United Community Banks, Inc.
Oct 23, 2008

United Community Banks, Inc. Announces Results for Third Quarter 2008

BLAIRSVILLE, GA, Oct 23, 2008 (MARKET WIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI)



--  Third quarter provision for loan losses of $76 million
--  Allowance-to-loans ratio of 1.91%, up from 1.53% in second quarter
--  Net loss for third quarter
--  Capital levels strong


United Community Banks, Inc. (NASDAQ: UCBI) today announced a net loss of $39.9 million, or 84 cents per diluted share, for the third quarter of 2008 compared to net income of $22.5 million, or 46 cents per diluted share, for the third quarter of 2007. For the first nine months of 2008 the company had a net loss of $16.7 million, or 35 cents per diluted share, compared to net operating income of $63.0 million, or $1.36 per diluted share, for the first nine months of 2007.

"As we noted in our October 6 announcement, economic pressures on the housing market, particularly in Atlanta, had an impact on our loan portfolio in the third quarter," stated Jimmy Tallent, president and chief executive officer. "As a result, we increased our provision for loan losses, which covered our higher net charge-offs and strengthened our allowance-to-loans ratio. Despite the challenging environment, we were able to negotiate sales of some of our largest and most impaired assets. We will continue our strategy to deal aggressively with problem credits, with a goal of emerging as quickly as possible from this difficult credit cycle."

Loans were down $123 million to $5.83 billion from the third quarter of 2007 and down $103 million on a linked-quarter basis as the company continued to reduce its exposure to the residential construction and housing markets. At September 30, 2008, residential construction loans were $1.6 billion, or 27 percent of total loans, a decrease of $339 million from a year ago and $149 million from the second quarter. "Partially off-setting the decrease in residential construction loans, we had $49 million of growth this quarter in the residential mortgage and commercial areas of our loan portfolio," Tallent said. "We are making good progress in rebalancing our portfolio and further reducing our exposure to residential construction."

Total customer deposits increased $98 million from the third quarter of 2007 and were down $217 million compared to the second quarter of 2008. "We saw a similar seasonal trend last year between the second and third quarters, but some of the decrease in customer deposits this quarter certainly reflects the concerns people are having about the banking industry," stated Tallent. "In response, we launched a company-wide customer education program about our bank's safety and soundness and about customers' options for FDIC insurance. This effort helped assure that all customers who came to us with concerns about their deposits could have their questions answered quickly and reassuringly."

Taxable equivalent net interest revenue of $58.8 million reflected a decrease of $3.0 million from the second quarter of 2008 and $12.9 million from the third quarter of 2007. Taxable equivalent net interest margin was 3.17 percent compared with 3.32 percent for the second quarter of 2008 and 3.89 percent for the third quarter of 2007. "We continued to see margin compression in the third quarter," Tallent said. "A higher level of non-performing assets, continued competitive deposit pricing, and liquidity were key contributors."

The third quarter provision for loan losses was $76.0 million. Net charge-offs for the third quarter were $55.7 million compared with $14.3 million for the second quarter of 2008. Annualized net charge-offs to average loans was 377 basis points for the third quarter of 2008 compared with 97 basis points for the second quarter of 2008. "Net charge-offs increased significantly this quarter due to our aggressive efforts to move problem credits off our books," said Tallent. "Specifically, we sold non-performing assets totaling $66 million. Among these were 13 of our largest non-performing assets, totaling $42 million, at the very end of the third quarter. Additionally, we had verbal commitments on three non-performing assets that were written down this quarter. The losses on these 16 sales represented a significant portion of the $55.7 million in charge-offs for the third quarter." At quarter-end, non-performing assets totaled $177.7 million compared with $152.2 million at June 30, 2008. The ratio of non-performing assets to total assets at quarter-end and last quarter was 2.20 percent and 1.84 percent, respectively.

Fee revenue of $13.1 million was down $2.5 million from the third quarter of 2007 and down $2.0 million from the second quarter of 2008. Service charges and fees on deposit accounts of $8.2 million were up $316,000 from the third quarter of 2007 and up $214,000 from last quarter. Mortgage fees were down $708,000 from last year and $792,000 from last quarter due to the slowdown in the housing market. Consulting fees were down $654,000 from last year and $525,000 from last quarter due to weakness in the market that affected sales efforts and closing contracts. Other revenue was down $1.4 million from last year and $735,000 from the second quarter of 2008, primarily due to lower levels of earnings on bank-owned life insurance and deferred compensation plan assets.

Operating expenses of $57.0 million reflected an increase of $8.8 million from the third quarter of 2007 and $7.2 million from last quarter. Salaries and employee benefit costs of $28.6 million declined $1.1 million from last year due to lower incentive compensation. Other expenses of $15.3 million increased $10.1 million from the third quarter of 2007 and $7.7 million from last quarter primarily due to a higher level of foreclosed property costs. Foreclosed property costs, which included $8.3 million of write-downs this quarter, totaled $10.1 million for the third quarter compared with $591,000 a year ago and $2.9 million last quarter.

The board of directors approved the regular quarterly dividend that will be paid in shares of common stock on January 2, 2009 for shareholders of record as of December 10, 2008. The dividend rate is 0.7692 percent. "Each shareholder will receive one new share of common stock for every 130 shares held on December 10, 2008," said Tallent. "This is equal to the third quarter stock dividend. The stock dividend is an appropriate balance between the company's need to retain capital during these uncertain times and the needs of those shareholders who depend on a cash dividend. Shareholders can choose either to sell their new shares or continue to hold them, increasing their ownership at a time when the stock price is historically low."

At September 30, 2008, the company's capital ratios were as follows: Tier I Risk-Based Capital of 8.66 percent; Leverage of 6.69 percent; and, Total Risk-Based of 11.40 percent. Also, the tangible equity-to-assets ratio was 6.65 percent. "We will continue to seek loan and foreclosed property sales as we expect further deterioration in real estate valuations and pricing," said Tallent. "Our strong capital levels enable us to pursue this strategy and absorb higher credit costs without impairing our financial soundness. A company cannot have too much capital in this environment, so we will be alert for cost-effective opportunities to maintain and build our capital levels. And we recently executed on two of these opportunities. We issued $30 million of subordinated debt in August and we will close $12 million of internally offered trust preferred securities by the end of October. Both of these securities will increase our regulatory capital levels. In addition, we are exploring the Treasury's TARP Program that would allow us to issue preferred stock."

"We are of course disappointed with the third quarter loss," Tallent continued. "At the same time, we firmly believe that the company's ability to manage through this cycle, and to support our long-term success, have been strengthened by the actions taken during the quarter. As we look ahead, we expect to see ongoing credit challenges and upward pressure on the level of non-performing assets. Charge-offs will continue to be elevated as we work through our problem credits, but we certainly don't see a repeat of the third quarter-level charge-offs in the immediate future."

Conference Call

United Community Banks will hold a conference call on Thursday, October 23, 2008, at 11 a.m. EDT to discuss the contents of this news release and to share business highlights for the quarter. The telephone number for the conference call is (877) 591-4953 and the pass code is "UCBI." The conference call will also be available by web cast within the Investor Relations section of the company's web site at www.ucbi.com.

About United Community Banks, Inc.

Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $8.1 billion and operates 27 community banks with 108 banking offices located throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The company specializes in providing personalized community banking services to individuals and small to mid-size businesses. United Community Banks also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United Community Banks common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at the company's web site at www.ucbi.com.

Safe Harbor

This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled "Forward-Looking Statements" on page 4 of United Community Banks, Inc.'s annual report filed on Form 10-K with the Securities and Exchange Commission.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
                                                    2008
                                  ---------------------------------------
(in thousands, except per share       Third        Second         First
data; taxable equivalent)           Quarter       Quarter       Quarter
                                  -----------   ------------  ------------
INCOME SUMMARY
Interest revenue                  $   112,510   $    116,984  $    129,041
Interest expense                       53,719         55,231        62,754
                                  -----------   ------------  ------------
      Net interest revenue             58,791         61,753        66,287
Provision for loan losses (1)          76,000         15,500         7,500
Fee revenue                            13,121         15,105        14,197
                                  -----------   ------------  ------------
    Total operating revenue            (4,088)        61,358        72,984
Operating expenses                     56,970         49,761        47,529
                                  -----------   ------------  ------------
      Income (loss) before taxes      (61,058)        11,597        25,455
Income tax expense (benefit)          (21,184)         4,504         9,377
                                  -----------   ------------  ------------
    Net operating income (loss)       (39,874)         7,093        16,078
Fraud loss provision, net of tax
 (1)                                        -              -             -
                                  -----------   ------------  ------------
    Net income (loss)             $   (39,874)  $      7,093  $     16,078
                                  ===========   ============  ============
OPERATING PERFORMANCE  (1)
  Earnings (loss) per common
   share:
    Basic                         $      (.84)  $        .15  $        .34
    Diluted                              (.84)           .15           .34
  Return on equity (2)                 (19.07)%         3.41%         7.85%
  Return on tangible equity
   (2)(3)(4)                           (30.43)          5.86         13.16
  Return on assets (4)                  (1.95)           .34           .78
  Dividend payout ratio                (10.71)         60.00         26.47
GAAP PERFORMANCE MEASURES
  Per common share:
    Basic earnings (loss)         $      (.84)  $        .15  $        .34
    Diluted earnings (loss)              (.84)           .15           .34
    Cash / stock dividends
     declared                             .09            .09           .09
    Book value                          17.12          17.75         18.50
    Tangible book value (3)             10.48          11.03         11.76
  Key performance ratios:
    Return on equity (2)(4)            (19.07)%         3.41%         7.85%
     Return on assets                   (1.95)           .34           .78
    Net interest margin (4)              3.17           3.32          3.55
     Efficiency ratio                   79.35          65.05         59.05
    Dividend payout ratio              (10.71)         60.00         26.47
    Equity to assets                    10.28          10.33         10.30
    Tangible equity to assets (3)        6.65           6.77          6.73
ASSET QUALITY
  Allowance for loan losses       $   111,299   $     91,035  $     89,848
  Net charge-offs (1)                  55,736         14,313         7,075
  Non-performing loans                139,266        123,786        67,728
  OREO                                 38,438         28,378        22,136
                                  -----------   ------------  ------------
    Total non-performing assets       177,704        152,164        89,864
  Allowance for loan losses to
   loans (1)                             1.91 %         1.53%         1.51%
  Net charge-offs to average
   loans (1)(4)                          3.77            .97           .48
  Non-performing assets to loans
   and OREO                              3.03           2.55          1.50
  Non-performing assets to total
   assets                                2.20           1.84          1.07
AVERAGE BALANCES
  Loans                           $ 5,889,168   $  5,933,143  $  5,958,296
  Investment securities             1,454,740      1,507,240     1,485,515
  Earning assets                    7,384,287      7,478,018     7,491,480
  Total assets                      8,146,880      8,295,748     8,305,621
  Deposits                          6,597,339      6,461,361     6,051,069
  Shareholders' equity                837,487        856,727       855,659
  Common shares - basic                47,304         47,060        46,966
  Common shares - diluted              47,479         47,249        47,272
AT PERIOD END
  Loans                           $ 5,829,937   $  5,933,141  $  5,967,839
  Investment securities             1,400,827      1,430,588     1,508,402
  Total assets                      8,072,543      8,264,051     8,386,255
  Deposits                          6,689,335      6,696,456     6,175,769
  Shareholders' equity                816,880        837,890       871,452
  Common shares outstanding            47,596         47,096        47,004
(1)  Excludes effect of special $15 million fraud related provision for
     loan losses recorded in the second quarter of 2007, an additional
     $3 million provision in the fourth quarter of 2007, and $18 million
     of related loan charge-offs recorded in the fourth quarter of 2007.
(2)  Net income available to common shareholders, which excludes preferred
     stock dividends, divided by average realized common equity, which
     excludes accumulated other comprehensive income (loss).
(3)  Excludes effect of acquisition related intangibles and associated
     amortization.
(4)  Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
                                               2007              Third
                                     ------------------------    Quarter
(in thousands, except per share        Fourth        Third      2008-2007
data; taxable equivalent)              Quarter      Quarter      Change
                                     -----------  -----------  ----------
INCOME SUMMARY
Interest revenue                     $   140,768  $   144,884
Interest expense                          71,038       73,203
                                     -----------  -----------
      Net interest revenue                69,730       71,681         (18)%
Provision for loan losses (1)             26,500        3,700
Fee revenue                               16,100       15,615         (16)
                                     -----------  -----------
    Total operating revenue               59,330       83,596        (105)
Operating expenses                        49,336       48,182          18
                                     -----------  -----------
      Income (loss) before taxes           9,994       35,414        (272)
Income tax expense (benefit)               3,960       12,878
                                     -----------  -----------
    Net operating income (loss)            6,034       22,536        (277)
Fraud loss provision, net of tax (1)       1,833            -
                                     -----------  -----------
    Net income (loss)                $     4,201  $    22,536        (277)
                                     ===========  ===========
OPERATING PERFORMANCE  (1)
  Earnings (loss) per common share:
    Basic                            $       .13  $       .47        (279)
    Diluted                                  .13          .46        (283)
  Return on equity (2)                      2.89%       10.66%
  Return on tangible equity
   (2)(3)(4)                                5.06        17.54
  Return on assets (4)                       .29         1.11
  Dividend payout ratio                    69.23        19.15
GAAP PERFORMANCE MEASURES
  Per common share:
    Basic earnings (loss)            $       .09  $       .47        (279)
    Diluted earnings (loss)                  .09          .46        (283)
    Cash / stock dividends declared          .09          .09           0
    Book value                             17.70        17.51          (2)
    Tangible book value (3)                10.92        10.81          (3)
  Key performance ratios:
    Return on equity (2)(4)                 2.01%       10.66%
 Return on assets                            .20         1.11
    Net interest margin (4)                 3.73         3.89
 Efficiency ratio                          57.67        55.34
    Dividend payout ratio                 100.00        19.15
    Equity to assets                       10.20        10.32
    Tangible equity to assets (3)           6.58         6.65
ASSET QUALITY
  Allowance for loan losses          $    89,423  $    90,935
  Net charge-offs (1)                     13,012        5,236
  Non-performing loans                    28,219       46,783
  OREO                                    18,039       16,554
                                     -----------  -----------
    Total non-performing assets           46,258       63,337
  Allowance for loan losses to loans
   (1)                                      1.51%        1.28%
  Net charge-offs to average loans
   (1)(4)                                    .87          .35
  Non-performing assets to loans and
   OREO                                      .78         1.06
  Non-performing assets to total
   assets                                    .56          .77
AVERAGE BALANCES
  Loans                              $ 5,940,230  $ 5,966,933          (1)
  Investment securities                1,404,796    1,308,192          11
  Earning assets                       7,424,992    7,332,492           1
  Total assets                         8,210,120    8,083,739           1
  Deposits                             6,151,476    6,246,319           6
  Shareholders' equity                   837,195      834,094           0
  Common shares - basic                   47,203       48,348
  Common shares - diluted                 47,652       48,977
AT PERIOD END
  Loans                              $ 5,929,263  $ 5,952,749          (2)
  Investment securities                1,356,846    1,296,826           8
  Total assets                         8,207,302    8,180,600          (1)
  Deposits                             6,075,951    6,154,308           9
  Shareholders' equity                   831,902      833,761          (2)
  Common shares outstanding               46,903       47,542
(1)  Excludes effect of special $15 million fraud related provision for
     loan losses recorded in the second quarter of 2007, an additional
     $3 million provision in the fourth quarter of 2007, and $18 million
     of related loan charge-offs recorded in the fourth quarter of 2007.
(2)  Net income available to common shareholders, which excludes preferred
     stock dividends, divided by average realized common equity, which
     excludes accumulated other comprehensive income (loss).
(3)  Excludes effect of acquisition related intangibles and associated
     amortization.
(4)  Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
                                         For the Nine
                                         Months Ended             YTD
(in thousands, except per share   -------------------------    2008-2007
data; taxable equivalent)             2008          2007         Change
                                  -----------   ------------  -----------
INCOME SUMMARY
Interest revenue                  $   358,535   $    410,150
Interest expense                      171,704        205,396
                                  -----------   ------------
      Net interest revenue            186,831        204,754           (9)%
Provision for loan losses (1)          99,000         11,100
Fee revenue                            42,423         46,551           (9)
                                  -----------   ------------
    Total operating revenue           130,254        240,205          (46)
Operating expenses                    154,260        140,725           10
                                  -----------   ------------
      Income (loss) before taxes      (24,006)        99,480         (124)
Income tax expense (benefit)           (7,303)        36,523
                                  -----------   ------------
    Net operating income (loss)       (16,703)        62,957         (127)
Fraud loss provision, net of tax
 (1)                                        -          9,165
                                  -----------   ------------
    Net income (loss)             $   (16,703)  $     53,792         (131)
                                  ===========   ============
OPERATING PERFORMANCE  (1)
  Earnings (loss) per common
   share:
    Basic                         $      (.35)  $       1.38         (125)
    Diluted                              (.35)          1.36         (126)
  Return on equity (2)                  (2.69)%        10.04%
  Return on tangible equity
   (2)(3)(4)                            (3.99)         17.42
  Return on assets (4)                   (.27)          1.11
  Dividend payout ratio                (77.14)         19.57
GAAP PERFORMANCE MEASURES
  Per common share:
    Basic earnings (loss)         $      (.35)  $       1.18         (130)
    Diluted earnings (loss)              (.35)          1.16         (130)
    Cash / stock dividends
     declared                             .27            .27            0
    Book value                          17.12          17.51           (2)
    Tangible book value (3)             10.48          10.81           (3)
  Key performance ratios:
    Return on equity (2)(4)             (2.69)%        10.04%
 Return on assets                        (.27)           .95
    Net interest margin (4)              3.35           3.94
 Efficiency ratio                       67.43          56.14
    Dividend payout ratio              (77.14)         22.88
    Equity to assets                    10.30           9.39
    Tangible equity to assets (3)        6.72           6.65
ASSET QUALITY
  Allowance for loan losses       $   111,299   $     90,935
  Net charge-offs (1)                  77,124          8,822
  Non-performing loans                139,266         46,783
  OREO                                 38,438         16,554
                                  -----------   ------------
    Total non-performing assets       177,704         63,337
  Allowance for loan losses to
   loans (1)                             1.91 %         1.28%
  Net charge-offs to average
   loans (1)(4)                          1.74            .21
  Non-performing assets to loans
   and OREO                              3.03           1.06
  Non-performing assets to total
   assets                                2.20            .77
AVERAGE BALANCES
  Loans                           $ 5,926,731   $  5,665,314            5
  Investment securities             1,482,397      1,235,183           20
  Earning assets                    7,451,017      6,951,573            7
  Total assets                      8,249,042      7,568,910            9
  Deposits                          6,370,753      5,987,225            6
  Shareholders' equity                849,912        710,950           20
  Common shares - basic                47,111         45,452
  Common shares - diluted              47,334         46,235
AT PERIOD END
  Loans                           $ 5,829,937   $  5,952,749           (2)
  Investment securities             1,400,827      1,296,826            8
  Total assets                      8,072,543      8,180,600           (1)
  Deposits                          6,689,335      6,154,308            9
  Shareholders' equity                816,880        833,761           (2)
  Common shares outstanding            47,596         47,542
(1)  Excludes effect of special $15 million fraud related provision for
     loan losses recorded in the second quarter of 2007, an additional
     $3 million provision in the fourth quarter of 2007, and $18 million
     of related loan charge-offs recorded in the fourth quarter of 2007.
(2)  Net income available to common shareholders, which excludes preferred
     stock dividends, divided by average realized common equity, which
     excludes accumulated other comprehensive income (loss).
(3)  Excludes effect of acquisition related intangibles and associated
     amortization.
(4)  Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
                                                             2008
                                                    -----------------------
                                                    Third   Second  First
(in millions)                                       Quarter Quarter Quarter
                                                    ------- ------- -------
LOANS BY CATEGORY
Commercial (sec. by RE)                             $ 1,604 $ 1,584 $ 1,526
Commercial construction                                 509     522     548
Commercial & industrial                                 425     417     437
                                                    ------- ------- -------
     Total commercial                                 2,538   2,523   2,511
Residential construction                              1,596   1,745   1,791
Residential mortgage                                  1,528   1,494   1,491
Consumer / installment                                  168     171     175
                                                    ------- ------- -------
     Total loans                                    $ 5,830 $ 5,933 $ 5,968
                                                    ======= ======= =======
LOANS BY MARKET
Atlanta MSA                                         $ 1,800 $ 1,934 $ 1,978
Gainesville MSA                                         426     422     415
North Georgia                                         2,066   2,065   2,071
Western North Carolina                                  815     819     816
Coastal Georgia                                         458     436     439
East Tennessee                                          265     257     249
                                                    ------- ------- -------
     Total loans                                    $ 5,830 $ 5,933 $ 5,968
                                                    ======= ======= =======
RESIDENTIAL CONSTRUCTION
Dirt loans
   Acquisition & development                        $   516 $   569 $   583
   Land loans                                           142     139     130
   Lot loans                                            385     401     406
                                                    ------- ------- -------
      Total                                           1,043   1,109   1,119
                                                    ------- ------- -------
House loans
   Spec                                                 393     450     460
   Sold                                                 160     186     212
                                                    ------- ------- -------
      Total                                             553     636     672
                                                    ------- ------- -------
Total residential construction                      $ 1,596 $ 1,745 $ 1,791
                                                    ======= ======= =======
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
   Acquisition & development                        $   185 $   232 $   252
   Land loans                                            47      50      50
   Lot loans                                            103     117     117
                                                    ------- ------- -------
      Total                                             335     399     419
                                                    ------- ------- -------
House loans
   Spec                                                 227     271     271
   Sold                                                  49      58      71
                                                    ------- ------- -------
      Total                                             276     329     342
                                                    ------- ------- -------
Total residential construction                      $   611 $   728 $   761
                                                    ======= ======= =======
(1)  Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
                                            2007                   Year
                                       ---------------  Linked     over
                                       Fourth  Third   Quarter     Year
(in millions)                          Quarter Quarter Change(1)  Change
                                       ------- ------- --------   -------
LOANS BY CATEGORY
Commercial (sec. by RE)                $ 1,476 $ 1,441        5 %      11 %
Commercial construction                    527     531      (10)       (4)
Commercial & industrial                    418     408        8         4
                                       ------- -------
     Total commercial                    2,421   2,380        2         7
Residential construction                 1,830   1,935      (34)      (18)
Residential mortgage                     1,502   1,459        9         5
Consumer / installment                     176     179       (7)       (6)
                                       ------- -------
     Total loans                       $ 5,929 $ 5,953       (7)       (2)
                                       ======= =======
LOANS BY MARKET
Atlanta MSA                            $ 2,002 $ 2,057      (28)%     (12)%
Gainesville MSA                            400     394        4         8
North Georgia                            2,060   2,026        0         2
Western North Carolina                     806     834       (2)       (2)
Coastal Georgia                            416     402       20        14
East Tennessee                             245     240       12        10
                                       ------- -------
     Total loans                       $ 5,929 $ 5,953       (7)       (2)
                                       ======= =======
RESIDENTIAL CONSTRUCTION
Dirt loans
   Acquisition & development           $   593 $   592      (37)%     (13)%
   Land loans                              126     125        9        14
   Lot loans                               407     403      (16)       (4)
                                       ------- -------
      Total                              1,126   1,120      (24)       (7)
                                       ------- -------
House loans
   Spec                                    473     539      (51)%     (27)%
   Sold                                    231     276      (56)      (42)
                                       ------- -------
      Total                                704     815      (52)      (32)
                                       ------- -------
Total residential construction         $ 1,830 $ 1,935      (34)      (18)
                                       ======= =======
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
   Acquisition & development           $   258 $   268      (81)%     (31)%
   Land loans                               52      50      (24)       (6)
   Lot loans                               117     123      (48)      (16)
                                       ------- -------
      Total                                427     441      (64)      (24)
                                       ------- -------
House loans
   Spec                                    280     322      (65)%     (30)%
   Sold                                     77     104      (62)      (53)
                                       ------- -------
      Total                                357     426      (64)      (35)
                                       ------- -------
Total residential construction         $   784 $   867      (64)      (30)
                                       ======= =======
(1)  Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
                                                  Third Quarter 2008
                                            -------------------------------
                                            Nonaccrual              Total
(in thousands)                                Loans       OREO      NPAs
                                            ----------- --------- ---------
NPAs BY CATEGORY
Commercial (sec. by RE)                     $     9,961 $     854 $  10,815
Commercial construction                           2,924       375     3,299
Commercial & industrial                           1,556         -     1,556
                                            ----------- --------- ---------
     Total commercial                            14,441     1,229    15,670
Residential construction                        102,095    32,453   134,548
Residential mortgage                             21,335     4,756    26,091
Consumer / installment                            1,395         -     1,395
                                            ----------- --------- ---------
     Total NPAs                             $   139,266 $  38,438 $ 177,704
                                            =========== ========= =========
NPAs BY MARKET
Atlanta MSA                                 $    80,805 $  27,011 $ 107,816
Gainesville MSA                                  15,105       648    15,753
North Georgia                                    20,812     8,337    29,149
Western North Carolina                           13,432     1,509    14,941
Coastal Georgia                                   3,682       601     4,283
East Tennessee                                    5,430       332     5,762
                                            ----------- --------- ---------
     Total NPAs                             $   139,266 $  38,438 $ 177,704
                                            =========== ========= =========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
                                                  Second Quarter 2008
                                            -------------------------------
                                            Nonaccrual              Total
(in thousands)                                Loans       OREO      NPAs
                                            ----------- --------- ---------
NPAs BY CATEGORY
Commercial (sec. by RE)                     $     4,610 $     593 $   5,203
Commercial construction                           3,027     1,859     4,886
Commercial & industrial                           2,950         -     2,950
                                            ----------- --------- ---------
     Total commercial                            10,587     2,452    13,039
Residential construction                         90,283    22,075   112,358
Residential mortgage                             21,792     3,851    25,643
Consumer / installment                            1,124         -     1,124
                                            ----------- --------- ---------
     Total NPAs                             $   123,786 $  28,378 $ 152,164
                                            =========== ========= =========
NPAs BY MARKET
Atlanta MSA                                 $    89,327 $  15,196 $ 104,523
Gainesville MSA                                   4,885        12     4,897
North Georgia                                    16,117     8,277    24,394
Western North Carolina                            9,838       990    10,828
Coastal Georgia                                   1,575     3,871     5,446
East Tennessee                                    2,044        32     2,076
                                            ----------- --------- ---------
     Total NPAs                             $   123,786 $  28,378 $ 152,164
                                            =========== ========= =========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
                                                   First Quarter 2008
                                               ----------------------------
                                               Nonaccrual           Total
(in thousands)                                   Loans      OREO     NPAs
                                               ---------- -------- --------
NPAs BY CATEGORY
Commercial (sec. by RE)                        $    4,070 $    653 $  4,723
Commercial construction                             1,514      961    2,475
Commercial & industrial                             1,936        -    1,936
                                               ---------- -------- --------
     Total commercial                               7,520    1,614    9,134
Residential construction                           42,249   16,486   58,735
Residential mortgage                               16,965    4,036   21,001
Consumer / installment                                994        -      994
                                               ---------- -------- --------
     Total NPAs                                $   67,728 $ 22,136 $ 89,864
                                               ========== ======== ========
NPAs BY MARKET
Atlanta MSA                                    $   37,442 $ 16,121 $ 53,563
Gainesville MSA                                     4,584      909    5,493
North Georgia                                      11,969    3,385   15,354
Western North Carolina                              7,775    1,405    9,180
Coastal Georgia                                     5,266       95    5,361
East Tennessee                                        692      221      913
                                               ---------- -------- --------
     Total NPAs                                $   67,728 $ 22,136 $ 89,864
                                               ========== ======== ========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
                        Third Quarter    Second Quarter     First Quarter
                            2008              2008              2008
                      ----------------- ----------------- -----------------
                                 Net               Net               Net
                               Charge-           Charge-           Charge-
                               Offs to           Offs to           Offs to
                        Net    Average    Net    Average    Net    Average
                       Charge-  Loans    Charge-  Loans    Charge-  Loans
(in thousands)          Offs     (1)      Offs     (1)      Offs     (1)
                      -------- -------  -------- -------  -------- -------
NET CHARGE-OFFS BY
 CATEGORY
Commercial (sec. by
 RE)                  $    257     .06% $    424     .11% $    630     .17%
Commercial
 construction              225     .17       125     .09         -       -
Commercial &
 industrial              1,018     .96       398     .38       304     .29
                      --------          --------          --------
     Total commercial    1,500     .24       947     .15       934     .15
Residential
 construction           50,228   11.94    10,343    2.36     4,665    1.03
Residential mortgage     3,332     .88     2,576     .70     1,011     .27
Consumer /
 installment               676    1.58       447    1.05       465    1.06
                      --------          --------          --------
     Total NPAs       $ 55,736    3.77  $ 14,313     .97  $  7,075     .48
                      ========          ========          ========
NET CHARGE-OFFS BY
 MARKET
Atlanta MSA           $ 48,313   10.08% $ 10,682    2.22% $  4,647     .94%
Gainesville MSA          1,470    1.49       360     .34       323     .32
North Georgia            4,567     .88     1,829     .36     1,280     .25
Western North
 Carolina                  855     .42       279     .14        57     .03
Coastal Georgia            249     .22       980     .90        42     .04
East Tennessee             282     .43       183     .29       726    1.18
                      --------          --------          --------
     Total NPAs       $ 55,736    3.77  $ 14,313     .97  $  7,075     .48
                      ========          ========          ========
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)
                                           2008
                            -----------------------------------
                              Third        Second       First
                             Quarter      Quarter      Quarter
                            ---------    ----------   ----------
Special provision for fraud
 related loan losses        $       -    $        -   $        -
                            ---------    ----------   ----------
Income tax effect of
 special provision                  -             -            -
                            ---------    ----------   ----------
     After-tax effect
      of special provision  $       -    $        -   $        -
                            =========    ==========   ==========
Net Income (Loss)
 Reconciliation
Operating net income (loss) $ (39,874)   $    7,093   $   16,078
After-tax effect of special
 provision and
 merger-related charges             -             -            -
                            ---------    ----------   ----------
   Net income (loss) (GAAP) $ (39,874)   $    7,093   $   16,078
                            =========    ==========   ==========
Basic Earnings (Loss) Per
 Share Reconciliation
Basic operating earnings
 (loss) per share           $    (.84)   $      .15   $      .34
Per share effect of special
 provision and
 merger-related charges             -             -            -
                            ---------    ----------   ----------
   Basic earnings (loss)
    per share (GAAP)        $    (.84)   $      .15   $      .34
                            =========    ==========   ==========
Diluted Earnings (Loss) Per
 Share Reconciliation
Diluted operating earnings
 (loss) per share           $    (.84)   $      .15   $      .34
Per share effect of special
 provision and
 merger-related charges             -             -            -
                            ---------    ----------   ----------
   Diluted earnings
    (loss) per share (GAAP) $    (.84)   $      .15   $      .34
                            =========    ==========   ==========
Provision for Loan Losses
 Reconciliation
Operating provision for
 loan losses                $  76,000    $   15,500   $    7,500
Special provision for fraud
 related loan losses                -             -            -
                            ---------    ----------   ----------
   Provision for loan
    losses (GAAP)           $  76,000    $   15,500   $    7,500
                            =========    ==========   ==========
Nonperforming Assets
 Reconciliation
Nonperforming assets
 excluding fraud-related
 assets                     $ 174,227    $  148,219   $   85,182
Fraud-related loans and
 OREO included in
 nonperforming assets           3,477         3,945        4,682
                            ---------    ----------   ----------
   Nonperforming assets
    (GAAP)                  $ 177,704    $  152,164   $   89,864
                            =========    ==========   ==========
Allowance for Loan Losses
 Reconciliation
Allowance for loan losses
 excluding special
 fraud-related allowance    $ 111,299    $   91,035   $   89,848
Fraud-related allowance for
 loan losses                        -             -            -
                            ---------    ----------   ----------
   Allowance for loan
    losses (GAAP)           $ 111,299    $   91,035   $   89,848
                            =========    ==========   ==========
Net Charge-Offs
 Reconciliation
Net charge offs excluding
 charge off of
 fraud-related loans        $  55,736    $   14,313   $    7,075
Fraud-related loans charged
 off                                -             -            -
                            ---------    ----------   ----------
   Net charge offs (GAAP)   $  55,736    $   14,313   $    7,075
                            =========    ==========   ==========
Allowance for Loan Losses
 to Loans Ratio
 Reconciliation
Allowance for loan losses
 to loans ratio excluding
 fraud-related allowance         1.91%         1.53%        1.51%
Portion of allowance
 assigned to fraud-related
 loans                              -             -            -
                            ---------    ----------   ----------
   Allowance for loan
    losses to loans ratio
    (GAAP)                       1.91%         1.53%        1.51%
                            =========    ==========   ==========
Nonperforming Assets to
 Total Assets Ratio
 Reconciliation
Nonperforming assets to
 total assets ratio
 excluding fraud-related
 assets                          2.16%         1.79%        1.02%
Fraud-related nonperforming
 assets                           .04           .05          .05
                            ---------    ----------   ----------
   Nonperforming assets
    to total assets ratio
    (GAAP)                       2.20%         1.84%        1.07%
                            =========    ==========   ==========
Net Charge Offs to Average
 Loans Ratio Reconciliation
Net charge offs to average
 loans ratio excluding
 fraud-related loans             3.77%          .97%         .48%
Charge offs of
 fraud-related loans                -             -            -
                            ---------    ----------   ----------
   Net charge offs to
    average loans ratio
    (GAAP)                       3.77%          .97%         .48%
                            =========    ==========   ==========
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)
                                                    For the Nine Months
                                   2007                    Ended
                            ----------------------       September 30
                              Fourth      Third     ----------------------
                              Quarter     Quarter      2008        2007
                            ----------  ----------  ----------  ----------
Special provision for fraud
 related loan losses        $    3,000  $        -  $        -  $   15,000
                            ----------  ----------  ----------  ----------
Income tax effect of
 special provision               1,167           -           -       5,835
                            ----------  ----------  ----------  ----------
     After-tax effect
      of special provision  $    1,833  $        -  $        -  $    9,165
                            ==========  ==========  ==========  ==========
Net Income (Loss)
 Reconciliation
Operating net income (loss) $    6,034  $   22,536  $  (16,703) $   62,957
After-tax effect of special
 provision and
 merger-related charges         (1,833)          -           -      (9,165)
                            ----------  ----------  ----------  ----------
   Net income (loss) (GAAP) $    4,201  $   22,536  $  (16,703) $   53,792
                            ==========  ==========  ==========  ==========
Basic Earnings (Loss) Per
 Share Reconciliation
Basic operating earnings
 (loss) per share           $      .13  $      .47  $     (.35) $     1.38
Per share effect of special
 provision and
 merger-related charges           (.04)          -           -        (.20)
                            ----------  ----------  ----------  ----------
   Basic earnings (loss)
    per share (GAAP)        $      .09  $      .47  $     (.35) $     1.18
                            ==========  ==========  ==========  ==========
Diluted Earnings (Loss) Per
 Share Reconciliation
Diluted operating earnings
 (loss) per share           $      .13  $      .46  $     (.35) $     1.36
Per share effect of special
 provision and
 merger-related charges           (.04)          -           -        (.20)
                            ----------  ----------  ----------  ----------
   Diluted earnings
    (loss) per share (GAAP) $      .09  $      .46  $     (.35) $     1.16
                            ==========  ==========  ==========  ==========
Provision for Loan Losses
 Reconciliation
Operating provision for
 loan losses                $   26,500  $    3,700  $   99,000  $   11,100
Special provision for fraud
 related loan losses             3,000           -           -      15,000
                            ----------  ----------  ----------  ----------
   Provision for loan
    losses (GAAP)           $   29,500  $    3,700  $   99,000  $   26,100
                            ==========  ==========  ==========  ==========
Nonperforming Assets
 Reconciliation
Nonperforming assets
 excluding fraud-related
 assets                     $   40,956  $   39,761  $  174,227  $   39,761
Fraud-related loans and
 OREO included in
 nonperforming assets            5,302      23,576       3,477      23,576
                            ----------  ----------  ----------  ----------
   Nonperforming assets
    (GAAP)                  $   46,258  $   63,337  $  177,704  $   63,337
                            ==========  ==========  ==========  ==========
Allowance for Loan Losses
 Reconciliation
Allowance for loan losses
 excluding special
 fraud-related allowance    $   89,423  $   75,935  $  111,299  $   75,935
Fraud-related allowance for
 loan losses                         -      15,000           -      15,000
                            ----------  ----------  ----------  ----------
   Allowance for loan
    losses (GAAP)           $   89,423  $   90,935  $  111,299  $   90,935
                            ==========  ==========  ==========  ==========
Net Charge-Offs
 Reconciliation
Net charge offs excluding
 charge off of
 fraud-related loans        $   13,012  $    5,236  $   77,124  $    8,822
Fraud-related loans charged
 off                            18,000           -           -           -
                            ----------  ----------  ----------  ----------
   Net charge offs (GAAP)   $   31,012  $    5,236  $   77,124  $    8,822
                            ==========  ==========  ==========  ==========
Allowance for Loan Losses
 to Loans Ratio
 Reconciliation
Allowance for loan losses
 to loans ratio excluding
 fraud-related allowance          1.51%       1.28%       1.91%       1.28%
Portion of allowance
 assigned to fraud-related
 loans                               -         .25           -         .25
                            ----------  ----------  ----------  ----------
   Allowance for loan
    losses to loans ratio
    (GAAP)                        1.51%       1.53%       1.91%       1.53%
                            ==========  ==========  ==========  ==========
Nonperforming Assets to
 Total Assets Ratio
 Reconciliation
Nonperforming assets to
 total assets ratio
 excluding fraud-related
 assets                            .50%        .49%       2.16%        .49%
Fraud-related nonperforming
 assets                            .06         .28         .04         .28
                            ----------  ----------  ----------  ----------
   Nonperforming assets
    to total assets ratio
    (GAAP)                         .56%        .77%       2.20%        .77%
                            ==========  ==========  ==========  ==========
Net Charge Offs to Average
 Loans Ratio Reconciliation
Net charge offs to average
 loans ratio excluding
 fraud-related loans               .87%        .35%       1.74%        .21%
Charge offs of
 fraud-related loans              1.20           -           -           -
                            ----------  ----------  ----------  ----------
   Net charge offs to
    average loans ratio
    (GAAP)                        2.07%        .35%       1.74%        .21%
                            ==========  ==========  ==========  ==========
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
                                                       Three Months Ended
                                                          September 30,
                                                      --------------------
(in thousands, except per share data)                   2008       2007
                                                      ---------  ----------
Interest revenue:
  Loans, including fees                               $  93,233  $  127,213
  Investment securities:
    Taxable                                              18,258      16,637
    Tax exempt                                              348         428
  Federal funds sold and deposits in banks                  100         134
                                                      ---------  ----------
      Total interest revenue                            111,939     144,412
                                                      ---------  ----------
Interest expense:
  Deposits:
    NOW                                                   6,778      12,046
    Money market                                          2,296       5,002
    Savings                                                 153         553
    Time                                                 39,044      42,862
                                                      ---------  ----------
      Total deposit interest expense                     48,271      60,463
  Federal funds purchased, repurchase agreements, &
   other short-term borrowings                            1,116       4,738
  Federal Home Loan Bank advances                         2,105       5,902
  Long-term debt                                          2,227       2,100
                                                      ---------  ----------
    Total interest expense                               53,719      73,203
                                                      ---------  ----------
    Net interest revenue                                 58,220      71,209
  Provision for loan losses                              76,000       3,700
                                                      ---------  ----------
    Net interest revenue after provision for loan
     losses                                             (17,780)     67,509
                                                      ---------  ----------
Fee revenue:
  Service charges and fees                                8,171       7,855
  Mortgage loan and other related fees                    1,410       2,118
  Consulting fees                                         1,727       2,381
  Brokerage fees                                            905         895
  Securities gains, net                                     120         225
  Losses on prepayment of borrowings                          -           -
  Other                                                     788       2,141
                                                      ---------  ----------
    Total fee revenue                                    13,121      15,615
                                                      ---------  ----------
    Total revenue                                        (4,659)     83,124
                                                      ---------  ----------
Operating expenses:
  Salaries and employee benefits                         28,626      29,698
  Communications and equipment                            3,909       3,936
  Occupancy                                               3,905       3,617
  Advertising and public relations                        1,399       1,537
  Postage, printing and supplies                          1,493       1,479
  Professional fees                                       1,596       1,920
  Amortization of intangibles                               752         771
  Other                                                  15,290       5,224
                                                      ---------  ----------
    Total operating expenses                             56,970      48,182
                                                      ---------  ----------
  Income (loss) before income taxes                     (61,629)     34,942
  Income tax expense (benefit)                          (21,755)     12,406
                                                      ---------  ----------
  Net income (loss)                                   $ (39,874) $   22,536
                                                      =========  ==========
  Net income (loss) available to common shareholders  $ (39,878) $   22,532
                                                      =========  ==========
Earnings (loss) per common share:
  Basic                                               $    (.84) $      .47
  Diluted                                                  (.84)        .46
Dividends per common share                                  .09         .09
Weighted average common shares outstanding:
  Basic                                                  47,304      48,348
  Diluted                                                47,479      48,977
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
                                                        Nine Months Ended
                                                          September 30,
                                                      --------------------
(in thousands, except per share data)                   2008       2007
                                                      ---------  ---------
Interest revenue:
  Loans, including fees                               $ 299,550  $ 361,085
  Investment securities:
    Taxable                                              55,765     46,081
    Tax exempt                                            1,140      1,313
  Federal funds sold and deposits in banks                  372        272
                                                      ---------  ---------
      Total interest revenue                            356,827    408,751
                                                      ---------  ---------
Interest expense:
  Deposits:
    NOW                                                  22,581     34,143
    Money market                                          7,519     11,082
    Savings                                                 560      1,236
    Time                                                116,756    126,466
                                                      ---------  ---------
      Total deposit interest expense                    147,416    172,927
  Federal funds purchased, repurchase agreements, &
   other short-term borrowings                            7,254     10,226
  Federal Home Loan Bank advances                        10,668     15,738
  Long-term debt                                          6,366      6,505
                                                      ---------  ---------
    Total interest expense                              171,704    205,396
                                                      ---------  ---------
    Net interest revenue                                185,123    203,355
  Provision for loan losses                              99,000     26,100
                                                      ---------  ---------
    Net interest revenue after provision for loan
     losses                                              86,123    177,255
                                                      ---------  ---------
Fee revenue:
  Service charges and fees                               23,941     23,083
  Mortgage loan and other related fees                    5,575      6,817
  Consulting fees                                         5,786      6,369
  Brokerage fees                                          2,812      3,031
  Securities gains, net                                     477      1,818
  Losses on prepayment of borrowings                          -     (1,164)
  Other                                                   3,832      6,597
                                                      ---------  ---------
    Total fee revenue                                    42,423     46,551
                                                      ---------  ---------
    Total revenue                                       128,546    223,806
                                                      ---------  ---------
Operating expenses:
  Salaries and employee benefits                         86,133     88,037
  Communications and equipment                           11,593     11,593
  Occupancy                                              11,325     10,124
  Advertising and public relations                        4,759      5,651
  Postage, printing and supplies                          4,533      4,819
  Professional fees                                       5,196      5,409
  Amortization of intangibles                             2,264      1,968
  Other                                                  28,457     13,124
                                                      ---------  ---------
    Total operating expenses                             154,260    140,725
                                                      ---------  ---------
  Income (loss) before income taxes                     (25,714)    83,081
  Income tax expense (benefit)                           (9,011)    29,289
                                                      ---------  ---------
    Net income (loss)                                 $ (16,703) $  53,792
                                                      =========  =========
    Net income (loss) available to common
     shareholders                                     $ (16,715) $  53,778
                                                      =========  =========
Earnings (loss) per common share:
  Basic                                               $    (.35) $    1.18
  Diluted                                                  (.35)      1.16
Dividends per common share                                  .27        .27
Weighted average common shares outstanding:
  Basic                                                  47,111     45,452
  Diluted                                                47,334     46,235
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
                               September 30,  December 31,   September 30,
(in thousands, except share        2008           2007           2007
 and per share data)          -------------  -------------  -------------
                                (unaudited)     (audited)     (unaudited)
ASSETS
  Cash and due from banks      $     126,033  $     157,549  $     162,710
  Interest-bearing deposits
   in banks                           40,707         62,074         75,745
                               -------------  -------------  -------------
    Cash and cash equivalents        166,740        219,623        238,455
  Securities available for
   sale                            1,400,827      1,356,846      1,296,826
  Mortgage loans held for sale        17,763         28,004         23,717
  Loans, net of unearned income    5,829,937      5,929,263      5,952,749
    Less allowance for loan
     losses                          111,299         89,423         90,935
                               -------------  -------------  -------------
        Loans, net                 5,718,638      5,839,840      5,861,814
  Premises and equipment, net        179,727        180,088        174,918
  Accrued interest receivable         47,920         62,828         67,385
  Goodwill and other intangible
   assets                            322,544        325,305        326,080
  Other assets                       218,384        194,768        191,405
                               -------------  -------------  -------------
    Total assets               $   8,072,543  $   8,207,302  $   8,180,600
                               =============  =============  =============
LIABILITIES AND SHAREHOLDERS'
 EQUITY
Liabilities:
  Deposits:
    Demand                     $     680,196  $     700,941  $     737,357
    NOW                            1,393,928      1,474,818      1,464,956
    Money market                     394,358        452,917        495,092
    Savings                          179,274        186,392        195,132
    Time:
      Less than $100,000           1,814,926      1,573,604      1,595,515
      Greater than $100,000        1,481,512      1,364,763      1,358,302
      Brokered                       745,141        322,516        307,954
                               -------------  -------------  -------------
        Total deposits             6,689,335      6,075,951      6,154,308
  Federal funds purchased,
   repurchase agreements,
   and other short-term
   borrowings                        119,699        638,462        502,081
  Federal Home Loan Bank
   advances                          285,362        519,782        519,381
  Long-term debt                     137,996        107,996        107,996
  Accrued expenses and other
   liabilities                        23,271         33,209         63,073
                               -------------  -------------  -------------
    Total liabilities              7,255,663      7,375,400      7,346,839
                               -------------  -------------  -------------
Shareholders' equity:
  Preferred stock, $1 par
   value; $10 stated value;
   10,000,000 shares
   authorized; 25,800, 25,800
   and 25,800 shares
   issued and outstanding                258            258            258
  Common stock, $1 par
   value; 100,000,000
   shares authorized;
   48,809,301, 48,809,301
   and 48,809,301 shares
   issued                             48,809         48,809         48,809
  Common stock issuable;
   116,567, 73,250 and
   66,366 shares                       2,762          2,100          1,954
  Capital surplus                    457,779        462,881        462,499
  Retained earnings                  317,544        347,391        347,478
  Treasury stock;
   1,213,182, 1,905,921 and
   1,266,935 shares, at cost         (27,024)       (43,798)       (30,969)
  Accumulated other
   comprehensive income               16,752         14,261          3,732
                               -------------  -------------  -------------
    Total shareholders' equity       816,880        831,902        833,761
                               -------------  -------------  -------------
    Total liabilities and
     shareholders' equity      $   8,072,543  $   8,207,302  $   8,180,600
                               =============  =============  =============
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
                                                      2008
                                     -------------------------------------
(dollars in thousands, taxable         Average                     Avg.
 equivalent)                           Balance      Interest       Rate
                                     -----------  ------------ -----------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                            $ 5,889,168  $     93,270        6.30%
  Taxable securities (3)               1,422,321        18,258        5.13
  Tax-exempt securities (1)(3)            32,419           573        7.07
  Federal funds sold and other
   interest-earning assets                40,379           409        4.05
                                     -----------  ------------
      Total interest-earning assets    7,384,287       112,510        6.07
                                     -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses              (93,687)
  Cash and due from banks                111,741
  Premises and equipment                 180,825
  Other assets (3)                       563,714
                                     -----------
      Total assets                   $ 8,146,880
                                     ===========
Liabilities and Shareholders'
 Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
    NOW                              $ 1,463,744  $      6,778        1.84
    Money market                         421,626         2,296        2.17
    Savings                              182,525           153         .33
    Time less than $100,000            1,779,550        17,812        3.98
    Time greater than $100,000         1,530,719        15,825        4.11
    Brokered                             530,705         5,407        4.05
                                     -----------  ------------
      Total interest-bearing
       deposits                        5,908,869        48,271        3.25
                                     -----------  ------------
    Federal funds purchased and
     other borrowings                    256,742         1,116        1.73
    Federal Home Loan Bank advances      286,540         2,105        2.92
    Long-term debt                       118,756         2,227        7.46
                                     -----------  ------------
      Total borrowed funds               662,038         5,448        3.27
                                     -----------  ------------
      Total interest-bearing
       liabilities                     6,570,907        53,719        3.25
                                                  ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits          688,470
  Other liabilities                       50,016
                                     -----------
      Total liabilities                7,309,393
Shareholders' equity                     837,487
                                     -----------
      Total liabilities and
       shareholders' equity          $ 8,146,880
                                     ===========
Net interest revenue                              $     58,791
                                                  ============
Net interest-rate spread                                              2.82%
                                                               ===========
Net interest margin                                                   3.17%
                                                               ===========
(1)  Interest revenue on tax-exempt securities and loans has been increased
     to reflect comparable interest on taxable securities and loans. The
     rate used was 39%, reflecting the statutory federal income tax rate
     and the federal tax adjusted state income tax rate.
(2)  Included in the average balance of loans outstanding are loans where
     the accrual of interest has been discontinued.
(3)  Securities available for sale are shown at amortized cost. Pretax
     unrealized losses of $11.7 million in 2008 and $13.3 million in 2007
     are included in other assets for purposes of this presentation.
(4)  Net interest margin is taxable equivalent net-interest revenue divided
     by average interest-earning assets.
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
                                                      2007
                                     -------------------------------------
(dollars in thousands, taxable         Average                     Avg.
 equivalent)                           Balance      Interest       Rate
                                     -----------  ------------ -----------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                            $ 5,966,933  $    126,992        8.44%
  Taxable securities (3)               1,266,609        16,637        5.25
  Tax-exempt securities (1)(3)            41,583           704        6.77
  Federal funds sold and other
   interest-earning assets                57,367           551        3.84
                                     -----------  ------------
      Total interest-earning assets    7,332,492       144,884        7.85
                                     -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses              (93,832)
  Cash and due from banks                141,536
  Premises and equipment                 173,605
  Other assets (3)                       529,938
                                     -----------
      Total assets                   $ 8,083,739
                                     ===========
Liabilities and Shareholders'
 Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
    NOW                              $ 1,431,168  $     12,046        3.34
    Money market                         496,005         5,002        4.00
    Savings                              201,031           553        1.09
    Time less than $100,000            1,624,698        20,151        4.92
    Time greater than $100,000         1,391,139        18,192        5.19
    Brokered                             358,614         4,519        5.00
                                     -----------  ------------
      Total interest-bearing
       deposits                        5,502,655        60,463        4.36
                                     -----------  ------------
    Federal funds purchased and
     other borrowings                    348,472         4,738        5.39
    Federal Home Loan Bank advances      474,555         5,902        4.93
    Long-term debt                       119,596         2,100        6.97
                                     -----------  ------------
      Total borrowed funds               942,623        12,740        5.36
                                     -----------  ------------
      Total interest-bearing
       liabilities                     6,445,278        73,203        4.51
                                                  ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits          743,664
  Other liabilities                       60,703
                                     -----------
      Total liabilities                7,249,645
Shareholders' equity                     834,094
                                     -----------
      Total liabilities and
       shareholders' equity          $ 8,083,739
                                     ===========
Net interest revenue                              $     71,681
                                                  ============
Net interest-rate spread                                              3.34%
                                                               ===========
Net interest margin                                                   3.89%
                                                               ===========
(1)  Interest revenue on tax-exempt securities and loans has been increased
     to reflect comparable interest on taxable securities and loans. The
     rate used was 39%, reflecting the statutory federal income tax rate
     and the federal tax adjusted state income tax rate.
(2)  Included in the average balance of loans outstanding are loans where
     the accrual of interest has been discontinued.
(3)  Securities available for sale are shown at amortized cost. Pretax
     unrealized losses of $11.7 million in 2008 and $13.3 million in 2007
     are included in other assets for purposes of this presentation.
(4)  Net interest margin is taxable equivalent net-interest revenue divided
     by average interest-earning assets.
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Nine Months Ended September 30,
                                                      2008
                                     -------------------------------------
(dollars in thousands, taxable         Average                     Avg.
 equivalent)                           Balance      Interest       Rate
                                     -----------  ------------ -----------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                            $ 5,926,731  $    299,601        6.75%
  Taxable securities (3)               1,447,409        55,765        5.14
  Tax-exempt securities (1)(3)            34,988         1,876        7.15
  Federal funds sold and other
   interest-earning assets                41,889         1,292        4.11
                                     -----------  ------------
      Total interest-earning assets    7,451,017       358,534        6.43
                                     -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses              (93,165)
  Cash and due from banks                136,920
  Premises and equipment                 181,210
  Other assets (3)                       573,060
                                     -----------
      Total assets                   $ 8,249,042
                                     ===========
Liabilities and Shareholders'
 Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
    NOW                              $ 1,476,998  $     22,581        2.04
    Money market                         427,676         7,519        2.35
    Savings                              184,713           560         .40
    Time less than $100,000            1,659,308        53,320        4.29
    Time greater than $100,000         1,460,277        48,330        4.42
    Brokered                             480,166        15,106        4.20
                                     -----------  ------------
      Total interest-bearing
       deposits                        5,689,138       147,416        3.46
                                     -----------  ------------
    Federal funds purchased and
     other borrowings                    396,798         7,254        2.44
    Federal Home Loan Bank advances      452,826        10,668        3.15
    Long-term debt                       111,607         6,366        7.62
                                     -----------  ------------
      Total borrowed funds               961,231        24,288        3.38
                                     -----------  ------------
      Total interest-bearing
       liabilities                     6,650,369       171,704        3.45
                                                  ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits          681,615
  Other liabilities                       67,146
                                     -----------
      Total liabilities                7,399,130
Shareholders' equity                     849,912
                                     -----------
      Total liabilities and
       shareholders' equity          $ 8,249,042
                                     ===========
Net interest revenue                              $    186,830
                                                  ============
Net interest-rate spread                                              2.98%
                                                               ===========
Net interest margin                                                   3.35%
                                                               ===========
(1)  Interest revenue on tax-exempt securities and loans has been increased
     to reflect comparable interest on taxable securities and loans. The
     rate used was 39%, reflecting the statutory federal income tax rate
     and the federal tax adjusted state income tax rate.
(2)  Included in the average balance of loans outstanding are loans where
     the accrual of interest has been discontinued.
(3)  Securities available for sale are shown at amortized cost. Pretax
     unrealized gains of $5.7 million in 2008 and pretax unrealized losses
     of $10.4 million in 2007 are included in other assets for purposes of
     this presentation.
(4)  Net interest margin is taxable equivalent net-interest revenue divided
     by average interest-earning assets.
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Nine Months Ended September 30,
                                                      2007
                                     -------------------------------------
(dollars in thousands, taxable         Average                     Avg.
 equivalent)                           Balance      Interest       Rate
                                     -----------  ------------ -----------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                            $ 5,665,314  $    360,430        8.51%
  Taxable securities (3)               1,192,815        46,081        5.15
  Tax-exempt securities (1)(3)            42,368         2,160        6.80
  Federal funds sold and other
   interest-earning assets                51,076         1,479        3.86
                                     -----------  ------------
      Total interest-earning assets    6,951,573       410,150        7.89
                                     -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses              (78,541)
  Cash and due from banks                130,816
  Premises and equipment                 159,674
  Other assets (3)                       405,388
                                     -----------
      Total assets                   $ 7,568,910
                                     ===========
Liabilities and Shareholders'
 Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
    NOW                              $ 1,378,200  $     34,143        3.31
    Money market                         371,716        11,082        3.99
    Savings                              187,693         1,236         .88
    Time less than $100,000            1,631,243        59,925        4.91
    Time greater than $100,000         1,383,004        54,000        5.22
    Brokered                             342,162        12,541        4.90
                                     -----------  ------------
      Total interest-bearing
       deposits                        5,294,018       172,927        4.37
                                     -----------  ------------
    Federal funds purchased and
     other borrowings                    255,115        10,226        5.36
    Federal Home Loan Bank advances      430,151        15,738        4.89
    Long-term debt                       115,390         6,505        7.54
                                     -----------  ------------
      Total borrowed funds               800,656        32,469        5.42
                                     -----------  ------------
      Total interest-bearing
       liabilities                     6,094,674       205,396        4.51
                                                  ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits          693,207
  Other liabilities                       70,079
                                     -----------
      Total liabilities                6,857,960
Shareholders' equity                     710,950
                                     -----------
      Total liabilities and
       shareholders' equity          $ 7,568,910
                                     ===========
Net interest revenue                              $    204,754
                                                  ============
Net interest-rate spread                                              3.38%
                                                               ===========
Net interest margin                                                   3.94%
                                                               ===========
(1)  Interest revenue on tax-exempt securities and loans has been increased
     to reflect comparable interest on taxable securities and loans. The
     rate used was 39%, reflecting the statutory federal income tax rate
     and the federal tax adjusted state income tax rate.
(2)  Included in the average balance of loans outstanding are loans where
     the accrual of interest has been discontinued.
(3)  Securities available for sale are shown at amortized cost. Pretax
     unrealized gains of $5.7 million in 2008 and pretax unrealized losses
     of $10.4 million in 2007 are included in other assets for purposes of
     this presentation.
(4)  Net interest margin is taxable equivalent net-interest revenue divided
     by average interest-earning assets.

For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Email Contact


SOURCE: United Community Banks, Inc.

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