United Community Banks, Inc.
Jul 23, 2010

United Community Banks, Inc. Reports Net Operating Loss for Second Quarter 2010

BLAIRSVILLE, GA, Jul 23, 2010 (MARKETWIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI)

--  Completed sale of $103 million of nonperforming assets that resulted
    in a non-cash charge of $45.3 million
--  Nonperforming assets decline 17 percent from last quarter
--  Provision for loan losses was $61.5 million, down $13.5 million from
    last quarter
--  Allowance-to-loans ratio increases to 3.57 percent
--  Margin improves 11 basis points to 3.60 percent

United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss from continuing operations of $59.5 million, or 66 cents per diluted share, for the second quarter of 2010. The second quarter operating loss included a non-cash charge of $45.3 million, or $30.0 million after-tax, resulting from the transaction with Fletcher International ("Fletcher") to dispose of nonperforming assets. The charge increased the net loss for the quarter by 32 cents per diluted share.

United's net operating losses from continuing operations for the first six months of 2010 and 2009 were $94.0 million, or $1.05 per diluted share, and $55.3 million, or $1.24 per diluted share, respectively. In the attached schedules, the results of operations for all periods presented have been restated to show earnings from continuing operations, which excludes Brintech's fee revenue and operating expenses during the periods it was owned by United and the gain from the sale. The net income or loss from Brintech's discontinued operations is reported as a separate line in the consolidated statement of income. Also, the net operating loss from continuing operations for the first six months of 2009 excludes a $70 million non-cash charge for impairment of goodwill and $1.8 million in severance costs, net of taxes, relating to a reduction in work force, both of which were incurred during the first quarter and the $7.1 million gain, net of taxes, on the acquisition of Southern Community Bank in the second quarter. These charges and gains were considered non-recurring items and therefore were excluded from operating earnings. Including these non-recurring items, United's net loss for the first six months of 2010 and 2009 was $92.8 million, or $1.04 per diluted share, and $119.8 million, or $2.57 per diluted share, respectively.

"We made steady progress during the second quarter," stated Jimmy Tallent, president and chief executive officer. "We completed the sale of $103 million of our most illiquid non-performing loans and foreclosed properties with the granting of a warrant and an option to purchase capital. This transaction was a giant step forward in clearing our books of the more difficult problem assets while at the same time preserving capital. We still see credit challenges ahead of us and elevated levels of charge-offs through the balance of 2010. We are pursuing every opportunity to resolve them in the best interests of our shareholders and return to profitability in early 2011."

Total loans were $4.9 billion at quarter-end, down $119 million from the end of the first quarter and $640 million from a year earlier. As of quarter-end, residential construction loans were $820 million, or 17 percent of total loans, down $140 million from the prior quarter-end and down $495 million from a year ago. This decline was net of new lending during the quarter that totaled $101 million, primarily commercial and small business loans in metropolitan Atlanta and north Georgia.

Taxable equivalent net interest revenue of $61.6 million was $745,000 higher than the second quarter of 2009. The net interest margin was 3.60 percent for the second quarter 2010, up 32 basis points from a year ago and up 11 basis points from the first quarter. "By staying focused on deposit and loan pricing, we've been able to steadily increase our net interest margin and hold net interest revenue above $60 million despite continuing attrition in the loan portfolio," Tallent said.

"We had our sixth consecutive quarter of core transaction deposit growth, with an increase of $94 million from the first quarter, or 16 percent, on an annualized basis," Tallent continued. "That compares to core deposit growth of $53 million for the first quarter of 2010 and $224 million from a year ago. We believe this growth is related to disruption in the banking industry and the favorable perception of United as a strong bank with strong service. We are emphasizing these positive attributes, which are always valuable and especially so during difficult times in our industry. We believe this message is being heard and responded to with our successful core deposit program."

The second quarter 2010 provision for loan losses decreased to $61.5 million from $75 million in the first quarter. Net charge-offs were up $4.7 million from first quarter 2010 and $3.0 million from the second quarter of 2009. Non-performing assets decreased to $348 million at quarter-end from $417 million at March 31, 2010, the lowest level since the first quarter of 2009. The ratios of non-performing assets to total assets at the end of the second and first quarters of 2010 were 4.55 percent and 5.32 percent, respectively. The decrease in non-performing assets and improvement in the ratio of non-performing assets to total assets reflected the sale of $103 million of nonperforming assets early in the second quarter.

The transaction with Fletcher resulted in an after-tax charge of $30.0 million, or $45.3 million pre-tax, primarily due to the recognition of the value of warrant and the option to purchase convertible preferred stock that were granted as part of the sale of the non-performing assets. United recorded the equity instruments at a fair value of $39.8 million that resulted in an increase to capital surplus within shareholders' equity, which more than offset the $30 million after-tax charge to expenses.

"Even though this transaction resulted in a higher net loss for the quarter, the importance of the strategic objective achieved was very significant," stated Tallent. "We likely would have carried these illiquid nonperforming assets for many quarters and incurred considerable foreclosure and carrying costs."

Operating fee revenue was $11.6 million for the second quarter of 2010, compared to $11.3 million a year ago. Service charges and fees of $8.0 million were up $436,000, due primarily to new accounts and an increase in ATM and debit card transactions. Mortgage loan fees of $1.6 million were down $1.2 million due to lower refinancing activities. Other fee revenue increased $262,000 to $1.4 million, due primarily to the gain recognized on ineffectiveness of terminated cash flow hedges on a certain portion of United's prime-based loans.

Second quarter operating expenses of $58.3 million, excluding the $45.3 million charge for the sale the non-performing assets, increased $4.6 million compared to last year. Foreclosed property costs more than doubled to $14.5 million compared to $5.7 million in the second quarter of 2009. Foreclosed property costs in the second quarter of 2010 included $3.3 million for maintenance, property taxes and other related costs, compared to $2.5 million last year. In addition, write-downs relating to the sale of properties totaled $5.1 million and write-downs of other foreclosed properties totaled $6.1 million, both to help expedite sales of foreclosed properties. Salary and benefit costs totaled $23.6 million, a decrease of $2.7 million from last year due primarily to the 10 percent reduction in workforce in 2009.

"We continued to focus on reducing expenses, and most controllable costs were flat or down compared to a year ago," commented Tallent. "Last year included the FDIC industry-wide assessment that cost us $3.8 million and a recovery in other expenses of $2.0 million for the reversal of bank owned life insurance surrender charges."

Excluding the tax effect of the charge from the transaction with Fletcher and a $1.3 million increase in the valuation allowance for deferred tax assets, the effective tax rate for the second quarter of 2010 was 40 percent, which was consistent with the prior quarter. The effective tax rate for the remainder of 2010 is expected to be 40 percent, slightly higher than the effective tax rate for the full year 2009.

As of June 30, 2010, United's capital ratios were as follows: Tier I Risk Based Capital of 11.1 percent; Leverage of 7.7 percent; and, Total Risk Based Capital of 13.8 percent. The quarterly average tangible equity-to-assets ratio was 9.3 percent and the tangible common equity-to-assets ratio was 6.9 percent.

"We are not where we want to be yet and the economy continues to be stubborn, but we are making important progress," Tallent said. "Aside from the non-cash loss on the sale of nonperforming assets this quarter, our net operating loss from continuing operations has declined for three consecutive quarters. Residential construction loans, where most of the problems have been, have decreased from a high of 35 percent to 17 percent of total loans at quarter end. We have widened our net interest margin by growing core deposits for six consecutive quarters and obtaining more favorable loan and time deposit pricing. All the while, our customer satisfaction scores lead the industry."

Conference Call

United Community Banks will hold a conference call today, Friday, July 23, 2010, 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 (877) 380-5665 and use the password '85745611.' 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.

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 $7.7 billion and operates 27 community banks with 106 banking offices 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
(in thousands,              2010                        2009
 except per share    -------------------   ------------------------------
 data; taxable        Second     First      Fourth     Third      Second
 equivalent)          Quarter    Quarter    Quarter    Quarter    Quarter
                     --------   --------   --------   --------   --------
INCOME SUMMARY
Interest revenue     $ 87,699   $ 89,849   $ 97,481   $101,181   $102,737
Interest expense       26,072     28,570     33,552     38,177     41,855
                     --------   --------   --------   --------   --------
   Net interest
    revenue            61,627     61,279     63,929     63,004     60,882
Provision for loan
 losses                61,500     75,000     90,000     95,000     60,000
Operating fee
 revenue (1)           11,579     11,666     14,447     13,389     11,305
                     --------   --------   --------   --------   --------
   Total operating
    revenue (1)        11,706     (2,055)   (11,624)   (18,607)    12,187
Operating expenses(2)  58,308     54,820     60,126     51,426     53,710
Loss on sale of
 nonperforming
 assets                45,349          -          -          -          -
                     --------   --------   --------   --------   --------
 Operating loss from
  continuing
  operations before
  taxes               (91,951)   (56,875)   (71,750)   (70,033)   (41,523)
Operating income tax
 benefit              (32,419)   (22,417)   (31,687)   (26,252)   (18,394)
                     --------   --------   --------   --------   --------
 Net operating loss
  from continuing
  operations (1)(2)   (59,532)   (34,458)   (40,063)   (43,781)   (23,129)
Gain from
 acquisition, net of
 tax expense                -          -          -          -      7,062
Noncash goodwill
 impairment charges         -          -          -    (25,000)         -
Severance costs, net
 of tax benefit             -          -          -          -          -
(Loss) income from
 discontinued
 operations                 -       (101)       228         63         66
Gain from sale of
 subsidiary, net of
 income taxes and
 selling costs              -      1,266          -          -          -
                     --------   --------   --------   --------   --------
  Net loss            (59,532)   (33,293)   (39,835)   (68,718)   (16,001)
Preferred dividends
 and discount
 accretion              2,577      2,572      2,567      2,562      2,559
                     --------   --------   --------   --------   --------
Net loss available
 to common
 shareholders        $(62,109)  $(35,865)  $(42,402)  $(71,280)  $(18,560)
                     ========   ========   ========   ========   ========
PERFORMANCE MEASURES
  Per common share:
    Diluted
     operating loss
     from continuing
     operations
     (1)(2)          $   (.66)  $   (.39)  $   (.45)  $   (.93)  $   (.53)
    Diluted loss
     from continuing
     operations          (.66)      (.39)      (.45)     (1.43)      (.38)
    Diluted loss         (.66)      (.38)      (.45)     (1.43)      (.38)
    Stock dividends                                      1 for      1 for
     declared (6)           -          -          -       130        130
    Book value           7.71       7.95       8.36       8.85      13.87
    Tangible book
     value (4)           5.39       5.62       6.02       6.50       8.85
  Key performance
   ratios:
    Return on equity
     (3)(5)            (35.89)%   (20.10)%   (22.08)%   (45.52)%   (11.42)%
    Return on assets
     (5)                (3.10)     (1.70)     (1.91)     (3.32)      (.78)
    Net interest
     margin (5)          3.60       3.49       3.40       3.39       3.28
    Operating
     efficiency
     ratio from
     continuing
     operations
     (1)(2)            141.60      75.22      78.74      68.35      73.68
    Equity to assets    11.84      11.90      11.94      10.27      10.71
    Tangible equity
     to assets (4)       9.26       9.39       9.53       7.55       7.96
    Tangible common
     equity to
     assets (4)          6.91       7.13       7.37       5.36       5.77
    Tangible common
     equity to
     risk-weighted
     assets (4)          9.97      10.03      10.39      10.67       7.49
ASSET QUALITY *
  Non-performing
   loans             $224,335   $280,802   $264,092   $304,381   $287,848
  Foreclosed
   properties         123,910    136,275    120,770    110,610    104,754
                     --------   --------   --------   --------   --------
    Total
     non-performing
     assets (NPAs)    348,245    417,077    384,862    414,991    392,602
  Allowance for loan
   losses             174,111    173,934    155,602    150,187    145,678
  Net charge-offs      61,323     56,668     84,585     90,491     58,312
  Allowance for loan
   losses to loans       3.57 %     3.48 %     3.02 %     2.80 %     2.64 %
  Net charge-offs to
   average loans (5)     4.98       4.51       6.37       6.57       4.18
  NPAs to loans and
   foreclosed
   properties            6.97       8.13       7.30       7.58       6.99
  NPAs to total
   assets                4.55       5.32       4.81       4.91       4.63
AVERAGE BALANCES ($
 in millions)
  Loans              $  5,011   $  5,173   $  5,357   $  5,565   $  5,597
  Investment
   securities           1,532      1,518      1,529      1,615      1,771
  Earning assets        6,854      7,085      7,487      7,401      7,442
  Total assets          7,704      7,946      8,287      8,208      8,212
  Deposits              6,375      6,570      6,835      6,690      6,545
  Shareholders'
   equity                 912        945        989        843        879
  Common shares -
   basic (thousands)   94,524     94,390     94,219     49,771     48,794
  Common shares -
   diluted
   (thousands)         94,524     94,390     94,219     49,771     48,794
AT PERIOD END ($ in
 millions)
  Loans *            $  4,873   $  4,992   $  5,151   $  5,363   $  5,513
  Investment
   securities           1,488      1,527      1,530      1,533      1,817
  Total assets          7,652      7,837      8,000      8,444      8,477
  Deposits              6,330      6,488      6,628      6,821      6,849
  Shareholders'
   equity                 904        926        962      1,007        855
  Common shares
   outstanding
   (thousands)         94,281     94,176     94,046     93,901     48,933
(1)  Excludes the gain from acquisition of $11.4 million, (income tax
expense of $4.3 million) in the second quarter of 2009 and revenue
generated by discontinued operations in all periods presented.
(2)  Excludes goodwill impairment charges of $25 million and $70 million in
the third and first quarters of 2009, respectively, severance costs of $2.9
million, (income tax benefit of $1.1 million) in the first quarter of 2009
and expenses relating to discontinued operations for all periods presented.
(3)  Net loss available to common shareholders, which is net of 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.
* Excludes loans and foreclosed properties covered by loss sharing
agreements with the FDIC.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
                                           2010        2009      Second
                                        ---------   ---------    Quarter
(in thousands, except per share           Second      Second    2010-2009
data; taxable equivalent)                 Quarter     Quarter     Change
                                        ---------   ---------   ----------
INCOME SUMMARY
Interest revenue                        $  87,699   $ 102,737
Interest expense                           26,072      41,855
                                        ---------   ---------
    Net interest revenue                   61,627      60,882            1%
Provision for loan losses                  61,500      60,000
Operating fee revenue (1)                  11,579      11,305            2
                                        ---------   ---------
   Total operating revenue (1)             11,706      12,187           (4)
Operating expenses (2)                     58,308      53,710            9
Loss on sale of nonperforming assets       45,349           -
                                        ---------   ---------
 Operating loss from continuing
  operations before taxes                 (91,951)    (41,523)        (121)
Operating income tax benefit              (32,419)    (18,394)
                                        ---------   ---------
 Net operating loss from continuing
  operations (1)(2)                       (59,532)    (23,129)        (157)
Gain from acquisition, net of tax
 expense                                        -       7,062
Noncash goodwill impairment charges             -           -
Severance costs, net of tax benefit             -           -
(Loss) income from discontinued
 operations                                     -          66
Gain from sale of subsidiary, net of
 income taxes and selling costs                 -           -
                                        ---------   ---------
 Net loss                                 (59,532)    (16,001)        (272)
Preferred dividends and discount
 accretion                                  2,577       2,559
                                        ---------   ---------
Net loss available to common
 shareholders                           $ (62,109)  $ (18,560)
                                        =========   =========
PERFORMANCE MEASURES
  Per common share:
    Diluted operating loss from
     continuing operations (1)(2)       $    (.66)  $    (.53)         (25)
    Diluted loss from continuing
     operations                              (.66)       (.38)         (74)
    Diluted loss                             (.66)       (.38)         (74)
    Stock dividends declared (6)                -   1 for 130
    Book value                               7.71       13.87          (44)
    Tangible book value (4)                  5.39        8.85          (39)
  Key performance ratios:
    Return on equity (3)(5)                (35.89)%    (11.42)%
    Return on assets (5)                    (3.10)       (.78)
    Net interest margin (5)                  3.60        3.28
    Operating efficiency ratio from
     continuing operations (1)(2)          141.60       73.68
    Equity to assets                        11.84       10.71
    Tangible equity to assets (4)            9.26        7.96
    Tangible common equity to assets
     (4)                                     6.91        5.77
    Tangible common equity to
     risk-weighted assets (4)                9.97        7.49
ASSET QUALITY *
  Non-performing loans                  $ 224,335   $ 287,848
  Foreclosed properties                   123,910     104,754
                                        ---------   ---------
    Total non-performing assets (NPAs)    348,245     392,602
  Allowance for loan losses               174,111     145,678
  Net charge-offs                          61,323      58,312
  Allowance for loan losses to loans         3.57%       2.64%
  Net charge-offs to average loans (5)       4.98        4.18
  NPAs to loans and foreclosed
   properties                                6.97        6.99
  NPAs to total assets                       4.55        4.63
AVERAGE BALANCES ($ in millions)
  Loans                                 $   5,011   $   5,597          (10)
  Investment securities                     1,532       1,771          (13)
  Earning assets                            6,854       7,442           (8)
  Total assets                              7,704       8,212           (6)
  Deposits                                  6,375       6,545           (3)
  Shareholders' equity                        912         879            4
  Common shares - basic (thousands)        94,524      48,794           94
  Common shares - diluted (thousands)      94,524      48,794           94
AT PERIOD END ($ in millions)
  Loans *                               $   4,873   $   5,513          (12)
  Investment securities                     1,488       1,817          (18)
  Total assets                              7,652       8,477          (10)
  Deposits                                  6,330       6,849           (8)
  Shareholders' equity                        904         855            6
  Common shares outstanding (thousands)    94,281      48,933           93
(1)  Excludes the gain from acquisition of $11.4 million, (income tax
expense of $4.3 million) in the second quarter of 2009 and revenue
generated by discontinued operations in all periods presented.
(2)  Excludes goodwill impairment charges of $25 million and $70 million in
the third and first quarters of 2009, respectively, severance costs of $2.9
million, (income tax benefit of $1.1 million) in the first quarter of 2009
and expenses relating to discontinued operations for all periods presented.
(3)  Net loss available to common shareholders, which is net of 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.
* Excludes loans and foreclosed properties covered by loss sharing
agreements with the FDIC.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
                                              For the Six
                                             Months Ended          YTD
(in thousands, except per share         ---------------------    2010-2009
data; taxable equivalent)                  2010        2009       Change
                                        ---------   ---------   ----------
INCOME SUMMARY
Interest revenue                        $ 177,548   $ 206,299
Interest expense                           54,642      88,005
                                        ---------   ---------
    Net interest revenue                  122,906     118,294            4%
Provision for loan losses                 136,500     125,000
Operating fee revenue (1)                  23,245      23,128            1
                                        ---------   ---------
   Total operating revenue (1)              9,651      16,422          (41)
Operating expenses (2)                    113,128     105,498            7
Loss on sale of nonperforming assets       45,349           -
                                        ---------   ---------
 Operating loss from continuing
  operations before taxes                (148,826)    (89,076)         (67)
Operating income tax benefit              (54,836)    (33,815)
                                        ---------   ---------
 Net operating loss from continuing
  operations (1)(2)                       (93,990)    (55,261)         (70)
Gain from acquisition, net of tax
 expense                                        -       7,062
Noncash goodwill impairment charges             -     (70,000)
Severance costs, net of tax benefit             -      (1,797)
(Loss) income from discontinued
 operations                                  (101)        222
Gain from sale of subsidiary, net of
 income taxes and selling costs             1,266           -
                                        ---------   ---------
 Net loss                                 (92,825)   (119,774)          22
Preferred dividends and discount
 accretion                                  5,149       5,113
                                        ---------   ---------
Net loss available to common
 shareholders                           $ (97,974)  $(124,887)
                                        =========   =========
PERFORMANCE MEASURES
  Per common share:
    Diluted operating loss from
     continuing operations (1)(2)       $   (1.05)  $   (1.24)          15
    Diluted loss from continuing
     operations                             (1.05)      (2.58)          59
    Diluted loss                            (1.04)      (2.57)          60
    Stock dividends declared (6)                -   2 for 130
    Book value                               7.71       13.87          (44)
    Tangible book value (4)                  5.39        8.85          (39)
  Key performance ratios:
    Return on equity (3)(5)                (27.87)%    (36.20)%
    Return on assets (5)                    (2.39)      (2.93)
    Net interest margin (5)                  3.55        3.18
    Operating efficiency ratio from
     continuing operations (1)(2)          108.48       74.38
    Equity to assets                        11.87       11.20
    Tangible equity to assets (4)            9.32        8.10
    Tangible common equity to assets
     (4)                                     7.02        5.93
    Tangible common equity to
     risk-weighted assets (4)                9.97        7.49
ASSET QUALITY *
  Non-performing loans                  $ 224,335   $ 287,848
  Foreclosed properties                   123,910     104,754
                                        ---------   ---------
    Total non-performing assets (NPAs)    348,245     392,602
  Allowance for loan losses               174,111     145,678
  Net charge-offs                         117,991     101,593
  Allowance for loan losses to loans         3.57 %      2.64 %
  Net charge-offs to average loans (5)       4.75        3.64
  NPAs to loans and foreclosed
   properties                                6.97        6.99
  NPAs to total assets                       4.55        4.63
AVERAGE BALANCES ($ in millions)
  Loans                                 $   5,091   $   5,636          (10)
  Investment securities                     1,525       1,742          (12)
  Earning assets                            6,969       7,486           (7)
  Total assets                              7,825       8,291           (6)
  Deposits                                  6,472       6,662           (3)
  Shareholders' equity                        929         923            1
  Common shares - basic (thousands)        94,453      48,560           95
  Common shares - diluted (thousands)      94,453      48,560           95
AT PERIOD END ($ in millions)
  Loans *                               $   4,873   $   5,513          (12)
  Investment securities                     1,488       1,817          (18)
  Total assets                              7,652       8,477          (10)
  Deposits                                  6,330       6,849           (8)
  Shareholders' equity                        904         855            6
  Common shares outstanding (thousands)    94,281      48,933           93
(1)  Excludes the gain from acquisition of $11.4 million, (income tax
expense of $4.3 million) in the second quarter of 2009 and revenue
generated by discontinued operations in all periods presented.
(2)  Excludes goodwill impairment charges of $25 million and $70 million in
the third and first quarters of 2009, respectively, severance costs of $2.9
million, (income tax benefit of $1.1 million) in the first quarter of 2009
and expenses relating to discontinued operations for all periods presented.
(3)  Net loss available to common shareholders, which is net of 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.
* Excludes loans and foreclosed properties covered by loss sharing
agreements with the FDIC.
UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information
(in thousands,               2010                        2009
 except per share    --------------------  -------------------------------
data; taxable         Second     First      Fourth     Third      Second
 equivalent)          Quarter    Quarter    Quarter    Quarter    Quarter
                     ---------  ---------  ---------  ---------  ---------
Interest revenue
 reconciliation
Interest revenue -
 taxable equivalent  $  87,699  $  89,849  $  97,481  $ 101,181  $ 102,737
Taxable equivalent
 adjustment               (500)      (493)      (601)      (580)      (463)
                     ---------  ---------  ---------  ---------  ---------
    Interest revenue
     (GAAP)          $  87,199  $  89,356  $  96,880  $ 100,601  $ 102,274
                     =========  =========  =========  =========  =========
Net interest revenue
 reconciliation
Net interest revenue
 - taxable
 equivalent          $  61,627  $  61,279  $  63,929  $  63,004  $  60,882
Taxable equivalent
 adjustment               (500)      (493)      (601)      (580)      (463)
                     ---------  ---------  ---------  ---------  ---------
    Net interest
     revenue (GAAP)  $  61,127  $  60,786  $  63,328  $  62,424  $  60,419
                     =========  =========  =========  =========  =========
Fee revenue
 reconciliation
Operating fee
 revenue             $  11,579  $  11,666  $  14,447  $  13,389  $  11,305
Gain from
 acquisition                 -          -          -          -     11,390
                     ---------  ---------  ---------  ---------  ---------
    Fee revenue
     (GAAP)          $  11,579  $  11,666  $  14,447  $  13,389  $  22,695
                     =========  =========  =========  =========  =========
Total revenue
 reconciliation
Total operating
 revenue             $  11,706  $  (2,055) $ (11,624) $ (18,607) $  12,187
Taxable equivalent
 adjustment               (500)      (493)      (601)      (580)      (463)
Gain from
 acquisition                 -          -          -          -     11,390
                     ---------  ---------  ---------  ---------  ---------
    Total revenue
     (GAAP)          $  11,206  $  (2,548) $ (12,225) $ (19,187) $  23,114
                     =========  =========  =========  =========  =========
Expense
 reconciliation
Operating expense    $ 103,657  $  54,820  $  60,126  $  51,426  $  53,710
Noncash goodwill
 impairment charge           -          -          -     25,000          -
Severance costs              -          -          -          -          -
                     ---------  ---------  ---------  ---------  ---------
    Operating
     expense (GAAP)  $ 103,657  $  54,820  $  60,126  $  76,426  $  53,710
                     =========  =========  =========  =========  =========
Loss from continuing
 operations before
 taxes
 reconciliation
Operating loss from
 continuing
 operations before
 taxes               $ (91,951) $ (56,875) $ (71,750) $ (70,033) $ (41,523)
Taxable equivalent
 adjustment               (500)      (493)      (601)      (580)      (463)
Gain from
 acquisition                 -          -          -          -     11,390
Noncash goodwill
 impairment charge           -          -          -    (25,000)         -
Severance costs              -          -          -          -          -
                     ---------  ---------  ---------  ---------  ---------
    Loss from
     continuing
     operations
     before taxes
     (GAAP)          $ (92,451) $ (57,368) $ (72,351) $ (95,613) $ (30,596)
                     =========  =========  =========  =========  =========
Income tax benefit
 reconciliation
Operating income tax
 benefit             $ (32,419) $ (22,417) $ (31,687) $ (26,252) $ (18,394)
Taxable equivalent
 adjustment               (500)      (493)      (601)      (580)      (463)
Gain from
 acquisition, tax
 expense                     -          -          -          -      4,328
Severance costs, tax
 benefit                     -          -          -          -          -
                     ---------  ---------  ---------  ---------  ---------
    Income tax
     benefit (GAAP)  $ (32,919) $ (22,910) $ (32,288) $ (26,832) $ (14,529)
                     =========  =========  =========  =========  =========
Diluted loss from
 continuing
 operations per
 common share
 reconciliation
Diluted operating
 loss from
 continuing
 operations per
 common share        $    (.66) $    (.39) $    (.45) $    (.93) $    (.53)
Gain from
 acquisition                 -          -          -          -        .15
Noncash goodwill
 impairment charge           -          -          -       (.50)         -
Severance costs              -          -          -          -          -
                     ---------  ---------  ---------  ---------  ---------
    Diluted loss
     from continuing
     operations per
     common share
     (GAAP)          $    (.66) $    (.39) $    (.45) $   (1.43) $    (.38)
                     =========  =========  =========  =========  =========
Book value per
 common share
 reconciliation
Tangible book value
 per common share    $    5.39  $    5.62  $    6.02  $    6.50  $    8.85
Effect of goodwill
 and other
 intangibles              2.32       2.33       2.34       2.35       5.02
                     ---------  ---------  ---------  ---------  ---------
   Book value per
    common share
    (GAAP)           $    7.71  $    7.95  $    8.36  $    8.85  $   13.87
                     =========  =========  =========  =========  =========
Efficiency ratio
 from continuing
 operations
 reconciliation
Operating efficiency
 ratio from
 continuing
 operations             141.60%     75.22%     78.74%     68.35%     73.68%
Gain from
 acquisition                 -          -          -          -      (9.96)
Noncash goodwill
 impairment charge           -          -          -      33.22          -
Severance costs              -          -          -          -          -
                     ---------  ---------  ---------  ---------  ---------
    Efficiency ratio
     from continuing
     operations
     (GAAP)             141.60%     75.22%     78.74%    101.57%     63.72%
                     =========  =========  =========  =========  =========
Average equity to
 assets
 reconciliation
Tangible common
 equity to assets         6.91%      7.13%      7.37%      5.36%      5.77%
Effect of preferred
 equity                   2.35       2.26       2.16       2.19       2.19
                     ---------  ---------  ---------  ---------  ---------
    Tangible equity
     to assets            9.26       9.39       9.53       7.55       7.96
Effect of goodwill
 and other
 intangibles              2.58       2.51       2.41       2.72       2.75
                     ---------  ---------  ---------  ---------  ---------
    Equity to assets
     (GAAP)              11.84%     11.90%     11.94%     10.27%     10.71%
                     =========  =========  =========  =========  =========
Actual tangible
 common equity to
 risk-weighted
 assets
 reconciliation
Tangible common
 equity to
 risk-weighted
 assets                   9.97%     10.03%     10.39%     10.67%      7.49%
Effect of other
 comprehensive
 income                   (.87)      (.85)      (.87)      (.90)      (.72)
Effect of deferred
 tax limitation          (2.47)     (1.75)     (1.27)      (.58)      (.22)
Effect of trust
 preferred                1.03       1.00        .97        .92        .90
Effect of preferred
 equity                   3.41       3.29       3.19       3.04       2.99
                     ---------  ---------  ---------  ---------  ---------
    Tier I capital
     ratio
     (Regulatory)        11.07%     11.72%     12.41%     13.15%     10.44%
                     =========  =========  =========  =========  =========
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)                              2010        2009
                                                    ----------  ----------
Interest revenue reconciliation
Interest revenue - taxable equivalent               $  177,548  $  206,299
Taxable equivalent adjustment                             (993)       (951)
                                                    ----------  ----------
    Interest revenue (GAAP)                         $  176,555  $  205,348
                                                    ==========  ==========
Net interest revenue reconciliation
Net interest revenue - taxable equivalent           $  122,906  $  118,294
Taxable equivalent adjustment                             (993)       (951)
                                                    ----------  ----------
    Net interest revenue (GAAP)                     $  121,913  $  117,343
                                                    ==========  ==========
Fee revenue reconciliation
Operating fee revenue                               $   23,245  $   23,128
Gain from acquisition                                        -      11,390
                                                    ----------  ----------
    Fee revenue (GAAP)                              $   23,245  $   34,518
                                                    ==========  ==========
Total revenue reconciliation
Total operating revenue                             $    9,651  $   16,422
Taxable equivalent adjustment                             (993)       (951)
Gain from acquisition                                        -      11,390
                                                    ----------  ----------
    Total revenue (GAAP)                            $    8,658  $   26,861
                                                    ==========  ==========
Expense reconciliation
Operating expense                                   $  158,477  $  105,498
Noncash goodwill impairment charge                           -      70,000
Severance costs                                              -       2,898
                                                    ----------  ----------
    Operating expense (GAAP)                        $  158,477  $  178,396
                                                    ==========  ==========
Loss from continuing operations before taxes
 reconciliation
Operating loss from continuing operations before
 taxes                                              $ (148,826) $  (89,076)
Taxable equivalent adjustment                             (993)       (951)
Gain from acquisition                                        -      11,390
Noncash goodwill impairment charge                           -     (70,000)
Severance costs                                              -      (2,898)
                                                    ----------  ----------
    Loss from continuing operations before taxes
     (GAAP)                                         $ (149,819) $ (151,535)
                                                    ==========  ==========
Income tax benefit reconciliation
Operating income tax benefit                        $  (54,836) $  (33,815)
Taxable equivalent adjustment                             (993)       (951)
Gain from acquisition, tax expense                           -       4,328
Severance costs, tax benefit                                 -      (1,101)
                                                    ----------  ----------
    Income tax benefit (GAAP)                       $  (55,829) $  (31,539)
                                                    ==========  ==========
Diluted loss from continuing operations per common
 share reconciliation
Diluted operating loss from continuing operations
 per common share                                   $    (1.05) $    (1.24)
Gain from acquisition                                        -         .15
Noncash goodwill impairment charge                           -       (1.45)
Severance costs                                              -        (.04)
                                                    ----------  ----------
    Diluted loss from continuing operations per
     common share (GAAP)                            $    (1.05) $    (2.58)
                                                    ==========  ==========
Book value per common share reconciliation
Tangible book value per common share                $     5.39  $     8.85
Effect of goodwill and other intangibles                  2.32        5.02
                                                    ----------  ----------
   Book value per common share (GAAP)               $     7.71  $    13.87
                                                    ==========  ==========
Efficiency ratio from continuing operations
 reconciliation
Operating efficiency ratio from continuing
 operations                                             108.48%      74.38%
Gain from acquisition                                        -       (5.53)
Noncash goodwill impairment charge                           -       45.69
Severance costs                                              -        1.89
                                                    ----------  ----------
    Efficiency ratio from continuing operations
     (GAAP)                                             108.48%     116.43%
                                                    ==========  ==========
Average equity to assets reconciliation
Tangible common equity to assets                          7.02%       5.93%
Effect of preferred equity                                2.30        2.17
                                                    ----------  ----------
    Tangible equity to assets                             9.32        8.10
Effect of goodwill and other intangibles                  2.55        3.10
                                                    ----------  ----------
    Equity to assets (GAAP)                              11.87%      11.20%
                                                    ==========  ==========
Actual tangible common equity to risk-weighted
 assets reconciliation
Tangible common equity to risk-weighted assets            9.97%       7.49%
Effect of other comprehensive income                      (.87)       (.72)
Effect of deferred tax limitation                        (2.47)       (.22)
Effect of trust preferred                                 1.03         .90
Effect of preferred equity                                3.41        2.99
                                                    ----------  ----------
    Tier I capital ratio (Regulatory)                    11.07%      10.44%
                                                    ==========  ==========
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
                                     2010                  2009
                               ----------------- --------------------------
                               Second    First   Fourth    Third   Second
                               Quarter  Quarter  Quarter  Quarter  Quarter
(in millions)                    (1)      (1)      (1)      (1)      (1)
                               -------- -------- -------- -------- --------
LOANS BY CATEGORY
Commercial (sec. by RE)        $  1,780 $  1,765 $  1,779 $  1,787 $  1,797
Commercial construction             342      357      363      380      379
Commercial & industrial             441      381      390      403      399
                               -------- -------- -------- -------- --------
     Total commercial             2,563    2,503    2,532    2,570    2,575
Residential construction            820      960    1,050    1,185    1,315
Residential mortgage              1,356    1,390    1,427    1,461    1,470
Consumer / installment              134      139      142      147      153
                               -------- -------- -------- -------- --------
     Total loans               $  4,873 $  4,992 $  5,151 $  5,363 $  5,513
                               ======== ======== ======== ======== ========
LOANS BY MARKET
Atlanta MSA                    $  1,373 $  1,404 $  1,435 $  1,526 $  1,605
Gainesville MSA                     343      372      390      402      413
North Georgia                     1,808    1,814    1,884    1,942    1,978
Western North Carolina              738      756      772      786      794
Coastal Georgia                     356      388      405      440      455
East Tennessee                      255      258      265      267      268
                               -------- -------- -------- -------- --------
     Total loans               $  4,873 $  4,992 $  5,151 $  5,363 $  5,513
                               ======== ======== ======== ======== ========
RESIDENTIAL CONSTRUCTION
Dirt loans
   Acquisition & development   $    214 $    290 $    332 $    380 $    413
   Land loans                       110      124      127      159      159
   Lot loans                        311      321      336      336      369
                               -------- -------- -------- -------- --------
      Total                         635      735      795      875      941
                               -------- -------- -------- -------- --------
House loans
   Spec                             125      153      178      218      268
   Sold                              60       72       77       92      106
                               -------- -------- -------- -------- --------
      Total                         185      225      255      310      374
                               -------- -------- -------- -------- --------
Total residential construction $    820 $    960 $  1,050 $  1,185 $  1,315
                               ======== ======== ======== ======== ========
RESIDENTIAL CONSTRUCTION -
 ATLANTA MSA
Dirt loans
   Acquisition & development   $     52 $     66 $     76 $    100 $    124
   Land loans                        32       43       43       61       63
   Lot loans                         39       47       52       54       81
                               -------- -------- -------- -------- --------
      Total                         123      156      171      215      268
                               -------- -------- -------- -------- --------
House loans
   Spec                              50       58       68       91      127
   Sold                              10       14       16       22       29
                               -------- -------- -------- -------- --------
      Total                          60       72       84      113      156
                               -------- -------- -------- -------- --------
Total residential construction $    183 $    228 $    255 $    328 $    424
                               ======== ======== ======== ======== ========
(1)  Excludes total loans of $80.8 million, $79.5 million, $85.1 million,
$104.0 million and $109.9 million as of June 30, 2010, March 31, 2010,
December 31, 2009, September 30, 2009 and June 30, 2009, respectively, that
are covered by the loss-sharing agreement with the FDIC, related to the
acquisition of Southern Community Bank.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
                                       2010        2009
                                  --------------- -------           Year
                                  Second  First   Second  Linked    over
                                  Quarter Quarter Quarter Quarter   Year
(in millions)                       (1)     (1)     (1)    Change   Change
                                  ------- ------- ------- --------  ------
LOANS BY CATEGORY
Commercial (sec. by RE)           $ 1,780 $ 1,765 $ 1,797 $     15  $  (17)
Commercial construction               342     357     379      (15)    (37)
Commercial & industrial               441     381     399       60      42
                                  ------- ------- -------
     Total commercial               2,563   2,503   2,575       60     (12)
Residential construction              820     960   1,315     (140)   (495)
Residential mortgage                1,356   1,390   1,470      (34)   (114)
Consumer / installment                134     139     153       (5)    (19)
                                  ------- ------- -------
     Total loans                  $ 4,873 $ 4,992 $ 5,513     (119)   (640)
                                  ======= ======= =======
LOANS BY MARKET
Atlanta MSA                       $ 1,373 $ 1,404 $ 1,605      (31)   (232)
Gainesville MSA                       343     372     413      (29)    (70)
North Georgia                       1,808   1,814   1,978       (6)   (170)
Western North Carolina                738     756     794      (18)    (56)
Coastal Georgia                       356     388     455      (32)    (99)
East Tennessee                        255     258     268       (3)    (13)
                                  ------- ------- -------
     Total loans                  $ 4,873 $ 4,992 $ 5,513     (119)   (640)
                                  ======= ======= =======
RESIDENTIAL CONSTRUCTION
Dirt loans
   Acquisition & development      $   214 $   290 $   413      (76)   (199)
   Land loans                         110     124     159      (14)    (49)
   Lot loans                          311     321     369      (10)    (58)
                                  ------- ------- -------
     Total                            635     735     941     (100)   (306)
                                  ------- ------- -------
House loans
   Spec                               125     153     268      (28)   (143)
   Sold                                60      72     106      (12)    (46)
                                  ------- ------- -------
     Total                            185     225     374      (40)   (189)
                                  ------- ------- -------
Total residential construction    $   820 $   960 $ 1,315     (140)   (495)
                                  ======= ======= =======
RESIDENTIAL CONSTRUCTION -
 ATLANTA MSA
Dirt loans
   Acquisition & development      $    52 $    66 $   124      (14)    (72)
   Land loans                          32      43      63      (11)    (31)
   Lot loans                           39      47      81       (8)    (42)
                                  ------- ------- -------
     Total                            123     156     268      (33)   (145)
                                  ------- ------- -------
House loans
   Spec                                50      58     127       (8)    (77)
   Sold                                10      14      29       (4)    (19)
                                  ------- ------- -------
     Total                             60      72     156      (12)    (96)
                                  ------- ------- -------
Total residential construction    $   183 $   228 $   424      (45)   (241)
                                  ======= ======= =======
(1)  Excludes total loans of $80.8 million, $79.5 million, $85.1 million,
$104.0 million and $109.9 million as of June 30, 2010, March 31, 2010,
December 31, 2009, September 30, 2009 and June 30, 2009, respectively, that
are covered by the loss-sharing agreement with the FDIC, related to the
acquisition of Southern Community Bank.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
                                          Second Quarter 2010
                            ----------------------------------------------
                            Non-performing    Foreclosed        Total
(in thousands)                  Loans         Properties         NPAs
                            --------------  --------------  --------------
NPAs BY CATEGORY
Commercial (sec. by RE)     $       56,013  $       13,297  $       69,310
Commercial construction             17,872          11,339          29,211
Commercial & industrial              7,245               -           7,245
                            --------------  --------------  --------------
     Total commercial               81,130          24,636         105,766
Residential construction            88,375          74,444         162,819
Residential mortgage                53,175          24,830          78,005
Consumer / installment               1,655               -           1,655
                            --------------  --------------  --------------
     Total NPAs             $      224,335  $      123,910  $      348,245
                            ==============  ==============  ==============
NPAs BY MARKET
Atlanta MSA                 $       74,031  $       30,605  $      104,636
Gainesville MSA                     10,730           2,750          13,480
North Georgia                      102,198          60,597         162,795
Western North Carolina              22,776          11,473          34,249
Coastal Georgia                      8,341          16,548          24,889
East Tennessee                       6,259           1,937           8,196
                            --------------  --------------  --------------
     Total NPAs             $      224,335  $      123,910  $      348,245
                            ==============  ==============  ==============
NPA ACTIVITY
Beginning Balance           $      280,802  $      136,275  $      417,077
Loans placed on non-accrual        155,007               -         155,007
Payments received                  (12,189)              -         (12,189)
Loan charge-offs                   (62,693)              -         (62,693)
Foreclosures                       (66,994)         66,994               -
Capitalized costs                        -             305             305
Note / property sales              (69,598)        (68,472)       (138,070)
Write downs                              -          (6,094)         (6,094)
Net losses on sales                      -          (5,098)         (5,098)
                            --------------  --------------  --------------
     Ending Balance         $      224,335  $      123,910  $      348,245
                            ==============  ==============  ==============
(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.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
                                          First Quarter 2010
                            ----------------------------------------------
                            Non-performing    Foreclosed        Total
(in thousands)                  Loans         Properties         NPAs
                            --------------  --------------  --------------
NPAs BY CATEGORY
Commercial (sec. by RE)     $       45,918  $       21,597  $       67,515
Commercial construction             23,556          14,285          37,841
Commercial & industrial              3,610               -           3,610
                            --------------  --------------  --------------
     Total commercial               73,084          35,882         108,966
Residential construction           147,326          74,220         221,546
Residential mortgage                57,920          26,173          84,093
Consumer / installment               2,472               -           2,472
                            --------------  --------------  --------------
     Total NPAs             $      280,802  $      136,275  $      417,077
                            ==============  ==============  ==============
NPAs BY MARKET
Atlanta MSA                 $       81,914  $       36,951  $      118,865
Gainesville MSA                     17,058           3,192          20,250
North Georgia                      109,280          63,128         172,408
Western North Carolina              31,353           8,588          39,941
Coastal Georgia                     33,438          21,871          55,309
East Tennessee                       7,759           2,545          10,304
                            --------------  --------------  --------------
     Total NPAs             $      280,802  $      136,275  $      417,077
                            ==============  ==============  ==============
NPA ACTIVITY
Beginning Balance           $      264,092  $      120,770  $      384,862
Loans placed on non-accrual        139,030               -         139,030
Payments received                   (5,733)              -          (5,733)
Loan charge-offs                   (58,897)              -         (58,897)
Foreclosures                       (49,233)         49,233               -
Capitalized costs                        -             320             320
Note / property sales               (8,457)        (25,951)        (34,408)
Write downs                              -          (4,579)         (4,579)
Net losses on sales                      -          (3,518)         (3,518)
                            --------------  --------------  --------------
     Ending Balance         $      280,802  $      136,275  $      417,077
                            ==============  ==============  ==============
(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.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
                                          Fourth Quarter 2009
                            ----------------------------------------------
                            Non-performing    Foreclosed        Total
(in thousands)                  Loans         Properties         NPAs
                            --------------  --------------  --------------
NPAs BY CATEGORY
Commercial (sec. by RE)     $       37,040  $       15,842  $       52,882
Commercial construction             19,976           9,761          29,737
Commercial & industrial              3,946               -           3,946
                            --------------  --------------  --------------
     Total commercial               60,962          25,603          86,565
Residential construction           142,332          76,519         218,851
Residential mortgage                58,767          18,648          77,415
Consumer / installment               2,031               -           2,031
                            --------------  --------------  --------------
     Total NPAs             $      264,092  $      120,770  $      384,862
                            ==============  ==============  ==============
NPAs BY MARKET
Atlanta MSA                 $      106,536  $       41,125  $      147,661
Gainesville MSA                      5,074           2,614           7,688
North Georgia                       87,598          53,072         140,670
Western North Carolina              29,610           5,096          34,706
Coastal Georgia                     26,871          17,150          44,021
East Tennessee                       8,403           1,713          10,116
                            --------------  --------------  --------------
     Total NPAs             $      264,092  $      120,770  $      384,862
                            ==============  ==============  ==============
NPA ACTIVITY
Beginning Balance           $      304,381  $      110,610  $      414,991
Loans placed on non-accrual        174,898               -         174,898
Payments received                  (26,935)              -         (26,935)
Loan charge-offs                   (88,427)              -         (88,427)
Foreclosures                       (79,983)         79,983               -
Capitalized costs                        -             981             981
Note / property sales              (19,842)        (61,228)        (81,070)
Write downs                              -          (2,209)         (2,209)
Net losses on sales                      -          (7,367)         (7,367)
                            --------------  --------------  --------------
     Ending Balance         $      264,092  $      120,770  $      384,862
                            ==============  ==============  ==============
(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.
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
                       Second Quarter     First Quarter    Fourth Quarter
                            2010              2010              2009
                      ----------------- ----------------- -----------------
                                 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)                  $  9,757    2.21% $  1,964     .45% $  3,896     .86%
Commercial
 construction            1,460    1.67     2,206    2.48     4,717    5.03
Commercial &
 industrial                867     .85     4,110    4.31       153     .15
                      --------          --------          --------
     Total commercial   12,084    1.91     8,280    1.33     8,766    1.36
Residential
 construction           41,515   18.71    43,100   17.32    67,393   23.87
Residential mortgage     6,517    1.90     4,551    1.31     7,026    1.93
Consumer /
 installment             1,207    3.53       737    2.12     1,400    3.83
                      --------          --------          --------
     Total            $ 61,323    4.98  $ 56,668    4.51  $ 84,585    6.37
                      ========          ========          ========
NET CHARGE-OFFS BY
 MARKET
Atlanta MSA           $ 16,926    4.85% $ 15,545    4.32% $ 43,595   12.07%
Gainesville MSA          2,547    3.01     1,675    1.92     2,273    2.49
North Georgia           28,100    6.19    29,747    6.51    18,057    3.57
Western North
 Carolina                7,194    3.86     3,695    1.96    10,091    5.11
Coastal Georgia          5,581    6.07     5,649    5.74     8,109    7.72
East Tennessee             975    1.53       357     .55     2,460    3.67
                      --------          --------          --------
     Total            $ 61,323    4.98  $ 56,668    4.51  $ 84,585    6.37
                      ========          ========          ========
(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)                   2010       2009
                                                      ---------  ---------
Interest revenue:
  Loans, including fees                               $  70,611  $  81,691
  Investment securities, including tax exempt of $295
   and $309                                              15,829     20,485
  Federal funds sold, commercial paper and deposits in
   banks                                                    759         98
                                                      ---------  ---------
      Total interest revenue                             87,199    102,274
                                                      ---------  ---------
Interest expense:
  Deposits:
    NOW                                                   1,745      2,843
    Money market                                          1,829      2,269
    Savings                                                  83        121
    Time                                                 17,718     32,064
                                                      ---------  ---------
      Total deposit interest expense                     21,375     37,297
  Federal funds purchased, repurchase agreements and
   other short-term borrowings                            1,056        595
  Federal Home Loan Bank advances                           974      1,203
  Long-term debt                                          2,667      2,760
                                                      ---------  ---------
    Total interest expense                               26,072     41,855
                                                      ---------  ---------
    Net interest revenue                                 61,127     60,419
  Provision for loan losses                              61,500     60,000
                                                      ---------  ---------
    Net interest revenue after provision for loan
     losses                                                (373)       419
                                                      ---------  ---------
Fee revenue:
  Service charges and fees                                7,993      7,557
  Mortgage loan and other related fees                    1,601      2,825
  Brokerage fees                                            586        497
  Securities losses, net                                      -       (711)
  Gain from acquisition                                       -     11,390
  Other                                                   1,399      1,137
                                                      ---------  ---------
    Total fee revenue                                    11,579     22,695
                                                      ---------  ---------
    Total revenue                                        11,206     23,114
                                                      ---------  ---------
Operating expenses:
  Salaries and employee benefits                         23,590     26,305
  Communications and equipment                            3,511      3,571
  Occupancy                                               3,836      3,818
  Advertising and public relations                        1,352      1,125
  Postage, printing and supplies                            765      1,288
  Professional fees                                       2,178      3,195
  Foreclosed property                                    14,540      5,737
  FDIC assessments and other regulatory charges           3,566      6,810
  Amortization of intangibles                               794        739
  Other                                                   4,176      1,122
  Loss on sale of nonperforming assets                   45,349          -
  Goodwill impairment                                         -          -
  Severance costs                                             -          -
                                                      ---------  ---------
    Total operating expenses                            103,657     53,710
                                                      ---------  ---------
  Loss from continuing operations before income taxes   (92,451)   (30,596)
  Income tax benefit                                    (32,919)   (14,529)
                                                      ---------  ---------
    Net loss from continuing operations                 (59,532)   (16,067)
  (Loss) income from discontinued operations, net
    of income taxes                                           -         66
  Gain from sale of subsidiary, net of income taxes
    and selling costs                                         -          -
                                                      ---------  ---------
    Net loss                                            (59,532)   (16,001)
  Preferred stock dividends and discount accretion        2,577      2,559
                                                      ---------  ---------
    Net loss available to common shareholders         $ (62,109) $ (18,560)
                                                      =========  =========
Loss from continuing operations per common share -
 Basic / Diluted                                      $    (.66) $    (.38)
Loss per common share - Basic / Diluted                    (.66)      (.38)
Weighted average common shares outstanding - Basic /
 Diluted                                                 94,524     48,794
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (Unaudited)
                                                       Six Months Ended
                                                           June 30,
                                                    ----------------------
(in thousands, except per share data)                  2010        2009
                                                    ----------  ----------
Interest revenue:
  Loans, including fees                             $  142,826  $  163,571
  Investment securities, including tax exempt of
   $606 and $628                                        32,032      41,237
  Federal funds sold, commercial paper and deposits
   in banks                                              1,697         540
                                                    ----------  ----------
      Total interest revenue                           176,555     205,348
                                                    ----------  ----------
Interest expense:
  Deposits:
    NOW                                                  3,599       6,180
    Money market                                         3,586       4,506
    Savings                                                167         248
    Time                                                37,916      68,117
                                                    ----------  ----------
      Total deposit interest expense                    45,268      79,051
  Federal funds purchased, repurchase agreements
   and other short-term borrowings                       2,094       1,148
  Federal Home Loan Bank advances                        1,951       2,277
  Long-term debt                                         5,329       5,529
                                                    ----------  ----------
  Total interest expense                                54,642      88,005
                                                    ----------  ----------
    Net interest revenue                               121,913     117,343
  Provision for loan losses                            136,500     125,000
                                                    ----------  ----------
    Net interest revenue after provision for loan
     losses                                            (14,587)     (7,657)
                                                    ----------  ----------
Fee revenue:
  Service charges and fees                              15,440      14,591
  Mortgage loan and other related fees                   3,080       5,476
  Brokerage fees                                         1,153       1,186
  Securities losses, net                                    61        (408)
  Gain from acquisition                                      -      11,390
  Other                                                  3,511       2,283
                                                    ----------  ----------
    Total fee revenue                                   23,245      34,518
                                                    ----------  ----------
    Total revenue                                        8,658      26,861
                                                    ----------  ----------
Operating expenses:
  Salaries and employee benefits                        47,950      53,618
  Communications and equipment                           6,784       7,217
  Occupancy                                              7,650       7,587
  Advertising and public relations                       2,395       2,169
  Postage, printing and supplies                         1,990       2,463
  Professional fees                                      4,121       6,476
  Foreclosed property                                   25,353      10,056
  FDIC assessments and other regulatory charges          7,192       9,492
  Amortization of intangibles                            1,596       1,478
  Other                                                  8,097       4,942
  Loss on sale of nonperforming assets                  45,349           -
  Goodwill impairment                                        -      70,000
  Severance costs                                            -       2,898
                                                    ----------  ----------
    Total operating expenses                           158,477     178,396
                                                    ----------  ----------
  Loss from continuing operations before income
   taxes                                              (149,819)   (151,535)
  Income tax benefit                                   (55,829)    (31,539)
                                                    ----------  ----------
    Net loss from continuing operations                (93,990)   (119,996)
  (Loss) income from discontinued operations, net of
   income taxes                                           (101)        222
  Gain from sale of subsidiary, net of income taxes
   and selling costs                                     1,266           -
                                                    ----------  ----------
    Net loss                                           (92,825)   (119,774)
  Preferred stock dividends and discount accretion       5,149       5,113
                                                    ----------  ----------
    Net loss available to common shareholders       $  (97,974) $ (124,887)
                                                    ==========  ==========
Loss from continuing operations per common share -
 Basic / Diluted                                    $    (1.05) $    (2.58)
Loss per common share - Basic / Diluted                  (1.04)      (2.57)
Weighted average common shares outstanding -
 Basic / Diluted                                        94,453      48,560
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
                                       June 30,   December 31,   June 30,
(in thousands, except share and per     2010         2009         2009
 share data)                         -----------  ------------ ------------
                                     (unaudited)   (audited)   (unaudited)
ASSETS
   Cash and due from banks           $   115,088  $    126,265 $    110,943
   Interest-bearing deposits in
    banks                                105,183       120,382       70,474
   Federal funds sold, commercial
    paper and short-term investments     148,227       129,720            -
                                     -----------  ------------ ------------
     Cash and cash equivalents           368,498       376,367      181,417
   Securities available for sale       1,165,776     1,530,047    1,816,787
   Securities held to maturity (fair
    value $327,497)                      322,148             -            -
   Mortgage loans held for sale           22,705        30,226       42,185
   Loans, net of unearned income       4,873,030     5,151,476    5,513,087
     Less allowance for loan losses      174,111       155,602      145,678
                                     -----------  ------------ ------------
          Loans, net                   4,698,919     4,995,874    5,367,409
   Assets covered by loss sharing
    agreements with the FDIC             156,611       185,938      230,125
   Premises and equipment, net           180,125       182,038      178,983
   Accrued interest receivable            29,650        33,867       41,405
   Goodwill and other intangible
    assets                               223,600       225,196      251,821
   Foreclosed property                   123,910       120,770      104,754
   Other assets                          360,542       319,591      262,469
                                     -----------  ------------ ------------
     Total assets                    $ 7,652,484  $  7,999,914 $  8,477,355
                                     ===========  ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Deposits:
     Demand                          $   779,934  $    707,826 $    714,630
     NOW                               1,326,861     1,335,790    1,273,368
     Money market                        756,370       713,901      573,463
     Savings                             185,176       177,427      180,368
     Time:
        Less than $100,000             1,575,211     1,746,511    1,992,056
        Greater than $100,000          1,093,975     1,187,499    1,351,527
        Brokered                         611,985       758,880      763,348
                                     -----------  ------------ ------------
             Total deposits            6,329,512     6,627,834    6,848,760
   Federal funds purchased,
    repurchase agreements, and
    other short-term borrowings          104,127       101,389      252,493
   Federal Home Loan Bank advances       104,138       114,501      283,292
   Long-term debt                        150,106       150,066      150,026
   Accrued expenses and other
    liabilities                           60,184        43,803       87,512
                                     -----------  ------------ ------------
     Total liabilities                 6,748,067     7,037,593    7,622,083
                                     -----------  ------------ ------------
Shareholders' equity:
   Preferred stock, $1 par value;
    10,000,000 shares authorized;
    Series A; $10 stated value;
     21,700 shares issued and
     outstanding                             217           217          217
    Series B; $1,000 stated value;
     180,000 shares issued and
     outstanding                         175,050       174,408      173,785
   Common stock, $1 par value;
    200,000,000 shares authorized;
    94,280,925, 94,045,603 and
    48,933,383 shares issued and
    outstanding                           94,281        94,046       48,933
   Common stock issuable; 284,771,
    221,906 and 182,041 shares             3,898         3,597        3,383
   Capital surplus                       663,836       622,034      450,514
   (Accumulated deficit) retained
     earnings                            (77,590)       20,384      136,624
   Accumulated other comprehensive
    income                                44,725        47,635       41,816
                                     -----------  ------------ ------------
      Total shareholders' equity         904,417       962,321      855,272
                                     -----------  ------------ ------------
      Total liabilities and
       shareholders' equity          $ 7,652,484  $  7,999,914 $  8,477,355
                                     ===========  ============ ============
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
                                                      2010
                                     -------------------------------------
(dollars in thousands, taxable         Average                     Avg.
 equivalent)                           Balance      Interest       Rate
                                     -----------  ------------ -----------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                            $ 5,010,937  $     70,640        5.65%
  Taxable securities (3)               1,503,162        15,534        4.13
  Tax-exempt securities (1)(3)            28,920           482        6.67
  Federal funds sold and other
   interest-earning assets               311,475         1,043        1.34
                                     -----------  ------------
       Total interest-earning assets   6,854,494        87,699        5.13
                                     -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses             (193,998)
  Cash and due from banks                100,931
  Premises and equipment                 181,064
  Other assets (3)                       761,803
                                     -----------
       Total assets                  $ 7,704,294
                                     ===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
   NOW                               $ 1,325,099  $      1,745         .53
   Money market                          746,039         1,829         .98
   Savings                               186,628            83         .18
   Time less than $100,000             1,605,308         7,887        1.97
   Time greater than $100,000          1,110,010         6,102        2.20
   Brokered                              642,954         3,729        2.33
                                     -----------  ------------
       Total interest-bearing
        deposits                       5,616,038        21,375        1.53
                                     -----------  ------------
   Federal funds purchased and other
    borrowings                           104,637         1,056        4.05
   Federal Home Loan Bank advances       107,948           974        3.62
   Long-term debt                        150,097         2,667        7.13
                                     -----------  ------------
       Total borrowed funds              362,682         4,697        5.19
                                     -----------  ------------
       Total interest-bearing
        liabilities                    5,978,720        26,072        1.75
                                                  ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits          758,558
  Other liabilities                       54,931
                                     -----------
       Total liabilities               6,792,209
Shareholders' equity                     912,085
                                     -----------
       Total liabilities and
        shareholders' equity         $ 7,704,294
                                     ===========
Net interest revenue                              $     61,627
                                                  ============
Net interest-rate spread                                              3.38%
                                                               ===========
Net interest margin (4)                                               3.60%
                                                               ===========
(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 $43.6 million in 2010 and $14.7 million in 2009
    are included in other assets for purposes of this presentation.
(4) Net interest margin is taxable equivalent net-interest revenue divided
    by average interest-earning assets.
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended 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)                       636,377
                                     -----------
       Total assets                  $ 8,212,140
                                     ===========
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                      107,036
                                     -----------
       Total liabilities               7,332,930
Shareholders' equity                     879,210
                                     -----------
       Total liabilities and
        shareholders' equity         $ 8,212,140
                                     ===========
Net interest revenue                              $     60,882
                                                  ============
Net interest-rate spread                                              2.97%
                                                               ===========
Net interest margin (4)                                               3.28%
                                                               ===========
(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 $43.6 million in 2010 and $14.7 million in 2009
    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,
                                                      2010
                                     -------------------------------------
(dollars in thousands, taxable         Average                     Avg.
 equivalent)                           Balance      Interest       Rate
                                     -----------  ------------ -----------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                            $ 5,091,445  $    142,859        5.66%
  Taxable securities (3)               1,495,447        31,426        4.20
  Tax-exempt securities (1)(3)            29,482           991        6.72
  Federal funds sold and other
   interest-earning assets               352,683         2,272        1.29
                                     -----------  ------------
       Total interest-earning assets   6,969,057       177,548        5.13
                                     -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses             (190,662)
  Cash and due from banks                102,728
  Premises and equipment                 181,493
  Other assets (3)                       762,014
                                     -----------
       Total assets                  $ 7,824,630
                                     ===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
    NOW                              $ 1,343,297  $      3,599         .54
    Money market                         734,817         3,586         .98
    Savings                              183,555           167         .18
    Time less than $100,000            1,648,739        16,778        2.05
    Time greater than $100,000         1,132,767        12,872        2.29
    Brokered                             689,717         8,266        2.42
                                     -----------  ------------
       Total interest-bearing
        deposits                       5,732,892        45,268        1.59
                                     -----------  ------------
    Federal funds purchased and other
     borrowings                          103,355         2,094        4.09
    Federal Home Loan Bank advances      111,150         1,951        3.54
    Long-term debt                       150,088         5,329        7.16
                                     -----------  ------------
       Total borrowed funds              364,593         9,374        5.18
                                     -----------  ------------
       Total interest-bearing
        liabilities                    6,097,485        54,642        1.81
                                                  ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits          738,876
  Other liabilities                       59,605
                                     -----------
       Total liabilities               6,895,966
Shareholders' equity                     928,664
                                     -----------
       Total liabilities and
        shareholders' equity         $ 7,824,630
                                     ===========
Net interest revenue                              $    122,906
                                                  ============
Net interest-rate spread                                              3.32%
                                                               ===========
Net interest margin (4)                                               3.55%
                                                               ===========
(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 $43.4 million in 2010 and $12.7 million in 2009 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)                       661,520
                                     -----------
       Total assets                  $ 8,291,767
                                     ===========
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                      112,382
                                     -----------
       Total liabilities               7,368,653
Shareholders' equity                     923,114
                                     -----------
       Total liabilities and
        shareholders' equity         $ 8,291,767
                                     ===========
Net interest revenue                              $    118,294
                                                  ============
Net interest-rate spread                                              2.86%
                                                               ===========
Net interest margin (4)                                               3.18%
                                                               ===========
(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 $43.4 million in 2010 and $12.7 million in 2009 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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