**UNITED      STATES **

**SECURITIES      AND EXCHANGE COMMISSION **

**FORM      10-K/A**

**ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d) OF **

**THE      SECURITIES EXCHANGE ACT OF 1934 **

*Commission      File Number 000-30062 *

**CAPITAL      BANK CORPORATION **

| North                Carolina           | 56-2101930                            |
|-----------------------------------------|---------------------------------------|
| (State                of incorporation) | (I.R.S.                Employer       |
|                                    | Identification                Number) |

|                                                                                                                                                                                                                                                   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  4901                Glenwood AvenueRaleigh,                North Carolina 27612(Address                of principal executive office) Registrant's                telephone number, including area code: (919)                645-6400 |

**Securities      registered pursuant to Section 12(b) of the Act: **

**Securities      registered pursuant to Section 12(g) of the Act: **

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|  **DOCUMENTS                INCORPORATED BY REFERENCE**                                                                                                   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                           |
| Document                Incorporated                                                                                                                           | Where |
| 1.                Portions of the registrant's Proxy Statement for the Annual Meeting                of                Shareholders to be held on May 25, 2006 | Part                III |

**EXPLANATORY      NOTE**

**Item      15. Exhibits and Financial Statement Schedules. **

*Financial      Statements*

| Financial                Statements and Information                                                                                                          |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                         |   |
| Consolidated                Balance Sheets as of December 31, 2005 and 2004                                                                                  |   |
|                                                                                                                                                         |   |
| Consolidated                Statements of Operations for the years ended December 31, 2005, 2004                and                2003                      |   |
|                                                                                                                                                         |   |
| Consolidated                Statements of Changes in Shareholders' Equity for the years ended                December                31, 2005, 2004 and 2003 |   |
|                                                                                                                                                         |   |
| Consolidated                Statements of Cash Flows for the years ended December 31, 2005, 2004                and                2003                      |   |
|                                                                                                                                                         |   |
| Notes                to Consolidated Financial Statements                                                                                                    |   |
|                                                                                                                                                         |   |
| Reports                of Independent Registered Public Accounting Firm                                                                                      |   |

*Financial      Statement Schedules*

*Exhibits.*

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**SIGNATURES      **

**CAPITAL      BANK CORPORATION **

|   | *By:*  | */s/B.                Grant Yarber*                                     |   |
|--------|--------|-------------------------------------------------------------------------|--------|
|   |   | B.                Grant Yarber                                          |   |
|   |   | *President                and Chief *Executive                Officer** |   |
|   |   |                                                                    |   |

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**EXHIBIT      INDEX**

| Exhibit                No. | Description                                                                                                                                                                                                                                                                                                                                                                                     |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 2.01                       | Merger                Agreement, dated June 29, 2005, by and among Capital Bank Corporation                and                1st State Bancorp, Inc. (incorporated by reference to Exhibit 2.1                to                Capital Bank Corporation’s Current Report on Form 8-K filed with the                Securities and Exchange Commission on June 29, 2005)                 |
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 2.02                       | List                of Schedules Omitted from Merger Agreement included as Exhibit 2.1                above                (incorporated by reference to Exhibit 2.2 to Capital Bank Corporation’s                Current Report on Form 8-K filed with the Securities and Exchange                Commission on June 29, 2005)                                                           |
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.01                       | Articles                of Incorporation of the Company (incorporated by reference to Exhibit                3.1                to the Company's Registration Statement on Form S-4 filed with the                SEC on                October 19, 1998, as amended on November 10, 1998, December 21, 1998                and                February 8, 1999)                                |
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.02                       | Bylaws                of the Company, as amended to date (incorporated by reference to                Exhibit                3.02 to the Company's Annual Report on Form 10-K filed with the SEC                on                March 29, 2002)                                                                                                                                               |
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.01                       | Specimen                Common Stock Certificate of the Company (incorporated by reference                to                Exhibit 4.1 to the Company's Registration Statement on Form S-4 filed                with                the SEC on October 19, 1998, as amended on November 10, 1998, December                21,                1998 and February 8, 1999)                        |
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.02                       | In                accordance with Item 601(b) (4) (iii) (A) of Regulation S-K, certain                instruments respecting long-term debt of the registrant have been                omitted                but will be furnished to the Commission upon request.                                                                                                                             |
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.01                      | Equity                Incentive Plan (incorporated by reference to Exhibit 10.02 to the                Company's Annual Report on Form 10-K filed with the SEC on March                28, 2003)                (management contract or compensatory plan, contract or                arrangement)                                                                                              |
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.02                      | Amended                and Restated Deferred Compensation Plan for Outside Directors                (incorporated by reference from Appendix A to the Company's Proxy                Statement for Annual Meeting held on May 26, 2005) (management contract                or                compensatory plan, contract or arrangement)                                                       |
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.03                      | Capital                Bank Defined Benefit Supplemental Executive Retirement Plan (incorporated                by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K                filed with the SEC on May 27, 2005) (management contract or compensatory                plan, contract or arrangement)                                                            |
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.04                      | Capital                Bank Supplemental Retirement Plan for Directors (incorporated by                reference                to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the                SEC on May 27, 2005) (management contract or compensatory plan, contract                or arrangement)                                                         |
|                       |                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.05                      | Employment                Agreement dated April 21, 2004 between B. Grant Yarber and Capital                Bank                Corporation (incorporated by reference to Exhibit 10.1 to the Company’s                Quarterly Report on Form 10-Q filed with the SEC on May 7, 2004)                (management contract or compensatory plan, contract or                arrangement) |

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|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.06                                      | Employment                Agreement dated January 3, 2006 between A. Christine Baker and Capital                Bank Corporation (incorporated by reference to Exhibit 10.1 to the                Company’s Current Report on Form 8-K filed with the SEC on January 9,                2006) (management contract or compensatory plan, contract or                arrangement)                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.07  10.08                | Employment                Agreement dated April 16, 2004 between Richard W. Edwards and Capital                Bank                Corporation (incorporated by reference to Exhibit 10.2 to the Company’s                Quarterly Report on Form 10-Q filed with the SEC on May 7, 2004)                (management contract or compensatory plan, contract or arrangement)                 Change                of Control Agreement dated May 3, 2004 between Karen H. Priester                and                Capital Bank (incorporated by reference to Exhibit 10.1 to the Company’s                Quarterly Report on Form 10-Q filed with the SEC on August 3, 2004)                (management contract or compensatory plan, contract or arrangement) |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.09                                      | Lease                Agreement, dated November 16, 1999, between Crabtree Park, LLC and                the                Company (incorporated by reference to Exhibit 10.01 to the Company's                Annual Report on Form 10-K filed with the SEC on March 27,                2000)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.10                                      | Lease                Agreement, dated November 1, 2005, by and between Capital Bank Corporation                and 333 Ventures, LLC (incorporated by reference to Exhibit 10.1                to the                Company’s Current Report on Form 8-K filed with the SEC on November 28,                2005)                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.11                                      | Agreement,                dated November 2001 between Fiserv Solutions, Inc. and the Company                (incorporated by reference to Exhibit 10.08 to the Company's Annual                Report                on Form 10-K filed with the SEC on March 29, 2002)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 16.1                                       | Letter                from PricewaterhouseCoopers LLP (incorporated by reference to Exhibit                16.1                to the Company’s Current Report on Form 8-K filed with the SEC on April                12, 2005)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 21*                                        | Subsidiaries                of the Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 23.01* 23.02*     | Consent                of Independent Registered Public Accounting Firm                        Consent of Independent Registered Public Accounting                Firm                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 31.01*                                     | Certification                of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a),                As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 31.02                                      | Certification                of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a),                As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 32.01*                                     | Certification                Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section                906 of                The Sarbanes-Oxley Act of 2002. [This exhibit is being furnished                pursuant                to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except                to                the extent required by that act, be deemed to be incorporated by                reference                into any document or filed herewith for purposes of liability under                the                Securities Exchange Act of 1934, as amended, or the Securities Act                of                1933, as amended, as the case may be.]                                                                         |
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 32.02*                                     | Certification                Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section                906 of                The Sarbanes-Oxley Act of 2002. [This exhibit is being furnished                pursuant                to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except                to                the extent required by that act, be deemed to be incorporated by                reference                into any document or filed herewith for purposes of liability under                the                Securities Exchange Act of 1934, as amended, or the Securities Act                of                1933, as amended, as the case may be.]                                                                         |