EXHIBIT 99.1

Crescent Financial Corporation Announces Q1 2011 Results

CARY, N.C., May 13, 2011 (GLOBE NEWSWIRE) -- Crescent Financial Corporation (Nasdaq:CRFN), parent company of Crescent State Bank in Cary, North Carolina today announced an unaudited net loss for the quarter ended March 31, 2011, before adjusting for the effective dividend on preferred stock, of $7,047,000 compared with net income for the prior year period of $542,000. After adjusting for $427,000 and $419,000 in dividends and accretion on preferred stock for each respective period, net loss attributable to common shareholders was $7,474,000 or ($0.78) per share for the current three-month period compared to net income available for common shareholders of $123,000 or $0.01 per diluted share for the quarter ended March 31, 2010. The decline in earnings was due primarily to a higher provision for loan losses, an increase in the valuation allowance on our deferred tax asset resulting in no tax benefit for the period, a decline in net interest margin due to the level of nonaccrual loans and an increase in non-interest expenses. Increases in non-interest expenses were primarily associated with our pending recapitalization transaction with Piedmont Community Bank Holdings, Inc. ("Piedmont").

Net Interest Income

Net interest income for the current three-month period decreased by more than $1.4 million or 19% to $6.0 million compared with $7.5 million for the period ended March 31, 2010. The interest rate spread between the yield on average earning assets and the cost of interest-bearing liabilities declined to 2.60% from 2.98%. The yield on average earning assets declined by 85 basis points from 5.78% to 4.93%. Interest reversals and foregone interest on loans transferred to nonaccrual status during the first quarter of approximately $945,000 accounts for 42 basis points of the total decline. The cost of interest-bearing liabilities declined by 47 basis points when comparing the two periods averaging 2.33% for the three-month period ended March 31, 2011 and 2.80% for the prior year period. The tax equivalent net interest margin declined to 2.82% for the current quarter compared to 3.27% for the prior year quarter. 

On a linked quarter basis, net interest income declined by $613,000 or 9% from $6.6 million. The decline is attributable to a combination of factors including a shift in the mix of earning assets from higher yielding loan categories to more liquid investment categories, the reversal of previously accrued interest on loans transferred to nonaccrual status during the quarter and the interest income foregone on nonperforming loans.  The yield on earning assets decreased by 31 basis points from 5.24% to 4.93%, the cost of interest-bearing liabilities declined by 13 basis points from 2.46% to 2.33% and net interest margin contracted to 2.82% from 3.03%. 

Provision for Loan Losses and Asset Quality

The provision for loan losses increased by $5.2 million to $7.0 million for the current three-month period from $1.8 million for the period ended March 31, 2010. While the Company did experience additional loan quality deterioration, the size of the provision also reflects the impact of current real estate valuations in our markets. The Company reappraises both impaired loans and other real estate owned every 12 to 15 months and the new appraised value is an integral input in our model to determine the adequacy of our loan loss reserve. Management continues to aggressively identify and provide for problem loans. The allowance for loan losses as a percentage of total gross outstanding loans was 3.60% at March 31, 2011, 3.06% at December 31, 2010 and 2.26% at March 31, 2010. Non-performing loans and other real estate owned as a percentage of total assets at March 31, 2011 was 6.33% compared to 4.74% at December 31, 2010 and 3.71% at March 31, 2010. Annualized net charge-offs for the first quarter of 2011 were 2.57% compared to 1.45% during the fourth quarter of 2010 and 1.38% for the prior year three-month period.

Non-Interest Income

Non-interest income was $1.0 million at both March 31, 2011 and 2010. Due primarily to a larger customer base, service charges and other deposit related revenue increased by $15,000 to $447,000 for the current three-month period compared to $432,000 for the prior three-month period. We experienced minor decreases in non-interest income including $71,000 in mortgage-related revenue, $14,000 in brokerage referral fees, $8,000 in revenue from nonmarketable investments and $5,000 in earnings from bank owned life insurance. The Company recorded $101,000 in gains on the sale of available for sale securities during the first quarter.

On a linked quarter basis, non-interest income declined by $421,000 due primarily to revenue from our mortgage loan division. Revenue related to brokered origination and the gain on sale of mortgage loans during the three-month period ended December 31, 2010 was $597,000 compared to $166,000 for the current quarter. The expiration of the federal housing tax credit program on April 30, 2010 and general economic conditions have reduced both new purchase money and refinance opportunities in residential real estate. Service charges and deposit account related fees declined by $17,000 due primarily to a $33,000 decline in NSF check processing. This decline was somewhat offset by an increase in service charges and other deposit activity fees of $16,000. 

Non-Interest Expenses

Non-interest expenses increased by $914,000 or 15% to $7.1 million compared to $6.2 million for the prior year period. Of the total increase, $272,000 related to personnel and occupancy expenses as the Company added personnel during the year and expanded the amount of leased space at our Operations Center in Cary, North Carolina. During the first quarter of 2011, we incurred approximately $381,000 in legal and other professional consulting services related to our pending recapitalization transaction with Piedmont. FDIC insurance assessments increased by $140,000 during the first quarter. Loan related expenses have increased by $138,000 primarily due to the realization of $166,000 in losses on the disposal of, and valuation write-downs on, other real estate owned compared to $33,000 of losses for the three-month period ended March 31, 2010. 

On a linked quarter basis, non-interest expenses increased by $108,000 from $7.0 million to $7.1 million.  Decreases in the areas of personnel, occupancy, FDIC insurance premiums, advertising and office supplies were offset by a $166,000 increase in legal and other professional consulting expenses related to the pending investment agreement with Piedmont. Loan related expenses increased by $68,000 over the linked periods. Although we experienced a $123,000 decrease in loan collection and legal expenses related to the acquisition and maintenance of foreclosed assets, the loss on disposition of, or valuation write-downs on, foreclosed assets was $166,000 in the three-month period ended March 31, 2011 compared to a gain on disposition of $68,000 for the three-month period ended December 31, 2010.

Tax Provision

The Company did not record any tax benefit associated with the pre-tax loss for the three-month period ended March 31, 2011. At December 31, 2010, we determined that a portion of our deferred tax asset may not be realizable and established at valuation allowance of $2.1 million. Management evaluates the level of the valuation allowance quarterly taking into consideration credit quality trends, losses from operations and deviations from forecasted results. Based on our evaluation at March 31, 2011, the appropriate level of the valuation allowance was determined to be $4.9 million resulting in a $2.8 million increase. There was no income tax impact for the quarter ended March 31, 2011 compared to income tax expense of $433,000 for the quarter ended December 31, 2010 and a tax benefit of $23,000 for the quarter ended March 31, 2010.

Balance Sheet

Crescent Financial Corporation has unaudited total assets at March 31, 2011 of $959.6 million, decreasing by approximately $13.5 million compared to the $973.0 million reported at December 31, 2010. Total deposits increased by $822,000 during the first quarter which includes increases of $6.6 million, $3.1 million and $1.4 million in interest-bearing demand deposits, money market and total time deposits, respectively. Balances in our savings products declined by $7.5 million as we implemented a new pricing strategy designed to migrate savings customers into money market accounts. Non-interest bearing demand deposits declined by $2.8 million during the quarter. The Company continues to reduce its dependence on non-core forms of funding by decreasing brokered time deposits by $11.3 million and borrowings by $7.0 million during the first quarter. 

Loan demand within the Company's markets continues to be soft and the market is very competitive for what demand does exist. The total portfolio of loans held for investment declined by $24.0 million during the first quarter of 2011. The decline was comprised of $28.4 million in normal principal payments and payoffs, $4.6 million in charged-off loans, $1.6 million in loans sold, $368,000 in loans transferred to foreclosed assets, and partially offset by $11.0 million in new loans produced. Other earning asset categories including interest-bearing deposits at correspondent banks, Fed funds sold and investment securities experienced a net increase of $23.7 million. Total stockholders' equity was $71.7 million at March 31, 2011 compared to $79.0 million at year end. The decrease was primarily related to the net loss for the quarter and an decline in other comprehensive income. 

Mike Carlton, President and CEO stated, "The first quarter results reflect our continuing efforts to work through the difficult credit cycle caused by current economic conditions. Management remains proactive and focused on the identification, proper loan loss provisioning and resolution of problem assets.  Although nonperforming assets reached new levels at March 31, 2011, early signs in the second quarter are encouraging and we are hopeful that problem assets have peaked and we anticipate levels to stabilize and subside.  As we move through the next several months, we will continue to take the necessary actions to position the Company for our new partnership with Piedmont. The staff and management team are excited about the upcoming recapitalization. We are currently in the process of securing shareholder approval and will hold a Special Meeting of Shareholders on June 7, 2011 to formalize that approval."  

Crescent State Bank is a state chartered bank operating fifteen banking offices in Cary (2), Apex, Clayton, Holly Springs, Southern Pines, Pinehurst, Sanford, Garner, Raleigh (3), Wilmington (2) and Knightdale, 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.

CONTACT: Michael G. Carlton
         President and CEO
         Bruce W. Elder
         Vice President
         (919) 460-7770