SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K
                                 CURRENT REPORT


    Pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934

        Date of Report (Date of Earliest Event Reported) July 19, 2006
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                                       FNB United Corp.
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             (Exact Name of Registrant as Specified in its Charter)


            North Carolina             0-13823             56-1456589
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      (State or Other Jurisdiction   (Commission File    (IRS Employer
          of Incorporation)             Number)         Identification No.)


                101 Sunset Avenue, Asheboro, North Carolina 27203
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               (Address of Principal Executive Offices) (Zip Code)


       Registrant's Telephone Number, Including Area Code (336) 626-8300
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                                       N/A
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          (Former Name or Former Address, if Changed Since Last Report)
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Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instructions A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act
    (17 CFR 230.425)
[ ] Soliciting  material pursuant to Rule 14a-12 under the Exchange Act
    (17  CFR  240.14a-12)
[ ] Pre-commencement  communications  pursuant  to  Rule 14d-2(b)
    under the  Exchange  Act (17 CFR  240.14d-2(b))
[ ] Pre-commencement communications  pursuant  to  Rule  13e-4(c)
    under  the  Exchange  Act  (17 CFR 240.13e-4(c))



Item 1.01.  Entry into a Material Definitive Agreement.

     As of July 19, 2006,  FNB United Corp., a North  Carolina  corporation  and
registered bank holding company (the "Registrant"),  and its executive officers,
including  Michael  C.  Miller,  Chairman  and  President,  R.  Larry  Campbell,
Executive Vice President, and Jerry A. Little, Secretary and Treasurer,  entered
into restricted stock agreements pursuant to which these executive officers were
granted  awards of restricted  stock of the  Registrant.  Mr. Miller  received a
grant of 4,000 shares;  Mr. Campbell  received a grant of 2,500 shares;  and Mr.
Little  received a grant of 2,000 shares.  The shares vest over three years with
one-third  of  the  awarded  shares  vesting  on the  first,  second  and  third
anniversaries of the date of the agreement.

     The form of the restricted  stock agreement  described above is attached as
Exhibit 10 to this report on Form 8-K and is incorporated herein by reference.


Item 9.01.  Financial Statements and Exhibits.

Exhibits:

10     Form of restricted stock agreement dated as of July 19, 2006 between the
Registrant and each of Michael C. Miller, R. Larry Campbell and Jerry A. Little.



                            SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                         FNB UNITED CORP.

Date: July 20, 2006                         By  /s/ Jerry A. Little
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                                               Jerry A. Little
                                               Secretary and Treasurer