FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person * Burney Lynn M   2. Issuer Name and Ticker or Trading Symbol Cape Fear Bank CORP [CAPE] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) Chief Operations Officer (Last) (First) (Middle) 1117 MILITARY CUTOFF ROAD 3. Date of Earliest Transaction (Month/Day/Year) 06/29/2007 (Street) WILMINGTON, NC 28405 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock               1,720 (1) D   Common Stock               515 (1) I By spouse Common Stock               294 (2) I By 401(k) plan

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Employee Stock Option Grant (Right to Buy)

$ 6.68 (1)

(3)

06/17/2009

Common Stock

17,226

17,226 (1)

D

Employee Stock Option Grant (Right to Buy)

$ 3.78 (1)

02/21/2003

02/21/2012

Common Stock

6,890

6,890 (1)

D

Employee Stock Option Grant (Right to Buy)

$ 9.76 (1)

(4)

07/22/2015

Common Stock

20,671

20,671 (1)

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
Burney Lynn M 1117 MILITARY CUTOFF ROAD WILMINGTON, NC 28405			Chief Operations Officer

Signatures

Lynn M. Burney, By: William R. Lathan, Jr., Attorney-in-Fact		07/30/2007
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	As adjusted to reflect the effect of two 5% stock dividends which became effective on June 30, 2006 and June 29, 2007. As a result of the stock dividends, the reporting person received an aggregate of 158 and 47 additional shares which are included in the common stock shares reported as held directly and indirectly, respectively. At the same time, and in accordance with antidilution provisions of the Issuer's stock option plans, the reporting person's stock options became exercisable for 4,162 additional shares, and the exercise prices were similarly adjusted.
(2)	The number of shares is based on the reporting person's 401 (k) plan statement as of June 30, 2007, and includes shares acquired under the plan as well as additional shares credited to the plan account as a result of the two 5% stock dividends which became effective on June 30, 2006 and June 29, 2007.
(3)	This option vests as to 20% annually beginning on June 17, 2000.
(4)	This option vests as to one-third of the shares annually starting July 22, 2006.
Remarks: This report is being furnished solely to show the effect of the stock dividends and does not represent a transaction by the reporting person. The Issuer is the successor issuer under Rule 12g-3(a) to Cape Fear Bank pursuant to a statutory share exchange in which the Issuer became the Bank's parent holding company but which did not alter the proportionate interests of security holders.  The Reporting Person's Section 16 reports previously were filed with the Federal Deposit Insurance Corporation.

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