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BOSTON (TheStreet) -- Some may look at it as bottom-feeding, others opportunistic investing. Pimco, the world's biggest manager of bonds, is buying a small stake in a tiny, struggling North Carolina bank in a Mayberry-like setting.

The Newport Beach, Calif.-based firm's year-old

Pimco Bravo Fund

is seeking government approval to acquire a 20% stake in

ECB Bancorp

( ECBE), an Engelhard, N.C., bank with a market value of a mere $32 million and deposits of $945 million.

Pimco clearly has something greater in mind for ECB, and most likely it is interested in quickly turning it into a

regional banking powerhouse through acquistions


Pimco Bravo is making a $25 million investment in ECB as part of an $80 million recapitalization of the lender. The fund is the single largest investor in the deal.

Other investors in the private placement include Philadelphia-based Patriot Financial Partners, a private-equity fund focused on investing in community banks, thrifts and other financial-services companies, and New York-based Endicott Management, founded by Kenneth Londoner.

The Federal Reserve Bank of Richmond is reviewing an application for the deal, according to a


report today.

Pimco began raising money for the Pimco Bravo Fund late last year, and it now has about $2.3 billion in assets. Bravo is an acronym for Bank Recapitalization and Value Opportunities, and in addition to targeting troubled banks, the fund is expected to invest in commercial and residential mortgage loans and other debt.

The fund's investors are primarily institutions such as pension funds and endowments.

Pimco's renowned bond fund manager Bill Gross isn't listed as a manger of the Bravo Fund.

Pimco didn't respond to an e-mail seeking comment, but Dan Ivascyn, a Pimco managing director and a portfolio manager for the Bravo fund, told


in a statement that "we see value from bank dispositions and recapitalizations and are targeting opportunities across a variety of strategies."

It may be an opportune time to scoop up small banks, because many are still trying to pay back cash received from the federal Troubled Asset Relief Program (TARP) during the height of the financial crisis and are having difficulty doing so given the economy's woes.

And the Federal Deposit Insurance Corp. (FDIC) has a long and growing list of banks, over 800, at risk of failure and in need of a helping hand.

At first blush, ECB seems an odd choice for the fund and not just because of the small size of the deal, but because ECB is clearly struggling. In the first six months of this year, it posted a loss of $469,000, or 16 cents a share, and in 2010, it had a loss of $1.4 million, or 49 cents.

The bank's shares have lost 17% this year and 11% over the past 12 months, according to Morningstar. Over the past five years, its shares have an average annual loss of 16%.

Brady Gailey, a

Keefe, Bruyette & Woods


analyst who follows ECB for his firm, said the company, which operates 25 banking offices in eastern North Carolina and offers typical consumer banking and lending services, has "historically been a coastal-area bank, and they're trying to diversify the franchise more inland.

"It's hard to call any area in the Southeast a growth area right now," he said of the region's economic outlook. "It's tough to grow, period."

But there are "three banks in their back yard that are acquisition opportunities," he said.

They include banks that may need an FDIC bailout, which makes them easy pickings for a recapitalized bank. So Pimco is likely eyeing growth through acquisitions for ECB.

Pimco, which is owned by Munich-based insurer Allianz SE, has $1.2 trillion in assets under management.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.