**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D. C.  20549**

**FORM      11 – K**

|   | ý | ANNUAL                REPORT PURSUANT TO SECTION 15 (d) OF                THE |
|--------|--------|-------------------------------------------------------------------------------|

|   | o | TRANSITION                REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT                OF 1934                FOR THE TRANSITION PERIOD FROM ________ TO                ________. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| A. | Full                title of the plan and the address of the plan, if different from                that of                the issuer named below: |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | Name                of issuer of the securities held pursuant to the plan and the address                of                its principal executive office: |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  **FNB                Southeast**** 401(K)                Retirement  Plan** Financial                Statementsand                Supplemental Schedule  December                31, 2006 and 2005 and for the Years Ended                December 31, 2006 and 2005  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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***FNB      SOUTHEAST 401(K) RETIREMENT PLAN***

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**TABLE      OF CONTENTS**

|                                                                                      |                    |
|-------------------------------------------------------------------------------------------|-------------------------|
|                                                                                      | Page                No. |
|                                                                                      |                    |
| **Report                of Independent Registered Public Accounting                Firm** | 1                       |
|                                                                                      |                    |
| **Financial                Statements**                                                   |                    |
|                                                                                      |                    |
| Statements                of Net Assets Available for                Benefits             | 2                       |
|                                                                                      |                    |
| Statement                of Changes in Net Assets Available for                Benefits   | 3                       |
|                                                                                      |                    |
| Notes                to Financial Statements                                              | 4                       |
|                                                                                      |                    |
| **Supplemental                Schedule of Assets (Held at End of                Year)**   | 12                      |
|                                                                                      |                    |
|                                                                                      |                    |

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*Table          of Contents*

**Report      of Independent Registered Public      Accounting Firm**

*Southern      Pines, North Carolina June 29, 2007*

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*Page 2*

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*Table            of Contents*

***FNB      SOUTHEAST 401(K) RETIREMENT PLAN***

***STATEMENTS      OF NET ASSETS AVAILABLE FOR BENEFITS***

***December      31, 2006 and 2005***

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|                                                                |   | 2006   |      |   | 2005   |   |
|---------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                |   |   |      |   |   |   |
| ASSETS                                                              |   |   |      |   |   |   |
|                                                                |   |   |      |   |   |   |
| Cash                and cash equivalents                            |   | $      | 53,287    |   |   | $      | 41,790 |   |
| Investments:                                                        |   |   |      |   |   |   |   |   |
| Mutual                funds                                         |   |   | 3,544,765 |   |   |   | 2,990,893 |   |
| FNB                Financial Services Corporation Common Stock Fund |   |   | 1,252,512 |   |   |   | 1,380,798 |   |
| Participant                loans                                    |   |   | 259,111   |   |   |   | 214,685 |   |
|                                                                |   |   |      |   |   |   |   |   |
| Total                investments                                    |   |   | 5,109,675 |   |   |   | 4,628,166 |   |
|                                                                |   |   |      |   |   |   |   |   |
| Receivables:                                                        |   |   |      |   |   |   |   |   |
| Employer’s                contributions                       |   |   | 17,998    |   |   |   | 8,574 |   |
| Participants’                contributions                    |   |   | 51,372    |   |   |   | 26,069 |   |
| Accrued                interest and dividends                       |   |   | -         |   |   |   | 10,103 |   |
|                                                                |   |   |      |   |   |   |   |   |
| Total                receivables                                    |   |   | 69,370    |   |   |   | 44,746 |   |
|                                                                |   |   |      |   |   |   |   |   |
| Benefits                payable                                     |   |   | (13,704   | )      |   |   | - |   |
|                                                                |   |   |      |   |   |   |   |   |
| Total                assets                                         |   |   | 5,165,341 |   |   |   | 4,672,912 |   |
|                                                                |   |   |      |   |   |   |   |   |
| NET                ASSETS AVAILABLE FOR BENEFITS                    |   | $      | 5,165,341 |   |   | $      | 4,672,912 |   |
|                                                                |   |   |      |   |   |   |   |   |

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*Page          3*

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*Table          of Contents*

***FNB      SOUTHEAST 401(K) RETIREMENT PLAN***

***STATEMENTS      OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS***

***Years      Ended***
***December      31,      2006 and 2005***

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|                                                         |   | 2006   |      |   | 2005   |   |
|--------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                         |   |   |      |   |   |   |
| Additions                to net assets attributed to:        |   |   |      |   |   |   |
| Investment                income:                            |   |   |      |   |   |   |
| Net                appreciation in fair value of investments |   | $      | 217,257   |   |   | $      | 68,278 |   |
| Interest                and dividends                        |   |   | 56,651    |   |   |   | 47,961 |   |
|                                                         |   |   |      |   |   |   |   |   |
| Total                investment income                       |   |   | 273,908   |   |   |   | 116,239 |   |
|                                                         |   |   |      |   |   |   |   |   |
| Contributions:                                               |   |   |      |   |   |   |   |   |
| Employer                                                     |   |   | 219,840   |   |   |   | 222,714 |   |
| Participants                                                 |   |   | 626,075   |   |   |   | 651,415 |   |
| Rollovers                                                    |   |   | 186,745   |   |   |   | 23,008 |   |
|                                                         |   |   |      |   |   |   |   |   |
| Total                contributions                           |   |   | 1,032,660 |   |   |   | 897,137 |   |
|                                                         |   |   |      |   |   |   |   |   |
| Total                additions                               |   |   | 1,306,568 |   |   |   | 1,013,376 |   |
|                                                         |   |   |      |   |   |   |   |   |
| Deductions                from net assets attributed to:     |   |   |      |   |   |   |   |   |
| Benefits                paid to participants                 |   |   | 802,941   |   |   |   | 547,685 |   |
| Administrative                expenses                       |   |   | 11,198    |   |   |   | 20,977 |   |
|                                                         |   |   |      |   |   |   |   |   |
| Total                deductions                              |   |   | 814,139   |   |   |   | 568,662 |   |
|                                                         |   |   |      |   |   |   |   |   |
| Net                increase                                  |   |   | 492,429   |   |   |   | 444,714 |   |
|                                                         |   |   |      |   |   |   |   |   |
| NET                ASSETS AVAILABLE FOR BENEFITS:            |   |   |      |   |   |   |   |   |
| Beginning                of year                             |   |   | 4,672,912 |   |   |   | 4,228,198 |   |
|                                                         |   |   |      |   |   |   |   |   |
| End                of year                                   |   | $      | 5,165,341 |   |   | $      | 4,672,912 |   |

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*Page          4*

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*Table          of Contents*

***FNB      SOUTHEAST 401 (K) RETIREMENT PLAN***

***NOTES      TO FINANCIAL STATEMENTS***

***December      31, 2006 and 2005***

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**NOTE      A - DESCRIPTION OF PLAN**

*General*

*Contributions*

*Participant      Accounts*

*Vesting*

*Investment      Options*

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*Page          5*

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*Table          of Contents*

***FNB        SOUTHEAST 401 (K) RETIREMENT PLAN***

***NOTES        TO FINANCIAL STATEMENTS***

***December        31, 2006 and 2005***

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**NOTE      A - DESCRIPTION OF PLAN (Continued)**

***Allianz      OCC Value A***

**American      Funds American Balanced R4**

**American      Funds Capital World G/I R4**

**BlackRock      Government Inc Inv A**

**Calamos      Growth A**

**Calvert      Income A**

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*Page            6*

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*Table            of Contents*

***FNB          SOUTHEAST 401 (K) RETIREMENT PLAN***

***NOTES          TO FINANCIAL STATEMENTS***

***December          31, 2006 and 2005***

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**NOTE      A - DESCRIPTION OF PLAN (Continued)**

**Davis      NY Venture A**

**First      American Small Cap Select A**

**American      Funds Growth Fund of America R4**

**Wells      Fargo Galliard Stable Return Fund**

**FNB      Financial Services Corporation Common Stock Fund**

*Participant      Loans*

*Payment      of Benefits*

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*Page          7*

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*Table          of Contents*

***FNB          SOUTHEAST 401 (K) RETIREMENT PLAN***

***NOTES          TO FINANCIAL STATEMENTS***

***December          31, 2006 and 2005***

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**NOTE      A - DESCRIPTION OF PLAN (Continued)**

*Forfeited      Accounts*

**NOTE      B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

*Basis      of Accounting*

*Investment      Valuation and Income Recognition*

*Payment      of Benefits*

*Cash      and Cash Equivalents*

*Use      of Estimates*

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*Page          8*

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*Table          of Contents*

***FNB          SOUTHEAST 401 (K) RETIREMENT PLAN***

***NOTES          TO FINANCIAL STATEMENTS***

***December          31, 2006 and 2005***

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**NOTE      C - INVESTMENTS**

| **As                of December 31, 2006:**                   |   |   |      |
|---------------------------------------------------------------|--------|--------|-----------|
| Non-participant                directed:                      |   |   |      |
| FNB                stock                                      |   | $      | 1,066,064 |   |
|                                                          |   |   |      |   |
| Participant                directed:                          |   |   |      |   |
| Calamos                Growth                                 |   |   | 267,274   |   |
| Allianz                OCC Value A                            |   |   | 416,103   |   |
| American                Funds American Balanced R4            |   |   | 364,175   |   |
| Davis                NY Venture A                             |   |   | 489,246   |   |
| First                American Small Cap Select A              |   |   | 459,096   |   |
| American                Funds Growth Fund of America R4       |   |   | 473,294   |   |
| Wells                Fargo Galliard Stable Value              |   |   | 486,583   |   |
| American                Funds Capital World Growth and Inc R4 |   |   | 285,945   |   |
|                                                          |   |   |      |   |
|                                                          |   |   |      |   |
| **As                of December 31, 2005:**                   |   |   |      |   |
| Non-participant                directed:                      |   |   |      |   |
| FNB                stock                                      |   | $      | 1,114,004 |   |
|                                                          |   |   |      |   |
| Participant                directed:                          |   |   |      |   |
| FNB                Financial Services Corporation Common      |   |   |      |   |
| Stock                Fund                                     |   |   | 266,794   |   |
| Allianz                OCC Value A                            |   |   | 278,760   |   |
| American                Funds American Balanced R4            |   |   | 267,698   |   |
| Davis                NY Venture A                             |   |   | 679,956   |   |
| First                American Small Cap Select A              |   |   | 266,932   |   |
| American                Funds Growth Fund of America R4       |   |   | 351,888   |   |
| Wells                Fargo Galliard Stable Return Fund        |   |   | 571,856   |   |

|                                                     |   | 2006   |     |   | 2005   |   |
|----------------------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                                     |   |   |     |   |   |   |
| Mutual                funds                              |   | $      | 351,007  |   |   | $      | 230,143 |   |
| FNB                Financial Services Corporation Common |   |   |     |   |   |   |   |   |
| Stock                Fund                                |   |   | (133,750 | )      |   |   | (161,865 | ) |
|                                                     |   |   |     |   |   |   |   |   |
|                                                     |   | $      | 217,257  |   |   | $      | 68,278 |   |

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*Page              9*

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*Table              of Contents*

***FNB            SOUTHEAST 401 (K) RETIREMENT PLAN***

***NOTES            TO FINANCIAL STATEMENTS***

***December            31, 2006 and 2005***

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**NOTE      D - NONPARTICIPANT-DIRECTED INVESTMENTS**

|                                              |   | December                31 |      |
|---------------------------------------------------|--------|----------------------------|-----------|
|                                              |   | 2006                       |      |   | 2005 |   |
| Net                assets:                        |   |                       |      |   |   |   |
| FNB                Financial Services Corporation |   |                       |      |   |   |   |
| Common                Stock Fund                  |   | $                          | 1,066,064 |   |   | $ | 1,114,004 |   |
|                                              |   |                       |      |   |   |   |   |   |
| Changes                in net assets:             |   |                       |      |   |   |   |   |   |
|                                              |   |                       |      |   |   |   |   |   |
| Contributions                                     |   | $                          | 219,840   |   |   | $ | 222,714 |   |
| Earnings                on investments            |   |                       | (70,006   | ) |   |   | (88,269 | ) |
| Benefits                paid to participants      |   |                       | (167,961  | ) |   |   | (106,642 | ) |
| Administrative                expense             |   |                       | 1,717     |   |   |   | 1,040 |   |
| Forfeitures                                       |   |                       | 11,793    |   |   |   | 8,467 |   |

**NOTE      E - PARTY-IN-INTEREST TRANSACTIONS**

**NOTE      F - PLAN TERMINATION**

**NOTE      G - TAX STATUS**

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*Page          10*

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*Table          of Contents*

***FNB          SOUTHEAST 401 (K) RETIREMENT PLAN***

***NOTES          TO FINANCIAL STATEMENTS***

***December          31, 2006 and 2005***

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**NOTE      H - RISKS AND UNCERTAINTIES**

**NOTE      I – EXCESS CONTRIBUTIONS**

**NOTE      J - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500**

|                                                                          |   | 2006   |      |   | 2005   |   |
|-------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                          |   |   |      |   |   |   |
| Net                assets available for benefits per the financial statements |   | $      | 5,165,341 |   |   | $      | 4,672,912 |   |
| Contributions                receivable not reflected on Form 5500            |   |   | (69,370   | )      |   |   | (34,643 | ) |
| Benefits                payable not reflected on Form 5500                    |   |   | (1,516    | )      |   |   | (24,947 | ) |
| Excess                contributions payable not reflected on Form 5500        |   |   | 13,704    |   |   |   | - |   |
|                                                                          |   |   |      |   |   |   |   |   |
| Net                assets available for benefits per the Form 5500            |   | $      | 5,108,159 |   |   | $      | 4,613,322 |   |
|                                                                          |   |   |      |   |   |   |   |   |

| Net                increase per the financial statements                    |   | $      | 492,429 |   |
|-----------------------------------------------------------------------------|--------|--------|---------|--------|
| 2005                contributions receivable not reflected on Form 5500     |   |   | 34,643  |   |
| 2006                contributions receivable not reflected on Form 5500     |   |   | (69,370 | )      |
| 2005                benefits payable reflected on Form 5500                 |   |   | 24,947  |   |
| 2006                benefits payable reflected on Form 5500                 |   |   | (1,516  | )      |
| 2005                excess contributions payable not reflected on Form 5500 |   |   | -       |   |
| 2005                excess contributions payable not reflected on Form 5500 |   |   | (13,704 | )      |
|                                                                        |   |   |    |   |
| Net                increase per Schedule H of Form 5500                     |   | $      | 494,837 |   |

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*Page          11*

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*Table          of Contents*

***SUPPLEMENTAL      SCHEDULE***

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*Page          12*

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*Table          of Contents*

***FNB      SOUTHEAST 401(k) RETIREMENT PLAN***

***SCHEDULE      H, PART IV, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF      YEAR)***

***EIN      56-1382275, PLAN NUMBER 003***

***December      31, 2006***

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|   |   | (b)                Identity of issuer, borrower, |                                                   |                                               |                                                           |                       |   |      | (e)                Current |   |
|--------|--------|--------------------------------------------------|--------------------------------------------------------|----------------------------------------------------|----------------------------------------------------------------|----------------------------|--------|-----------|----------------------------|--------|
| (a)    |   | lessor                or similar party           |                                                   | (c)                Description of investment, etc. |                                                           | (d)                Cost*** |   |      | value                      |   |
|   |   |                                             |                                                   |                                               |                                                           |                       |   |      |                       |   |
|   |   | Money                Market                      |                                                   |                                               |                                                           |                       |   |      |                       |   |
|   |   |                                             |                                                   |                                               |                                                           |                       |   |      |                       |   |
|   | *      |                                             | FiServ                Money Market                     |                                               |                                                           |                       | $      | -         |                       |   | $ | 53,287 |   |
|   |   |                                             |                                                   |                                               |                                                           |                       |   |      |                       |   |   |   |   |
|   |   |                                             | Mutual                Funds                            |                                               |                                                           |                       |   |      |                       |   |   |   |   |
|   |   |                                             |                                                   |                                               |                                                           |                       |   |      |                       |   |   |   |   |
|   |   |                                             | Allianz                OCC Value A                     |                                               | *Long-term                growth; 23,763.744 shares*           |                       |   | -         |                       |   |   | 416,103 |   |
|   |   |                                             | American                Funds American Bal R4          |                                               | *Capital**preservation                fund; 19,167.108 sh.*    |                       |   | -         |                       |   |   | 364,175 |   |
|   |   |                                             | American                Funds Capital World G/I R4     |                                               | *Long-term                capital growth; 6,829.344 shares*    |                       |   | -         |                       |   |   | 285,945 |   |
|   |   |                                             | BlackRock                Government Inc Inv A          |                                               | *Maximization                of total returns; 7,100.146 sh.*  |                       |   | -         |                       |   |   | 76,256 |   |
|   |   |                                             | Calamos                Growth A                        |                                               | *Long-term                capital growth; 4,958.706 shares*    |                       |   | -         |                       |   |   | 267,274 |   |
|   |   |                                             | Calvert                Income A                        |                                               | *Maximization                of total returns; 13,523.705 sh.* |                       |   | -         |                       |   |   | 226,793 |   |
|   |   |                                             | Davis                NY Venture A                      |                                               | *Long-term                capital growth; 12,701.080 shares*   |                       |   | -         |                       |   |   | 489,246 |   |
|   |   |                                             | First                American Small Cap Select A       |                                               | *Long-term                capital growth; 34,082.880 shares*   |                       |   | -         |                       |   |   | 459,096 |   |
|   |   |                                             | American                Funds Growth Fund of           |                                               |                                                           |                       |   |      |                       |   |   |   |   |
|   |   |                                             | America                R4                              |                                               | *Long-term                capital growth; 14,491.562 shares*   |                       |   | -         |                       |   |   | 473,294 |   |
|   |   |                                             | Wells                Fargo Galliard Stable Return Fund |                                               | *11,663.269                shares*                             |                       |   | -         |                       |   |   | 486,583 |   |
|   | *      |                                             | Plan                participants                       |                                               | *Participant                loans (interest rates*             |                       |   |      |                       |   |   |   |   |
|   |   |                                             |                                                   |                                               | *from                5.00-8.25%)*                              |                       |   | -         |                       |   |   | 259,111 |   |
|   | *      |                                             | FNB                Financial Services Corporation      |                                               |                                                           |                       |   |      |                       |   |   |   |   |
|   |   |                                             | stock                                                  |                                               | *Employer                Stock; 84,515 shares*                 |                       |   | 1,338,297 | **                         |   |   | 1,252,512 |   |
|   |   |                                             |                                                   |                                               |                                                           |                       |   |      |                       |   |   |   |   |
|   |   |                                             |                                                   |                                               |                                                           |                       | $      | 1,338,297 |                       |   | $ | 5,109,675 |   |

| * | Denotes                party-in-interest. |
|---|-------------------------------------------|

| ** | Represents                total cost of employer stock, which is comprised of participant-directed                and non-participant directed                investments. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *** | Cost                omitted for participant-directed                investments. |
|-----|----------------------------------------------------------------------------------|

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*Page          13*

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*Table          of Contents*

|                                          | ***FNB                SOUTHEAST 401(K) RETIREMENT PLAN***                                 |                                               |
|-----------------------------------------------|-------------------------------------------------------------------------------------------|----------------------------------------------------|
|                                          |                                                                                      |                                               |   |
|                                          |                                                                                      |                                               |   |
| Date:  June                29, 2007 | By:                                                                                       | /s/  K.                Dwight Willoughby |   |
|                                          |                                                                                      | K.                Dwight Willoughby                |   |
|                                          |  (Senior              Vice President, Chief Accounting Officer and Controller)  |

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