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) September 30, 2009

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: (see General Instruction 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 2.06.  Material Impairments

          On September 30, 2009, FNB United Corp. concluded that a material charge for impairment of its goodwill is required.  During the third quarter of 2009, FNB United reviewed the carrying value of its goodwill in light of the current economic environment, the significant decline of its common stock price, and the relationship between the corporation’s net book value and tangible net book value, and determined to record a non-cash impairment charge of $52.4 million, eliminating the remaining goodwill on its balance sheet.  The non-cash charge is being recorded as a component of noninterest expense for the third quarter of 2009.


ITEM 8.01.  Other Events

          On October 5, 2009, FNB United Corp. announced that its Board of Directors voted to discontinue temporarily payment of the corporation’s quarterly cash dividend to common shareholders.  The Board will evaluate resuming payment of the dividend as warranted by future operating earnings.


ITEM 9.01.  Financial Statements and Exhibits

Exhibits:
99.1	News release dated October 5, 2009
99.2	Letter to Shareholders dated October 5, 2009

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, thereunto duly authorized.

		FNB UNITED CORP.
Date:	October 5, 2009	By:	/s/ Mark A. Severson
			Mark A. Severson
			Executive Vice President and
			Treasurer
			(Principal Financial and
			Accounting Officer)

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	News Release dated October 5, 2009
99.2	Letter to Shareholders dated October 5, 2009

EX-99.1

Exhibit 99.1

FNB United Corp. Announces Goodwill Write-Off and Temporarily Discontinues Quarterly Common Stock Cash Dividend

ASHEBORO, N.C.--(BUSINESS WIRE)--October 5, 2009--FNB United Corp. (NASDAQ:FNBN), the holding company for CommunityOne Bank, N.A., today reported that it will book a third quarter non-cash charge of $52.4 million to eliminate the remaining goodwill on the balance sheet.

While the write-down of goodwill is a non-cash charge that does not affect the company’s or the bank’s liquidity or operations, the adjustment brings the company’s book value and tangible book value more closely in line with each other and more accurately reflects current market conditions. Also, since goodwill is excluded from regulatory capital, this impairment charge, which is not deductible for tax purposes, does not have an adverse effect on the regulatory capital ratios of the company or the bank, both of which continue to remain “well capitalized” status under the regulatory requirements.

“As a result of further weakening of the economic environment and the deep discount of our stock price from both a net book value and tangible book value standpoint, we took another hard look at the carrying value of goodwill and concluded that it was appropriate to record a non-cash write-off of this asset,” said Michael C. Miller, President and CEO, in a letter to shareholders. “As a result of the significant decline in most banks’ common stock prices, including FNB United’s, and the lack of merger transactions in recent months, measuring the value of goodwill has become more difficult. Therefore, we have taken this action to reflect more accurately current market conditions.”

The Company also announced that its Board of Directors has decided to discontinue the quarterly cash dividend previously paid on shares of its common stock. “Due to the current uncertainty in our markets, the Board believes it prudent to bolster the Company’s capital position by eliminating the regular quarterly cash dividend payment,” said Miller. “Future operating earnings will dictate the return of the cash dividends that our historical financial performance has provided.” On July 24, 2009, the company paid a quarterly cash dividend of $0.025 per common share.

FNB United Corp. is the Asheboro, 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 45 offices in 38 communities throughout central, southern and western North Carolina. 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. Forward-looking statements often address our expected future business and financial performance, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” or “will.” 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, changes in real estate markets, regulatory changes, changes in interest rates, 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.

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

EX-99.2

Exhibit 99.2

FNB UNITED

FNB United Corp. • PO Box 1328, Asheboro, NC 27204 • 150 S. Fayetteville Street, Asheboro, NC 27203

October 5, 2009

To Our Shareholders:

Given the challenging times we are experiencing, it is important for us to keep shareholders informed about company performance.  As we work our way through this difficult time in our national and regional economy, the Board of Directors wanted to update you on several matters:

• We are well aware of the company’s stock price. As a result of further weakening of the economic environment and the deep discount of our stock price from both a net book value and tangible book value standpoint, we took another hard look at the carrying value of goodwill and concluded that it was appropriate to record a non-cash write-off of this asset. As a result of the significant decline in most banks’ common stock prices, including FNB United’s, and the lack of merger transactions in recent months, measuring the value of goodwill has become more difficult. Therefore, we have taken this action to reflect more accurately current market conditions.
• As goodwill is not a component of regulatory capital calculations, the write-down of goodwill has no effect on the regulatory capital ratios of the company or the bank and we remain “well capitalized” under all regulatory requirements. Further, this goodwill impairment charge, which is not deductible for tax purposes, is a non-cash charge that does not affect the company’s or the bank’s liquidity or operations, or our ability to serve our customers.
• Reflecting the goodwill write-off, and in order to conserve capital, the Board has elected to temporarily discontinue regular quarterly cash dividend payments to common shareholders. Future operating earnings will dictate the return of the cash dividends that our historical financial performance has provided.
• Our financial results at the present time reflect reserve set-asides and loan write-downs due to diminished loan quality. This decline is a result of the sluggish housing economy and a more aggressive policy on loan re-evaluations focused on the value of the collateral. We are mindful that the Federal Reserve has noted signs of increased economic activity on a nationwide basis, and we look forward to similar signs in the North Carolina economy.
• Our core deposit growth has been the best in our company’s history, and much of our business remains a strong revenue generator. We remain encouraged that our stimulus programs will help pull the local housing economy out of doldrums.
• We are facing current economic challenges head-on by aggressively and pro-actively identifying and working out potential problem loans. The strong levels of capital and reserves we possess will help our customers and the bank work through this housing and economic turndown.

We appreciate the continued support and encouragement we have received from our customers and shareholders.

Best regards,

Michael C. Miller

President and Chief Executive Officer

Phone 336.626.8326  |  Fax 336.629.3176  |  MyYesBank.com  |  NASDAQ: FNBN