For Immediate Release

Date: July 25, 2024

ECB Bancorp, Inc. Reports Second Quarter Results

Lavertu EVERETT, MA, July 25, 2024 - ECB Bancorp, Inc. (NASDAQ-ECBK) (the “Company”), the holding company for Everett Co-operative Bank (the “Bank”), a state-chartered co-operative bank headquartered in Everett, Massachusetts, today reported net income of $791,000, or $0.09 per diluted share, for the quarter ended June 30, 2024, compared to $1.4 million, or $0.17 per diluted share, for the quarter ended June 30, 2023, a decrease of $634,000 in net income. For the six months ended June 30, 2024, the Company reported net income of $1.4 million, or $0.17 per diluted share, as compared to net income of $2.3 million, or $0.27 per diluted share, for the six months ended June 30, 2023, a decrease of $914,000 in net income.

Richard J. O’Neil, Jr., President and Chief Executive Officer, said, "Our second quarter results indicate positive movement across our major asset classes. In an environment of increasing economic uncertainty our continuing attention to, and focus on, our customers, expenses, credit and responsible growth continue to be our guiding principles."

NET INTEREST AND DIVIDEND INCOME

Net interest and dividend income before provision for credit losses was $6.0 million for the quarter ended June 30, 2024, a decrease of $386,000, or 6.0%, from $6.4 million for the quarter ended June 30, 2023. This decrease was primarily due to a decrease in the net interest margin, as increases in earning asset yields were more than offset by increased funding costs. Our net interest margin for the quarter ended June 30, 2024 was 1.82% as compared to 2.18% for the quarter ended June 30, 2023. The provision for credit losses increased to $292,000 for the quarter ended June 30, 2024 from $0 for the quarter ended June 30, 2023. The provision for credit losses for the quarter ended June 30, 2024 was driven by loan growth. The $0 provision for credit losses for the quarter ended June 30, 2023 included a provision for loan losses, offset by a benefit to the provision for off balance sheet commitments. The combination of these items resulted in a decrease of $678,000, or 10.6%, in net interest and dividend income after provision for credit losses for the quarter ended June 30, 2024 as compared to the quarter ended June 30, 2023.

Net interest and dividend income before provision for credit losses was $11.9 million for the six months ended June 30, 2024, a decrease of $852,000, or 6.7%, from $12.8 million for the six months ended June 30, 2023. This decrease was primarily due to a decrease in the net interest margin, as increases in earning asset yields were more than offset by increased funding costs. Our net interest margin for the six months ended June 30, 2024 was 1.83% as compared to 2.28% for the six months ended June 30, 2023. The provision for credit losses decreased $441,000, to $438,000 for the six months ended June 30, 2024, from $879,000 for the six months ended June 30, 2023. The decrease in the provision for credit losses was driven by lower loan growth during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. The combination of these items resulted in a decrease of $411,000, or 3.5%, in net interest and dividend income after provision for credit losses for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

NONINTEREST INCOME

Noninterest income increased $49,000, or 20.4%, to $289,000 for the quarter ended June 30, 2024 from $240,000 for the quarter ended June 30, 2023. The increase was driven by increases in income from bank-owned life insurance, net gains on sales of loans and customer service fees.

Noninterest income increased $124,000, or 26.4%, to $594,000 for the six months ended June 30, 2024 from $470,000 for the six months ended June 30, 2023. The increase was driven by increases in net gains on sales of loans, income from bank-owned life insurance and customer service fees.

NONINTEREST EXPENSE

Noninterest expense increased $236,000, or 5.0%, to $4.9 million for the quarter ended June 30, 2024 from $4.7 million for the quarter ended June 30, 2023. Significant changes are as follows:

Noninterest expense increased $968,000, or 10.5%, to $10.2 million for six months ended June 30, 2024 from $9.2 million for the six months ended June 30, 2023. Significant changes are as follows:

INCOME TAXES

We recorded a provision for income tax expense of $272,000 for the quarter ended June 30, 2024, compared to a provision for income tax expense of $503,000 for the quarter ended June 30, 2023, reflecting effective tax rates of 25.6% and 26.1%, respectively.

We recorded a provision for income tax expense of $482,000 for the six months ended June 30, 2024, compared to a provision for income tax expense of $823,000 for the six months ended June 30, 2023, reflecting effective tax rates of 25.4% and 26.1%, respectively.

BALANCE SHEET

Total assets increased $55.6 million, or 4.3%, to $1.34 billion at June 30, 2024 from $1.28 billion at December 31, 2023.

Total net loans increased $63.1 million, or 6.1%, to $1.10 billion at June 30, 2024 from $1.04 billion at December 31, 2023.

Cash and cash equivalents decreased $7.6 million, or 6.4%, to $111.4 million at June 30, 2024 from $119.0 million at December 31, 2023. The decrease in cash and cash equivalents was driven by loan growth.

Deposits increased $64.6 million, or 7.4%, to $932.8 million at June 30, 2024 from $868.2 million at December 31, 2023.

FHLB advances decreased $10.0 million, or 4.3%, to $224.0 million at June 30, 2024 from $234.0 million at December 31, 2023.

Total shareholders' equity increased $1.6 million, or 0.9%, to $166.5 million as of June 30, 2024 from $164.9 million as of December 31, 2023. This increase is primarily the result of earnings of $1.4 million and an increase of $427,000 in accumulated other comprehensive income (“AOCI”). The increase in AOCI was driven by an increase in the fair value of cash flow hedges entered into during the six months ended June 30, 2024. Partially offsetting these increases to shareholders' equity was a decrease in additional paid-in capital of $457,000. This decrease was driven by $1.2 million in shares repurchased under our share repurchase plan, partially offset by an increase in additional paid in capital of $699,000 related to stock based compensation and ESOP shares committed to be released. Our book value per share increased $0.34 to $18.09 at June 30, 2024 from $17.75 at December 31, 2023.

ASSET QUALITY

Asset quality remains strong. The allowance for credit losses in total and as a percentage of total loans as of June 30, 2024 was $9.0 million and 0.81%, respectively, as compared to $8.6 million and 0.82%, respectively, as of December 31, 2023. For the six months ended June 30, 2024 and June 30, 2023 the Company recorded net charge offs of $3,000 and $0, respectively. Total non-performing assets were $1.2 million, or 0.09%, of total assets as of June 30, 2024 and $1.2 million, or 0.09% of total assets, as of December 31, 2023.

Company Profile

ECB Bancorp, Inc. is headquartered in Everett, Massachusetts and is the holding company for Everett Co-operative Bank. The Bank provides financial services to individuals, families, municipalities and businesses through its three full-service branch offices located in Everett, Lynnfield and Woburn, Massachusetts. The Company's common stock is traded on the NASDAQ Capital Market under the symbol "ECBK." For more information, visit the Company's website at www.everettbank.com.

Forward-looking statements

Certain statements herein constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on the beliefs and expectations of management, as well as the assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. As a result, actual results may differ from those contemplated by these statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, the Company's ability to continue to increase loans and deposit growth, legislative and regulatory changes that adversely affect the businesses in which the Company is engaged and changes in the securities market. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any intent or obligation to update any forward-looking statements, whether in response to new information, future events or otherwise, except as may be required by law.

ECB Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets

June 30, 2024 (unaudited) and December 31, 2023

(in thousands except share data)

ECB Bancorp, Inc. and Subsidiary

Consolidated Statements of Income

(unaudited)

(in thousands except share data)