<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly Period Ended September 30, 2001

                                       or

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

  For the transition period from _____________________ to _____________________


                           Commission File No. 2017-6

                                ECB Bancorp, Inc.

             (Exact name of registrant as specified in its charter)


                 North Carolina                    56-0215930

      (State or other jurisdiction of (I.R.S. Employer Identification No.)
                             incorporation or organization)


              Post Office Box 337, Engelhard, North Carolina 27824

               (Address of principal executive offices) (Zip Code)


                                 (252) 925-9411

              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes __X__ No_____

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

As of November 9, 2001, 2,066,191 shares of the registrant's common stock, $3.50
par value, were outstanding.

This Form 10-QSB has 15 pages.

<PAGE>

Part I.  FINANCIAL INFORMATION
Item 1. Financial Statements

                        ECB BANCORP, INC. AND SUBSIDIARY
                           Consolidated Balance Sheets
                       September 30, 2001 and December 31, 2000
                          (dollar amounts in thousands)


<TABLE>
<CAPTION>
<S>                                                                           <C>                  <C>
                                                                       September 30,         December 31,
Assets                                                                          2001                2000*
------------------------------------------------------------------------------------           -----------
                                                                          (unaudited)
Non-interest bearing deposits and cash                                       $12,797              $18,342
Federal funds sold                                                            19,775                1,975
------------------------------------------------------------------------------------           -----------
   Total cash and cash equivalents                                            32,572               20,317
------------------------------------------------------------------------------------           -----------
Investment securities

  Available-for-sale, at market value (cost of $67,697 and
  $64,463 at September 30, 2001 and December 31, 2000, respectively)          69,303               64,777

Loans                                                                        187,357              172,965
Allowance for probable loan losses                                            (2,791)              (2,800)
------------------------------------------------------------------------------------           -----------
   Loans, net                                                                184,566              170,165
------------------------------------------------------------------------------------           -----------

Real estate acquired in settlement of loans, net                                  70                   58
Federal Home Loan Bank stock, at cost                                            633                  633
Bank premises and equipment, net                                               8,355                7,882
Accrued interest receivable                                                    2,985                2,637
Other assets                                                                   1,687                1,920
------------------------------------------------------------------------------------           -----------
Total                                                                       $300,171             $268,389
------------------------------------------------------------------------------------           -----------

Liabilities and Shareholders' Equity
------------------------------------------------------------------------------------           -----------
Deposits
   Demand, noninterest bearing                                               $56,683              $46,565
   Demand interest bearing                                                    63,750               61,759
   Savings                                                                    14,427               13,457
   Time                                                                      121,024              114,461
------------------------------------------------------------------------------------           -----------
       Total deposits                                                        255,884              236,242
------------------------------------------------------------------------------------           -----------

Short-term borrowings                                                          5,326                2,678
Long-term obligations                                                         10,000                3,000
Accrued interest payable                                                       1,324                1,160
Other
liabilities                                                                    1,757                1,366
------------------------------------------------------------------------------------           -----------
         Total liabilities                                                   274,291              244,446
------------------------------------------------------------------------------------           -----------

Shareholders' equity
   Common stock, par value $3.50 per share; authorized
     10,000,000 shares; issued and outstanding 2,066,191 and
     2,073,081 at September 30, 2001 and December 31, 2000, respectively.      7,232                7,256
   Capital surplus                                                             5,765                5,822
   Retained earnings                                                          11,905               10,682
   Deferred compensation - restricted stock                                      (82)                 (24)
   Accumulated other comprehensive income                                      1,060                  207
-------------------------------------------------------------------------------------          -----------
         Total shareholders' equity                                           25,880               23,943
-------------------------------------------------------------------------------------          -----------

Commitments

-------------------------------------------------------------------------------------          -----------
Total                                                                       $300,171             $268,389
-------------------------------------------------------------------------------------          -----------
</TABLE>

See accompanying notes to consolidated financial statements.
* Derived from audited consolidated financial statements.


                                       2

<PAGE>
                        ECB BANCORP, INC. AND SUBSIDIARY
                         Consolidated Income Statements
             For the three and nine months ended September 30, 2001 and 2000
     (unaudited - dollar amounts in thousands, except net income per share)
<TABLE>
<CAPTION>
                                                                       Three months ended                Nine months ended
                                                                          September, 30                    September, 30
                                                                    2001               2000                2001            2000
----------------------------------------------                ------------      ------------        ------------        ---------
<S>                                                             <C>               <C>                    <C>            <C>
Interest income:
  Interest and fees on loans                                      $3,890             $3,874             $11,776        $10,913
  Interest on investment securities:
    Interest exempt from federal income taxes                        206                156                 556            480
    Taxable interest income                                          837                813               2,391          2,303
  Interest on federal funds sold                                                         80                 299            246
----------------------------------------------                ------------      ------------        ------------        ---------
       Total interest income                                       5,060              4,923              15,022         13,942
----------------------------------------------                ------------      ------------        ------------        ---------
Interest expense:
  Deposits:
    Demand accounts                                                  171                366                 677          1,040
    Savings                                                           38                 56                 127            167
    Time                                                           1,528              1,379               5,051          3,871
  Short-term borrowings                                               25                 47                  82            103
  Long-term obligations                                               86                 36                  98            107
----------------------------------------------                ------------      ------------        ------------      ---------
       Total interest expense                                      1,848              1,884               6,035          5,288
----------------------------------------------                ------------      ------------        ------------      ---------
       Net interest income                                         3,212              3,039               8,987          8,654
Provision for probable loan losses                                   100                 75                 300            205
----------------------------------------------                ------------      ------------        ------------      ---------
       Net interest income after provision for
       probable loan losses                                        3,112              2,964               8,687          8,449
----------------------------------------------                ------------      ------------        ------------      ---------
Noninterest income:
   Service charges on deposit accounts                               415                353               1,220          1,052
   Other service charges and fees                                    366                278                 882            614
   Net gain on sale of securities                                    148                  7                 224              5
   Other operating income                                             10                  9                  32             35
----------------------------------------------                ------------      ------------        ------------      ---------
     Total noninterest income                                        939                647               2,358          1,706
----------------------------------------------                ------------      ------------        ------------      ---------
Noninterest expenses:
   Salaries                                                         1,101             1,025               3,281          2,923
   Retirement and other employee benefits                             362               308               1,057            906
   Occupancy                                                          226               217                 715            620
   Equipment                                                          324               330                 966            927
   Professional fees                                                   38                52                 173            188
   Supplies                                                            53                83                 196            258
   Telephone                                                           74                78                 241            258
   Postage                                                             51                52                 148            128
   Other operating expenses                                           654               533               1,817          1,481
----------------------------------------------                ------------      ------------        ------------      ---------
     Total noninterest expenses                                     2,883             2,678               8,594          7,689
----------------------------------------------                ------------      ------------        ------------      ---------
     Income before income taxes                                     1,168               933               2,451          2,466
Income taxes                                                          350               255                 670            690
----------------------------------------------                ------------      ------------        ------------      ---------
Net income                                                           $818              $678              $1,781         $1,776
----------------------------------------------                ============      ============        ============      =========
Net income per share (basic and diluted)                            $0.40             $0.32               $0.86          $0.84
Weighted average shares outstanding - basic                     2,058,221         2,090,946           2,061,123      2,106,192
Weighted average shares outstanding - diluted                   2,063,282         2,092,144           2,067,498      2,108,419
See accompanying notes to consolidated financial statements.
</TABLE>


                                       3

<PAGE>
                        ECB BANCORP, INC. AND SUBSIDIARY
                Consolidated Statements of Shareholders' Equity
               For nine months ended September 30, 2001 and 2000
                   (unaudited - dollar amounts in thousands)
<TABLE>
<CAPTION>
                                                                          Deferred        Accumulated
                                                                        compensation-         other
                                    Common     Capital     Retained      restricted      comprehensive    Comprehensive
                                    stock      surplus     earnings        stock             loss             income         Total
                                 ------------ ----------  -----------   -------------    --------------  ---------------   ---------
<S>                                  <C>        <C>         <C>          <C>                <C>           <C>              <C>
Balance January 1, 2000              $7,425     $6,229      $9,009       $        (35)      $      (566)                   $ 22,062

Unrealized gains, net of
    income taxes of  $117                                                                           228       $   228           228

    Net income                                              1,776                                               1,776         1,776
                                                                                                          --------------
Total comprehensive income                                                                                    $ 2,004
                                                                                                          ==============
Recognition of deferred
  compensation - restricted stock                   (3)                            9                                              6
`
Repurchase of common stock           (111)        (257)                                                                        (368)

Cash dividends ($.2475 per share)                            (522)                                                             (522)
                                 ------------ -----------  ----------   ------------    ---------------                    ---------
Balance September 30, 2000         $7,314       $5,969     $10,263      $         (26)       $     (338)                   $ 23,182
                                 ============ ===========  ==========   =============   ===============                    =========

                                                                          Deferred        Accumulated
                                                                        compensation-         other
                                    Common     Capital     Retained      restricted      comprehensive    Comprehensive
                                    stock      surplus     earnings        stock            income            income        Total
                               -------------- -----------  ----------  -------------    ---------------  ---------------   ---------
Balance January 1, 2001            $7,256       $5,822     $10,682     $         (24)        $      207                   $  23,943

Unrealized gains, net of
  income taxes of $439                                                                              853       $    853          853

    Net income                                               1,781                                               1,781        1,781
                                                                                                         ---------------
Total comprehensive income                                                                                    $  2,634
                                                                                                         ===============
Deferred compensation -
  restricted stock issuance            21           54                           (75)

Recognition of deferred
 compensation - restricted stock                                                  17                                             17

Repurchase of common stock            (45)        (111)                                                                        (156)

Cash dividends ($.27 per share)                               (558)                                                            (558)
                               -------------- -----------  ---------  --------------   ----------------  ----------------- ---------
Balance September 30, 2001        $ 7,232       $5,765     $11,905    $          (82)        $    1,060                    $ 25,880
                               ============== ===========  ========== ==============    ===============                    =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4

<PAGE>
                        ECB BANCORP, INC. AND SUBSIDIARY
                     Consolidated Statements of Cash Flows
                  Nine months ended September 30, 2001 and 2000
                   (Unaudited - dollar amounts in thousands)
<TABLE>
<CAPTION>

                                                                     Nine Months Ended
                                                                     September, 30
Cash flows from operating                                             2001              2000
                                                              ------------         ----------
<S>                                                                 <C>                 <C>
    Net income                                                      $1,781             $1,776
    Adjustment to reconcile net income to
       net cash provided by operating activities:
      Depreciation                                                     617                532
      Accretion of discount on investment securities, net               (2)               (38)
      Provision for probable loan losses                               300                205
      (Gain) loss on sale of available-for-sale securities            (224)                (5)
      Deferred compensation - restricted stock                          17                  6
      Increase in accrued interest receivable                         (348)              (869)
      Gain on sale of real estate acquired in
        settlement of loans                                             (2)                (9)
      (Increase) decrease in other assets                              233               (679)
      Increase in accrued interest payable                             164                240
      Increase in postretirement benefit liability                      35                 42
      Increase (decrease) in other liabilities, net                   (121)                76
----------------------------------------------------------    ------------        -----------
    Net cash provided by operating activities                        2,450              1,277
----------------------------------------------------------    ------------        -----------

Cash flows from investing activities:
    Proceeds from sales of investment securities classified
      as available-for-sale                                         22,206              4,996
    Proceeds from maturities of investment securities
      classified as available-for-sale                              12,765              9,814
    Purchases of investment securities classified
      as available-for-sale                                        (37,979)           (23,990)
    Proceeds from disposal of premises and equipment                   195                908
    Purchases of premises and equipment                             (1,285)            (2,427)
    Proceeds from disposal of real estate acquired in
      settlement of loans and real estate held for sale                 14                134
    Net loan originations                                          (14,701)           (19,568)
-----------------------------------------------------------    -----------        -----------
    Net cash used by investing activities                          (18,785)           (30,133)
-----------------------------------------------------------    -----------        -----------

Cash flows from financing activities:
    Net increase in deposits                                        19,642             23,518
    Net increase in short-term borrowings                            2,648              1,570
    Increase in long-term obligations                                7,000                  -
    Dividends paid                                                    (544)              (503)
    Repurchase of common stock                                        (156)              (368)
-----------------------------------------------------------    -----------        -----------
    Net cash provided by financing activities                       28,590             24,217
-----------------------------------------------------------    -----------        -----------

Increase (decrease) in cash and cash equivalents                    12,255             (4,639)
Cash and cash equivalents at beginning of period                    20,317             17,789
                                                               -----------        -----------
Cash and cash equivalents at end of period                        $ 32,572           $ 13,150
                                                               ===========        ===========
Cash paid during the period:
    Interest                                                      $  5,871           $  5,048
    Taxes                                                              308                575

Supplemental disclosures of noncash financing and investing
activities:
    Cash dividends declared but not paid                          $   186            $    172
    Unrealized gains on available-for-sale
       securities, net of deferred taxes                              853                 228
</TABLE>

See accompanying notes to consolidated financial
statements.


                                       5

<PAGE>

                        ECB BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

(1) Basis of Presentation

The consolidated financial statements include the accounts of ECB Bancorp, Inc.
("Bancorp") and its wholly-owned subsidiary, The East Carolina Bank (the "Bank")
(collectively referred to hereafter as the "Company"). The Bank has two
wholly-owned subsidiaries, Carolina Financial Courier, Inc. and Carolina
Financial Realty, Inc. All intercompany transactions and balances are eliminated
in consolidation.

The preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect reported
amounts of assets and liabilities at the date of the financial statements, as
well as the amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.

All adjustments considered necessary for a fair presentation of the results for
the interim periods presented have been included (such adjustments are normal
and recurring in nature). The footnotes in Bancorp's annual report on Form
10-KSB should be referenced when reading these unaudited interim financial
statements. Operating results for the nine-month period ended September 30,
2001, are not necessarily indicative of the results that may be expected for the
year ending December 31, 2001.

(2) Allowance for Probable Loan Losses

The following summarizes the activity in the allowance for probable loan losses
for the nine-month periods ended September 30, 2001 and 2000, respectively.
<TABLE>
<CAPTION>

                                                                              Nine months ended September 30,
                                                                          ----------------------------------------
                                                                                2001                          2000
                                                                                ----                          ----
          <S>                                                              <C>                               <C>
          Balance at the beginning of the
             period                                                       $2,800,000                     2,700,000
          Provision for probable loan losses                                 300,000                       205,000
          Charge-offs                                                       (345,000)                     (210,000)
          Recoveries                                                          36,000                        74,000
                                                                              ------                        ------

          Net charge-offs                                                   (309,000)                     (136,000)
                                                                            --------                     ---------
          Balance at the end of the period                                $2,791,000                     2,769,000
                                                                          ==========                     =========
</TABLE>



(3) New Accounting Pronouncements

The Financial Accounting Standards Board ("FASB") issued Statement of Financial
Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities." This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. This Statement, as amended, is effective for all fiscal quarters of
fiscal years beginning after June 15, 2000, and was adopted by the Company on
January 1, 2001 with no impact the Company's financial statements.

The "FASB" issued SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities, a replacement of FASB
Statement No. 125." It revises the standards for accounting for securitizations
and other transfers of financial assets and collateral and requires certain
disclosures, but it carries over most of SFAS No. 125's provisions without
reconsideration. This statement is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after March 31,
2001. This statement is effective for recognition and reclassification of
collateral and disclosures relating to securitization transactions and
collateral for fiscal years ending after December 15, 2000. This Statement did
not materially impact the Company.


                                       6

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

General

ECB Bancorp, Inc. ("Bancorp") is a bank holding company headquartered in
Engelhard, North Carolina. Bancorp's wholly-owned subsidiary, The East Carolina
Bank (the "Bank" or "ECB") (collectively referred to hereafter as the
"Company"), is a state-chartered community bank which was founded in 1919. The
Bank offers a full range of banking services through 17 branches serving eastern
North Carolina, including the communities of Engelhard, Swan Quarter, Columbia,
Creswell, Fairfield, Nags Head, Manteo, Southern Shores, Barco, Avon, Hatteras,
Ocracoke, Washington, Hertford, New Bern and Greenville (two branches).

The operations of the Company and depository institutions in general are
significantly influenced by general economic conditions and by related monetary,
fiscal and other policies of depository institution regulatory agencies,
including the Federal Reserve Board, the Federal Deposit Insurance Corporation
(the "FDIC") and the North Carolina State Banking Commission. Deposit flows and
costs of funds are influenced by interest rates on competing investments and
general market rates of interest. Lending activities are affected by the demand
for financing of real estate and other types of loans, which in turn are
affected by the interest rates at which such financing may be offered and other
factors affecting local demand and availability of funds.

Comparison of the Results of Operations for the Nine Month Periods Ended
September 30, 2001 and 2000

Summary

For the nine months ended September 30, 2001, the Company had net income of
$1,781,000, or $0.86 basic and diluted earnings per share, compared to
$1,776,000, or $0.84 basic and diluted earnings per share for the nine months
ended September 30, 2000. For the nine months ended September 30, 2001, net
interest income increased 3.85% and noninterest income increased 38.22% when
compared to the same period last year. Noninterest expense increased $905,000 or
11.77% for the nine months ended September 30, 2001 as compared to the same
period in 2000, partly attributable to general increases in salary and employee
benefits expense of $509,000. Net income for 2001 also includes realized gains
on the sale of securities of $224,000 which were taken to mitigate the negative
impact of the nonrecurring expenses of $156,000 associated with the relocation
of the Bank's temporary Barco banking office to its new permanent location in
Currituck.

Net interest income

Net interest income for the nine months ended September 30, 2001 was $8,987,000,
an increase of $333,000 or 3.85% when compared to net interest income of
$8,654,000 for the nine months ended September 30, 2000. The Company's net
interest margin, on a tax-equivalent basis, for the nine months ended September
30, 2001 was 4.76% compared to 5.22% in 2000. The decline of the Company's net
interest margin is attributable to the negative effect of a net asset-sensitive
interest rate gap position during a falling rate environment and the increase in
funding cost as a result of increased balances of certificates of deposit.

Total interest income increased $1,080,000 for the nine months ended September
30, 2001 compared to the nine months ended September 30, 2000, principally due
to an increase in the average volume of loans of $23.6 million. Yield on average
earning assets, on a tax-equivalent basis, for the nine months ended September
30, 2001 was 7.86% compared to 8.34% in 2000. This decrease in the Company's
yield on earning assets is a result of a lower interest rate environment
compared to 2000 as the Federal Reserve Board has lowered the federal funds
target rate by 350 basis points since the first of the year. The Bank is asset
sensitive in the initial 90 to 120 day time horizon as interest rates on
approximately 35% of the loan portfolio float with the prime rate. Consequently,
the net interest margin is negatively affected by decreases

                                       7

<PAGE>

in interest rates during this period. Beyond this initial asset sensitive period
the Bank becomes liability sensitive on a cumulative basis due to re-pricing
opportunities within the certificate of deposit portfolio.

Total interest expense increased $747,000 for the nine months ended September
30, 2001 compared to the nine months ended September 30, 2000, as a result of
average certificate of deposit balances increasing $31.0 million. The cost of
funds for the Company during the nine months ended September 30, 2001 was 3.94%,
a decrease of 12 basis points when compared to 4.06% for the nine months ended
September 30, 2000 as a result of a lower interest rate environment.

Provision for probable loan losses

The provision for probable loan losses charged to operations during the first
nine months of 2001 was $300,000, compared to $205,000 during the first nine
months of 2000. Net charge-offs for the nine months ended September 30, 2001
totaled $309,000, compared to net charge-offs of $136,000 during the same period
of 2000. Higher current year net charge-offs are primarily the result of a land
development credit loss of approximately $100,000. The amount charged for
provision for probable loan losses is the result of management's review and
evaluation of the portfolio, which considers current economic conditions, past
due loans, and prior loan loss experience.

Noninterest income

Noninterest income increased $652,000 to $2,358,000 for the nine months ended
September 30, 2001 from $1,706,000 for the same period in 2000. This is partly
due to an increase of $268,000 in other fee income generated from some of the
new banking products introduced by the Bank since the first quarter of 2000. A
new accounts receivable purchase product introduced in the second quarter of
2000 generated net fees of $28,000 greater than the prior year period while the
Bank's newly formed Insurance Services generated fees of $69,000. In addition,
the Bank's mortgage department increased loan origination fees by $106,000 as
the reduction in mortgage rates spurred homeowners to refinance. Service charges
on deposit accounts increased $168,000 to $1,220,000 compared to $1,052,000 in
2000. Other operating income decreased $3,000 to $32,000 from the $35,000
recorded during the first half of 2000 due to a gain on the sale of other real
estate owned of $9,000 in the first quarter of 2000. During 2001, the Bank
realized gains on the sale of securities of $224,000.

Noninterest expense

Noninterest expense increased $905,000 or 11.77% to $8,594,000 for the nine
months ended September 30, 2001 from the same period in 2000. This increase is
principally due to increases in salary and employee benefits expense of
$509,000. The opening of offices in New Bern and Hertford accounted for
approximately $157,000 of the personnel expense increase while additional
staffing within the Company's home offices accounted for an additional $296,000
of personnel expense. The Company experienced increases in employee group
insurance premiums during 2001 of $23,000 compared to the prior year. Occupancy
expense increased $95,000 over the prior year period as a result of increased
utilities of $22,000, building depreciation expense of $23,000 and increases in
property insurance and outside janitorial services of $22,000 and $15,000,
respectively. Equipment expense increased $39,000 as equipment depreciation
increased $57,000 but was partially offset by a decrease in equipment lease
payments of $27,000. Bank supply expense decreased $62,000 during the first nine
months of 2001 due to approximately $35,000 of nonrecurring expenses related to
the implementation of the Bank's check image statement during the first quarter
of 2000. Other operating expenses increased $336,000 from $1,481,000 for the
nine months ended September 30, 2000 to $1,817,000 for the nine months ended
September 30, 2001. This increase is primarily due to write offs of leasehold
improvements associated with the relocation of the Bank's Barco banking office
to Currituck of $156,000. Advertising and public relations increased $59,000
over the prior year period.

                                       8

<PAGE>

Income taxes

Income tax expense for the nine months ended September 30, 2001 and 2000 was
$670,000 and $690,000, respectively, resulting in effective tax rates of 27.34%
and 27.98%, respectively. Tax-exempt interest income increased $76,000 or 15.83%
to $556,000 from the $480,000 recorded in 2000 and had the effect of reducing
the Bank's effective tax rate when compared to the prior year period. The
effective tax rates in both years differ from the federal statutory rate of
34.00% primarily due to tax-exempt interest income.

Comparison of the Results of Operations for the Three Month Periods Ended
September 30, 2001 and 2000

Summary

For the three months ended September 30, 2001, the Company had net income of
$818,000, or $0.40 basic and diluted earnings per share, compared to $678,000,
or $0.32 basic and diluted earnings per share for the three months ended
September 30, 2000. Net interest income increased 5.69% to $3,212,000 in the
third quarter of 2001 from $3,039,000 in the third quarter of 2000, and
noninterest income increased $292,000 or 45.13% when compared to the same period
last year. Noninterest expense increased $205,000 or 7.65% for the three month
period ended September 30, 2001 as compared to the same period in 2000, partly
attributable to the opening of offices in New Bern and Hertford and the addition
of personnel at the Company's corporate office. Salary and employee benefits
expense increased $130,000 to $1,463,000 compared to $1,333,000 during the third
quarter of 2000. For the three-month period ended September 30, 2001, net income
includes realized gains on the sale of securities of $148,000, which were taken
to mitigate the negative impact of the nonrecurring expenses of $66,000
associated with the relocation of the Bank's temporary Barco banking office to
its new permanent location in Currituck.

Net interest income

Net interest income for the three months ended September 30, 2001 was
$3,212,000, an increase of $173,000 or 5.69% when compared to net interest
income of $3,039,000 for the three months ended September 30, 2000. The net
interest margin, on a tax-equivalent basis, for the three months ended September
30, 2001 was 4.77% compared to 5.34% in 2000.

Total interest income increased $137,000 for the three months ended September
30, 2001 compared to the three months ended September 30, 2000, principally due
to an increase in the average volume of loans of $25.4 million. Yield on average
earning assets, on a tax-equivalent basis, for the three months ended September
30, 2001 was 7.44% compared to 8.55% in 2000. The cost of funds for the Company
during the three months ended September 30, 2001 decreased 78 basis points when
compared to the three months ended September 30, 2000. The Company's decrease in
cost of funding was principally the result of decreased rates paid on
money-market accounts compared to rate paid during the third quarter of 2000.

Provision for probable loan losses

The provision for probable loan losses charged to operations during the three
months ended September 30, 2001 was $100,000, compared to $75,000 during the
three months ended September 30, 2000. Net charge-offs for the quarter ended
September 30, 2001 totaled $66,000, compared to net charge-offs of $26,000
during the same period of 2000. Higher current year net charge-offs are
primarily the result of a land development credit loss of approximately $100,000
and credit card losses of $60,000. The amount charged for provision for probable
loan losses is the result of management's review and evaluation of the
portfolio, which considers current economic conditions, past due loans, and
prior loan loss experience.

Noninterest income

                                       9

<PAGE>

Noninterest income increased $292,000 or 45.13% to $939,000 for the three months
ended September 30, 2001 compared to $647,000 for the same period in 2000. This
is partly due to an increase of $88,000 in other fee income generated from some
of the new banking products introduced by the Bank since the first quarter of
2000. A new accounts receivable purchase product introduced in the second
quarter of 2000 increased net fees by $14,000 for the quarter while the Bank's
newly formed Insurance Services generated fees of $14,000. In addition, the
Bank's mortgage department increased loan origination fees by $33,000 as the
reduction in mortgage rates spurred homeowners to refinance. Service charges on
deposit accounts increased $62,000 to $415,000 compared to $353,000 in 2000.
During the third quarter of 2001, the Bank realized gains on the sale of
securities of $148,000.

Noninterest expense

Noninterest expense increased $205,000 or 7.65% to $2,883,000 for the three
months ended September 30, 2001 from the same period in 2000. This increase is
principally due to general increases in salary and employee benefits expense of
$130,000. The opening of offices in New Bern and Hertford accounted for
approximately $18,000 of the personnel expense increase while additional
staffing within the Company's home offices accounted for an additional $86,000
of personnel expense. Occupancy expense increased $9,000 over the prior year
period as a result of increased building depreciation expense of $5,000.
Equipment expense decreased $6,000 as increased equipment depreciation expense
of $17,000 was offset by a decrease in miscellaneous equipment expense of
$17,000 for the quarter. Other operating expenses increased $121,000 from
$533,000 for the three months ended September 30, 2000 to $654,000 for the three
months ended September 30, 2001. This increase is primarily due to write offs of
leasehold improvements associated with the relocation of the Bank's Barco
banking office to Currituck of $66,000.

Income taxes

Income tax expense for the three months ended September 30, 2001 and 2000 was
$350,000 and $255,000, respectively, resulting in effective tax rates of 29.77%
and 27.33%, respectively. Tax-exempt interest income increased $50,000 or 32.05%
to $206,000 from the $156,000 recorded in the third quarter of 2000. The
effective tax rates in both years differ from the federal statutory rate of
34.00% primarily due to tax-exempt interest income.

Comparison of Financial Condition at September 30, 2001 and December 31, 2000

Total assets increased $31.8 million to $300.2 million, an increase of $31.8
million or 11.84% when compared to $268.4 million at December 31, 2000. Asset
growth was funded by increased non-interest bearing demand deposits of $10.1
million and certificates of deposit of $6.6 million. Additional asset growth
occurred as the result of the Bank's implementation of a leverage strategy using
$10 million in advances from the Federal Home Loan Bank of Atlanta during the
third quarter of 2001. This transaction was designed to improve the Bank's
return on equity without increasing the Bank's rate sensitivity to an
unacceptable level.

Loans receivable have increased $14.4 million from $173.0 million at December
31, 2000 to $187.4 million at September 30, 2001. The Company has experienced
steady loan demand from all of its markets throughout the year.

Shareholders' equity increased by $1,937,000 from December 31, 2000 to September
30, 2001, as the Company generated net income of $1,781,000 and experienced an
increase of net unrealized gains on available-for-sale securities of $853,000.
The Company declared cash dividends of $558,000 or 27.00 cents per share, during
the first three quarters of 2001 compared to 24.75 cents per share in the prior
year period. The Company repurchased $156,000 of common stock during the first
nine months of 2001.

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<PAGE>

Asset Quality

Management continuously analyzes the growth and risk characteristics of the
total loan portfolio under current economic conditions in order to evaluate the
adequacy of the allowance for probable loan losses. The factors that influence
management's judgment in determining the amount charged to operating expense
include past loan loss experience, composition of the loan portfolio, evaluation
of probable losses inherent in the portfolio and current economic conditions.
The Company's watch committee, which includes three members of senior management
as well as regional managers and other credit administration personnel, conducts
a quarterly review of all credits classified as substandard. This review follows
a re-evaluation by the account officer who has primary responsibility for the
relationship. Various regulatory agencies, as an integral part of their
examination process, periodically review the Company's allowance for probable
loan losses. Such agencies may require the Company to recognize additions to the
allowance for probable loan losses based on their judgments about information
available to them at the time of their examination. Nonperforming assets, which
consist of loans not accruing interest, restructured debt and real estate
acquired in settlement of loans, were $380,000 and $252,000 at September 30,
2001 and December 31, 2000, respectively. At September 30, 2001, the recorded
investment in loans that are considered to be impaired under SFAS No. 114 was
$241,000 compared to $121,000 at December 31, 2000, all of which are on
non-accrual. Management considers the allowance for probable loan losses
adequate to cover estimated probable loan losses relating to the loans
outstanding as of each reporting period.

Regulatory Matters

Management is not presently aware of any current recommendation to the Company
by regulatory authorities which, if they were to be implemented, would have a
material effect on the Company's liquidity, capital resources or operations.

Liquidity

The Company relies on the investment portfolio as a source of liquidity, with
maturities designed to provide needed cash flows. Further, retail deposits
generated throughout the branch network have enabled management to fund asset
growth and maintain liquidity. These sources have allowed limited dependence on
short-term borrowed funds for liquidity or for asset expansion. External sources
of funds include the ability to access advances from the Federal Home Loan Bank
of Atlanta and Fed Fund lines with correspondent banks.

Capital Resources

Bancorp and the Bank are subject to the capital requirements of the Federal
Reserve, the FDIC and the State Banking Commission. The FDIC requires the Bank
to maintain minimum ratios of Tier I capital to total risk-weighted assets and
total capital to risk-weighted assets of 4% and 8%, respectively. To be "well
capitalized," the FDIC requires ratios of Tier I capital to total risk-weighted
assets and total capital to risk-weighted assets of 6% and 10%, respectively.
Tier I capital consists of total stockholders' equity calculated in accordance
with generally accepted accounting principles excluding unrealized gains or
losses, net of income taxes, on securities available-for-sale, and total capital
is comprised of Tier I capital plus certain adjustments, the only one of which
is applicable to the Bank is the allowance for probable loan losses.
Risk-weighted assets reflect the Banks' on- and off-balance sheet exposures
after such exposures have been adjusted for their relative risk levels using
formulas set forth in FDIC regulations. As of September 30, 2001, the Bank was
in compliance with all of the aforementioned capital requirements and meets the
"well-capitalized" definition that is used by the FDIC in its evaluation of
member banks. Additionally, at September 30, 2001, Bancorp was also in
compliance with the applicable capital requirements set forth by the Federal
Reserve.

Current Accounting Issues


                                       11

<PAGE>

The Financial Standards Board has issued new requirements regarding business
combinations and the proper accounting for intangibles. SFAS 141 "Business
Combinations" requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. SFAS 141 also provides
guidance on classifying intangible assets. SFAS 142 "Goodwill and Other Tangible
Assets" prohibits the amortization of goodwill and intangible assets with
indefinite useful lives. Instead, those intangible assets will be tested for
impairment at least annually. Assets with estimable useful lives will continue
to be amortized over their estimated useful lives, and those assets will be
reviewed for impairment under SFAS 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The
implementation of SFAS 142 requires an assessment of goodwill to determine if
any impairment exists as of the date of adoption. Any transitional impairment
exists as of the income statements the cumulative effect of a change in
accounting principle. Management does not expect these statements to have a
material impact on the Company.

In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144 (SFAS No. 144), "Accounting for the Impairment or Disposal of Long-Lived
Assets", which addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. This standard provides guidance on
differentiating between long-lived assets to be held and used, long-lived assets
to be disposed of other than by sale and long-lived assets to be disposed of by
sale. SFAS No. 121 supersedes "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 144 also
supersedes Accounting Principals Board Opinion No. 30, "Reporting the Results of
Operations - Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, unusual and Infrequently Occurring Events and Transactions". This
statement is effective for fiscal years beginning after December 15, 2001. At
this time, the Company is assessing the impact of SFAS No. 144 on its financial
condition and results of operations.


The FASB also issues exposure drafts for proposed statements of financial
accounting standards. Such exposure drafts are subject to comment from the
public, to revisions by the FASB and to final issuance by the FASB as statements
of financial accounting standards. Management considers the effect of the
proposed statements on the consolidated financial statements of the Company and
monitors the status of changes to issued exposure drafts and to proposed
effective dates.

Management awareness

Management is not aware of any known trends, events, uncertainties, or current
recommendations by regulatory authorities that will or that are reasonably
likely to have a material effect on the Company's liquidity, capital resources
or other operations.

Forward-Looking Statements

This discussion may contain statements that could be deemed forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934 and the Private Securities Litigation Reform Act, which statements are
inherently subject to risks and uncertainties. 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.
Such statements are often characterized by the use of qualifying words (and
their derivatives) such as "expect," "believe," "estimate," "plan," "project,"
"anticipate," or other statements concerning opinions or judgment of Bancorp and
its 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 Bancorp's customers, actions of government
regulators, the level of market interest rates, and general economic conditions.

                                       12

<PAGE>

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

None.


Item 2.  Changes in Securities and Use of Proceeds

Not applicable.


Item 3.  Defaults upon Senior Securities

Not applicable.


Item 4.  Submission of Matters to a Vote of Security Holders

None.


Item 5.  Other Information

Not applicable.


Item 6.  Exhibits and Reports on Form 8-KSB

(a)  Exhibits:

     Exhibit
     Number                       Description
     ------                       -----------

 3.1 Registrant's Articles of Incorporation (incorporated by reference from
     Exhibit 3.1 to Registrant's Registration Statement on Form SB-2, Reg.
     No. 333-61839)

 3.2 Registrant's Bylaws (incorporated by reference from Exhibit 3.2 to
     Registrant's Registration Statement on Form SB-2, Reg. No. 333-61839)


(b)  Reports on Form 8-KSB

     None.

                                       13

<PAGE>

                                   SIGNATURES

Under the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

                                ECB BANCORP, INC.

                                  (Registrant)

Date: 11/9/2001                                    By: /s/ Arthur H. Keeney, III
---------------                                        -------------------------
                                                        Arthur H. Keeney, III
                                                          (President & CEO)


Date: 11/9/2001                                    By: /s/ Gary M. Adams
---------------                                        -----------------
                                                           Gary M. Adams
                                                 (Senior Vice President  & CFO)

                                       14