8-K

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 15, 2008

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 15, 2008, we announced our results of operations for the three and nine months ended September 30, 2008. A copy of our press release is being furnished as Exhibit 99.1 to this Report.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits. The following exhibit is furnished with this Report:

Exhibit No.	Exhibit Description
99.1	Copy of our press release dated October 15, 2008

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 17, 2008	By:	/S/ Gary M. Adams
		Gary M. Adams
		Chief Financial Officer

EX-99.1

Exhibit 99.1

PRESS RELEASE

October 15, 2008

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 2008 Third Quarter Financial Results

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, 2008.

2008 Third Quarter Financial Highlights

For the three months ended September 30, 2008, net income was $1,009,000 or $0.35 per diluted share which compares to net income for the three months ended September 30, 2007 of $1,335,000 or $0.46 per diluted share.

For the nine months ended September 30, 2008, net income was $3,157,000 or $1.09 per diluted share which compares to net income for the nine months ended September 30, 2007 of $3,544,000 or $1.22 per diluted share.

Other Financial Highlights include:

• Consolidated assets increased 21.9% to $767,768,000 at September 30, 2008 from $629,679,000 at September 30, 2007.

• Loans increased 19.1% to $524,337,000 at September 30, 2008 from $440,340,000 at September 30, 2007.

• Deposits increased 17.4% to $619,019,000 at September 30, 2008 from $527,368,000 at September 30, 2007.

• Net interest income increased 3.5% to $15,777,000 for the nine months ended September 30, 2008 from $15,239,000 a year ago. For the 2008 third quarter, net interest income increased 1.3% to $5,390,000 compared to $5,320,000 for the third quarter of 2007.

-MORE-

• Non-interest income for the nine months ended September 30, 2008 increased 12.0% to $5,430,000 which compares to $4,848,000 for the nine months ended September 30, 2007. For the 2008 third quarter, non-interest income increased 12.2% to $1,775,000 compared to $1,582,000 in the third quarter of 2007.

• Declared quarterly dividend of $0.1825 per share, or $0.73 per share on an annualized basis, representing a 4.3% increase over our 2007 annualized dividend.

Arthur H. Keeney III, President and CEO stated: “Despite the current national economic situation and the distressed condition of the credit markets and equity markets, The East Carolina Bank remains safe and strong with good asset quality, good liquidity and above average capital levels. We continue to focus on sustainable balance sheet strength and liquidity in addition to the production of a strong, quality net income stream. Moreover, ECB does not have any Fannie Mae or Freddie Mac preferred stock in its investment portfolio.

“Our newest branch in Leland, North Carolina (Brunswick County), which brings our total number of branches to 24, opened in July and is already performing slightly above our expectations. The construction of our 25^th branch on Market Street North in Porter’s Neck Township of Wilmington, North Carolina is now scheduled to begin in the fourth quarter and should open in late summer 2009. We will continue to proceed cautiously with our capital expenditures during these economically challenging times and until we see some relief from the continued pressure on our net interest margin.

“With concerns about FDIC insurance, ECB is now offering an innovative new service, Certificate of Deposit Account Registry Service (CDARS), which allows CD customers to have 100% of their CD deposits FDIC-insured up to $50 million. ECB is considered well-capitalized under the FDIC regulatory framework.

“Relative to this year’s financial results, it is important to note that in the second quarter of 2007, ECB modified its allowance for loan losses (“AFLL”) model to more accurately conform to the industry guidance that had been issued by the accounting and regulatory agencies regarding the AFLL. As a result, a one-time credit adjustment of $539,000 was made to the “Provision for Loan Loss” which, in turn, resulted in a negative provision expense of $489,000 and $99,000 respectively for the three and six month periods ended June 30, 2007. The $99,000 negative provision expense continued through the third quarter in 2007 (as no additions were made to the AFLL during that period) and is reflected on the attached financials.

“At September 30, 2008, our non-performing loans to period end loans increased. Management expects any losses on these well collaterized non-performing loans to be minimal. At September 30, 2008, our AFLL to total loans was 0.97% which compares to 0.90% at December 31, 2007 and 0.99% for the period ended September 30, 2007. Net charge-offs to average loans annualized were a modest 0.09% for the nine months ended September 30, 2008.

“We will also continue to monitor our non-interest expenses as cost containment remains one of our principal goals, particularly during this time of continued margin compression. In short, the organization remains focused on asset quality, capital adequacy, liquidity, cost control and quality of earnings. We will also continue with our previously announced stock repurchase plan (up to 5% or 145,000 shares of the Company’s outstanding common stock) authorized by our Board of Directors last month and originally authorized by the Board in the fall of 2007. We continue to feel the stock repurchase authorization is one tool among several that will allow us to manage our capital in the best interests of our stockholders. We believe we remain well positioned for future successes.”

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 (the “Bank”), is a state-chartered, independent community bank insured by the FDIC. The Bank provides a full range of financial services through its 24 offices covering eastern North Carolina from Currituck to Ocean Isle Beach 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 pressures on the earnings, capital and liquidity of financial institutions in general, 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, 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, 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.

###

See 3 pages of financial information attached

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets

September 30, 2008, December 31, 2007 and September 30, 2007

(Dollars in thousands, except per share data)

	September 30, 2008			December 31, 2007*			September 30, 2007
	(unaudited)						(unaudited)
Assets
Non-interest bearing deposits and cash	$	15,679		$	16,303		$	19,900
Interest bearing deposits		1,376			925			876
Overnight investments		20,875			4,775			525
Total cash and cash equivalents		37,930			22,003			21,301
Investment securities
Available-for-sale, at market value (cost of $156,771, $126,616 and $126,491 at September 30, 2008, December 31, 2007, and September 30, 2007, respectively)		154,077			125,888			124,581
Loans		524,337			454,198			440,340
Allowance for loan losses		(5,077	)		(4,083	)		(4,351	)
Loans, net		519,260			450,115			435,989
Real estate & repossessions acquired in settlement of loans, net		697			66			82
Federal Home Loan Bank common stock, at cost		3,859			2,382			1,775
Bank premises and equipment, net		25,250			24,450			24,693
Accrued interest receivable		5,076			4,456			5,020
Bank owned life insurance		8,271			8,030			7,958
Other assets		13,348			6,499			8,280
Total	$	767,768		$	643,889		$	629,679
Liabilities and Shareholders’ Equity
Deposits
Demand, noninterest bearing	$	94,308		$	95,596		$	105,547
Demand, interest bearing		95,238			103,347			97,211
Savings		17,416			18,492			18,187
Time		412,057			308,926			306,423
Total deposits		619,019			526,361			527,368
Accrued interest payable		2,972			2,525			2,877
Short-term borrowings		45,674			43,174			29,128
Long-term obligations		26,000			—			—
Other liabilities		8,017			4,988			4,967
Total liabilities		701,682			577,048			564,340
Shareholders’ equity
Common stock, par value $3.50 per share; authorized 10,000,000 shares; issued and outstanding 2,887,996 at September 30, 2008 and 2,920,769 at December 31, 2007 and 2,921,992 at September 30, 2007, respectively		10,108			10,184			10,188
Capital surplus		26,371			27,026			27,004
Retained earnings		31,284			30,099			29,342
Accumulated other comprehensive loss		(1,677	)		(468	)		(1,195	)
Total shareholders’ equity		66,086			66,841			65,339
Total	$	767,768		$	643,889		$	629,679

* Derived from audited consolidated financial statements.

ECB BANCORP, INC. AND SUBSIDIARY

Consolidated Income Statements

For three and nine months ended September 30, 2008 and 2007

(Dollars in thousands, except per share data)

	Three months ended September 30,				Nine months ended September 30,
	2008		2007		2008		2007
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Interest income:
Interest and fees on loans	$	7,902	$	8,651	$	23,734	$	25,103
Interest on investment securities:
Interest exempt from federal income taxes		330		302		990		907
Taxable interest income		1,605		1,091		4,429		3,300
Dividend income		54		41		205		88
Other Interest		73		125		188		499
Total interest income		9,964		10,210		29,546		29,897
Interest expense:
Deposits:
Demand accounts		209		527		690		1,363
Savings		23		23		68		71
Time		3,766		3,873		11,337		11,374
Short-term borrowings		388		467		1,237		1,850
Long-term obligations		188		—		437		—
Total interest expense		4,574		4,890		13,769		14,658
Net interest income		5,390		5,320		15,777		15,239
Provision for loan losses		440		—		1,340		(99	)
Net interest income after provision for loan losses		4,950		5,320		14,437		15,338
Noninterest income:
Service charges on deposit accounts		792		736		2,427		2,270
Other service charges and fees		411		445		1,085		1,174
Mortgage origination brokerage fees		207		243		844		804
Net gain on sale of securities		118		—		212		—
Income from bank owned life insurance		76		72		241		217
Other operating income		171		86		621		383
Total noninterest income		1,775		1,582		5,430		4,848
Noninterest expenses:
Salaries		2,064		2,221		6,083		6,267
Retirement and other employee benefits		863		709		2,542		2,102
Occupancy		478		483		1,389		1,345
Equipment		433		411		1,269		1,458
Professional fees		168		53		464		527
Supplies		70		116		225		314
Telephone		177		146		515		415
FDIC deposit insurance		98		15		265		46
Other operating expenses		1,125		1,131		3,089		3,013
Total noninterest expenses		5,476		5,285		15,841		15,487
Income before income taxes		1,249		1,617		4,026		4,699
Income taxes		240		282		869		1,155
Net Income	$	1,009	$	1,335	$	3,157	$	3,544
Net income per share – basic	$	0.35	$	0.46	$	1.09	$	1.22
Net income per share – diluted	$	0.35	$	0.46	$	1.09	$	1.22
Weighted average shares outstanding – basic		2,883,121		2,913,279		2,895,512		2,906,797
Weighted average shares outstanding – diluted		2,888,466		2,919,190		2,901,730		2,914,825

ECB Bancorp, Inc.

Supplemental Quarterly Financial Data (Unaudited)

(Dollars in thousands, except per share data)

	9/30/2008			6/30/08			3/31/08			12/31/07			9/30/07
Income Statement Data:
Interest income	$	9,964		$	9,848		$	9,734		$	10,086		$	10,210
Interest expense		4,574			4,481			4,714			4,777			4,890
Net interest income		5,390			5,367			5,020			5,309			5,320
Provision for loan losses		440			570			330			—			—
Net after provision expense		4,950			4,797			4,690			5,309			5,320
Noninterest income		1,775			1,707			1,948			1,338			1,582
Noninterest expense		5,476			5,108			5,257			4,857			5,285
Income before income taxes		1,249			1,396			1,381			1,790			1,617
Income taxes		240			294			335			522			282
Net income	$	1,009		$	1,102		$	1,046		$	1,268		$	1,335
Per Share Data and Shares Outstanding:
Net income – basic	$	0.35		$	0.38		$	0.36		$	0.44		$	0.46
Net income – diluted		0.35			0.38			0.36			0.43			0.46
Cash dividends		0.1825			0.1825			0.1825			0.1750			0.1750
Book value at period end		22.88			22.43			23.30			22.88			22.36
Dividend payout ratio		52.14	%		48.03	%		50.69	%		39.77	%		38.04	%
Weighted-average number of common shares outstanding:
Basic		2,883,121			2,891,931			2,911,620			2,913,043			2,913,279
Diluted		2,888,466			2,897,399			2,913,142			2,919,625			2,919,190
Shares outstanding at period end		2,887,996			2,888,896			2,909,699			2,920,769			2,921,992
Balance Sheet data:
Total assets	$	767,768		$	738,040		$	714,562		$	643,889		$	629,679
Loans – gross		524,337			516,492			485,774			454,198			440,340
Allowance for loan losses		5,077			4,739			4,379			4,083			4,351
Investment securities		154,077			157,589			160,874			125,888			124,581
Interest earning assets		704,524			679,708			661,182			588,168			568,097
Premises and equipment, net		25,250			25,143			24,916			24,450			24,693
Total deposits		619,019			578,273			555,591			526,361			527,368
Short-term borrowings		45,674			60,928			56,300			43,174			29,128
Long-term obligations		26,000			26,000			26,000			—			—
Shareholders’ equity		66,086			64,806			67,798			66,841			65,339
Selected Performance Ratios: (annualized) :
Return on average assets		0.54	%		0.61	%		0.62	%		0.80	%		0.85	%
Return on average shareholders’ equity		6.23	%		6.52	%		6.17	%		7.67	%		8.30	%
Net interest margin		3.18	%		3.33	%		3.40	%		3.78	%		3.83	%
Efficiency ratio		73.81	%		69.73	%		72.68	%		70.48	%		74.06	%
Asset Quality Ratios:
Nonperforming loans to period-end loans		2.27	%		0.12	%		0.27	%		0.10	%		0.06	%
Allowance for loan losses to period-end loans		0.97	%		0.92	%		0.90	%		0.90	%		0.99	%
Allowance for loan losses to nonperforming loans		43	%		752	%		336	%		877	%		1,738	%
Net charge-offs to average loans (annualized)		0.08	%		0.17	%		0.03	%		0.24	%		0.11	%
Capital Ratios:
Equity-to-assets ratio		8.61	%		8.78	%		9.49	%		10.38	%		10.38	%
Leverage Capital ratio		9.00	%		9.28	%		10.02	%		10.66	%		10.61	%
Tier 1 Capital ratio		11.31	%		11.52	%		12.07	%		12.94	%		12.87	%
Total Capital ratio		12.16	%		12.33	%		12.86	%		13.72	%		13.71	%

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