Exhibit 99.1


                                                    For Immediate Release
                                                        October 5, 2006
                                                  For Information Contact:
                                              Robert O. Bratton 336-626-8300

[LOGO]    FNB UNITED CORP.
_________________________________________________________
P.O. Box 1328, Asheboro, NC 27204
101 Sunset Avenue, Asheboro, NC 27203


               FNB United Corp. Restructures Investment Portfolio

         Asheboro, N.C. - FNB United Corp. (NASDAQ:FNBN) today announced that it
has restructured its investment portfolio to eliminate certain under-performing
investments and to improve the net interest margin.

         As part of the restructuring, the Company sold approximately $123
million of available for sale securities, or approximately 53% of the total
current carrying value of the investment portfolio, having an estimated
remaining weighted average maturity of 4.1 years and a weighted average yield of
4.59%. The restructuring will result in an estimated loss of $812,500, net of
income taxes, or $.07 per diluted share. This charge will be reflected in the
results of operations for the quarter ended September 30, 2007. The proceeds
will be reinvested in securities with final maturities or average life of 2 to 4
years. The Company estimates the improvement in yield on the total investment
portfolio will be 35 to 40 basis points and will improve annualized diluted
earnings per share by $.05 to $.06. Portions of the liquidated portfolio were
obtained in FNB United's recent acquisitions of United Financial, Inc. and
Integrity Financial Corporation. The repositioning will not have a negative
impact on shareholders' equity as the decline in market value of the investments
is currently reflected in accumulated other comprehensive income, a component of
shareholders' equity.

         Michael C. Miller, Chief Executive Officer, stated, "This strategic
action has been taken to reposition FNB United Corp.'s balance sheet to improve
long-term financial performance and create more value for our shareholders.
While this action will result in a current charge to earnings, we believe the
result will be an improved net interest margin, an improved interest rate risk
position, increased liquidity, and increased profitability that will enhance
shareholder value."

         FNB United Corp. is the central North Carolina-based bank holding
company for First National Bank and Trust Company - including its divisions
First Gaston Bank, Catawba Valley Bank and Northwestern Bank - and Dover
Mortgage Company. Opened in 1907, First National (MyYesBank.com) operates 26
community YES! Banks in Archdale, Asheboro, Biscoe, Burlington, China Grove,
Ellerbe, Graham, Greensboro, Hillsborough, Kannapolis, Laurinburg, Pinehurst,
Ramseur, Randleman, Rockingham, Salisbury, Seagrove, Siler City, Southern Pines
and Trinity. It also operates five community offices as First Gaston Bank
(firstgaston.com) in Belmont, Dallas, Gastonia, Mt. Holly and Stanley; six
community offices as Catawba Valley Bank (catawbavalleybank.com) in Hickory,
Mooresville, Newton and Statesville and six community offices as Northwestern
Bank of Wilkesboro (nwesternbank.com) in Boone, Millers Creek, Taylorsville,
Wilkesboro and West Jefferson. Dover Mortgage Company (dovermortgage.com)
operates 10 mortgage production offices in Carolina Beach, Charlotte, Goldsboro,
Greensboro, Greenville, Lake Norman, Leland, Raleigh, Waxhaw and Wilmington.
Through its subsidiaries, FNB United Corp. offers a complete line of consumer,
mortgage and business banking services, including loan, deposit, cash
management, wealth management and internet banking services. The Federal Deposit
Insurance Corporation insures deposits up to applicable limits.

         This news release contains forward-looking statements. Such statements
are subject to certain factors which may cause the Company's results to vary
from those expected, including the risks set forth from time to time in the
Company's filings with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
reflect management's judgment only as of the date hereof. The Company undertakes
no obligation to publicly revise these ford-looking statements to reflect events
and circumstances that arise after the date hereof.

         Factors that might cause such a difference include, but are not limited
to, competition from both financial and non-financial institutions; changes in
interest rates, deposit flows, loan demand and real estate values; changes in
legislation or regulation; changes in accounting principles, policies or
guidelines; changes in the securities markets; the timing and occurrence (or
non-occurrence) of transactions and events that may be subject to circumstances
beyond the control of the Company; and other economic, competitive,
governmental, regulatory and technological factors affecting the Company
specifically or the banking industry or economy generally.

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