8-K

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K
CURRENT REPORT

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

Date of Report (Date of earliest event reported): January 31, 2008

FNB United Corp.

(Exact Name of Registrant as Specified in its Charter)

North Carolina	0-13823	56-1456589
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

150 South Fayetteville Street,          Asheboro, North Carolina	27203
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, Including Area Code (336) 626-8300

N/A

(Former Name or Former Address, if Changed Since Last Report)

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:

⃞ 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 2.02     Results of Operations and Financial Condition.

On January 31, 2008, FNB United Corp. issued a news release announcing the results of operations for the quarter and year ended December 31, 2007. A copy of the FNB United news release is attached hereto as Exhibit 99.1.

The information in this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing made by FNB United under the Securities Act of 1933, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01     Financial Statements and Exhibits.

Exhibits:
99.1	News release dated January 31, 2008

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:	January 31, 2008	By:	/s/ Mark A. Severson
			Mark A. Severson
			Executive Vice President
			(Principal Financial and
			Accounting Officer)

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	News Release dated January 31, 2008.

EX-99.1

Exhibit 99.1

FNB United Corp. 2007 Profits Increaseto $12.4 Million

Fourth Quarter Profits of $1.3 Million or $0.11 per share

ASHEBORO, N.C.--(BUSINESS WIRE)--FNB United Corp. (NASDAQ: FNBN), the holding company for CommunityONE Bank, N.A. and Dover Mortgage Company, today reported fourth quarter and 2007 profits for the periods ended December 31, 2007. Following a $2.8 million increase in its loan provision and a $358,000 non-cash goodwill impairment charge, net income was $1.3 million, or $0.11 per diluted share, in the fourth quarter of 2007, compared to $3.0 million, or $0.27 per diluted share, in the fourth quarter a year ago. For 2007, net income increased 1% to $12.4 million, or $1.09 per diluted share, compared to $12.2 million, or $1.27 per diluted share, in 2006. FNB United completed its acquisition of Integrity Financial Corporation during the second quarter of 2006.

In the third quarter of 2007, FNB United’s net income included a pre-tax gain of $1.3 million resulting from the sale of its credit card portfolio. Third quarter results also included a reversal of $408,000 in previously accrued interest. In the third quarter of 2006, net income included a pre-tax loss of $557,000 on the sale of securities.

“In 2007, we focused on improving efficiencies within our organization and integrating our franchise after two years of acquisitions,” stated Michael Miller, President and CEO. “The rebranding initiative to bring all of our community banking offices and customer service contact points under the CommunityONE brand is a major accomplishment and significantly strengthens our franchise and brand awareness in the markets we serve. Although the costs associated with this integration have hampered profits in 2007, our larger balance sheet and expanded franchise are producing more revenue than a year ago.”

2007 Highlights (compared to 2006)

• Net income increased to $12.4 million.
• Net interest income increased 13%, to $63.6 million.
• Revenues increased to $85.2 million.
• Net interest margin was 4.06%.
• Loans increased 11%, to $1.4 billion.
• Total assets increased 5%, to $1.9 billion.

Credit Quality

Credit quality of the loan portfolio continues to be good, reflecting the Bank’s strong credit practices. At the end of 2007, total nonperforming assets increased to $21.6 million, or 1.13% of total assets, compared to $18.6 million, or 0.98% of total assets three months earlier. Nonperforming assets were $14.7 million, or 0.81%, of total assets a year ago. Four borrowing relationships comprise the majority of newly identified nonperforming loan balances. Of these, two relationships, comprising approximately one-third of the total nonperforming balances, are related to residential development and construction. OREO declined during the quarter, to $2.9 million from $5.0 million at the end of the third quarter 2007.

“Because our market is predominantly in central and western North Carolina, our real estate values have been less volatile than other markets around the country that experienced rapid acceleration in housing values. Consequently our housing markets have been more resilient,” said Miller. “With that said, certain loans that had been in the work-out process for more than a year were charged off or written down approximately $1.5 million in the fourth quarter. This action resulted in net charge offs for 2007 of $3.8 million.” Net charge offs were 0.27% of average loans outstanding for the year.

“In addition, slowness in certain real estate developments and an increase in nonperforming loans made it prudent to strengthen our reserve position,” Miller continued. The provision for loan losses increased to $3.0 million for the fourth quarter of 2007, compared to $1.5 million for the previous quarter, and $220,000 in the fourth quarter of 2006. For the year, the provision for loan losses increased to $5.5 million, compared to $2.5 million in 2006. The allowance for loan losses was $17.4 million, or 1.20% of loans held for investment at the end of December 2007, compared to $16.1 million, or 1.17%, at the end of the preceding quarter and $15.9 million or 1.22%, at the end of 2006.

Operating Results

Fourth quarter net interest income before the provision for loan losses was $15.7 million, compared to $15.9 million for the fourth quarter a year ago. Noninterest income was $4.8 million, compared to $5.7 million in the fourth quarter a year ago, largely due to the decrease in mortgage loan sales income associated with the slowing housing market. Total revenues (net interest income before the provision for loan losses plus noninterest income) were $20.5 million, compared to $21.6 million in the fourth quarter a year ago.

For 2007, net interest income before the provision for loan losses increased to $63.6 million, compared to $56.2 million a year ago. Interest income increased $23.3 million, primarily due to the increase in earning assets, while interest expense increased $15.9 million. For the year, noninterest income grew to $21.6 million, compared to $19.2 million a year ago, primarily due to a rise in service charges on deposit accounts and the $1.3 million gain on sale of the credit card portfolio in the third quarter. Total revenues increased to $85.2 million, compared to $75.4 million in 2006. “In light of the 225 basis point drop in the Fed Funds Rate during the last five months, we expect our margin to experience continued pressure,” said Miller. For 2007, the net interest margin was 4.06%, compared to 4.20% in 2006.

For the fourth quarter, noninterest expense was $15.7 million, compared to $15.6 million in the preceding quarter and $16.2 million in the fourth quarter a year ago. For 2007, noninterest expense increased to $61.0 million, from $53.4 million a year earlier. The increase in expenses was due to a number of one-time costs associated with the name change, write-off of equipment and search and relocation costs for key executives, as well as the expanded size of the company following the acquisition of Integrity Financial Corporation in the second quarter of 2006.

“During the last year we have implemented a number of initiatives to improve efficiencies, and incurred several expenses that affected our short-term earnings performance,” said Miller. “In the third quarter we made significant changes to our credit card products and operations, as well as consolidated our ATM processing. In the second quarter we wrote off $154,000 in equipment when we closed our Gastonia operations facility. In 2007, we incurred rebranding costs of approximately $563,000. In addition, we installed a teller platform system that is improving customer service, while automating the collection of data for commercial deposit account analysis and providing better information regarding customer activity. Going forward, these initiatives should enable us to improve overall efficiencies, as well as our performance metrics.”

Additionally, the Bank recorded a non-cash goodwill impairment charge of $358,000 for Dover Mortgage Company, compared to the goodwill impairment charge for Dover of $1.6 million recorded in the fourth quarter of 2006. “We experienced the goodwill write-down in large part due to major aftershocks in the mortgage banking economy felt this year. We have also taken the opportunity to do a complete makeover of the business following management changes earlier in the year,” said Miller.

Balance Sheet

“Loan production for the quarter was strong and showed significant growth over year ago balances,” Miller said. Gross loans increased 11%, to $1.44 billion at the end of 2007, compared to $1.30 billion a year earlier. The Bank has not originated any subprime loans and has no subprime MBS or CDO exposure in its investment portfolio.

“Our focus on deposit growth in recent months has shifted from certificates of deposits to transaction accounts,” said Miller. “In September, we initiated a new transaction deposit product that pays a premium interest rate, provides for increased fee income by promoting debit card usage, and also provides operating efficiencies through electronic statement delivery and lower transaction costs. As this new program begins to mature, I expect we will see improvement in our transaction account balances in 2008.” Total deposits were $1.44 billion at the end of 2007, compared to $1.42 billion a year earlier. Certificates of deposit increased 2%, compared to the end of 2006, while noninterest-bearing deposits remained even with year ago levels.

Assets increased 5%, to $1.91 billion at year end, compared to $1.82 billion a year earlier. Shareholder’s equity increased 4%, to $216.3 million, compared to $207.7 million a year earlier. Book value per share improved to $18.92 at December 31, 2007, from $18.39 a year earlier, and tangible book value per share was $8.71 at year end, compared to $7.91 a year earlier.

Performance Ratios

The return on average tangible equity for 2007 was 12.99%, compared 14.75% for 2006. Return on average equity was 5.81%, for the 2007, compared to 7.00% for the prior year.

About the Company

FNB United Corp. is the central North Carolina-based bank holding company for CommunityONE Bank, N.A., and the bank’s subsidiary, Dover Mortgage Company. Opened in 1907, CommunityONE (MyYesBank.com) operates 43 offices in 35 communities throughout central, southern and western North Carolina. Opened in 1986, Dover (DoverMortgage.com), based in Charlotte, NC, joined FNB United in 2003 and has a retail origination network in key growth markets across the state in addition to wholesale operations. Through these companies, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services.

This news release may contain forward-looking statements regarding future events. These statements are only predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include risks of managing our growth, changes in financial markets, regulatory changes, changes in interest rates, changes in economic conditions being less favorable than anticipated, and loss of deposits and loan demand to other financial institutions. Additional information concerning factors that could cause actual results to be materially different from those in the forward-looking statements is contained in FNB United’s filings with the Securities and Exchange Commission. FNB United does not assume any obligation to update these forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

RESULTS OF OPERATIONS			Quarters Ended				Percent Change
(In thousands except share and per share data)			December 31, 2007		December 31, 2006
INTEREST INCOME:
	Interest and fees on loans		$	29,160	$	27,633	6	%
	Interest and dividends on investments securities:
		Taxable income		2,145		1,269	69	%
		Non-taxable income		532		536	-1	%
	Other interest income			44		1,052	-96	%
		Total interest income		31,881		30,490	5	%
INTEREST EXPENSE:
	Deposits			13,063		12,267	6	%
	Borrowed funds			3,090		2,347	32	%
		Total interest expense		16,153		14,614	11	%
	Net interest income before provision for loan losses			15,728		15,876	-1	%
PROVISION FOR LOAN LOSSES				3,044		220	1284	%
	Net interest income after provision for loan losses			12,684		15,656	-19	%
NONINTEREST INCOME:
	Service charges on deposit accounts			2,434		2,386	2	%
	Mortgage loan sales			887		1,343	-34	%
	Cardholder and merchant services income			393		512	-23	%
	Trust and investment services			418		481	-13	%
	Other service charges, commissions and fees			62		244	-75	%
	Bank owned life insurance			254		261	-3	%
	Other income			345		455	-24	%
		Total noninterest income		4,793		5,682	-16	%
NONINTEREST EXPENSE:
	Salaries and employee benefits			8,042		7,741	4	%
	Net occupancy expense			1,383		1,238	12	%
	Furniture and equipment expense			1,114		1,051	6	%
	Data processing services			527		436	21	%
	Other expense			4,618		5,759	-20	%
		Total noninterest expense		15,684		16,225	-3	%
	Income before provision for income taxes			1,793		5,113	-65	%
PROVISION FOR INCOME TAXES				542		2,115	-74	%
NET INCOME			$	1,251	$	2,998	-58	%
Earnings per common share:
		Basic	$	0.11	$	0.27	-59	%
		Diluted	$	0.11	$	0.27	-59	%
Cash dividends declared per common share			$	0.15	$	0.17	-12	%
Weighted average shares outstanding:
		Basic		11,368,423		11,196,885
		Diluted		11,368,423		11,287,752

RESULTS OF OPERATIONS			Year to Date				Percent Change
(In thousands except share and per share data)			December 31, 2007		December 31, 2006
INTEREST INCOME:
	Interest and fees on loans		$	114,880	$	92,565	24	%
	Interest and dividends on investments securities:
		Taxable income		8,330		6,791	23	%
		Non-taxable income		2,096		2,081	1	%
	Other interest income			1,334		1,932	-31	%
		Total interest income		126,640		103,369	23	%
INTEREST EXPENSE:
	Deposits			52,594		38,565	36	%
	Borrowed funds			10,434		8,590	21	%
		Total interest expense		63,028		47,155	34	%
	Net interest income before provision for loan losses			63,612		56,214	13	%
PROVISION FOR LOAN LOSSES				5,514		2,526	118	%
	Net interest income after provision for loan losses			58,098		53,688	8	%
NONINTEREST INCOME:
	Service charges on deposit accounts			9,012		8,214	10	%
	Mortgage loan sales			4,543		4,841	-6	%
	Cardholder and merchant services income			1,878		1,908	-2	%
	Trust and investment services			1,686		1,529	10	%
	Other service charges, commissions and fees			998		987	1	%
	Bank owned life insurance			945		1,226	-23	%
	Other income			2,531		510	396	%
		Total noninterest income		21,593		19,215	12	%
NONINTEREST EXPENSE:
	Salaries and employee benefits			33,169		28,078	18	%
	Net occupancy expense			5,303		3,774	41	%
	Furniture and equipment expense			4,641		3,832	21	%
	Data processing services			1,915		2,432	-21	%
	Other expense			16,016		15,325	5	%
		Total noninterest expense		61,044		53,441	14	%
	Income before provision for income taxes			18,647		19,462	-4	%
PROVISION FOR INCOME TAXES				6,286		7,275	-14	%
NET INCOME			$	12,361	$	12,187	1	%
Earnings per common share:
		Basic	$	1.09	$	1.27	-14	%
		Diluted	$	1.09	$	1.25	-13	%
Cash dividends declared per common share			$	0.60	$	0.62	-3	%
Weighted average shares outstanding:
		Basic		11,321,908		9,619,870
		Diluted		11,336,321		9,715,585

FINANCIAL CONDITION		As of / For the Years Ended						Percent Change
(In thousands except share and per share data)		December 31, 2007			December 31, 2006
ASSETS
Cash and due from banks		$	37,739		$	35,225		7	%
Interest-bearing bank balances			836			42,929		-98	%
Federal funds sold			542			30,186		-98	%
Securities available for sale			157,941			128,945		22	%
Securities held to maturity			35,650			42,870		-17	%
Loans receivable:
	Held for sale		17,586			20,862		-16	%
	Held for investment		1,446,116			1,301,840		11	%
	Allowance for loan losses		(17,381	)		(15,943	)	9	%
			1,446,321			1,306,759		11	%
Property and equipment, net			46,614			45,691		2	%
Goodwill			110,195			110,956		-1	%
Core deposit premiums			6,564			7,378		-11	%
Other assets			64,104			64,643		-1	%
		$	1,906,506		$	1,815,582		5	%
LIABILITIES
Deposits:
	Noninterest-bearing	$	158,564		$	158,938		0	%
	Interest-bearing deposits:
	Demand, savings, and money market deposits		464,731			463,355		0	%
	Time deposits of $100,000 or more		375,419			365,770		3	%
	Other time deposits		442,328			432,950		2	%
			1,441,042			1,421,013		1	%
Retail repurchase agreements			29,133			23,161		26	%
Federal Home Loan Bank advances			131,790			65,825		100	%
Other borrowed funds			70,202			78,032		-10	%
Other liabilities			18,083			19,883		-9	%
			1,690,250			1,607,914		5	%
STOCKHOLDERS' EQUITY
Common stock			28,567			28,235		1	%
Surplus			114,119			112,213		2	%
Retained earnings			74,199			68,662		8	%
Accumulated other comprehensive income (loss)			(629	)		(1,442	)	-56	%
			216,256			207,668		4	%
		$	1,906,506		$	1,815,582		5	%
Shares Issued:
Shares outstanding at end of period			11,428,902			11,293,992		1	%
Book value per share (1)		$	18.92		$	18.39		3	%
Tangible book value per share (1)		$	8.71		$	7.91		10	%
(1)- Calculation is based on number of shares outstanding at the end of the period.

ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands)			As of / For the Years Ended
NONPERFORMING ASSETS:			December 31, 2007			December 31, 2006
Loans on nonaccrual status			$	16,022		$	8,282
Loans more than 90 days delinquent, still on accrual				2,686			2,852
Total nonperforming loans				18,708			11,134
Real estate owned (REO) / Repossessed assets				2,862			3,557
		Total nonperforming assets	$	21,570		$	14,691
Total nonperforming assets / Total assets				1.13	%		0.81	%
CHANGE IN THE ALLOWANCE FOR LOAN LOSSES:			December 31, 2007			December 31, 2006
Balance, beginning of period			$	15,943		$	9,945
Provision				5,514			2,526
Recoveries of loans previously charged off				1,719			2,745
Loans charged-off				(5,493	)		(4,630	)
Acquired in purchase transactions				-			6,038
Allowance adjustment for loans sold				(302	)		(4	)
Adjustment for reserve for unfunded commitments				-			(677	)
Balance, end of period			$	17,381		$	15,943
Net chargeoffs / Average loans outstanding				0.27	%		0.16	%
Allowance for loan losses / Loans held for investment				1.20	%		1.22	%
DEPOSITS			December 31, 2007			December 31, 2006
Noninterest-bearing			$	158,564		$	158,938
Interest-bearing transaction deposits:
	Checking			163,275			177,498
	Money Market			260,307			235,340
	Savings			41,149			50,517
		Total interest-bearing transaction deposits		464,731			463,355
Interest-bearing time deposits				817,747			798,720
		Total deposits	$	1,441,042		$	1,421,013

ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands)
(Rates / Ratios Annualized)
		For the Years Ended
OPERATING PERFORMANCE:		December 31, 2007			December 31, 2006
Average loans		$	1,376,883		$	1,142,350
Average investments			221,396			234,071
Average noninterest-earning assets			267,183			198,886
	Total average assets	$	1,865,462		$	1,575,307
Average interest-bearing deposits		$	1,281,399		$	1,075,447
Average noninterest bearing deposits			159,205			142,624
Average borrowings			188,790			166,506
Average noninterest-earning liabilities			23,230			16,595
	Total average liabilities		1,652,624			1,401,172
Total average shareholders' equity			212,838			174,135
		`
	Total average liabilities and shareholders' equity	$	1,865,462		$	1,575,307
Interest rate yield on loans			8.36	%		8.12	%
Interest rate yield on securities and deposits			5.82	%		5.22	%
	Interest rate yield on interest-earning assets		8.01	%		7.63	%
Interest rate expense on deposits			4.10	%		3.59	%
Interest rate expense on borrowings			5.53	%		5.16	%
	Interest rate expense on interest-bearing liabilities		4.29	%		3.80	%
Interest rate spread			3.72	%		3.83	%
Net interest margin			4.06	%		4.20	%
Noninterest income / Average assets			1.16	%		1.22	%
Noninterest expense / Average assets			3.27	%		3.39	%
Efficiency ratio ( noninterest expense / revenue )			71.64	%		69.38	%
Return on average assets			0.66	%		0.77	%
Return on average tangible assets			0.71	%		0.82	%
Return on average equity			5.81	%		7.00	%
Return on average tangible equity			12.99	%		14.75	%
Average equity / Average assets			11.41	%		11.05	%

CONTACT:
FNB United Corp.
Mark Severson, CFO, 336-626-8351