On December 8, 2008, Crescent Financial Corporation, Cary, North Carolina (the "Registrant"), parent company of Crescent State Bank, announced that it had received preliminary approval of its application to participate in the United States Department of the Treasury's TARP Capital Purchase Program (the "TCPP").

As a participant in the TCPP, the Registrant could receive up to $24.9 million in capital from the United States Department of the Treasury in exchange for shares of preferred stock and warrants to purchase shares of the Registrant's common stock. The preferred stock would pay a 5% dividend for the first five years of the investment, after which the rate would increase to 9% if the preferred shares are not redeemed by the Registrant.

Final approval of the Registrant's participation in the TCPP by the United States Department of the Treasury is subject to satisfaction of certain conditions, including any necessary amendments to the Registrant's articles of incorporation and the execution of definitive agreements.

A copy of the press release regarding the Registrant's preliminary approval to participate in the TCPP is included as Exhibit 99.1 to this report.

(d) Exhibits.

The following exhibits are filed herewith:

  EXHIBIT NO.     DESCRIPTION OF EXHIBIT

  99.1            Press Release dated December 8, 2008, regarding
                  Registrant's preliminary approval to participate
                  in the U.S. Treasury Capital Purchase Program

The Current Report on Form 8-K (including information included or incorporated by reference herein) may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of the Registrant's goals and expectations with respect to earnings, income per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "projects," "outlook" or similar expressions. These statements are based upon the current belief and expectations of the Registrant's management and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Registrant's control).