Exhibit 99.1

CONTACT:

B. Grant Yarber

President and Chief Executive Officer

Phone: (919) 645-3494

Email: gyarber@capitalbank-nc.com

FOR IMMEDIATE RELEASE

Capital Bank Corporation Announces Solid Earnings, Improved Asset Quality Despite Economy

RALEIGH, N.C. – July 22, 2008 – Capital Bank Corporation (Nasdaq: CBKN), the parent company of Capital Bank, today reported net income for the six months ended June 30, 2008 of $4.4 million compared to $5.1 million for the six months ended June 30, 2007. Earnings per share on a fully diluted basis were $.39 for the first six months of 2008 compared to $.44 for the first six months of 2007. Net income was $2.2 million, or $.20 per share on a fully diluted basis, for the second quarter ended June 30, 2008 compared to $2.7 million, or $.23 per share on a fully diluted basis, for the second quarter ended June 30, 2007.

“In spite of the current negative economic trends, Capital Bank continues to experience strong credit quality in our portfolio. We attribute our success in this arena to our ongoing strong commitment to prudent credit management and our franchise being located within the best markets in the country. We remain cautiously optimistic that our clients will be able to withstand this economic downturn. In addition to asset quality, we continue to manage our capital position and do not anticipate a need to raise additional capital in the foreseeable future,” stated B. Grant Yarber, president and CEO.

Asset quality continued to improve during the second quarter of 2008 compared to both the first quarter of 2008 and the second quarter of 2007. Past due loans as a percent of total loans declined to 0.78% at June 30, 2008 from 0.82% at March 31, 2008 and 1.27% at June 30, 2007. Nonperforming assets, which include loans on nonaccrual and other real estate owned, decreased to 0.37% as a percent of total assets at the end of June 2008 compared to 0.59% at June 30, 2007 and increased slightly from 0.33% at March 31, 2008. Allowance for loan losses totaled 1.18% of total loans at June 30, 2008 compared to 1.30% at June 30, 2007 and 1.18% at March 31, 2008. The allowance for loan losses was 267% of nonperforming loans as of June 30, 2008 compared to 175% at the end of the second quarter 2007 and 319% at the end of March 2008.

Capital Bank achieved $83.1 million in loan growth during the first half of 2008. Much of the growth has occurred in the Triangle and Western North Carolina markets which we believe continue to present excellent growth opportunities. Deposits increased $83.9 million during the first half of 2008 from $1.10 billion at December 31, 2007 to $1.18 billion at June 30, 2008. Checking accounts increased $38.4 million from December 31, 2007 as the bank continued to emphasize growth in this critical product area. Time deposits increased $75.2 million over the same period. Some of the growth in time deposits was due to retail customers shifting funds from money market savings products to CDs. Money market deposits decreased $29.7 million over the same period.

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Net interest income for the first six months of 2008 decreased $132 thousand compared to the first six months of 2007. This decline was due to the impact of a decrease in net interest margin from 3.59% to 3.21% for the first six months of 2007 and 2008, respectively. Nearly offsetting this decline in net interest margin was 9.7% growth in average earning assets for the comparable periods.

Provision for loan losses increased $1.2 million for the six months ended June 30, 2008 compared to the same period in 2007. During 2007, Capital Bank enhanced its methodology for calculating the allowance for loan losses based on updated guidance issued through an interagency policy statement by the Federal Reserve, the FDIC and other regulatory agencies. Largely due to the enhancements in methodology, the allowance was reduced during the second quarter of 2007, creating a credit for loan losses of $91 thousand compared to a provision for loan losses of $850 thousand during the second quarter of 2008. Management continues to thoroughly review its loan portfolio and the adequacy of its allowance for loan losses.

Noninterest income increased $627 thousand or approximately 13.7% on a year-to-date basis compared to the same period one year ago despite a $470 thousand decline in mortgage revenue. Service charge income, bank card income and brokerage income increased a combined $721 thousand, or 28.5%, compared to the same period one year ago primarily as a result of management’s continued emphasis on increasing income from these sources.

“We are very pleased that our concentrated effort to improve noninterest income is showing success. The improvements are based on fee collection efforts, restructured pricing and innovative product enhancements, including our Smart Checking product,” stated B. Grant Yarber.

Noninterest expense increased a modest 2.5% to $19.6 million during the first six months of 2008 compared to $19.1 million for the same period one year ago. Increased FDIC deposit insurance premiums of $101 thousand accounted for approximately 21% of the increased noninterest expense.

Capital Bank Corporation, headquartered in Raleigh, N.C., with approximately $1.6 billion in total assets, offers a broad range of financial services. Capital Bank operates 27 banking offices in Asheville (4), Burlington (4), Cary, Graham (2), Hickory, Mebane, Morrisville, Oxford, Pittsboro, Raleigh (5), Sanford (3), Siler City, Wake Forest and Zebulon. The Company’s website is http://www.capitalbank-nc.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 Capital Bank Corporation’s filings with the Securities and Exchange Commission, including without limitation its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Capital Bank Corporation does not undertake a duty to update any forward-looking statements in this press release.

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CAPITAL BANK CORPORATION

Summary of Operations

(Unaudited)	Three Months Ended June 30, 2008		Three Months Ended June 30, 2007			Six Months Ended June 30, 2008		Six Months Ended June 30, 2007
(In thousands except per share data)
Interest income	$	21,283	$	23,567		$	44,001	$	46,742
Interest expense		10,355		12,321			22,164		24,773
Net interest income		10,928		11,246			21,837		21,969
Provision (credit) for loan losses		850		(91	)		1,415		246
Net interest income after provision for loan losses		10,078		11,337			20,422		21,723
Noninterest income		2,974		2,384			5,201		4,574
Noninterest expense		9,968		9,857			19,573		19,093
Income before taxes		3,084		3,864			6,050		7,204
Income tax expense		869		1,188			1,668		2,144
Net income	$	2,215	$	2,676		$	4,382	$	5,060
Income per share – basic	$	0.20	$	0.23		$	0.39	$	0.44
Income per share – fully diluted	$	0.20	$	0.23		$	0.39	$	0.44
Weighted average shares outstanding:
Basic		11,310		11,503			11,300		11,498
Fully diluted		11,324		11,574			11,315		11,574

End of Period Balances

(Unaudited)	2008				2007
	June 30		March 31		December 31(a)		September 30		June 30
(Dollars in thousands except per share data)
Total assets	$	1,592,034	$	1,575,301	$	1,517,603	$	1,490,244	$	1,440,240
Investment securities		246,468		258,086		259,116		249,083		241,666
Loans (gross)*		1,178,157		1,150,497		1,095,107		1,070,656		1,022,147
Allowance for loan losses		13,910		13,563		13,571		13,366		13,339
Total earning assets		1,435,020		1,419,174		1,362,048		1,335,434		1,285,715
Deposits		1,182,615		1,150,897		1,098,698		1,090,589		1,072,979
Shareholders’ equity		165,731		167,967		164,300		164,089		162,402
Book value per share	$	14.76	$	14.95	$	14.71	$	14.58	$	14.17
Tangible book value per share	$	9.16	$	9.33	$	9.04	$	8.93	$	8.59

(a) Derived from audited consolidated financial statements

*Includes loans held for sale

Average Balances

(Unaudited)	2008				2007
	June 30		March 31		December 31(a)		September 30		June 30
(Dollars in thousands)
Total assets	$	1,578,357	$	1,555,986	$	1,492,563	$	1,445,915	$	1,436,584
Investments		256,406		256,538		242,272		252,090		248,850
Loans (gross)*		1,166,795		1,142,728		1,090,801		1,042,635		1,021,517
Total earning assets		1,429,301		1,407,345		1,347,727		1,302,859		1,292,651
Deposits		1,148,671		1,139,106		1,066,438		1,064,174		1,078,430
Shareholders’ equity		170,945		167,610		166,222		163,850		164,877

(a) Derived from audited consolidated financial statements

*Includes loans held for sale

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CAPITAL BANK CORPORATION

Quarterly Results

(Unaudited)	2008				2007
	June 30		March 31		December 31(a)			September 30		June 30
(In thousands except per share data)
Net interest income	$	10,928	$	10,909	$	10,952		$	11,185	$	11,246
Provision (credit) for loan losses		850		565		3,099			261		(91	)
Net interest income after provision for loan losses		10,078		10,344		7,853			10,924		11,337
Noninterest income		2,974		2,227		2,176			2,233		2,384
Noninterest expense		9,968		9,605		10,109			9,299		9,857
Income (loss) before taxes		3,084		2,966		(80	)		3,858		3,864
Income tax expense (benefit)		869		799		(125	)		1,105		1,188
Net income	$	2,215	$	2,167	$	45		$	2,753	$	2,676
Income per share – basic	$	0.20	$	0.19	$	–		$	0.24	$	0.23
Income per share – fully diluted	$	0.20	$	0.19	$	–		$	0.24	$	0.23
Weighted average shares outstanding:
Basic		11,310		11,289		11,252			11,451		11,503
Fully diluted		11,324		11,306		11,316			11,510		11,574

(a) Derived from audited consolidated financial statements

Quarterly Net Interest Margin*

(Unaudited)	2008						2007
	June 30			March 31			December 31(a)			September 30			June 30
Yield on earning assets		6.09	%		6.60	%		7.17	%		7.42	%		7.51	%
Cost of interest bearing liabilities		3.24			3.76			4.33			4.32			4.34
Net interest spread		2.85			2.83			2.84			3.10			3.17
Net interest margin		3.18			3.23			3.38			3.57			3.65

*Annualized and on a fully taxable equivalent basis

(a) Derived from audited consolidated financial statements

Nonperforming Assets

(Unaudited)	2008				2007
	June 30		March 31		December 31(a)		September 30		June 30
(Dollars in thousands)
Commercial and commercial real estate	$	3,650	$	2,919	$	4,489	$	7,304	$	6,089
Consumer		42		61		28		23		67
Equity lines		515		579		397		491		471
Construction		418		230		562		–		–
Mortgage		582		463		506		2,414		975
Total nonperforming loans		5,207		4,252		5,982		10,232		7,602
Other real estate owned		633		890		1,571		309		866
Total nonperforming assets	$	5,870	$	5,142	$	7,553	$	10,541	$	8,468

Nonperforming assets include loans that are 90 days or more past due or in nonaccrual status and other real estate owned.

(a) Derived from audited consolidated financial statements

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CAPITAL BANK CORPORATION

Key Ratios

(Unaudited)	2008						2007
	June 30			March 31			December 31(a)			September 30			June 30
(Dollars in thousands)
Past due loans	$	9,239		$	9,380		$	10,769		$	13,157		$	13,008
Past due loans as a percent of total loans		0.78	%		0.82	%		0.98	%		1.23	%		1.27	%
Net charge-offs	$	504		$	573		$	2,894		$	234		$	101
Net charge-offs as a percent of average loans (annualized)		0.17	%		0.20	%		1.06	%		0.09	%		0.04	%
Allowance for loan losses as a percent of total loans		1.18	%		1.18	%		1.24	%		1.25	%		1.30	%
Nonperforming assets as a percent of total assets		0.37	%		0.33	%		0.50	%		0.71	%		0.59	%
Allowance for loan losses as a percent of nonperforming loans		267	%		319	%		227	%		131	%		175	%

(a) Derived from audited consolidated financial statements

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CAPITAL BANK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2008 and December 31, 2007

	June 30, 2008			December 31, 2007
(Dollars in thousands except share data)	(Unaudited)
Assets
Cash and due from banks:
Interest earning	$	10,377		$	7,815
Noninterest earning		32,257			32,347
Federal funds sold and short term investments		18			10
Total cash and cash equivalents		42,652			40,172
Investment securities – available for sale, at fair value		240,940			249,094
Investment securities – held to maturity, at amortized cost		5,528			10,022
Loans – net of unearned income and deferred fees		1,178,157			1,095,107
Allowance for loan losses		(13,910	)		(13,571	)
Net loans		1,164,247			1,081,536
Premises and equipment, net		24,726			23,863
Bank-owned life insurance		21,952			21,589
Goodwill and deposit premium, net		62,831			63,345
Deferred income tax		7,198			5,829
Accrued interest receivable		6,479			7,789
Other assets		15,481			14,364
Total assets	$	1,592,034		$	1,517,603
Liabilities
Deposits:
Demand, noninterest bearing	$	116,987		$	114,780
Savings and interest bearing checking		187,940			151,698
Money market deposit accounts		199,839			229,560
Time deposits less than $100,000		420,168			370,416
Time deposits $100,000 and greater		257,681			232,244
Total deposits		1,182,615			1,098,698
Repurchase agreements and federal funds purchased		30,297			45,295
Borrowings		171,000			163,347
Subordinated debentures		30,930			30,930
Other liabilities		11,461			15,033
Total liabilities		1,426,303			1,353,303
Commitments and contingencies
Shareholders’ Equity
Common stock, no par value; 20,000,000 shares authorized; 11,229,085 and 11,169,777 shares issued and outstanding as of June 30, 2008 and December 31, 2007, respectively		136,781			136,154
Retained earnings		30,567			27,985
Accumulated other comprehensive income		(1,617	)		161
Total shareholders’ equity		165,731			164,300
Total liabilities and shareholders’ equity	$	1,592,034		$	1,517,603

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CAPITAL BANK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2008 and 2007 (Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2008		2007			2008		2007
(Dollars in thousands except per share data)
Interest income:
Loans and loan fees	$	18,111	$	20,519		$	37,610	$	40,402
Investment securities:
Taxable interest income		2,216		1,842			4,434		3,768
Tax-exempt interest income		805		810			1,634		1,584
Dividends		118		106			235		213
Federal funds and other interest income		33		290			88		775
Total interest income		21,283		23,567			44,001		46,742
Interest expense:
Deposits		8,026		9,918			17,098		19,924
Borrowings and repurchase agreements		2,329		2,403			5,066		4,849
Total interest expense		10,355		12,321			22,164		24,773
Net interest income		10,928		11,246			21,837		21,969
Provision (credit) for loan losses		850		(91	)		1,415		246
Net interest income after provisionfor loan losses		10,078		11,337			20,422		21,723
Noninterest income:
Service charges and other fees		1,237		929			2,196		1,806
Mortgage fees and revenues		354		568			626		1,096
Brokerage fees		245		150			401		253
Bank card services		354		254			653		470
Net gain on sale of securities		69		–			140		–
Bank-owned life insurance		260		208			562		405
Other		455		275			623		544
Total noninterest income		2,974		2,384			5,201		4,574
Noninterest expense:
Salaries and employee benefits		5,326		5,198			10,362		10,240
Occupancy		996		1,035			1,954		1,991
Furniture and equipment		793		647			1,540		1,262
Data processing and telecommunications		528		397			960		785
Advertising		205		300			520		598
Office expenses		315		386			680		719
Professional fees		281		422			651		605
Business development and travel		340		344			673		657
Amortization of deposit premiums		257		300			514		600
Miscellaneous loan handling costs		224		112			318		298
Directors fees		132		229			399		497
Insurance		103		87			198		177
FDIC deposit insurance		181		77			228		127
Other		287		323			576		537
Total noninterest expense		9,968		9,857			19,573		19,093
Net income before tax expense		3,084		3,864			6,050		7,204
Income tax expense		869		1,188			1,668		2,144
Net income	$	2,215	$	2,676		$	4,382	$	5,060
Earnings per share – basic	$	0.20	$	0.23		$	0.39	$	0.44
Earnings per share – diluted	$	0.20	$	0.23		$	0.39	$	0.44

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Average Balances, Interest Earned or Paid, and Interest Yields/Rates

For the Three Months Ended June 30, 2008, March 31, 2008and June 30, 2007

Tax Equivalent Basis (1)

	June 30, 2008								March 31, 2008								June 30, 2007
(Dollars in thousands)	Average Balance			Amount Earned		Average Rate			Average Balance			Amount Earned		Average Rate			Average Balance			Amount Earned		Average Rate
Assets
Loans receivable: (2)
Commercial	$	1,010,809		$	15,713		6.23	%	$	986,205		$	16,777		6.82	%	$	861,872			17,359		8.08	%
Consumer		46,344			869		7.53			46,700			910		7.81			31,300			677		8.68
Home equity		80,842			1,101		5.46			79,564			1,321		6.66			81,736			1,727		8.47
Residential mortgages		28,710			427		5.95			30,259			491		6.51			46,609			756		6.51
Total loans		1,166,795			18,111		6.23			1,142,728			19,499		6.84			1,021,517			20,519		8.06
Investment securities (3)		256,406			3,555		5.55			256,538			3,590		5.61			248,850			3,282		5.29
Federal funds sold and other interest on short-term investments		6,100			33		2.18			8,079			55		2.72			22,284			290		5.22
Total interest-earning assets		1,429,301		$	21,699		6.09	%		1,407,345		$	23,144		6.60	%		1,292,651		$	24,091		7.48	%
Cash and due from banks		26,736								26,232								27,489
Other assets		135,976								136,071								129,972
Allowance for loan losses		(13,656	)							(13,662	)							(13,528	)
Total assets	$	1,578,357							$	1,555,986							$	1,436,584
Liabilities and Equity
Savings deposits	$	30,540		$	35		0.46	%	$	30,382		$	46		0.61	%	$	33,664		$	44		0.52	%
Interest-bearing demand deposits		335,851			1,635		1.95			333,108			1,855		2.23			377,274			3,264		3.47
Time deposits		668,690			6,356		3.81			657,609			7,171		4.37			554,979			6,610		4.78
Total interest-bearing deposits		1,035,081			8,025		3.11			1,021,099			9,072		3.56			965,917			9,918		4.12
Borrowed funds		181,841			1,820		4.01			171,645			2,022		4.73			119,978			1,570		5.25
Subordinated debt		30,930			403		5.23			30,930			526		6.82			30,930			496		6.43
Repurchase agreements and fed funds purchased		35,183			106		1.21			35,563			189		2.13			31,696			337		4.26
Total interest-bearing liabilities		1,283,035		$	10,355		3.24	%		1,259,237		$	11,809		3.76	%		1,148,521		$	12,321		4.30	%
Noninterest-bearing deposits		113,590								118,007								112,513
Other liabilities		10,787								11,132								10,673
Total liabilities		1,407,412								1,388,376								1,271,707
Shareholders’ equity		170,945								167,610								164,877
Total liabilities and shareholders’ equity	$	1,578,357							$	1,555,986							$	1,436,584
Net interest spread (4)							2.85	%							2.83	%							3.17	%
Tax equivalent adjustment				$	416							$	426							$	524
Net interest income and net interest margin (5)				$	11,344		3.18	%				$	11,335		3.23	%				$	11,778		3.65	%

(1) The tax equivalent basis is computed using a blended federal and state tax rate of approximately 34%.

(2) Loans receivable include nonaccrual loans for which accrual of interest has not been recorded.

(3) The average balance for investment securities excludes the effect of their mark-to-market adjustment, if any.

(4) Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average interest-earning assets.

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Average Balances, Interest Earned or Paid, and Interest Yields/Rates

For the Six Months Ended June 30, 2008 and 2007

Tax Equivalent Basis (1)

	June 30, 2008								June 30, 2007
(Dollars in thousands)	Average Balance			Amount Earned		Average Rate			Average Balance			Amount Earned		Average Rate
Assets
Loans receivable: (2)
Commercial	$	998,552		$	32,490		6.53	%	$	857,000		$	34,115		8.03	%
Consumer		46,522			1,779		7.67			31,061			1,329		8.63
Home equity		80,203			2,422		6.06			82,017			3,454		8.49
Residential mortgages		29,485			919		6.23			46,922			1,504		6.46
Total Loans		1,154,762			37,610		6.53			1,017,000			40,402		8.01
Investment securities (3)		256,472			7,145		5.57			246,291			6,585		5.39
Federal funds sold and other interest on short-term investments		7,090			88		2.49			29,440			775		5.31
Total interest-earnings assets		1,418,323		$	44,842		6.34	%		1,292,731		$	47,762		7.45	%
Cash and due from banks		26,484								27,541
Other assets		136,024								130,049
Allowance for loan losses		(13,659	)							(13,412	)
Total assets	$	1,567,172							$	1,436,909
Liabilities and Equity
Savings deposits	$	30,461		$	81		0.53	%	$	34,017		$	86		0.51	%
Interest-bearing demand deposits		334,480			3,489		2.09			360,044			6,186		3.46
Time deposits		663,150			13,527		4.09			577,922			13,652		4.76
Total interest-bearing deposits		1,028,090			17,097		3.34			971,983			19,924		4.13
Borrowed funds		176,743			3,842		4.36			116,832			3,070		5.30
Subordinated debt		30,930			929		6.02			30,930			1,085		7.07
Repurchase agreements and fed funds purchased		35,373			294		1.67			33,012			694		4.24
Total interest-bearing liabilities		1,271,136		$	22,163		3.50	%		1,152,757		$	24,773		4.33	%
Noninterest-bearing deposits		115,799								109,441
Other liabilities		10,960								10,627
Total liabilities		1,397,894								1,272,825
Shareholders’ equity		169,278								164,084
Total liabilities and shareholders’ equity	$	1,567,172							$	1,436,909
Net interest spread (4)							2.84	%							3.12	%
Tax equivalent adjustment				$	841							$	1,020
Net interest income and net interest margin (5)				$	22,679		3.21	%				$	22,989		3.59	%

(1) The tax equivalent basis is computed using a blended federal and state tax rate of approximately 34%.

(2) Loans receivable include nonaccrual loans for which accrual of interest has not been recorded.

(3) The average balance for investment securities excludes the effect of their mark-to-market adjustment, if any.

(4) Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average interest-earning assets.

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