Exhibit 99.1

	- NEWS RELEASE -
Date:	January 19, 2007
Contact:	Michael G. Carlton
	President and CEO
	Bruce W. Elder
	Vice President
	(919) 460-7770

Crescent Financial Corporation

Announces 63% Increase in Fourth Quarter 2006 Earnings and 56%

Increase in 2006 Annual Earnings

CARY, N.C. – Crescent Financial Corporation (NasdaqGM: CRFN), parent company of Crescent State Bank in Cary, North Carolina and Port City Capital Bank in Wilmington, North Carolina today announced unaudited net income for the year ended December 31, 2006 of $4,904,000 reflecting a 56% increase over net income of $3,144,000 for the year ended December 31, 2005. Diluted earnings per share for the current year increased by 13% to $.69 compared to split-adjusted diluted earnings per share of $.61 for the prior year period. The percentage increase in earnings per share was not comparable to the increase in net income due to the issuance of an additional 848,000 shares during the fourth quarter of 2005 and 2,432,000 shares in connection with the acquisition of Port City Capital Bank on August 31, 2006. The increase in net income for 2006 was primarily the result of strong earning asset growth.

Average earning assets for 2006 increased by approximately $137.9 million to $491.8 million compared to $353.9 million for 2005. Earning asset growth resulted in the increase of net interest income by 39% from $14.0 million in 2005 to $19.4 million in 2006. Non-interest income increased by 8% from $2.4 million to $2.6 million. Non-interest expenses increased by 24% from $10.8 million to $13.4 million primarily in the areas of personnel, occupancy and data processing expenses as the Company opened a new loan production office and a full-service branch office in Raleigh, North Carolina during the first and second quarters, respectively, and acquired Port City Capital Bank of Wilmington, North Carolina during the third quarter. The loan loss provision was $991,000 for the year ended December 31, 2006 compared to $807,000 for the prior year.

Unaudited net income for the three-month period ended December 31, 2006 was $1,643,000 or $.19 per diluted share compared with $1,005,000 or $.18 per split-adjusted diluted share for the three-month period ended December 31, 2005. In comparing results for the two quarterly periods, net income increased by 63%, net interest income increased by 59%, non-interest income increased by 4% and non-interest expenses increased by 32%. The loan loss provision was $374,000 for the current three-month period compared to $60,000 for the prior year period.

Crescent Financial Corporation reported total assets on December 31, 2006 of $697.9 million reflecting a 70% increase over total assets of $410.8 million on December 31, 2005. Total net loans increased by 68% from $324.0 million at December 31, 2005 to $542.9 million at December 31, 2006. Total deposits increased 68% from $322.1 million at December 31, 2005 to $541.9 million at December 31, 2006. Total stockholders’ equity grew by 100% from $41.5 million at December 31, 2005 to $83.0 million at December 31, 2006. The increase was primarily due to the acquisition of Port City Capital Bank and net income for the year.

Mike Carlton, President and CEO stated, “This past year reflects the results of our plan and continued commitment to build a top-performing financial institution. We are pleased to be able to report to our shareholders the significant increases in both balance sheet and net income over the past twelve months. This most recent quarter reflects the first full period of combined earnings from the completed merger with Port City Capital Bank. Our successes during the year would not have been possible without the dedication and focus from each of our employees.

As we move into 2007 and beyond, our branch network will increase more rapidly than in prior years as we seek out additional expansion opportunities. We have identified several banking locations in the Greater Raleigh area and Southeastern North Carolina, and hope to open three new offices by the end of 2007. Through our existing branch network and other identified communities, we are well positioned for further successes.”

Crescent State Bank is a state chartered bank operating ten banking offices in Cary (2), Apex, Clayton, Holly Springs, Southern Pines, Pinehurst, Sanford, Garner and Raleigh, North Carolina and one loan production office in Raleigh, North Carolina. Port City Capital Bank is a state chartered bank operating one full-service banking office in Wilmington, North Carolina. Crescent Financial Corporation stock can be found on the NASDAQ Global Market trading under the symbol CRFN. Investors can access additional corporate information, product descriptions and online services through the Bank’s website at www.crescentstatebank.com.

Information in this press release contains “forward-looking statements.” These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in Crescent Financial Corporation’s recent filings with the Securities Exchange Commission, including but not limited to its Annual Report on Form 10-K and its other periodic reports.

Crescent Financial Corporation

Consolidated Balance Sheet

(Amounts in thousands except share and per share data)

(Unaudited)

	December 31, 2006			September 30, 2006			June 30, 2006			March 31, 2006			December 31, 2005 (a)
ASSETS
Cash and due from banks	$	14,295		$	14,046		$	12,263		$	10,577		$	9,403
Interest earning deposits with banks		763			812			207			571			69
Federal funds sold		92			11,556			8,738			—			—
Investment securities available for sale at fair value		84,723			83,827			64,397			59,262			55,550
Loans		549,819			526,066			365,174			355,806			328,322
Allowance for loan losses		(6,945	)		(6,573	)		(4,772	)		(4,621	)		(4,351	)
Net Loans		542,874			519,493			360,402			351,185			323,971
Accrued interest receivable		3,046			2,950			2,146			1,913			1,768
Federal Home Loan Bank stock		3,583			3,133			3,072			2,712			2,133
Bank premises and equipment		5,908			5,818			5,067			5,008			4,844
Investment in life insurance		5,683			5,633			5,583			5,533			5,483
Goodwill		30,225			30,284			3,600			3,600			3,600
Other assets		6,717			6,619			5,288			4,657			3,967
Total Assets	$	697,909		$	684,171		$	470,763		$	445,018		$	410,788
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits
Demand	$	70,420		$	74,875		$	52,179		$	49,879		$	46,830
Savings		78,379			74,277			33,664			12,110			9,365
Money market and NOW		97,343			110,235			85,342			89,472			87,695
Time		295,739			280,844			198,444			198,103			178,191
Total Deposits		541,881			540,231			369,629			349,564			322,081
Short-term borrowings		24,451			14,741			16,000			10,775			14,964
Long-term debt		45,248			45,248			40,248			40,248			30,248
Accrued expenses and other liabilities		3,295			2,697			1,922			2,025			2,038
Total Liabilities		614,875			602,917			427,799			402,612			369,331
STOCKHOLDERS’ EQUITY
Common stock		8,265			8,249			5,798			5,035			5,026
Additional paid-in capital		62,659			62,522			28,829			29,513			29,406
Retained earnings		12,611			10,967			9,693			8,689			7,707
Accumulated other comprehensive loss		(501	)		(484	)		(1,356	)		(831	)		(682	)
Total Stockholders’ Equity		83,034			81,254			42,964			42,406			41,457
Total Liabilities and Stockholders’ Equity	$	697,909		$	684,171		$	470,763		$	445,018		$	410,788
Ending shares outstanding (b)		8,265,136			8,248,654			5,798,240			5,789,917			5,780,353
Book value per share	$	10.05		$	9.85		$	7.41		$	7.32		$	7.17

Crescent Financial Corporation

Consolidated Income Statements

(Amounts in thousands except share and per share data)

(Unaudited)

	For the year ended						For the three-month period ended
	December 31, 2006			December 31, 2005 (a)			December 31, 2006			September 30, 2006			June 30, 2006			March 31, 2006			December 31, 2005
INTEREST INCOME
Loans	$	33,094		$	20,456		$	11,125		$	8,516		$	7,019		$	6,433		$	5,989
Investment securities available for sale		3,303			2,323			1,038			877			724			663			612
Fed funds sold and other interest		310			47			125			129			51			5			8
Total Interest Income		36,707			22,826			12,288			9,522			7,794			7,101			6,609
INTEREST EXPENSE
Deposits		14,207			6,884			5,161			3,824			2,831			2,391			2,077
Short-term borrowings		844			475			234			164			213			233			211
Long-term debt		2,206			1,513			649			620			534			403			383
Total Interest Expense		17,257			8,872			6,044			4,608			3,578			3,027			2,671
Net Interest Income		19,450			13,954			6,244			4,914			4,216			4,074			3,938
Provision for loan losses		991			807			374			182			164			270			60
Net interest income after provision for loan losses		18,459			13,147			5,870			4,732			4,052			3,804			3,878
Non-interest income
Mortgage loan origination income		642			755			138			193			165			145			186
Service charges and fees on deposit accounts		1,288			1,045			341			321			308			318			297
Realized gain/loss on sale of securities		—			(16	)		—			—			—			—			—
Other		682			633			222			181			146			133			192
Total non-interest income		2,612			2,417			701			695			619			596			675
Non-interest expense
Salaries and employee benefits		7,307			5,904			2,169			1,899			1,670			1,569			1,723
Occupancy and equipment		2,018			1,728			547			512			489			469			454
Data processing		834			648			260			205			186			183			170
Other		3,228			2,481			1,003			816			759			650			659
Total non-interest expense		13,387			10,761			3,979			3,432			3,104			2,871			3,006
Income before income taxes		7,684			4,803			2,592			1,995			1,567			1,529			1,547
Income taxes		2,780			1,659			949			721			564			547			542
Net income	$	4,904		$	3,144		$	1,643		$	1,274		$	1,003		$	982		$	1,005
NET INCOME PER COMMON SHARE (b)
Basic	$	0.74		$	0.64		$	0.20		$	0.19		$	0.17		$	0.17		$	0.19
Diluted	$	0.69		$	0.61		$	0.19		$	0.18		$	0.17		$	0.16		$	0.18
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (b)
Basic		6,619,105			4,911,264			8,249,710			6,620,379			5,793,021			5,786,227			5,421,741
Diluted		7,078,590			5,165,861			8,697,190			7,080,336			6,025,727			6,010,819			5,656,219
Return on average assets		0.93	%		0.84	%		0.95	%		0.94	%		0.88	%		0.93	%		0.98	%
Return on average equity		8.72	%		10.34	%		7.90	%		8.99	%		9.33	%		9.91	%		10.63	%
Net interest margin		3.95	%		3.94	%		3.92	%		3.89	%		3.95	%		4.09	%		4.09	%
Allowance for loan losses to avg loans		1.26	%		1.33	%		1.26	%		1.25	%		1.31	%		1.30	%		1.33	%
Nonperforming loans to total loans		0.02	%		0.01	%		0.02	%		0.02	%		0.07	%		0.01	%		0.01	%
Nonperforming assets to total assets		0.03	%		0.01	%		0.03	%		0.05	%		0.06	%		0.01	%		0.01	%

(a) Derived from audited consolidated financial statements.

(b) Adjusted, where applicable, for the stock split effected as a 15% stock dividend paid on May 31, 2006 to stockholders of record on May 18, 2006.