4.16	%
Efficiency ratio		72.81	%		62.64	%		64.41	%		69.30	%		65.17	%
Asset Quality Ratios:
Nonperforming loans to period-end loans		0.04	%		0.04	%		0.12	%		0.02	%		0.02	%
Allowance for loan losses to period-end loans		1.13	%		1.15	%		1.21	%		1.23	%		1.20	%
Allowance for loan losses to nonperforming loans		2,568	%		2,570	%		1,013	%		7,960	%		7,154	%
Net charge-offs (recoveries) to average loans (annualized)		0.03	%		(0.05	%)		0.05	%		0.00	%		0.23	%
Capital Ratios:
Equity-to-assets ratio		10.06	%		10.30	%		10.25	%		10.19	%		6.31	%
Leverage Capital ratio		12.05	%		12.66	%		12.54	%		12.69	%		8.43	%
Tier 1 Capital ratio		15.08	%		14.94	%		15.12	%		15.46	%		10.32	%
Total Capital ratio		16.04	%		15.94	%		16.17	%		16.51	%		11.36	%

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