United Community Banks, Inc.
Jul 25, 2006

United Community Banks, Inc. Reports 17% Gain in Diluted Earnings per Share for Second Quarter 2006

United Community Banks, Inc. Reports 17

BLAIRSVILLE, GA, Jul 25, 2006 (MARKET WIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI)

HIGHLIGHTS:

--  Record Second Quarter Earnings
      Diluted Earnings per Share of $.41 -- Up 17%
      Net Income of $17 Million -- Up 23%
      Return on Tangible Equity of 17.68%
      Total Assets Rise to $6.3 Billion
--  Strong Loan Demand and Rise in Net Interest Margin Drove Performance

United Community Banks, Inc. (NASDAQ: UCBI), Georgia's third-largest bank holding company, today announced record financial results for the second quarter of 2006. Compared with the second quarter of 2005, the company achieved a 16% increase in total revenue, a 23% rise in net income and a 17% gain in diluted earnings per share.

For the second quarter of 2006, net income was $16.9 million compared with $13.8 million a year earlier. Diluted earnings per share increased to $.41 from $.35 a year ago. Total revenue, on a taxable equivalent basis, was $70.6 million compared with $60.6 million for the second quarter of 2005. Return on tangible equity was 17.68% and return on assets was 1.10%, compared with 19.21% and 1.03%, respectively, a year ago.

"Strong demand for loans and deposits continued across all markets," said Jimmy Tallent, President and Chief Executive Officer of United Community Banks. "Loans increased $226 million during the second quarter, or 20% on an annualized basis, and helped drive the increase in net interest revenue. We more than funded our loan growth by adding $228 million of deposits this quarter -- more than half were core deposits. The strong loan growth pushed total assets to $6.3 billion, a 14% increase from a year ago. Our net interest margin was 4.34%, up 22 basis points from a year ago and up 1 basis point from last quarter, as rising short-term interest rates continued to positively affect our slightly asset-sensitive balance sheet."

For the first six months of 2006, net income increased $5.8 million to $33.0 million, up 21% from $27.2 million for the first half of 2005. Diluted earnings per share of $.80 increased $.11, or 16%, from $.69 for the first six months of 2005. Total revenue, on a taxable equivalent basis, was $138.6 million, up 19% from $116.7 million a year ago. Return on tangible equity was 17.67% and return on assets was 1.10%, compared with 19.52% and 1.04%, respectively, a year ago.

At June 30, 2006, total loans were $4.8 billion, up $737 million, or 18%, from a year ago. All of the loan growth was organic. "Organic growth, with an uncompromising focus on sound credit quality, is at the core of our balanced growth strategy and is further supported by our focused de novo expansion," Tallent said. "We find the right people and build around them, usually adding two to four new offices a year. The most recent example of this strategy was the announcement yesterday that we will open our 25th community bank in Cleveland, Tennessee, along the high-growth I-75 corridor. Led by veteran Cleveland bankers Mickey Torbett and DeWayne Morrow, our new bank downtown will begin full-service operations as United Community Bank - Cleveland later this month with a total of ten seasoned, local bankers. I am excited to welcome this fine team to our family of United banks and look forward to their growth opportunities in this attractive market."

Tallent continued, "De novo expansion will continue to allow us to open offices in selective new markets and expand our franchise. Earlier in the year, we opened three offices in Georgia -- a second location in Savannah, a fifth location in Hall County, and a commercial loan office in Jasper, just north of Atlanta in Pickens County. Earlier this quarter, we announced an agreement to acquire two banking offices in Sylva and Bryson City, North Carolina and we expect the transaction to close in September. Both of these offices are in markets where we already have a presence and a deep knowledge of the banking environment.

"The highest level of customer service continues to be our distinguishing characteristic," Tallent said. "Our relentless focus on service has generated customer satisfaction scores that continue to exceed 90%, well above the comparable industry average of 75%. This personal, caring brand of service is invaluable in building deposits through customer referrals while also maintaining and growing our long-term relationships with existing customers."

For the second quarter, taxable equivalent net interest revenue of $62.3 million was up $11.1 million, or 22%, from the first quarter of 2005. Taxable equivalent net interest margin for the second quarter was 4.34%, compared with 4.12% a year ago and 4.33% for the second quarter of 2006. "Our balance sheet has remained slightly asset sensitive, which allowed us to benefit from the rise in interest rates as reflected in the expansion of our margin throughout 2005 and into the first half of 2006," Tallent said.

The second quarter provision for loan losses was $3.7 million, which increased $900,000 from a year earlier and $200,000 from the first quarter of 2006. Annualized net charge-offs to average loans were 9 basis points for the second quarter, compared with 11 basis points for the first quarter of 2006 and 14 basis points for the second quarter of 2005. At quarter-end, non-performing assets totaled $8.8 million compared with $8.4 million at the end of the first quarter of 2006 and $13.5 million a year ago. Non-performing assets as a percentage of total assets were 14 basis points at quarter-end, unchanged from the first quarter of 2006 and down from the 24 basis points at June 30, 2005. "Strong credit quality, rooted with our guiding principle of securing loans with hard assets, is essential to our balanced growth strategy and overall success," Tallent said.

Fee revenue of $12.0 million was down slightly from $12.2 million for the second quarter of 2005, primarily due to $530,000 in gains from the sale of two banking offices in the second quarter of 2005. Also impacting fee revenue this quarter was $280,000 in charges for the prepayment of Federal Home Loan Bank advances that were part of our balance sheet management activities. Service charges and fees on deposit accounts increased $548,000 to $6.8 million, primarily due to growth in transactions and new accounts resulting from core deposit programs and higher ATM and debit card usage fees. Mortgage fees, consulting fees and brokerage fees remain substantially unchanged from a year ago.

Operating expenses of $43.5 million increased $4.7 million, or 12%, from the second quarter of 2005. Salaries and employee benefit costs of $28.3 million increased $3.0 million, or 12%, from the second quarter of 2005 due to the increase in staff to support our significant expansion efforts and business growth. Communications and equipment expenses increased $616,000 to $3.7 million due to further investments and upgrades in technology equipment to support business growth and additional banking offices. Advertising and public relations expense rose $249,000 to $1.9 million reflecting the costs of initiatives to raise core deposits and efforts to generate brand awareness in new markets. Occupancy expense increased $198,000 to $2.9 million reflecting the increase in cost to operate additional banking offices added through de novo expansion. The increase in other operating expense was primarily due to write-downs on foreclosed real estate properties and higher costs to support business growth.

"We had a positive operating leverage of four percent this quarter," Tallent said. "Also, our operating efficiency ratio of 58.53% was within our long-term efficiency goal of 58% to 60%. This reflects the continued strength of our existing franchise, strong revenue growth and disciplined expense controls, which more than offset the cost of reinvesting for the future through our de novo expansion efforts," Tallent said.

"Our outlook for the balance of 2006 is for earnings per share growth at the upper-end of our long-term goal of 12% to 15%," Tallent said. "We anticipate core loan growth to be slightly above our targeted range of 10% to 14%. Our net interest margin has benefited from rising short-term interest rates; however, we expect the margin could decline slightly in the second half of 2006, due to further pricing competition for deposits. This outlook assumes a stable economic environment and continued strong credit quality.

"Our results for the first half of 2006 are leading towards another year of strong growth and superior operating performance," Tallent stated. "We are committed to excellent customer service while maintaining solid credit quality as we continue our efforts to build shareholder value through our balanced growth strategy of strong internal growth, complemented by selective de novo and merger expansion."

Conference Call

United Community Banks will hold a conference call on Tuesday, July 25, 2006, at 11 a.m. ET to discuss the contents of this news release, as well as business highlights for the quarter and the financial outlook for the remainder of 2006. The telephone number for the conference call is (866) 700-7441 and the pass code is "UCBI." The conference call will also be available by web cast within the Investor Relations section of the company's web site at www.ucbi.com.

About United Community Banks, Inc.

Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $6.3 billion and operates 25 community banks with 94 banking offices located throughout north Georgia, metro Atlanta, 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 factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled "Forward-Looking Statements" on page 4 of United Community Banks, Inc.'s annual report filed on Form 10-K with the Securities and Exchange Commission.

UNITED COMMUNITY BANKS, INC.
Selected Financial Information
                                               2006                2005
                                     ------------------------  -----------
(in thousands, except per share        Second        First       Fourth
data; taxable equivalent)              Quarter      Quarter      Quarter
                                     -----------  -----------  -----------
INCOME SUMMARY
Interest revenue                     $   111,728  $   102,797  $    95,465
Interest expense                          49,407       43,065       38,576
                                     -----------  -----------  -----------
    Net interest revenue                  62,321       59,732       56,889
Provision for loan losses                  3,700        3,500        3,500
Fee revenue                               11,976       11,758       11,373
                                     -----------  -----------  -----------
   Total revenue                          70,597       67,990       64,762
Operating expenses                        43,483       42,222       40,520
                                     -----------  -----------  -----------
    Income before taxes                   27,114       25,768       24,242
Income taxes                              10,185        9,729        9,012
                                     -----------  -----------  -----------
   Net income                        $    16,929  $    16,039  $    15,230
                                     ===========  ===========  ===========
PERFORMANCE MEASURES
  Per common share:
    Basic earnings                   $       .42  $       .40  $       .39
    Diluted earnings                         .41          .39          .38
    Cash dividends declared                  .08          .08          .07
    Book value                             12.34        12.09        11.80
    Tangible book value (2)                 9.50         9.25         8.94
  Key performance ratios:
    Return on tangible equity
     (1)(2)(3)                             17.68%       17.66%       18.20%
    Return on equity (1)(3)                13.41        13.25        13.30
    Return on assets (3)                    1.10         1.09         1.05
    Net interest margin (3)                 4.34         4.33         4.20
    Efficiency ratio                       58.53        59.06        58.80
    Dividend payout ratio                  19.05        20.00        17.95
    Equity to assets                        7.95         8.04         7.69
    Tangible equity to assets (2)           6.22         6.24         5.82
ASSET QUALITY
  Allowance for loan losses          $    58,508  $    55,850  $    53,595
  Non-performing assets                    8,805        8,367       12,995
  Net charge-offs                          1,042        1,245        1,793
  Allowance for loan losses to loans        1.22%        1.22%        1.22%
  Non-performing assets to total
   assets                                    .14          .14          .22
  Net charge-offs to average loans
   (3)                                       .09          .11          .16
AVERAGE BALANCES
  Loans                              $ 4,690,196  $ 4,505,494  $ 4,328,613
  Investment securities                1,039,707    1,038,683    1,004,966
  Earning assets                       5,758,697    5,574,712    5,383,096
  Total assets                         6,159,152    5,960,801    5,769,632
  Deposits                             4,842,389    4,613,810    4,354,275
  Stockholders' equity                   489,821      478,960      443,746
  Common shares outstanding:
    Basic                                 40,156       40,088       39,084
    Diluted                               41,328       41,190       40,379
AT PERIOD END
  Loans                              $ 4,810,277  $ 4,584,155  $ 4,398,286
  Investment securities                  974,524      983,846      990,687
  Earning assets                       5,862,614    5,633,381    5,470,718
  Total assets                         6,331,136    6,070,596    5,865,756
  Deposits                             4,976,650    4,748,438    4,477,600
  Stockholders' equity                   496,297      485,414      472,686
  Common shares outstanding               40,179       40,119       40,020
(1)  Net income available to common stockholders, which excludes preferred
stock dividends, divided by average realized common equity, which excludes
accumulated other comprehensive income (loss).
(2)  Excludes effect of acquisition related intangibles and associated
amortization.
(3)  Annualized.
UNITED COMMUNITY BANKS, INC.
Selected Financial Information
                                                                   Second
                                       ------------------------   Quarter
(in thousands, except per share           Third       Second     2006-2005
data; taxable equivalent)                Quarter      Quarter      Change
                                       -----------  -----------  ---------
INCOME SUMMARY
Interest revenue                       $    89,003  $    80,701
Interest expense                            34,033       29,450
                                       -----------  -----------
    Net interest revenue                    54,970       51,251         22%
Provision for loan losses                    3,400        2,800
Fee revenue                                 12,396       12,179         (2)
                                       -----------  -----------
   Total revenue                            63,966       60,630         16
Operating expenses                          41,294       38,808         12
                                       -----------  -----------
    Income before taxes                     22,672       21,822         24
Income taxes                                 8,374        8,049
                                       -----------  -----------
   Net income                          $    14,298  $    13,773         23
                                       ===========  ===========
PERFORMANCE MEASURES
  Per common share:
    Basic earnings                     $       .37  $       .36         17
    Diluted earnings                           .36          .35         17
    Cash dividends declared                    .07          .07         14
    Book value                               11.04        10.86         14
    Tangible book value (2)                   8.05         7.85         21
  Key performance ratios:
    Return on tangible equity
     (1)(2)(3)                               18.90%       19.21%
    Return on equity (1)(3)                  13.42        13.46
    Return on assets (3)                      1.01         1.03
    Net interest margin (3)                   4.17         4.12
    Efficiency ratio                         61.16        61.18
    Dividend payout ratio                    18.92        19.44
    Equity to assets                          7.46         7.65
    Tangible equity to assets (2)             5.53         5.62
ASSET QUALITY
  Allowance for loan losses            $    51,888  $    49,873
  Non-performing assets                     13,565       13,495
  Net charge-offs                            1,385        1,380
  Allowance for loan losses to loans          1.22%        1.22%
  Non-performing assets to total
   assets                                      .24          .24
  Net charge-offs to average loans (3)         .13          .14
AVERAGE BALANCES
  Loans                                $ 4,169,170  $ 3,942,077         19
  Investment securities                  1,008,687      996,096          4
  Earning assets                         5,239,195    4,986,339         15
  Total assets                           5,608,158    5,338,398         15
  Deposits                               4,078,437    3,853,884         26
  Stockholders' equity                     418,459      408,352         20
  Common shares outstanding:
    Basic                                   38,345       38,270
    Diluted                                 39,670       39,436
AT PERIOD END
  Loans                                $ 4,254,051  $ 4,072,811         18
  Investment securities                    945,922      990,500         (2)
  Earning assets                         5,302,532    5,161,067         14
  Total assets                           5,709,666    5,540,242         14
  Deposits                               4,196,369    3,959,226         26
  Stockholders' equity                     424,000      415,994         19
  Common shares outstanding                 38,383       38,283
(1)  Net income available to common stockholders, which excludes preferred
stock dividends, divided by average realized common equity, which excludes
accumulated other comprehensive income (loss).
(2)  Excludes effect of acquisition related intangibles and associated
amortization.
(3)  Annualized.
UNITED COMMUNITY BANKS, INC.
Selected Financial Information
                                             For the Six
                                             Months Ended           YTD
(in thousands, except per share        ------------------------  2006-2005
data; taxable equivalent)                  2006         2005       Change
                                       -----------  -----------  ---------
INCOME SUMMARY
Interest revenue                       $   214,525  $   154,350
Interest expense                            92,472       54,817
                                       -----------  -----------
    Net interest revenue                   122,053       99,533         23%
Provision for loan losses                    7,200        5,200
Fee revenue                                 23,734       22,379          6
                                       -----------  -----------
   Total revenue                           138,587      116,712         19
Operating expenses                          85,705       73,587         16
                                       -----------  -----------
    Income before taxes                     52,882       43,125         23
Income taxes                                19,914       15,911
                                       -----------  -----------
   Net income                          $    32,968  $    27,214         21
                                       ===========  ===========
PERFORMANCE MEASURES
  Per common share:
    Basic earnings                     $       .82  $       .71         15
    Diluted earnings                           .80          .69         16
    Cash dividends declared                    .16          .14         14
    Book value                               12.34        10.86         14
    Tangible book value (2)                   9.50         7.85         21
  Key performance ratios:
    Return on tangible equity
     (1)(2)(3)                               17.67%       19.52%
    Return on equity (1)(3)                  13.33        13.57
    Return on assets (3)                      1.10         1.04
    Net interest margin (3)                   4.34         4.09
    Efficiency ratio                         58.79        60.36
    Dividend payout ratio                    19.51        19.72
    Equity to assets                          7.99         7.68
    Tangible equity to assets (2)             6.23         5.60
ASSET QUALITY
  Allowance for loan losses            $    58,508  $    49,873
  Non-performing assets                      8,805       13,495
  Net charge-offs                            2,287        2,523
  Allowance for loan losses to loans          1.22%        1.22%
  Non-performing assets to total
   assets                                      .14          .24
  Net charge-offs to average loans (3)         .10          .13
AVERAGE BALANCES
  Loans                                $ 4,598,355  $ 3,870,177         19
  Investment securities                  1,039,198      971,283          7
  Earning assets                         5,667,213    4,903,610         16
  Total assets                           6,060,526    5,251,913         15
  Deposits                               4,728,731    3,786,276         25
  Stockholders' equity                     484,420      403,286         20
  Common shares outstanding:
    Basic                                   40,122       38,234
    Diluted                                 41,259       39,412
AT PERIOD END
  Loans                                $ 4,810,277  $ 4,072,811         18
  Investment securities                    974,524      990,500         (2)
  Earning assets                         5,862,614    5,161,067         14
  Total assets                           6,331,136    5,540,242         14
  Deposits                               4,976,650    3,959,226         26
  Stockholders' equity                     496,297      415,994         19
  Common shares outstanding                 40,179       38,283
(1)  Net income available to common stockholders, which excludes preferred
stock dividends, divided by average realized common equity, which excludes
accumulated other comprehensive income (loss).
(2)  Excludes effect of acquisition related intangibles and associated
amortization.
(3)  Annualized.
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income
                                 Three Months Ended     Six Months Ended
                                      June 30,              June 30,
                                --------------------- --------------------
 (in thousands, except per
  share data)                     2006       2005       2006       2005
                                ---------- ---------  ---------  ---------
Interest revenue:
 Loans, including fees          $   99,080 $  69,446  $ 189,445  $ 132,913
 Investment securities:
  Taxable                           11,521    10,190     22,839     19,204
  Tax exempt                           509       528      1,023      1,053
 Federal funds sold and
  deposits in banks                    162       150        320        409
                                ---------- ---------  ---------  ---------
   Total interest revenue          111,272    80,314    213,627    153,579
                                ---------- ---------  ---------  ---------
Interest expense:
 Deposits:
  Demand                             8,956     4,379     16,143      7,906
  Savings                              226       174        454        342
  Time                              29,599    15,019     54,985     28,027
                                ---------- ---------  ---------  ---------
   Total deposit interest
    expense                         38,781    19,572     71,582     36,275
 Federal funds purchased,
  repurchase agreements, &
  other short-term borrowings        2,078     1,121      3,554      2,006
 Federal Home Loan Bank
  advances                           6,380     6,565     13,009     12,222
 Long-term debt                      2,168     2,192      4,327      4,314
                                ---------- ---------  ---------  ---------
  Total interest expense            49,407    29,450     92,472     54,817
                                ---------- ---------  ---------  ---------
  Net interest revenue              61,865    50,864    121,155     98,762
 Provision for loan losses           3,700     2,800      7,200      5,200
                                ---------- ---------  ---------  ---------
  Net interest revenue after
   provision for loan losses        58,165    48,064    113,955     93,562
                                ---------- ---------  ---------  ---------
Fee revenue:
 Service charges and fees            6,828     6,280     13,181     11,894
 Mortgage loan and other
  related fees                       1,708     1,742      3,221      3,225
 Consulting fees                     1,572     1,685      3,156      3,167
 Brokerage fees                        796       768      1,646      1,210
 Securities losses, net                  -        (2)        (3)        (2)
 Other                               1,072     1,706      2,533      2,885
                                ---------- ---------  ---------  ---------
  Total fee revenue                 11,976    12,179     23,734     22,379
                                ---------- ---------  ---------  ---------
  Total revenue                     70,141    60,243    137,689    115,941
                                ---------- ---------  ---------  ---------
Operating expenses:
 Salaries and employee benefits     28,307    25,274     55,950     47,509
 Communications and equipment        3,731     3,115      7,107      6,097
 Occupancy                           2,916     2,718      5,848      5,386
 Advertising and public
  relations                          1,948     1,699      3,836      3,062
 Postage, printing and supplies      1,289     1,369      2,805      2,720
 Professional fees                   1,069     1,071      2,230      2,109
 Amortization of intangibles           503       503      1,006      1,006
 Other                               3,720     3,059      6,923      5,698
                                ---------- ---------  ---------  ---------
  Total operating expenses          43,483    38,808     85,705     73,587
                                ---------- ---------  ---------  ---------
 Income before income taxes         26,658    21,435     51,984     42,354
 Income taxes                        9,729     7,662     19,016     15,140
                                ---------- ---------  ---------  ---------
  Net income                    $   16,929 $  13,773  $  32,968  $  27,214
                                ========== =========  =========  =========
  Net income available to
   common stockholders          $   16,924 $  13,767  $  32,958  $  27,201
                                ========== =========  =========  =========
Earnings per common share:
 Basic                          $      .42 $     .36  $     .82  $     .71
 Diluted                               .41       .35        .80        .69
Weighted average common shares
 outstanding:
 Basic                              40,156    38,270     40,122     38,234
 Diluted                            41,328    39,436     41,259     39,412
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
                                       June 30,  December 31,    June 30,
 (in thousands, except share and per
  share data)                            2006         2005         2005
                                     -----------  -----------  -----------
                                     (unaudited)   (audited)   (unaudited)
 ASSETS
   Cash and due from banks           $   159,954  $   121,963  $   117,478
   Interest-bearing deposits in
    banks                                 21,948       20,607       17,451
                                     -----------  -----------  -----------
       Cash and cash equivalents         181,902      142,570      134,929
   Securities available for sale         974,524      990,687      990,500
   Mortgage loans held for sale           24,000       22,335       34,095
   Loans, net of unearned income       4,810,277    4,398,286    4,072,811
        Less allowance for loan
         losses                           58,508       53,595       49,873
                                     -----------  -----------  -----------
               Loans, net              4,751,769    4,344,691    4,022,938
   Premises and equipment, net           124,018      112,887      105,469
   Accrued interest receivable            44,187       37,197       31,909
   Goodwill and other intangible
    assets                               117,646      118,651      119,617
   Other assets                          113,090       96,738      100,785
                                     -----------  -----------  -----------
       Total assets                  $ 6,331,136  $ 5,865,756  $ 5,540,242
                                     ===========  ===========  ===========
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Liabilities:
   Deposits:
        Demand                       $   662,463  $   602,525  $   590,306
        Interest-bearing demand        1,305,479    1,264,947    1,141,115
        Savings                          173,985      175,453      177,822
        Time:
             Less than $100,000        1,388,009    1,218,277    1,041,680
             Greater than $100,000     1,106,359      895,466      696,941
             Brokered                    340,355      320,932      311,362
                                     -----------  -----------  -----------
                      Total deposits   4,976,650    4,477,600    3,959,226
    Federal funds purchased,
     repurchase agreements, &
     other short-term borrowings         249,552      122,881      219,218
    Federal Home Loan Bank advances      458,587      635,616      800,316
    Long-term debt                       111,869      111,869      111,869
    Accrued expenses and other
     liabilities                          38,181       45,104       33,619
                                     -----------  -----------  -----------
         Total liabilities             5,834,839    5,393,070    5,124,248
                                     -----------  -----------  -----------
 Shareholders' equity:
     Preferred stock, $1 par value;
      $10 stated value; 10,000,000
      shares authorized; 32,200, 32,200
       and 37,200 shares issued
       and outstanding                       322          322          372
     Common stock, $1 par value;
      100,000,000 shares authorized;
       40,178,533, 40,019,853 and
       38,407,874 shares issued           40,179       40,020       38,408
     Common stock issuable; 19,712
      and 9,948 shares as of June
      30, 2006 and December 31, 2005,
       respectively                          544          271            -
     Capital surplus                     197,235      193,355      154,480
     Retained earnings                   277,086      250,563      226,546
     Treasury stock; 124,665 shares
      as of June 30, 2005, at cost             -            -       (2,517)
     Accumulated other comprehensive
      loss                               (19,069)     (11,845)      (1,295)
                                     -----------  -----------  -----------
         Total shareholders' equity      496,297      472,686      415,994
                                     -----------  -----------  -----------
         Total liabilities and
          shareholders' equity       $ 6,331,136  $ 5,865,756  $ 5,540,242
                                     ===========  ===========  ===========
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
                                   --------------------------------------
                                                      2006
                                   --------------------------------------
(dollars in thousands, taxable       Average                     Avg.
 equivalent)                         Balance      Interest       Rate
                                   --------------------------------------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                            $ 4,690,196  $     98,965        8.46%
  Taxable securities (3)                 991,701        11,521        4.65
  Tax-exempt securities (1) (3)           48,006           837        6.98
  Federal funds sold and other
   interest-earning assets                28,794           405        5.63
                                     -----------  ------------
     Total interest-earning assets     5,758,697       111,728        7.78
                                     -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses              (57,654)
  Cash and due from banks                129,389
  Premises and equipment                 120,870
  Other assets (3)                       207,850
                                     -----------
     Total assets                    $ 6,159,152
                                     ===========
Liabilities and Stockholders'Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
   Transaction accounts              $ 1,282,798         8,956        2.80
   Savings deposits                      174,533           226         .52
   Time deposits less than $100,000
    $100,000                           1,344,861        14,066        4.20
   Time deposits greater than
    $100,000                           1,061,249        12,147        4.59
   Brokered deposits                     327,962         3,386        4.14
                                     -----------  ------------
       Total interest-bearing
        deposits                       4,191,403        38,781        3.71
                                     -----------  ------------
 Federal funds purchased & other
  borrowings                             165,563         2,078        5.03
 Federal Home Loan Bank advances         506,531         6,380        5.05
 Long-term debt                          111,869         2,168        7.77
                                     -----------  ------------
      Total borrowed funds               783,963        10,626        5.44
                                     -----------  ------------
      Total interest-bearing
       liabilities                     4,975,366        49,407        3.98
                                                  ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits          650,986
  Other liabilities                       42,979
                                     -----------
     Total liabilities                 5,669,331
Stockholders' equity                     489,821
                                     -----------
     Total liabilities
        and stockholders' equity     $ 6,159,152
                                     ===========
Net interest revenue                              $     62,321
                                                  ============
Net interest-rate spread                                              3.80%
                                                               ===========
Net interest margin (4)                                               4.34%
                                                               ===========
(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 tax rate and
     the federal tax adjusted state tax rate.
(2)  Included in the average balance of loans outstanding are loans where
     the accrual of interest has been discontinued.
(3)  Securities available for sale are shown at amortized cost.  Pretax
     unrealized losses of $21.6 million and $782,000 in 2006 and 2005,
     respectively, 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,
                                   --------------------------------------
                                                    2005
                                   --------------------------------------
(dollars in thousands, taxable       Average                     Avg.
 equivalent)                         Balance      Interest       Rate
                                   --------------------------------------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                          $ 3,942,077  $     69,130         7.03 %
  Taxable securities (3)               946,543        10,190         4.31
  Tax-exempt securities (1) (3)         49,553           869         7.01
  Federal funds sold and other
   interest-earning assets              48,166           512         4.25
                                   -----------  ------------
     Total interest-earning assets   4,986,339        80,701         6.49
                                   -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses            (49,576)
  Cash and due from banks               94,488
  Premises and equipment               103,439
  Other assets (3)                     203,708
                                   -----------
     Total assets                  $ 5,338,398
                                   ===========
Liabilities and Stockholders'
 Equity:
Interest-bearing liabilities:
 Interest-bearing deposits:
   Transaction accounts            $ 1,109,861         4,379         1.58
   Savings deposits                    176,624           174          .40
   Time deposits less than
    $100,000                         1,025,236         7,307         2.86
   Time deposits greater than
    $100,000                           661,214         5,515         3.35
   Brokered deposits                   311,933         2,197         2.83
                                   -----------  ------------
     Total interest-bearing
      deposits                       3,284,868        19,572         2.39
                                   -----------  ------------
   Federal funds purchased & other
    borrowings                         149,438         1,121         3.01
   Federal Home Loan Bank advances     785,523         6,565         3.35
   Long-term debt                      111,868         2,192         7.86
                                   -----------  ------------
     Total borrowed funds            1,046,829         9,878         3.78
                                   -----------  ------------
     Total interest-bearing
      liabilities                    4,331,697        29,450         2.73
                                                ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits        569,016
  Other liabilities                     29,333
                                   -----------
     Total liabilities               4,930,046
Stockholders' equity                   408,352
                                   -----------
     Total liabilities
      and stockholders' equity     $ 5,338,398
                                   ===========
Net interest revenue                            $     51,251
                                                ============
Net interest-rate spread                                             3.76 %
                                                             ============
Net interest margin (4)                                              4.12 %
                                                             ============
(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 tax rate and the
    federal tax adjusted state tax rate.
(2) Included in the average balance of loans outstanding are loans where
    the accrual of interest has been discontinued.
(3) Securities available for sale are shown at amortized cost.  Pretax
    unrealized losses of $21.6 million and $782,000 in 2006 and 2005,
    respectively, 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,
                                   --------------------------------------
                                                    2006
                                   --------------------------------------
(dollars in thousands, taxable       Average                     Avg.
 equivalent)                         Balance      Interest       Rate
                                   ---------------------------------------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                          $ 4,598,355  $    189,219         8.30 %
  Taxable securities (3)               990,698        22,839         4.61
  Tax-exempt securities (1) (3)         48,500         1,683         6.94
  Federal funds sold and other
   interest-earning assets              29,660           784         5.29
                                   -----------  ------------
     Total interest-earning
      assets                         5,667,213       214,525         7.63
                                   -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses            (56,247)
  Cash and due from banks              125,957
  Premises and equipment               118,245
  Other assets (3)                     205,358
                                   -----------
     Total assets                  $ 6,060,526
                                   ===========
Liabilities and Stockholders'
 Equity:
Interest-bearing liabilities:
 Interest-bearing deposits:
   Transaction accounts            $ 1,264,373  $     16,143         2.57
   Savings deposits                    175,161           454          .52
   Time deposits less than
    $100,000                         1,307,676        26,101         4.03
   Time deposits greater than
    $100,000                         1,020,682        22,556         4.46
   Brokered deposits                   321,562         6,328         3.97
                                   -----------  ------------
     Total interest-bearing
      deposits                       4,089,454        71,582         3.53
                                   -----------  ------------
   Federal funds purchased & other
    borrowings                         147,185         3,554         4.87
   Federal Home Loan Bank advances     546,405        13,009         4.80
   Long-term debt                      111,868         4,327         7.80
                                   -----------  ------------
     Total borrowed funds              805,458        20,890         5.23
                                   -----------  ------------
     Total interest-bearing
      liabilities                    4,894,912        92,472         3.81
                                                ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits        639,276
  Other liabilities                     41,918
                                   -----------
     Total liabilities               5,576,106
Stockholders' equity                   484,420
                                   -----------
     Total liabilities
      and stockholders' equity     $ 6,060,526
                                   ===========
Net interest revenue                            $   122,053
                                                ============
Net interest-rate spread                                             3.82 %
                                                             ============
Net interest margin (4)                                              4.34 %
                                                             ============
(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 tax rate and the
    federal tax adjusted state tax rate.
(2) Included in the average balance of loans outstanding are loans where
    the accrual of interest has been discontinued.
(3) Securities available for sale are shown at amortized cost. Pretax
    unrealized losses of $17.9 million in 2006 and pretax unrealized
    gains of $1.1 million in 2005 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,
                                   --------------------------------------
                                                    2005
                                   --------------------------------------
(dollars in thousands, taxable        Average                    Avg.
 equivalent)                         Balance      Interest       Rate
                                   --------------------------------------
Assets:
Interest-earning assets:
  Loans, net of unearned income
   (1)(2)                          $ 3,870,177  $    132,266         6.89 %
  Taxable securities (3)               921,564        19,204         4.17
  Tax-exempt securities (1) (3)         49,719         1,733         6.97
  Federal funds sold and other
   interest-earning assets              62,150         1,147         3.69
                                   -----------  ------------
     Total interest-earning assets   4,903,610       154,350         6.34
                                   -----------  ------------
Non-interest-earning assets:
  Allowance for loan losses            (48,869)
  Cash and due from banks               93,446
  Premises and equipment               102,927
  Other assets (3)                     200,799
                                   -----------
     Total assets                  $ 5,251,913
                                   ===========
Liabilities and Stockholders'
 Equity:
Interest-bearing liabilities:
 Interest-bearing deposits:
   Transaction accounts            $ 1,092,181  $      7,906         1.46
   Savings deposits                    175,033           342          .39
   Time deposits less than
    $100,000                         1,010,395        13,769         2.75
   Time deposits greater than
    $100,000                           626,918         9,884         3.18
   Brokered deposits                   329,396         4,374         2.68
                                   -----------  ------------
     Total interest-bearing
      deposits                       3,233,923        36,275         2.26
                                   -----------  ------------
   Federal funds purchased & other
    borrowings                         144,533         2,006         2.80
   Federal Home Loan Bank advances     778,160        12,222         3.17
   Long-term debt                      111,868         4,314         7.78
                                   -----------  ------------
     Total borrowed funds            1,034,561        18,542         3.61
                                   -----------  ------------
     Total interest-bearing
      liabilities                    4,268,484        54,817         2.59
                                                ------------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits        552,354
  Other liabilities                     27,789
                                   -----------
     Total liabilities               4,848,627
Stockholders' equity                   403,286
                                   -----------
     Total liabilities
      and stockholders' equity     $ 5,251,913
                                   ===========
Net interest revenue                            $     99,533
                                                ============
Net interest-rate spread                                             3.75 %
                                                             ============
Net interest margin (4)                                              4.09 %
                                                             ============
(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 tax rate and the
    federal tax adjusted state tax rate.
(2) Included in the average balance of loans outstanding are loans where
    the accrual of interest has been discontinued.
(3) Securities available for sale are shown at amortized cost. Pretax
    unrealized losses of $17.9 million in 2006 and pretax unrealized
    gains of $1.1 million in 2005 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) 781-2265
Contact via http://www.marketwire.com/mw/emailprcntct?id=BF142A391990280D

SOURCE: United Community Banks, Inc.