United Community Banks, Inc.
Jul 24, 2009

United Community Banks, Inc. Reports Net Operating Loss for Second Quarter 2009

BLAIRSVILLE, GA, Jul 24, 2009 (MARKETWIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI)

--  Provision for loan losses of $60 million exceeded charge-offs by $1.7
    million
--  Allowance-to-loans ratio of 2.64 percent, up from 2.56 percent last
    quarter
--  Further margin improvement of 20 basis points this quarter to 3.28
    percent
--  Acquisition of Southern Community Bank added $230 million of covered
    assets and $200 million of customer deposits with a gain on acquisition of
    $11.4 million
--  Capital levels remain strong


United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss of $23.1 million, or 53 cents per diluted share, for the second quarter of 2009. The net operating loss reflects elevated credit costs, including $60 million provision for loan losses. Net operating loss does not reflect an acquisition gain of $11.4 million related to the purchase of Southern Community Bank from the FDIC, which is considered a non-recurring item and excluded from operating earnings. Including this non-recurring gain the net loss for the quarter was $16.0 million, or 38 cents per diluted share.

United's net operating loss for the first six months of 2009 was $55.0 million, or $1.24 per diluted share. The net operating loss for the first six months does not reflect a $70 million non-cash charge for impairment of goodwill and $2.9 million in severance costs relating to a reduction in work force that were incurred during the first quarter and the $11.4 million gain on acquisition in the second quarter, all of which are considered non-recurring items and are therefore excluded from operating earnings. Including these non-recurring items the net loss for the first six months was of 2009 $119.8 million, or $2.57 per diluted share.

"We continued our strategy of aggressively disposing of problem credits," stated Jimmy Tallent, president and chief executive officer. "At the same time, we are sharply focused on building core earnings through stronger customer relationships and core deposits."

"As part of that strategy, we acquired Southern Community Bank in an FDIC assisted transaction which will allow us to deepen our market share in the south side of metro Atlanta," added Tallent. "Southern Community Bank brings $208 million in customer deposits, along with 60 experienced employees in five offices. The acquisition of Southern Community Bank and its locations provided a good fit into the existing United market. Four of the new offices fill a gap in the south side of the Atlanta market. The other office will be closed and then we will merge one of our existing offices into their superior location in the same market. Further, through our discounted bid and the loss share agreement, we have substantially eliminated all credit related exposure associated with the transaction. So, we have classified Southern's loans, foreclosed properties and FDIC receivable into one category and line on the balance sheet -- 'covered assets.' These covered assets are excluded from all credit quality disclosures and ratios. In addition, the transaction provided United with capital through the after-tax gain of $7.1 million."

Total loans were $5.5 billion at quarter-end, down $120 million from last quarter and $420 million from a year ago, reflecting the company's continued efforts to reduce exposure to the residential construction market. At June 30, 2009, residential construction loans were $1.3 billion, or 24 percent of total loans, a decrease of $430 million from a year ago and $115 million from the first quarter of 2009.

Taxable equivalent net interest revenue of $60.9 million reflected an increase of $3.5 million from last quarter and a decrease of $871 thousand from a year ago. The taxable equivalent net interest margin was 3.28 percent compared with 3.08 percent for the first quarter of 2009 and 3.32 percent for the second quarter of 2008.

"The improvement in our net interest margin this quarter reflects a continuation of the program we began in the latter part of 2008 to improve loan and deposit pricing," stated Tallent. "We maintained our loan pricing and credit spreads, decreased deposit interest rates and, with sustained liquidity, we were able to let higher-cost time deposits and brokered deposits run off. We will continue to actively pursue these strategies to improve our margin in 2009, while balancing liquidity needs with our goal of maximizing pre-tax, pre-provision core earnings."

"Excluding public funds and the acquisition, core deposits increased $129 million this quarter, or 12 percent on an annualized basis, reflective of the United Express program for customer referrals and cross selling," stated Tallent. "We added 13,884 new services this quarter and opened 6,575 net new deposit accounts year-to-date."

The second quarter provision for loan losses was $60 million, compared with $65 million for the first quarter of 2009. Net charge-offs for the second quarter were $58.3 million compared with $43.3 million for the first quarter of 2009. At quarter-end, non-performing assets totaled $392.6 million compared with $334.5 million at March 31, 2009. The ratio of non-performing assets to total assets at the end of the second and first quarters was 4.67 percent and 4.11 percent, respectively. The allowance for loan losses to total loans was 2.64 percent and 2.56 percent, respectively.

"Credit quality continues to be a primary area of focus for us, particularly within the Atlanta residential construction portfolio," Tallent said. "While we have seen some problem credits in other loan categories and markets, our principal challenge remains in the residential construction portfolio. We have seen a rise in all categories of non-performing assets, but the inflow is still driven by the continued weakness in the housing and construction markets. We will continue to aggressively work through our problem credits and pursue the best economic outcome for our company in each instance."

Operating fee revenue of $13.1 million was up $204 thousand from last quarter and down $2.1 million from a year ago, excluding the $11.4 million gain from the acquisition of Southern Community Bank. Service charges and fees on deposit accounts of $7.6 million reflected a $400 thousand decrease from a year ago due to lower activity and fewer transaction charges. Consulting fees were down $507 thousand from last year due to weakness in the market. However, consulting fees increased $724 thousand from the first quarter, reflecting a shift back to non-United projects. Mortgage loan fees of $2.8 million were up $623 thousand from a year ago due to a high level of refinancing activity.

Operating expenses for the second quarter of 2009 were $55.3 million reflecting a $5.6 million increase from last year. The increase was primarily due to higher foreclosed property costs of $2.9 million and an increase in FDIC insurance premiums of $5.5 million, including a $3.7 million special assessment. Salaries and employee benefit costs of $28.1 million decreased $695 thousand from a year ago. The decrease from last year and linked quarter was primarily due to the reduction in work force, down 165 staff year-to-date and offset partially by higher mortgage commissions and incentive program costs and the 60 staff added by the acquisition. Other expenses of $1.2 million decreased $2.2 million from last year due to the $2.0 million expense recovery related to the decision to reverse the surrender of bank owned life insurance policies in the second quarter.

The effective tax rate for the second quarter of 2009 was 47.5 percent, compared to 35.5 percent for the second quarter of 2008. The tax rate was higher this quarter reflective of a $2.9 million tax adjustment recorded in the second quarter due to reversing the surrender of bank owned life insurance policies. The projected effective tax rate for the balance of 2009 is 38 percent.

At June 30, 2009, the company's regulatory capital ratios were as follows: Tier I Risk-Based Capital of 10.6 percent; Leverage of 7.8 percent; and, Total Risk-Based of 13.3 percent. Also, the average tangible equity to assets ratio was 8.0 percent, the average tangible common equity to assets ratio was 5.8 percent and the tangible common equity to risk weighted assets was 7.5 percent.

"Today, based on our stress models of the loan portfolio and ranges of losses through 2010, we believe our capital position is sound," stated Tallent. "Assuming we incur these losses, our models still indicate all regulatory capital ratios will remain above well capitalized levels. But if the credit cycle lengthens, if the economy worsens beyond what our models have assumed, or if there would be compelling reasons to offensively add additional capital, we clearly will do what is best for the long-term success of the company. Our absolute goal is financial soundness balanced with creating and retaining shareholder value."

Conference Call

United Community Banks will hold a conference call today, Friday, July 24, 2009, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (866) 431-5320 and use the password 'UCBI.' The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of the company's website at www.ucbi.com. The Investor Presentation for Second Quarter 2009 can be accessed on the website by selecting 'Presentations' within the Investor Relations section.

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 $8.4 billion and operates 27 community banks with 110 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 3 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
                                            2009                 2008
                                 -------------------------   ------------
(in thousands, except per share     Second         First        Fourth
data; taxable equivalent)           Quarter       Quarter       Quarter
                                 -----------   -----------   ------------
INCOME SUMMARY
Interest revenue                 $   102,737   $   103,562   $    108,434
Interest expense                      41,855        46,150         56,561
                                 -----------   -----------   ------------
    Net interest revenue              60,882        57,412         51,873
Provision for loan losses             60,000        65,000         85,000
Operating fee revenue (1)             13,050        12,846         10,718
                                 -----------   -----------   ------------
   Total operating revenue            13,932         5,258        (22,409)
Operating expenses (2)                55,348        52,569         52,439
                                 -----------   -----------   ------------
   Operating (loss) income before
    taxes                            (41,416)      (47,311)       (74,848)
Income tax (benefit) expense         (18,353)      (15,335)       (28,101)
                                 -----------   -----------   ------------
   Net operating (loss) income
   (1)(2)                            (23,063)      (31,976)       (46,747)
Gain from acquisition, net of tax
 benefit                               7,062             -              -
Noncash goodwill impairment
 charge                                    -       (70,000)             -
Severance costs, net of tax
 benefit                                   -        (1,797)             -
                                 -----------   -----------   ------------
   Net (loss) income                 (16,001)     (103,773)       (46,747)
Preferred dividends and discount
 accretion                             2,559         2,554            712
                                 -----------   -----------   ------------
Net (loss) income available to
 common shareholders             $   (18,560)  $  (106,327)  $    (47,459)
                                 ===========   ===========   ============
PERFORMANCE MEASURES
  Per common share:
    Diluted operating (loss)
     earnings (1)(2)             $      (.53)  $      (.71)  $       (.99)
    Diluted (loss) earnings             (.38)        (2.20)          (.99)
    Cash dividends declared                 -             -              -
    Stock dividends declared (6)   1 for 130     1 for 130      1 for 130
    Book value                         13.87         14.70          16.95
    Tangible book value (4)             8.85          9.65          10.39
  Key performance ratios:
    Return on equity (3)(5)           (11.42)%      (58.28)%       (23.83)%
    Return on assets (5)                (.79)        (5.06)         (2.20)
    Net interest margin (5)             3.28          3.08           2.70
    Operating efficiency ratio
     (1)(2)(4)                         74.15         75.15          81.34
    Equity to assets                   10.76         11.64          10.08
    Tangible equity to assets (4)       8.00          8.30           6.59
    Tangible common equity to
     assets (4)                         5.81          6.13           6.23
    Tangible common equity to
     risk-weighted assets (4)           7.48          8.03           8.34
ASSET QUALITY *
  Non-performing loans (NPLs)    $   287,848   $   259,155   $    190,723
  Foreclosed properties              104,754        75,383         59,768
                                 -----------   -----------   ------------
    Total non-performing assets
     (NPAs)                          392,602       334,538        250,491
  Allowance for loan losses          145,678       143,990        122,271
  Net charge-offs                     58,312        43,281         74,028
  Allowance for loan losses to
   loans                                2.64%         2.56%          2.14%
  Net charge-offs to average
   loans (5)                            4.18          3.09           5.09
  NPAs to loans and foreclosed
   properties                           6.99          5.86           4.35
  NPAs to total assets                  4.67          4.11           2.94
AVERAGE BALANCES
  Loans                          $ 5,597,259   $ 5,675,054   $  5,784,139
  Investment securities            1,771,482     1,712,654      1,508,808
  Earning assets                   7,442,178     7,530,230      7,662,536
  Total assets                     8,168,147     8,312,648      8,449,097
  Deposits                         6,544,537     6,780,531      6,982,229
  Shareholders' equity               879,210       967,505        851,956
  Common shares - basic               48,794        48,324         47,844
  Common shares - diluted             48,794        48,324         47,844
AT PERIOD END
  Loans                          $ 5,513,087   $ 5,632,705   $  5,704,861
  Investment securities            1,816,787     1,719,033      1,617,187
  Total assets                     8,403,046     8,140,909      8,520,765
  Deposits                         6,848,760     6,616,488      7,003,624
  Shareholders' equity               855,272       888,853        989,382
  Common shares outstanding           48,933        48,487         48,009
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
                                             2008               Second
                                  -------------------------     Quarter
(in thousands, except per share       Third        Second      2009-2008
data; taxable equivalent)           Quarter       Quarter        Change
                                  -----------   ------------  -----------
INCOME SUMMARY
Interest revenue                  $   112,510   $    116,984
Interest expense                       53,719         55,231
                                  -----------   ------------
    Net interest revenue               58,791         61,753           (1)%
Provision for loan losses              76,000         15,500
Operating fee revenue (1)              13,121         15,105          (14)
                                  -----------   ------------
   Total operating revenue             (4,088)        61,358           NM
Operating expenses (2)                 56,970         49,761           11
                                  -----------   ------------
   Operating (loss) income before
    taxes                             (61,058)        11,597           NM
Income tax (benefit) expense          (21,184)         4,504
                                  -----------   ------------
   Net operating (loss) income
    (1)(2)                            (39,874)         7,093           NM
Gain from acquisition, net of tax
 benefit                                    -              -
Noncash goodwill impairment
 charge                                     -              -
Severance costs, net of tax
 benefit                                    -              -
                                  -----------   ------------
   Net (loss) income                  (39,874)         7,093           NM
Preferred dividends and discount
 accretion                                  4              4
                                  -----------   ------------
Net (loss) income available to
 common shareholders              $   (39,878)  $      7,089           NM
                                  ===========   ============
PERFORMANCE MEASURES
  Per common share:
    Diluted operating (loss)
     earnings (1)(2)              $      (.84)  $        .15           NM
    Diluted (loss) earnings              (.84)           .15           NM
    Cash dividends declared                 -            .09
    Stock dividends declared (6)    1 for 130              -
    Book value                          17.12          17.75          (22)
    Tangible book value (4)             10.48          11.03          (20)
  Key performance ratios:
    Return on equity (3)(5)            (19.07)%         3.41%
    Return on assets (5)                (1.95)           .34
    Net interest margin (5)              3.17           3.32
    Operating efficiency ratio
     (1)(2)(4)                          79.35          65.05
    Equity to assets                    10.28          10.33
    Tangible equity to assets (4)        6.65           6.77
    Tangible common equity to
     assets (4)                          6.65           6.77
    Tangible common equity to
     risk-weighted assets (4)            8.26           8.51
ASSET QUALITY *
  Non-performing loans (NPLs)     $   139,266   $    123,786
  Foreclosed properties                38,438         28,378
                                  -----------   ------------
    Total non-performing assets
     (NPAs)                           177,704        152,164
  Allowance for loan losses           111,299         91,035
  Net charge-offs                      55,736         14,313
  Allowance for loan losses to
   loans                                 1.91%          1.53%
  Net charge-offs to average
   loans (5)                             3.77            .97
  NPAs to loans and foreclosed
   properties                            3.03           2.55
  NPAs to total assets                   2.20           1.84
AVERAGE BALANCES
  Loans                           $ 5,889,168   $  5,933,143           (6)
  Investment securities             1,454,740      1,507,240           18
  Earning assets                    7,384,287      7,478,018            -
  Total assets                      8,146,880      8,295,748           (2)
  Deposits                          6,597,339      6,461,361            1
  Shareholders' equity                837,487        856,727            3
  Common shares - basic                47,417         47,158
  Common shares - diluted              47,417         47,249
AT PERIOD END
  Loans                           $ 5,829,937   $  5,933,141           (7)
  Investment securities             1,400,827      1,430,588           27
  Total assets                      8,072,543      8,264,051            2
  Deposits                          6,689,335      6,696,456            2
  Shareholders' equity                816,880        837,890            2
  Common shares outstanding            47,596         47,096
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
                                          For the Six
                                          Months Ended            YTD
(in thousands, except per share   -------------------------    2009-2008
data; taxable equivalent)             2009          2008         Change
                                  -----------   ------------  -----------
INCOME SUMMARY
Interest revenue                  $   206,299   $    246,025
Interest expense                       88,005        117,985
                                  -----------   ------------
    Net interest revenue              118,294        128,040           (8)%
Provision for loan losses             125,000         23,000
Operating fee revenue (1)              25,896         29,302          (12)
                                  -----------   ------------
   Total operating revenue             19,190        134,342           NM
Operating expenses (2)                107,917         97,290           11
                                  -----------   ------------
    Operating (loss) income before
     taxes                            (88,727)        37,052           NM
Income tax (benefit) expense          (33,688)        13,881
                                  -----------   ------------
    Net operating (loss) income
     (1)(2)                           (55,039)        23,171           NM
Gain from acquisition, net of tax
 benefit                                7,062              -
Noncash goodwill impairment
 charge                               (70,000)             -
Severance costs, net of tax
 benefit                               (1,797)             -
                                  -----------   ------------
    Net (loss) income                (119,774)        23,171           NM
Preferred dividends and discount
 accretion                              5,113              8
                                  -----------   ------------
Net (loss) income available to
 common shareholders              $  (124,887)  $     23,163           NM
                                  ===========   ============
PERFORMANCE MEASURES
  Per common share:
    Diluted operating (loss)
     earnings (1)(2)              $     (1.24)  $        .49           NM
    Diluted (loss) earnings             (2.57)           .49           NM
    Cash dividends declared                 -            .18
    Stock dividends declared (6)    2 for 130              -
    Book value                          13.87          17.75          (22)
    Tangible book value (4)              8.85          11.03          (20)
  Key performance ratios:
    Return on equity (3)(5)            (36.20)%         5.61%
    Return on assets (5)                (2.93)           .56
    Net interest margin (5)              3.18           3.43
    Operating efficiency ratio
     (1)(2)(4)                          74.63          61.97
    Equity to assets                    11.20          10.31
    Tangible equity to assets (4)        8.15           6.75
    Tangible common equity to
     assets (4)                          5.97           6.75
    Tangible common equity to
     risk-weighted assets (4)            7.48           8.51
ASSET QUALITY *
  Non-performing loans (NPLs)     $   287,848   $    123,786
  Foreclosed properties               104,754         28,378
                                  -----------   ------------
    Total non-performing assets
     (NPAs)                           392,602        152,164
  Allowance for loan losses           145,678         91,035
  Net charge-offs                     101,593         21,388
  Allowance for loan losses to
   loans                                 2.64%          1.53%
  Net charge-offs to average
   loans (5)                             3.64            .72
  NPAs to loans and foreclosed
   properties                            6.99           2.55
  NPAs to total assets                   4.67           1.84
AVERAGE BALANCES
  Loans                           $ 5,635,942   $  5,945,720           (5)
  Investment securities             1,742,231      1,496,377           16
  Earning assets                    7,485,961      7,484,749            -
  Total assets                      8,239,997      8,300,686           (1)
  Deposits                          6,661,881      6,256,217            6
  Shareholders' equity                923,114        856,193            8
  Common shares - basic                48,560         47,105
  Common shares - diluted              48,560         47,260
AT PERIOD END
  Loans                           $ 5,513,087   $  5,933,141           (7)
  Investment securities             1,816,787      1,430,588           27
  Total assets                      8,403,046      8,264,051            2
  Deposits                          6,848,760      6,696,456            2
  Shareholders' equity                855,272        837,890            2
  Common shares outstanding            48,933         47,096
(1)  Excludes the gain from acquisition of $11.4 million, net of income tax
expense of $4.3 million in the second quarter of 2009.  (2)  Excludes the
non-recurring goodwill impairment charge of $70 million and severance costs
of $2.9 million, net of income tax benefit of $1.1 million in the first
quarter of 2009.  (3)  Net income available to common shareholders, which
excludes preferred stock dividends, divided by average realized common
equity, which excludes accumulated other comprehensive income (loss).  (4)
 Excludes effect of acquisition related intangibles and associated
amortization.  (5)  Annualized.  (6)  Number of new shares issued for
shares currently held.  NM - Not meaningful.
* Excludes covered loans and covered NPAs
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
                                                          2009
                                              ---------------------------
(in thousands, except per share                 Second          First
data; taxable equivalent)                       Quarter        Quarter
                                              ------------   ------------
Interest revenue reconciliation
Interest revenue - taxable equivalent         $    102,737   $    103,562
Taxable equivalent adjustment                         (463)          (488)
                                              ------------   ------------
    Interest revenue (GAAP)                   $    102,274   $    103,074
                                              ============   ============
Net interest revenue reconciliation
Net interest revenue - taxable equivalent     $     60,882   $     57,412
Taxable equivalent adjustment                         (463)          (488)
                                              ------------   ------------
    Net interest revenue (GAAP)               $     60,419   $     56,924
                                              ============   ============
Fee revenue reconciliation
Operating fee revenue                         $     13,050   $     12,846
Gain from acquisition                               11,390              -
                                              ------------   ------------
    Fee revenue (GAAP)                        $     24,440   $     12,846
                                              ============   ============
Total revenue reconciliation
Total operating revenue                       $     13,932   $      5,258
Taxable equivalent adjustment                         (463)          (488)
Gain from acquisition                               11,390              -
                                              ------------   ------------
    Total revenue (GAAP)                      $     24,859   $      4,770
                                              ============   ============
Expense reconciliation
Operating expense                             $     55,348   $     52,569
Noncash goodwill impairment charge                       -         70,000
Severance costs                                          -          2,898
                                              ------------   ------------
    Operating expense (GAAP)                  $     55,348   $    125,467
                                              ============   ============
(Loss) income before taxes reconciliation
Operating (loss) income before taxes          $    (41,416)  $    (47,311)
Taxable equivalent adjustment                         (463)          (488)
Gain from acquisition                               11,390              -
Noncash goodwill impairment charge                       -        (70,000)
Severance costs                                          -         (2,898)
                                              ------------   ------------
    (Loss) income before taxes (GAAP)         $    (30,489)  $   (120,697)
                                              ============   ============
Income tax (benefit) expense reconciliation
Operating income tax (benefit) expense        $    (18,353)  $    (15,335)
Taxable equivalent adjustment                         (463)          (488)
Gain from acquisition, tax expense                   4,328              -
Severance costs, tax benefit                             -         (1,101)
                                              ------------   ------------
    Income tax (benefit) expense (GAAP)       $    (14,488)  $    (16,924)
                                              ============   ============
(Loss) earnings per common share
 reconciliation
Operating (loss) earnings per common share    $      (0.53)  $      (0.71)
Gain from acquisition                                 0.15              -
Noncash goodwill impairment charge                       -          (1.45)
Severance costs                                          -          (0.04)
                                              ------------   ------------
    (Loss) earnings per common share (GAAP)   $      (0.38)  $      (2.20)
                                              ============   ============
Book value reconciliation
Tangible book value                           $       8.85   $       9.65
Effect of goodwill and other intangibles              5.02           5.05
                                              ------------   ------------
   Book value (GAAP)                          $      13.87   $      14.70
                                              ============   ============
Efficiency ratio reconciliation
Operating efficiency ratio                           74.15%         75.15%
Gain from acquisition                                (9.82)             -
Noncash goodwill impairment charge                       -         100.06
Severance costs                                          -           4.14
                                              ------------   ------------
    Efficiency ratio (GAAP)                          64.33%        179.35%
                                              ============   ============
Average equity to assets reconciliation
Tangible common equity to assets                      5.81%          6.13%
Effect of preferred equity                            2.19           2.17
                                              ------------   ------------
    Tangible equity to assets                         8.00           8.30
Effect of goodwill and other intangibles              2.76           3.34
                                              ------------   ------------
    Equity to assets (GAAP)                          10.76%         11.64%
                                              ============   ============
Actual tangible common equity to risk-weighted
 assets reconciliation
Tangible common equity to risk-weighted assets        7.48%          8.03%
Effect of other comprehensive income                  (.72)         (1.00)
Effect of trust preferred                              .89            .89
Effect of preferred equity                            3.00           2.96
                                              ------------   ------------
    Tier I capital ratio (Regulatory)                10.65%         10.88%
                                              ============   ============
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
                                                      2008
                                       ----------------------------------
(in thousands, except per share          Fourth      Third       Second
data; taxable equivalent)                Quarter     Quarter     Quarter
                                       ----------  ----------  ----------
Interest revenue reconciliation
Interest revenue - taxable equivalent  $  108,434  $  112,510  $  116,984
Taxable equivalent adjustment                (553)       (571)       (606)
                                       ----------  ----------  ----------
    Interest revenue (GAAP)            $  107,881  $  111,939  $  116,378
                                       ==========  ==========  ==========
Net interest revenue reconciliation
Net interest revenue - taxable
 equivalent                            $   51,873  $   58,791  $   61,753
Taxable equivalent adjustment                (553)       (571)       (606)
                                       ----------  ----------  ----------
    Net interest revenue (GAAP)        $   51,320  $   58,220  $   61,147
                                       ==========  ==========  ==========
Fee revenue reconciliation
Operating fee revenue                  $   10,718  $   13,121  $   15,105
Gain from acquisition                           -           -           -
                                       ----------  ----------  ----------
    Fee revenue (GAAP)                 $   10,718  $   13,121  $   15,105
                                       ==========  ==========  ==========
Total revenue reconciliation
Total operating revenue                $  (22,409) $   (4,088) $   61,358
Taxable equivalent adjustment                (553)       (571)       (606)
Gain from acquisition                           -           -           -
                                       ----------  ----------  ----------
    Total revenue (GAAP)               $  (22,962) $   (4,659) $   60,752
                                       ==========  ==========  ==========
Expense reconciliation
Operating expense                      $   52,439  $   56,970  $   49,761
Noncash goodwill impairment charge              -           -           -
Severance costs                                 -           -           -
                                       ----------  ----------  ----------
    Operating expense (GAAP)           $   52,439  $   56,970  $   49,761
                                       ==========  ==========  ==========
(Loss) income before taxes
 reconciliation
Operating (loss) income before taxes   $  (74,848) $  (61,058) $   11,597
Taxable equivalent adjustment                (553)       (571)       (606)
Gain from acquisition                           -           -           -
Noncash goodwill impairment charge              -           -           -
Severance costs                                 -           -           -
                                       ----------  ----------  ----------
    (Loss) income before taxes (GAAP)  $  (75,401) $  (61,629) $   10,991
                                       ==========  ==========  ==========
Income tax (benefit) expense
 reconciliation
Operating income tax (benefit) expense $  (28,101) $  (21,184) $    4,504
Taxable equivalent adjustment                (553)       (571)       (606)
Gain from acquisition, tax expense              -           -           -
Severance costs, tax benefit                    -           -           -
                                       ----------  ----------  ----------
   Income tax (benefit) expense (GAAP) $  (28,654) $  (21,755) $    3,898
                                       ==========  ==========  ==========
(Loss) earnings per common share
 reconciliation
Operating (loss) earnings per common
 share                                 $    (0.99) $    (0.84) $     0.15
Gain from acquisition                           -           -           -
Noncash goodwill impairment charge              -           -           -
Severance costs                                 -           -           -
                                       ----------  ----------  ----------
    (Loss) earnings per common share
     (GAAP)                            $    (0.99) $    (0.84) $     0.15
                                       ==========  ==========  ==========
Book value reconciliation
Tangible book value                    $    10.39  $    10.48  $    11.03
Effect of goodwill and other
 intangibles                                 6.56        6.64        6.72
                                       ----------  ----------  ----------
   Book value (GAAP)                   $    16.95  $    17.12  $    17.75
                                       ==========  ==========  ==========
Efficiency ratio reconciliation
Operating efficiency ratio                  81.34%      79.35%      65.05%
Gain from acquisition                           -           -           -
Noncash goodwill impairment charge              -           -           -
Severance costs                                 -           -           -
                                       ----------  ----------  ----------
    Efficiency ratio (GAAP)                 81.34%      79.35%      65.05%
                                       ==========  ==========  ==========
Average equity to assets reconciliation
Tangible common equity to assets             6.23%       6.65%       6.77%
Effect of preferred equity                    .36           -           -
                                       ----------  ----------  ----------
    Tangible equity to assets                6.59        6.65        6.77
Effect of goodwill and other
 intangibles                                 3.49        3.63        3.56
                                       ----------  ----------  ----------
    Equity to assets (GAAP)                 10.08%      10.28%      10.33%
                                       ==========  ==========  ==========
Actual tangible common equity to
 risk-weighted assets reconciliation
Tangible common equity to risk-weighted
 assets                                      8.34%       8.26%       8.51%
Effect of other comprehensive income         (.91)       (.28)       (.01)
Effect of trust preferred                     .88         .68         .67
Effect of preferred equity                   2.90           -           -
                                       ----------  ----------  ----------
    Tier I capital ratio (Regulatory)       11.21%       8.66%       9.17%
                                       ==========  ==========  ==========
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
                                                        For the Six
                                                        Months Ended
(in thousands, except per share                  -------------------------
data; taxable equivalent)                            2009          2008
                                                 -----------   -----------
Interest revenue reconciliation
Interest revenue - taxable equivalent            $   206,299   $   246,025
Taxable equivalent adjustment                           (951)       (1,137)
                                                 -----------   -----------
    Interest revenue (GAAP)                      $   205,348   $   244,888
                                                 ===========   ===========
Net interest revenue reconciliation
Net interest revenue - taxable equivalent        $   118,294   $   128,040
Taxable equivalent adjustment                           (951)       (1,137)
                                                 -----------   -----------
    Net interest revenue (GAAP)                  $   117,343   $   126,903
                                                 ===========   ===========
Fee revenue reconciliation
Operating fee revenue                            $    25,896   $    29,302
Gain from acquisition                                 11,390             -
                                                 -----------   -----------
    Fee revenue (GAAP)                           $    37,286   $    29,302
                                                 ===========   ===========
Total revenue reconciliation
Total operating revenue                          $    19,190   $   134,342
Taxable equivalent adjustment                           (951)       (1,137)
Gain from acquisition                                 11,390             -
                                                 -----------   -----------
    Total revenue (GAAP)                         $    29,629   $   133,205
                                                 ===========   ===========
Expense reconciliation
Operating expense                                $   107,917   $    97,290
Noncash goodwill impairment charge                    70,000             -
Severance costs                                        2,898             -
                                                 -----------   -----------
    Operating expense (GAAP)                     $   180,815   $    97,290
                                                 ===========   ===========
(Loss) income before taxes reconciliation
Operating (loss) income before taxes             $   (88,727)  $    37,052
Taxable equivalent adjustment                           (951)       (1,137)
Gain from acquisition                                 11,390             -
Noncash goodwill impairment charge                   (70,000)            -
Severance costs                                       (2,898)            -
                                                 -----------   -----------
    (Loss) income before taxes (GAAP)            $  (151,186)  $    35,915
                                                 ===========   ===========
Income tax (benefit) expense reconciliation
Operating income tax (benefit) expense           $   (33,688)  $    13,881
Taxable equivalent adjustment                           (951)       (1,137)
Gain from acquisition, tax expense                     4,328             -
Severance costs, tax benefit                          (1,101)            -
                                                 -----------   -----------
    Income tax (benefit) expense (GAAP)          $   (31,412)  $    12,744
                                                 ===========   ===========
(Loss) earnings per common share reconciliation
Operating (loss) earnings per common share       $     (1.24)  $      0.49
Gain from acquisition                                   0.15             -
Noncash goodwill impairment charge                     (1.44)            -
Severance costs                                        (0.04)            -
                                                 -----------   -----------
    (Loss) earnings per common share (GAAP)      $     (2.57)  $      0.49
                                                 ===========   ===========
Book value reconciliation
Tangible book value                              $      8.85   $     11.03
Effect of goodwill and other intangibles                5.02          6.72
                                                 -----------   -----------
   Book value (GAAP)                             $     13.87   $     17.75
                                                 ===========   ===========
Efficiency ratio reconciliation
Operating efficiency ratio                             74.63%        61.97%
Gain from acquisition                                  (9.12)            -
Noncash goodwill impairment charge                     48.41             -
Severance costs                                         2.00             -
                                                 -----------   -----------
    Efficiency ratio (GAAP)                           115.92%        61.97%
                                                 ===========   ===========
Average equity to assets reconciliation
Tangible common equity to assets                        5.97%         6.75%
Effect of preferred equity                              2.18             -
                                                 -----------   -----------
    Tangible equity to assets                           8.15          6.75
Effect of goodwill and other intangibles                3.05          3.56
                                                 -----------   -----------
    Equity to assets (GAAP)                            11.20%        10.31%
                                                 ===========   ===========
Actual tangible common equity to risk-weighted
 assets reconciliation
Tangible common equity to risk-weighted assets          7.48%         8.51%
Effect of other comprehensive income                    (.72)         (.01)
Effect of trust preferred                                .89           .67
Effect of preferred equity                              3.00             -
                                                 -----------   -----------
    Tier I capital ratio (Regulatory)                  10.65%         9.17%
                                                 ===========   ===========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
                                                    2009            2008
                                            --------------------- ---------
                                              Second      First    Fourth
(in millions)                               Quarter (1)  Quarter   Quarter
                                            ----------- --------- ---------
LOANS BY CATEGORY
Commercial (sec. by RE)                     $     1,797 $   1,779 $   1,627
Commercial construction                             379       377       500
Commercial & industrial                             399       387       410
                                            ----------- --------- ---------
      Total commercial                            2,575     2,543     2,537
Residential construction                          1,315     1,430     1,479
Residential mortgage                              1,470     1,504     1,526
Consumer / installment                              153       156       163
                                            ----------- --------- ---------
      Total loans                           $     5,513 $   5,633 $   5,705
                                            =========== ========= =========
LOANS BY MARKET
Atlanta MSA                                 $     1,605 $   1,660 $   1,706
Gainesville MSA                                     413       422       420
North Georgia                                     1,978     2,014     2,040
Western North Carolina                              794       808       810
Coastal Georgia                                     455       460       464
East Tennessee                                      268       269       265
                                            ----------- --------- ---------
      Total loans                           $     5,513 $   5,633 $   5,705
                                            =========== ========= =========
RESIDENTIAL CONSTRUCTION
Dirt loans
   Acquisition & development                $       413 $     445 $     484
   Land loans                                       159       155       153
   Lot loans                                        369       390       358
                                            ----------- --------- ---------
      Total                                         941       990       995
                                            ----------- --------- ---------
House loans
   Spec                                             268       317       347
   Sold                                             106       123       137
                                            ----------- --------- ---------
      Total                                         374       440       484
                                            ----------- --------- ---------
Total residential construction              $     1,315 $   1,430 $   1,479
                                            =========== ========= =========
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
   Acquisition & development                $       124 $     148 $     167
   Land loans                                        63        52        56
   Lot loans                                         81        98        86
                                            ----------- --------- ---------
      Total                                         268       298       309
                                            ----------- --------- ---------
House loans
   Spec                                             127       164       189
   Sold                                              29        33        40
                                            ----------- --------- ---------
      Total                                         156       197       229
                                            ----------- --------- ---------
Total residential construction              $       424 $     495 $     538
                                            =========== ========= =========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
                                                                    Year
                                                        Linked      over
                                                        Quarter     Year
                                                      Change(2)    Change
                                    ----------------- ---------   -------
                                     Third   Second
(in millions)                       Quarter  Quarter    Actual     Actual
                                    -------- -------- ---------   -------
LOANS BY CATEGORY
Commercial (sec. by RE)             $  1,604 $  1,584         4%       13%
Commercial construction                  509      522         2       (27)
Commercial & industrial                  425      417        12        (4)
                                    -------- --------
     Total commercial                  2,538    2,523         5         2
Residential construction               1,596    1,745       (32)      (25)
Residential mortgage                   1,528    1,494        (9)       (2)
Consumer / installment                   168      171        (8)      (11)
                                    -------- --------
     Total loans                    $  5,830 $  5,933        (9)       (7)
                                    ======== ========
LOANS BY MARKET
Atlanta MSA                         $  1,800 $  1,934       (13)%     (17)%
Gainesville MSA                          426      422        (9)       (2)
North Georgia                          2,066    2,065        (7)       (4)
Western North Carolina                   815      819        (7)       (3)
Coastal Georgia                          458      436        (4)        4
East Tennessee                           265      257        (1)        4
                                    -------- --------
     Total loans                    $  5,830 $  5,933        (9)       (7)
                                    ======== ========
RESIDENTIAL CONSTRUCTION
Dirt loans
   Acquisition & development        $    516 $    569       (29)%     (27)%
   Land loans                            142      139        10        14
   Lot loans                             385      401       (22)       (8)
                                    -------- --------
      Total                            1,043    1,109       (20)      (15)
                                    -------- --------
House loans
   Spec                                  393      450       (62)%     (40)%
   Sold                                  160      186       (55)      (43)
                                    -------- --------
      Total                              553      636       (60)      (41)
                                    -------- --------
Total residential construction      $  1,596 $  1,745       (32)      (25)
                                    ======== ========
RESIDENTIAL CONSTRUCTION - ATLANTA
 MSA
Dirt loans
   Acquisition & development        $    185 $    232       (65)%     (47)%
   Land loans                             47       50        85        26
   Lot loans                             103      117       (69)      (31)
                                    -------- --------
      Total                              335      399       (40)      (33)
                                    -------- --------
House loans
   Spec                                  227      271       (90)%     (53)%
   Sold                                   49       58       (48)      (50)
                                    -------- --------
      Total                              276      329       (83)      (53)
                                    -------- --------
Total residential construction      $    611 $    728       (57)      (42)
                                    ======== ========
(1)  Excludes total loans of $109.9 million as of June 30 that are covered
by the loss-sharing agreement with the FDIC, related to the acquisition of
Southern Community Bank.  (2)  Annualized.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
                                                  Second Quarter 2009
                                            -------------------------------
                                               Non-
                                            performing Foreclosed   Total
(in thousands)                                Loans    Properties   NPAs
                                            ---------- ---------- ---------
NPAs BY CATEGORY
Commercial (sec. by RE)                     $   37,755 $    5,395 $  43,150
Commercial construction                         15,717      5,847    21,564
Commercial & industrial                         11,378          -    11,378
                                            ---------- ---------- ---------
     Total commercial                           64,850     11,242    76,092
Residential construction                       176,400     81,648   258,048
Residential mortgage                            44,256     11,864    56,120
Consumer / installment                           2,342          -     2,342
                                            ---------- ---------- ---------
     Total NPAs                             $  287,848 $  104,754 $ 392,602
                                            ========== ========== =========
NPAs BY MARKET
Atlanta MSA                                 $  148,155 $   50,450 $ 198,605
Gainesville MSA                                  9,745      3,511    13,256
North Georgia                                   72,174     37,454   109,628
Western North Carolina                          21,814      7,245    29,059
Coastal Georgia                                 30,311      3,904    34,215
East Tennessee                                   5,649      2,190     7,839
                                            ---------- ---------- ---------
     Total NPAs                             $  287,848 $  104,754 $ 392,602
                                            ========== ========== =========
                                                   First Quarter 2009
                                            -------------------------------
                                               Non-
                                            performing Foreclosed   Total
(in thousands)                                Loans    Properties   NPAs
                                            ---------- ---------- ---------
NPAs BY CATEGORY
Commercial (sec. by RE)                     $   18,188 $    3,811 $  21,999
Commercial construction                          6,449      2,948     9,397
Commercial & industrial                         12,066          -    12,066
                                            ---------- ---------- ---------
     Total commercial                           36,703      6,759    43,462
Residential construction                       187,656     58,327   245,983
Residential mortgage                            33,148     10,297    43,445
Consumer / installment                           1,648          -     1,648
                                            ---------- ---------- ---------
     Total NPAs                             $  259,155 $   75,383 $ 334,538
                                            ========== ========== =========
NPAs BY MARKET
Atlanta MSA                                 $  131,020 $   48,574 $ 179,594
Gainesville MSA                                 17,448        694    18,142
North Georgia                                   66,875     20,811    87,686
Western North Carolina                          21,240      3,067    24,307
Coastal Georgia                                 15,699      1,286    16,985
East Tennessee                                   6,873        951     7,824
                                            ---------- ---------- ---------
     Total NPAs                             $  259,155 $   75,383 $ 334,538
                                            ========== ========== =========
                                                   Fourth Quarter 2008
                                            -------------------------------
                                               Non-
                                            performing Foreclosed   Total
(in thousands)                                Loans    Properties   NPAs
                                            ---------- ---------- ---------
NPAs BY CATEGORY
Commercial (sec. by RE)                     $   15,188 $    2,427 $  17,615
Commercial construction                          1,513      2,333     3,846
Commercial & industrial                          1,920          -     1,920
                                            ---------- ---------- ---------
     Total commercial                           18,621      4,760    23,381
Residential construction                       144,836     48,572   193,408
Residential mortgage                            25,574      6,436    32,010
Consumer / installment                           1,692          -     1,692
                                            ---------- ---------- ---------
     Total NPAs                             $  190,723 $   59,768 $ 250,491
                                            ========== ========== =========
NPAs BY MARKET
Atlanta MSA                                 $  105,476 $   42,336 $ 147,812
Gainesville MSA                                 16,208      1,110    17,318
North Georgia                                   31,631     12,785    44,416
Western North Carolina                          18,509      2,986    21,495
Coastal Georgia                                 11,863        138    12,001
East Tennessee                                   7,036        413     7,449
                                            ---------- ---------- ---------
     Total NPAs                             $  190,723 $   59,768 $ 250,491
                                            ========== ========== =========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
                       Second Quarter     First Quarter    Fourth Quarter
                            2009              2009              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     (2)      Offs     (2)      Offs     (2)
                      -------- -------  -------- -------  -------- -------
NET CHARGE-OFFS BY CATEGORY
Commercial (sec. by
 RE)                  $  5,986    1.34% $    826     .20% $  4,460    1.10%
Commercial
 construction              756     .80        54     .05     1,442    1.14
Commercial &
 industrial              3,107    3.16       873     .89     3,416    3.24
                      --------          --------          --------
     Total commercial    9,849    1.54     1,753     .28     9,318    1.46
Residential
 construction           44,240   12.90    37,762   10.52    57,882   14.93
Residential mortgage     3,526     .95     2,984     .80     5,852    1.52
Consumer /
 installment               697    1.80       782    1.99       976    2.34
                      --------          --------          --------
     Total            $ 58,312    4.18  $ 43,281    3.09  $ 74,028    5.09
                      ========          ========          ========
NET CHARGE-OFFS BY MARKET
Atlanta MSA           $ 37,473    8.89% $ 26,228    6.16% $ 49,309   10.80%
Gainesville MSA          4,125    4.38     1,105    1.18     7,994    8.60
North Georgia           12,571    2.52     8,208    1.64     9,872    1.91
Western North
 Carolina                1,015     .51     3,669    1.83     2,371    1.16
Coastal Georgia            969     .85     3,229    2.84     3,150    2.70
East Tennessee           2,159    3.21       842    1.28     1,332    2.02
                      --------          --------          --------
     Total            $ 58,312    4.18  $ 43,281    3.09  $ 74,028    5.09
                      ========          ========          ========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
                                Second          First           Fourth
(in thousands)               Quarter 2009    Quarter 2009    Quarter 2008
                            --------------  --------------  --------------
FORECLOSED PROPERTIES
Beginning balance           $       75,383  $       59,768  $       38,438
Foreclosures transferred in         64,417          38,742          50,678
Capital costs added                  1,324           1,452           1,059
Write downs                         (2,738)         (2,151)         (2,714)
Proceeds from sales                (33,632)        (22,428)        (27,693)
                            --------------  --------------  --------------
     Total                  $      104,754  $       75,383  $       59,768
                            ==============  ==============  ==============
(1)  Excludes non-performing loans and foreclosed properties covered by the
loss-sharing agreement with the FDIC, related to the acquisition of
Southern Community Bank.  (2)  Annualized.
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
                                                       Three Months Ended
                                                            June 30,
                                                      --------------------
(in thousands, except per share data)                   2009       2008
                                                      ---------  ----------
Interest revenue:
 Loans, including fees                                $  81,691  $   97,051
 Investment securities, including tax exempt of
  $309 and $398                                          20,485      19,277
 Federal funds sold, commercial paper and deposits in
  banks                                                      98          50
                                                      ---------  ----------
   Total interest revenue                               102,274     116,378
                                                      ---------  ----------
Interest expense:
 Deposits:
  NOW                                                     2,843       7,216
  Money market                                            2,269       2,310
  Savings                                                   121         180
  Time                                                   32,064      38,828
                                                      ---------  ----------
   Total deposit interest expense                        37,297      48,534
 Federal funds purchased, repurchase agreements and
  other short-term borrowings                               595       1,820
 Federal Home Loan Bank advances                          1,203       2,818
 Long-term debt                                           2,760       2,059
                                                      ---------  ----------
  Total interest expense                                 41,855      55,231
                                                      ---------  ----------
  Net interest revenue                                   60,419      61,147
 Provision for loan losses                               60,000      15,500
                                                      ---------  ----------
  Net interest revenue after provision for loan
   losses                                                   419      45,647
                                                      ---------  ----------
Fee revenue:
 Service charges and fees                                 7,557       7,957
 Mortgage loan and other related fees                     2,825       2,202
 Consulting fees                                          1,745       2,252
 Brokerage fees                                             497         814
 Securities (losses) gains, net                            (711)        357
 Gain from acquisition                                   11,390           -
 Other                                                    1,137       1,523
                                                      ---------  ----------
  Total fee revenue                                      24,440      15,105
                                                      ---------  ----------
  Total revenue                                          24,859      60,752
                                                      ---------  ----------
Operating expenses:
 Salaries and employee benefits                          28,058      28,753
 Communications and equipment                             3,645       3,852
 Occupancy                                                3,853       3,704
 Advertising and public relations                         1,191       2,009
 Postage, printing and supplies                           1,294       1,448
 Professional fees                                        2,806       1,679
 Foreclosed property                                      5,737       2,852
 FDIC assessments and other regulatory charges            6,810       1,265
 Amortization of intangibles                                739         745
 Other                                                    1,215       3,454
 Goodwill impairment                                          -           -
 Severance costs                                              -           -
                                                      ---------  ----------
  Total operating expenses                               55,348      49,761
                                                      ---------  ----------
 (Loss) income before income taxes                      (30,489)     10,991
 Income tax (benefit) expense                           (14,488)      3,898
                                                      ---------  ----------
  Net (loss) income                                     (16,001)      7,093
 Preferred stock dividends and discount accretion         2,559           4
                                                      ---------  ----------
  Net (loss) income available to common shareholders  $ (18,560) $    7,089
                                                      =========  ==========
(Loss) earnings per common share:
   Basic                                              $    (.38) $      .15
   Diluted                                                 (.38)        .15
Weighted average common shares outstanding:
   Basic                                                 48,794      47,158
   Diluted                                               48,794      47,249
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
                                                       Six Months Ended
                                                           June 30,
                                                    ----------------------
(in thousands, except per share data)                  2009        2008
                                                    ----------  -----------
Interest revenue:
  Loans, including fees                             $  163,571  $   206,317
  Investment securities, including tax exempt of
   $628 and $792                                        41,237       38,299
  Federal funds sold, commercial paper and deposits
   in banks                                                540          272
                                                    ----------  -----------
      Total interest revenue                           205,348      244,888
                                                    ----------  -----------
Interest expense:
  Deposits:
    NOW                                                  6,180       15,803
    Money market                                         4,506        5,223
    Savings                                                248          407
    Time                                                68,117       77,712
                                                    ----------  -----------
      Total deposit interest expense                    79,051       99,145
  Federal funds purchased, repurchase agreements and
   other short-term borrowings                           1,148        6,138
  Federal Home Loan Bank advances                        2,277        8,563
  Long-term debt                                         5,529        4,139
                                                    ----------  -----------
    Total interest expense                              88,005      117,985
                                                    ----------  -----------
    Net interest revenue                               117,343      126,903
  Provision for loan losses                            125,000       23,000
                                                    ----------  -----------
    Net interest revenue after provision for loan
     losses                                             (7,657)     103,903
                                                    ----------  -----------
Fee revenue:
  Service charges and fees                              14,591       15,770
  Mortgage loan and other related fees                   5,476        4,165
  Consulting fees                                        2,766        4,059
  Brokerage fees                                         1,186        1,907
  Securities (losses) gains, net                          (408)         357
  Gain from acquisition                                 11,390            -
  Other                                                  2,285        3,044
                                                    ----------  -----------
      Total fee revenue                                 37,286       29,302
                                                    ----------  -----------
      Total revenue                                     29,629      133,205
                                                    ----------  -----------
Operating expenses:
  Salaries and employee benefits                        56,897       57,507
  Communications and equipment                           7,374        7,684
  Occupancy                                              7,660        7,420
  Advertising and public relations                       2,300        3,360
  Postage, printing and supplies                         2,476        3,040
  Professional fees                                      5,099        3,600
  Foreclosed property                                   10,056        3,763
  FDIC assessments and other regulatory charges          9,492        2,531
  Amortization of intangibles                            1,478        1,512
  Other                                                  5,085        6,873
  Goodwill impairment                                   70,000            -
  Severance costs                                        2,898            -
                                                    ----------  -----------
    Total operating expenses                           180,815       97,290
                                                    ----------  -----------
  (Loss) income before income taxes                   (151,186)      35,915
  Income tax (benefit) expense                         (31,412)      12,744
                                                    ----------  -----------
    Net (loss) income                                 (119,774)      23,171
  Preferred stock dividends and discount accretion       5,113            8
    Net (loss) income available to common
     shareholders                                   $ (124,887) $    23,163
                                                    ==========  ===========
(Loss) earnings per common share:
  Basic                                             $    (2.57) $       .49
  Diluted                                                (2.57)         .49
Weighted average common shares outstanding:
  Basic                                                 48,560       47,105
  Diluted                                               48,560       47,260
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
(in thousands, except share and per    June 30,   December 31,    June 30,
 share data)                             2009         2008         2008
                                     ------------ -----------  -----------
                                     (unaudited)   (audited)   (unaudited)
ASSETS
  Cash and due from banks            $    110,943 $   116,395  $   176,240
  Interest-bearing deposits in
   banks                                   70,474       8,417       12,455
  Federal funds sold, commercial
   paper and short-term investments             -     368,609            -
                                     ------------ -----------  -----------
    Cash and cash equivalents             181,417     493,421      188,695
  Securities available for sale         1,816,787   1,617,187    1,430,588
  Mortgage loans held for sale             42,185      20,334       27,094
  Loans, net of unearned income         5,513,087   5,704,861    5,933,141
    Less allowance for loan losses        145,678     122,271       91,035
                                     ------------ -----------  -----------
      Loans, net                        5,367,409   5,582,590    5,842,106
  Covered assets                          230,125           -            -
  Premises and equipment, net             178,983     179,160      181,395
  Accrued interest receivable              41,405      46,088       50,399
  Goodwill and other intangible
   assets                                 251,821     321,798      323,296
  Other assets                            292,914     260,187      220,478
                                     ------------ -----------  -----------
    Total assets                     $  8,403,046 $ 8,520,765  $ 8,264,051
                                     ============ ===========  ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
  Deposits:
    Demand                           $    714,630 $   654,036  $   696,575
    NOW                                 1,273,368   1,543,385    1,541,609
    Money market                          573,463     466,750      418,935
    Savings                               180,368     170,275      187,088
    Time:
      Less than $100,000                1,992,056   1,953,235    1,747,763
      Greater than $100,000             1,351,527   1,422,974    1,573,078
      Brokered                            763,348     792,969      531,408
                                     ------------ -----------  -----------
        Total deposits                  6,848,760   7,003,624    6,696,456
  Federal funds purchased,
   repurchase agreements, and other
   short-term borrowings                  252,493     108,411      288,650
  Federal Home Loan Bank advances         283,292     235,321      285,807
  Long-term debt                          150,026     150,986      107,996
  Accrued expenses and other
   liabilities                             13,203      33,041       47,252
                                     ------------ -----------  -----------
    Total liabilities                   7,547,774   7,531,383    7,426,161
                                     ------------ -----------  -----------
Shareholders' equity:
  Preferred stock, $1 par value;
   10,000,000 shares authorized;
    Series A; $10 stated value;
     21,700, 25,800 and 25,800 shares
     issued and outstanding                   217         258          258
    Series B; $1,000 stated value;
     180,000 shares issued and
     outstanding                          173,785     173,180            -
  Common stock, $1 par value;
   100,000,000 shares authorized;
   48,933,383, 48,809,301 and
   48,809,301 shares issued                48,933      48,809       48,809
  Common stock issuable; 182,041,
   129,304 and 105,579 shares               3,383       2,908        2,696
  Capital surplus                         450,514     460,708      462,939
  Retained earnings                       136,624     265,405      362,089
  Treasury stock; 799,892 and
   1,713,310 shares, at cost                    -     (16,465)     (39,222)
  Accumulated other comprehensive
   income                                  41,816      54,579          321
                                     ------------ -----------  -----------
    Total shareholders' equity            855,272     989,382      837,890
                                     ------------ -----------  -----------
    Total liabilities and
     shareholders' equity            $  8,403,046 $ 8,520,765  $ 8,264,051
                                     ============ ===========  ===========
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
                                                 2009
                                -------------------------------------------
(dollars in thousands, taxable    Average                       Avg.
 equivalent)                      Balance      Interest         Rate
                                -----------  ------------ -----------------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                       $ 5,597,259  $     81,567         5.85%
  Taxable securities (3)          1,742,620        20,176         4.63
  Tax-exempt securities (1)(3)       28,862           506         7.01
  Federal funds sold and other
   interest-earning assets           73,437           488         2.66
                                -----------  ------------
    Total interest-earning
     assets                       7,442,178       102,737         5.53
                                -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses        (147,691)
  Cash and due from banks           101,830
  Premises and equipment            179,446
  Other assets (3)                  592,384
                                -----------
    Total assets                $ 8,168,147
                                ===========
Liabilities and Shareholders'
 Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
   NOW                          $ 1,258,134  $      2,843          .91
   Money market                     521,989         2,269         1.74
   Savings                          178,435           121          .27
   Time less than $100,000        1,894,071        15,342         3.25
   Time greater than $100,000     1,325,757        11,513         3.48
   Brokered                         686,070         5,209         3.05
                                -----------  ------------
    Total interest-bearing
     deposits                     5,864,456        37,297         2.55
                                -----------  ------------
  Federal funds purchased and
   other borrowings                 220,376           595         1.08
  Federal Home Loan Bank
   advances                         309,962         1,203         1.56
  Long-term debt                    151,019         2,760         7.33
                                -----------  ------------
    Total borrowed funds            681,357         4,558         2.68
                                -----------  ------------
    Total interest-bearing
     liabilities                  6,545,813        41,855         2.56
                                             ------------
Non-interest-bearing
 liabilities:
  Non-interest-bearing deposits     680,081
  Other liabilities                  63,043
                                -----------
    Total liabilities             7,288,937
Shareholders' equity                879,210
                                -----------
    Total liabilities and
     shareholders' equity       $ 8,168,147
                                ===========
Net interest revenue                         $     60,882
                                             ============
Net interest-rate spread                                          2.97%
                                                          ============
Net interest margin (4)                                           3.28%
                                                          ============
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
                                                    2008
                               --------------------------------------------
(dollars in thousands, taxable   Average                         Avg.
 equivalent)                     Balance      Interest           Rate
                               -----------  ------------ ------------------
Assets:
Interest-earning assets:
  Loans, net of unearned
   income (1)(2)               $ 5,933,143  $     97,080         6.58%
  Taxable securities (3)         1,471,958        18,879         5.13
  Tax-exempt securities (1)(3)      35,282           655         7.43
  Federal funds sold and other
   interest-earning assets          37,635           370         3.93
                               -----------  ------------
    Total interest-earning
     assets                      7,478,018       116,984         6.29
                               -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses        (93,776)
  Cash and due from banks          144,589
  Premises and equipment           181,454
  Other assets (3)                 585,463
                               -----------
    Total assets               $ 8,295,748
                               ===========
Liabilities and Shareholders'
 Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
   NOW                         $ 1,505,280  $      7,216         1.93
   Money market                    422,419         2,310         2.20
   Savings                         186,826           180          .39
   Time less than $100,000       1,643,740        17,285         4.23
   Time greater than $100,000    1,484,032        16,135         4.37
   Brokered                        534,835         5,408         4.06
                               -----------  ------------
    Total interest-bearing
     deposits                    5,777,132        48,534         3.38
                               -----------  ------------
  Federal funds purchased and
   other borrowings                383,378         1,820         1.91
  Federal Home Loan Bank
   advances                        412,268         2,818         2.75
  Long-term debt                   107,996         2,059         7.67
                               -----------  ------------
    Total borrowed funds           903,642         6,697         2.98
                               -----------  ------------
    Total interest-bearing
     liabilities                 6,680,774        55,231         3.33
                                            ------------
Non-interest-bearing
 liabilities:
  Non-interest-bearing
   deposits                        684,229
  Other liabilities                 74,018
                               -----------
    Total liabilities            7,439,021
Shareholders' equity               856,727
                               -----------
    Total liabilities and
     shareholders' equity      $ 8,295,748
                               ===========
Net interest revenue                        $     61,753
                                            ============
Net interest-rate spread                                         2.96%
                                                         ============
Net interest margin (4)                                          3.32%
                                                         ============
(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 $14.7 million in 2009 and $13.0 million in 2008 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 Six Months Ended June 30,
                                                      2009
                                     -------------------------------------
(dollars in thousands, taxable         Average                     Avg.
 equivalent)                           Balance      Interest       Rate
                                     -----------  ------------ -----------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                            $ 5,635,942  $    163,316        5.84%
  Taxable securities (3)               1,712,778        40,609        4.74
  Tax-exempt securities (1)(3)            29,453         1,028        6.98
  Federal funds sold and other
   interest-earning assets               107,788         1,346        2.50
                                     -----------  ------------
     Total interest-earning assets     7,485,961       206,299        5.55
                                     -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses             (138,297)
  Cash and due from banks                103,113
  Premises and equipment                 179,470
  Other assets (3)                       609,750
                                     -----------
     Total assets                    $ 8,239,997
                                     ===========
Liabilities and Shareholders'
 Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
    NOW                              $ 1,307,865  $      6,180         .95
    Money market                         499,780         4,506        1.82
    Savings                              175,587           248         .28
    Time less than $100,000            1,918,349        32,559        3.42
    Time greater than $100,000         1,359,286        24,338        3.61
    Brokered                             735,844        11,220        3.07
                                     -----------  ------------
       Total interest-bearing
        deposits                       5,996,711        79,051        2.66
                                     -----------  ------------
    Federal funds purchased and other
     borrowings                          185,639         1,148        1.25
    Federal Home Loan Bank advances      257,742         2,277        1.78
    Long-term debt                       151,009         5,529        7.38
                                     -----------  ------------
      Total borrowed funds               594,390         8,954        3.04
                                     -----------  ------------
      Total interest-bearing
       liabilities                     6,591,101        88,005        2.69
                                                  ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits          665,170
  Other liabilities                       60,612
                                     -----------
    Total liabilities                  7,316,883
Shareholders' equity                     923,114
                                     -----------
    Total liabilities and
     shareholders' equity            $ 8,239,997
                                     ===========
Net interest revenue                              $    118,294
                                                  ============
Net interest-rate spread                                              2.86%
                                                               ===========
Net interest margin (4)                                               3.18%
                                                               ===========
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Six Months Ended June 30,
                                                      2008
                                     -------------------------------------
(dollars in thousands, taxable         Average                     Avg.
 equivalent)                           Balance      Interest       Rate
                                     -----------  ------------ -----------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                            $ 5,945,720  $    206,332        6.98%
  Taxable securities (3)               1,460,090        37,507        5.14
  Tax-exempt securities (1)(3)            36,287         1,303        7.18
  Federal funds sold and other
   interest-earning assets                42,652           883        4.14
                                     -----------  ------------
     Total interest-earning assets     7,484,749       246,025        6.60
                                     -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses              (92,901)
  Cash and due from banks                149,648
  Premises and equipment                 181,405
  Other assets (3)                       577,785
                                     -----------
     Total assets                    $ 8,300,686
                                     ===========
Liabilities and Shareholders'
 Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
    NOW                              $ 1,483,699  $     15,803        2.14
    Money market                         430,734         5,223        2.44
    Savings                              185,819           407         .44
    Time less than $100,000            1,598,526        35,508        4.47
    Time greater than $100,000         1,424,670        32,505        4.59
    Brokered                             454,619         9,699        4.29
                                     -----------  ------------
       Total interest-bearing
        deposits                       5,578,067        99,145        3.57
                                     -----------  ------------
    Federal funds purchased and other
     borrowings                          467,596         6,138        2.64
    Federal Home Loan Bank advances      536,883         8,563        3.21
    Long-term debt                       107,995         4,139        7.71
                                     -----------  ------------
      Total borrowed funds             1,112,474        18,840        3.41
                                     -----------  ------------
      Total interest-bearing
       liabilities                     6,690,541       117,985        3.55
                                                  ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits          678,150
  Other liabilities                       75,802
                                     -----------
    Total liabilities                  7,444,493
Shareholders' equity                     856,193
                                     -----------
    Total liabilities and
     shareholders' equity            $ 8,300,686
                                     ===========
Net interest revenue                              $    128,040
                                                  ============
Net interest-rate spread                                              3.05%
                                                               ===========
Net interest margin (4)                                               3.43%
                                                               ===========
(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 $12.7 million in 2009 and $14.5 million in 2008 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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