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

Press Release Details

Oct 24, 2006

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

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

BLAIRSVILLE, GA, Oct 24, 2006 (MARKET WIRE via COMTEX News Network) -- United Community Banks, Inc. (NASDAQ: UCBI)

HIGHLIGHTS:

--  Record Third Quarter Earnings
      Diluted Earnings per Share of 42 Cents - Up 17 Percent
      Net Income of $17.4 Million - Up 22 Percent
      Return on Tangible Equity of 17.29 Percent
      Total Assets Rise to $6.5 Billion
--  Strong Loan and Deposit Growth and Rise in Net Interest Margin Drive
    Performance
--  25th Community Bank now open in Cleveland, Tennessee


United Community Banks, Inc. (NASDAQ: UCBI), Georgia's third-largest bank holding company, today announced record financial results for the third quarter of 2006. Compared with the third quarter of 2005, the company achieved a 14 percent increase in total revenue, a 22 percent rise in net income and a 17 percent gain in diluted earnings per share.

For the third quarter of 2006, net income was $17.4 million compared with $14.3 million a year earlier. Diluted earnings per share increased to 42 cents from 36 cents a year ago. Total revenue, on a taxable equivalent basis, was $72.8 million compared with $64.0 million for the third quarter of 2005. Return on tangible equity was 17.29 percent and return on assets was 1.09 percent, compared with 18.90 percent and 1.01 percent, respectively, a year ago.

"Our winning combination of seasoned bankers and attractive markets continues to produce strong business growth," said Jimmy Tallent, president and chief executive officer of United Community Banks. "Loans increased $155 million during the third quarter, up 17 percent from a year ago, and helped drive the increase in net interest revenue. We funded our loan growth with customer deposits by more than two to one, adding $312 million this quarter. The strong growth pushed total assets to $6.5 billion, a 13 percent increase from a year ago while substantially lessening our use of wholesale borrowings. Our net interest margin was 4.30 percent, up 13 basis points from a year ago as rising short-term interest rates positively affected our slightly asset-sensitive balance sheet."

For the first nine months of 2006, net income increased $8.9 million to $50.4 million, up 21 percent from $41.5 million for the first nine months of 2005. Diluted earnings per share of $1.22 increased 17 cents, or 16 percent, from $1.05 for the first nine months of 2005. Total revenue, on a taxable equivalent basis, was $211.4 million, up 17 percent from $180.7 million a year ago. Return on tangible equity was 17.54 percent and return on assets was 1.09 percent, compared with 19.30 percent and 1.03 percent, respectively, a year ago.

At September 30, 2006, total loans were $5.0 billion, up $711 million, or 17 percent, from a year ago. With the exception of $8 million in loans received through branch acquisitions during the quarter, 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. In the third quarter, we opened our 25th community bank, United Community Bank - Cleveland, which complements our existing franchise along the high-growth I-75 industrial corridor in east Tennessee. This new bank is led by President Mickey Torbett who is joined by nine other local veteran bankers. United now has a stronger foothold in this attractive market that is among Tennessee's leaders in number of manufacturing companies."

"Also during the quarter, we opened a new banking office in Cumming, which is located in Forsyth County on the north side of metro Atlanta," added Tallent. "We expanded our commercial loan office in Jasper, in Pickens County, to a full-service banking office. This commercial loan office was opened in the first quarter of 2006, along with a banking office in Savannah and Hall County, Georgia. We continue to look for opportunities to expand our franchise through de novo locations in both new and existing markets."

Tallent continued, "Our balanced growth strategy also includes selective acquisitions. During the third quarter, we completed the acquisition of two banking offices in Sylva and Bryson City, North Carolina, expanding the customer base in those markets. Also, we announced an agreement to acquire Southern Bancorp, Inc., and its wholly owned subsidiary, Southern National Bank. Southern National Bank has two offices in Marietta and Canton, located in fast-growing Cobb and Cherokee counties on the northwest side of metro Atlanta."

"With a strong management team and assets of $346 million, Southern National Bank significantly leverages our presence in these northwest metro Atlanta markets, especially Cherokee County," Tallent said. "First, when the transaction is completed in the fourth quarter, it will provide us with the opportunity to form a new community bank in Cherokee County by adding their Canton office to our existing office in that county. Steve Holcomb, the current president of Southern National, will become the president of our 26th community bank, United Community Bank - Cherokee. Holcomb and his team of 13 Cherokee County bankers have over 300 years of experience in that local community, where United's deposit market share will improve from fifteenth to ninth. We have a great opportunity to significantly expand our franchise in Cherokee County over the next year and beyond. Second, it will allow us to add their downtown Marietta office to our four banking offices in Cobb County. This will strengthen our presence in Marietta and Cobb County, and increase our deposit market share from fourteenth to seventh," added Tallent.

"In every one of our communities, 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 percent, well above the comparable industry average of 75 percent. 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 third quarter, taxable equivalent net interest revenue of $64.4 million was up $9.4 million, or 17 percent, from the third quarter of 2005. Taxable equivalent net interest margin for the third quarter was 4.30 percent, compared with 4.17 percent a year ago. "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 from a year ago," Tallent said.

The third quarter provision for loan losses was $3.7 million, an increase of $300,000 from a year earlier, and equal to the second quarter of 2006. Annualized net charge-offs to average loans was 11 basis points for the third quarter, compared with nine basis points for the second quarter of 2006 and 13 basis points for the third quarter of 2005. At quarter-end, non-performing assets totaled $9.3 million compared with $8.8 million at the end of the second quarter of 2006 and $13.6 million a year ago. Non-performing assets as a percentage of total assets were 14 basis points at quarter-end, unchanged from the second quarter of 2006 and down from 24 basis points at September 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 $12.1 million was down slightly from $12.4 million for the third quarter of 2005, primarily due to lower mortgage fees and losses from the sale of securities. Mortgage fees were down from a year ago due to a less favorable interest rate environment leading to lower refinancing activity. Also impacting fee revenue this quarter was a $290,000 charge for the prepayment of Federal Home Loan Bank advances that was part of our balance sheet management activities. Service charges and fees on deposit accounts increased $287,000 to $6.9 million, primarily due to growth in transactions and new accounts resulting from core deposit programs and higher ATM and debit card usage fees. Consulting fees and brokerage fees were each up more than $200,000 from a year ago reflecting growth in both businesses.

Operating expenses of $44.9 million increased $3.6 million, or 9 percent, from the third quarter of 2005. Salaries and employee benefit costs of $29.6 million increased $3.3 million, or 12 percent, from the third quarter of 2005 due to the increase in staff to support our expansion efforts and business growth. Communications and equipment expenses increased $379,000 to $3.9 million due to further investments and upgrades in technology equipment to support business growth and additional banking offices. Occupancy expense increased $202,000 to $2.9 million reflecting the increase in cost to operate additional banking offices added through de novo expansion. Advertising and public relations expense rose $199,000 to $1.9 million reflecting the costs of initiatives to raise core deposits and efforts to generate brand awareness in selected markets.

"We had a positive operating leverage of 5 percent this quarter," Tallent said. "Also, our operating efficiency ratio of 58.4 percent was within our long-term efficiency goal of 58 to 60 percent. 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."

"Our outlook for the fourth quarter of 2006 is for earnings per share growth slightly above our long-term goal of 12 to 15 percent. For 2007, our outlook for growth is within this range of 12 to 15 percent," Tallent

said. "We anticipate core loan growth for the fourth quarter and next year to be within a range of 10 to 12 percent. Our net interest margin has benefited from rising short-term interest rates; however, we expect that the margin through next year will continue to stabilize and possibly compress slightly from the third quarter level due to further price competition for deposits. This outlook assumes a stable economic environment and continued strong credit quality."

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

Conference Call

United Community Banks will hold a conference call on Tuesday, October 24, 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 and next year. The telephone number for the conference call is (800) 299-6183 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 $6.5 billion and operates 25 community banks with 96 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
                                     -------------------------------------
(in thousands, except per share         Third       Second        First
 data; taxable equivalent)             Quarter      Quarter      Quarter
                                     -----------  -----------  -----------
INCOME SUMMARY
Interest revenue                     $   119,802  $   111,728  $   102,797
Interest expense                          55,431       49,407       43,065
                                     -----------  -----------  -----------
    Net interest revenue                  64,371       62,321       59,732
Provision for loan losses                  3,700        3,700        3,500
Fee revenue                               12,146       11,976       11,758
                                     -----------  -----------  -----------
   Total revenue                          72,817       70,597       67,990
Operating expenses                        44,939       43,483       42,222
                                     -----------  -----------  -----------
    Income before taxes                   27,878       27,114       25,768
Income taxes                              10,465       10,185        9,729
                                     -----------  -----------  -----------
   Net income                        $    17,413  $    16,929  $    16,039
                                     ===========  ===========  ===========
PERFORMANCE MEASURES
  Per common share:
    Basic earnings                   $       .43  $       .42  $       .40
    Diluted earnings                         .42          .41          .39
    Cash dividends declared                  .08          .08          .08
    Book value                             13.07        12.34        12.09
    Tangible book value (2)                10.16         9.50         9.25
  Key performance ratios:
    Return on tangible equity
     (1)(2)(3)                             17.29%       17.68%       17.66%
    Return on equity (1)(3)                13.22        13.41        13.25
    Return on assets (3)                    1.09         1.10         1.09
    Net interest margin (3)                 4.30         4.34         4.33
    Efficiency ratio                       58.44        58.53        59.06
    Dividend payout ratio                  18.60        19.05        20.00
    Equity to assets                        8.04         7.95         8.04
    Tangible equity to assets (2)           6.35         6.22         6.24
ASSET QUALITY
  Allowance for loan losses          $    60,901  $    58,508  $    55,850
  Non-performing assets                    9,347        8,805        8,367
  Net charge-offs                          1,307        1,042        1,245
  Allowance for loan losses to loans        1.23%        1.22%        1.22%
  Non-performing assets to total
   assets                                    .14          .14          .14
  Net charge-offs to average loans
   (3)                                       .11          .09          .11
AVERAGE BALANCES
  Loans                              $ 4,865,886  $ 4,690,196  $ 4,505,494
  Investment securities                1,029,981    1,039,707    1,038,683
  Earning assets                       5,942,710    5,758,697    5,574,712
  Total assets                         6,350,205    6,159,152    5,960,801
  Deposits                             5,085,168    4,842,389    4,613,810
  Shareholders' equity                   510,791      489,821      478,960
  Common shares outstanding:
    Basic                                 40,223       40,156       40,088
    Diluted                               41,460       41,328       41,190
AT PERIOD END
  Loans                              $ 4,965,365  $ 4,810,277  $ 4,584,155
  Investment securities                  980,273      974,524      983,846
  Earning assets                       6,012,987    5,862,614    5,633,381
  Total assets                         6,455,290    6,331,136    6,070,596
  Deposits                             5,309,219    4,976,650    4,748,438
  Shareholders' equity                   526,734      496,297      485,414
  Common shares outstanding               40,269       40,179       40,119
                                               2005               Third
                                     ------------------------    Quarter
(in thousands, except per share        Fourth        Third      2006-2005
data; taxable equivalent)              Quarter      Quarter      Change
                                     -----------  -----------  -----------
INCOME SUMMARY
Interest revenue                     $    95,465  $    89,003
Interest expense                          38,576       34,033
                                     -----------  -----------
    Net interest revenue                  56,889       54,970           17%
Provision for loan losses                  3,500        3,400
Fee revenue                               11,373       12,396           (2)
                                     -----------  -----------
   Total revenue                          64,762       63,966           14
Operating expenses                        40,520       41,294            9
                                     -----------  -----------
    Income before taxes                   24,242       22,672           23
Income taxes                               9,012        8,374
                                     -----------  -----------
   Net income                        $    15,230  $    14,298           22
                                     ===========  ===========
PERFORMANCE MEASURES
  Per common share:
    Basic earnings                   $       .39  $       .37           16
    Diluted earnings                         .38          .36           17
    Cash dividends declared                  .07          .07           14
    Book value                             11.80        11.04           18
    Tangible book value (2)                 8.94         8.05           26
  Key performance ratios:
    Return on tangible equity
     (1)(2)(3)                             18.20%       18.90%
    Return on equity (1)(3)                13.30        13.42
    Return on assets (3)                    1.05         1.01
    Net interest margin (3)                 4.20         4.17
    Efficiency ratio                       58.80        61.16
    Dividend payout ratio                  17.95        18.92
    Equity to assets                        7.69         7.46
    Tangible equity to assets (2)           5.82         5.53
ASSET QUALITY
  Allowance for loan losses          $    53,595  $    51,888
  Non-performing assets                   12,995       13,565
  Net charge-offs                          1,793        1,385
  Allowance for loan losses to loans        1.22%        1.22%
  Non-performing assets to total
   assets                                    .22          .24
  Net charge-offs to average loans
   (3)                                       .16          .13
AVERAGE BALANCES
  Loans                              $ 4,328,613  $ 4,169,170           17
  Investment securities                1,004,966    1,008,687            2
  Earning assets                       5,383,096    5,239,195           13
  Total assets                         5,769,632    5,608,158           13
  Deposits                             4,354,275    4,078,437           25
  Shareholders' equity                   443,746      418,459           22
  Common shares outstanding:
    Basic                                 39,084       38,345
    Diluted                               40,379       39,670
AT PERIOD END
  Loans                              $ 4,398,286  $ 4,254,051           17
  Investment securities                  990,687      945,922            4
  Earning assets                       5,470,718    5,302,532           13
  Total assets                         5,865,756    5,709,666           13
  Deposits                             4,477,600    4,196,369           27
  Shareholders' equity                   472,686      424,000           24
  Common shares outstanding               40,020       38,383
                                           For the Nine
                                           Months Ended            YTD
(in thousands, except per share      ------------------------   2006-2005
 data; taxable equivalent)               2006         2005       Change
                                     -----------  -----------  -----------
INCOME SUMMARY
Interest revenue                     $   334,327  $   243,353
Interest expense                         147,903       88,850
                                     -----------  -----------
    Net interest revenue                 186,424      154,503           21%
Provision for loan losses                 10,900        8,600
Fee revenue                               35,880       34,775            3
                                     -----------  -----------
   Total revenue                         211,404      180,678           17
Operating expenses                       130,644      114,881           14
                                     -----------  -----------
    Income before taxes                   80,760       65,797           23
Income taxes                              30,379       24,285
                                     -----------  -----------
   Net income                        $    50,381  $    41,512           21
                                     ===========  ===========
PERFORMANCE MEASURES
  Per common share:
    Basic earnings                   $      1.25  $      1.08           16
    Diluted earnings                        1.22         1.05           16
    Cash dividends declared                  .24          .21           14
    Book value                             13.07        11.04           18
    Tangible book value (2)                10.16         8.05           26
  Key performance ratios:
    Return on tangible equity
     (1)(2)(3)                             17.54%       19.30%
    Return on equity (1)(3)                13.29        13.51
    Return on assets (3)                    1.09         1.03
    Net interest margin (3)                 4.32         4.12
    Efficiency ratio                       58.67        60.64
    Dividend payout ratio                  19.20        19.44
    Equity to assets                        8.01         7.60
    Tangible equity to assets (2)           6.27         5.57
ASSET QUALITY
  Allowance for loan losses          $    60,901  $    51,888
  Non-performing assets                    9,347       13,565
  Net charge-offs                          3,594        3,908
  Allowance for loan losses to loans        1.23%        1.22%
  Non-performing assets to total
   assets                                    .14          .24
  Net charge-offs to average loans
   (3)                                       .10          .13
AVERAGE BALANCES
  Loans                              $ 4,688,512  $ 3,970,937           18
  Investment securities                1,036,092      983,889            5
  Earning assets                       5,760,055    5,016,702           15
  Total assets                         6,158,147    5,371,966           15
  Deposits                             4,848,849    3,884,733           25
  Shareholders' equity                   493,307      408,399           21
  Common shares outstanding:
    Basic                                 40,156       38,272
    Diluted                               41,327       39,499
AT PERIOD END
  Loans                              $ 4,965,365  $ 4,254,051           17
  Investment securities                  980,273      945,922            4
  Earning assets                       6,012,987    5,302,532           13
  Total assets                         6,455,290    5,709,666           13
  Deposits                             5,309,219    4,196,369           27
  Shareholders' equity                   526,734      424,000           24
  Common shares outstanding               40,269       38,383
(1)  Net income available to common shareholders, 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 (unaudited)
                                 Three Months Ended     Nine Months Ended
                                    September 30,         September 30,
                                --------------------  --------------------
 (in thousands, except per
  share data)                     2006       2005       2006       2005
                                ---------  ---------  ---------  ---------
Interest revenue:
  Loans, including fees         $ 106,688  $  77,470  $ 296,133  $ 210,383
  Investment securities:
    Taxable                        11,822     10,340     34,661     29,544
    Tax exempt                        474        520      1,497      1,573
  Federal funds sold and
   deposits in banks                  365        253        685        662
                                ---------  ---------  ---------  ---------
      Total interest revenue      119,349     88,583    332,976    242,162
                                ---------  ---------  ---------  ---------
Interest expense:
  Deposits:
    Demand                         10,255      5,187     26,398     13,093
    Savings                           226        223        680        565
    Time                           34,694     17,653     89,679     45,680
                                ---------  ---------  ---------  ---------
     Total deposit interest
      expense                      45,175     23,063    116,757     59,338
  Federal funds purchased,
   repurchase agreements, &
   other short-term borrowings      2,254      1,651      5,814      3,723
  Federal Home Loan Bank
   advances                         5,828      7,181     18,837     19,403
  Long-term debt                    2,174      2,138      6,495      6,386
                                ---------  ---------  ---------  ---------
    Total interest expense         55,431     34,033    147,903     88,850
                                ---------  ---------  ---------  ---------
    Net interest revenue           63,918     54,550    185,073    153,312
  Provision for loan losses         3,700      3,400     10,900      8,600
                                ---------  ---------  ---------  ---------
    Net interest revenue after
     provision for loan losses     60,218     51,150    174,173    144,712
                                ---------  ---------  ---------  ---------
Fee revenue:
  Service charges and fees          6,914      6,627     20,095     18,521
  Mortgage loan and other
   related fees                     1,928      2,367      5,149      5,592
  Consulting fees                   2,040      1,777      5,196      4,944
  Brokerage fees                      784        571      2,430      1,781
  Securities losses, net             (382)      (153)      (385)      (155)
  Other                               862      1,207      3,395      4,092
                                ---------  ---------  ---------  ---------
    Total fee revenue              12,146     12,396     35,880     34,775
                                ---------  ---------  ---------  ---------
    Total revenue                  72,364     63,546    210,053    179,487
                                ---------  ---------  ---------  ---------
Operating expenses:
  Salaries and employee
   benefits                        29,585     26,334     85,535     73,843
  Communications and equipment      3,863      3,484     10,970      9,581
  Occupancy                         2,945      2,743      8,793      8,129
  Advertising and public
   relations                        1,882      1,683      5,718      4,745
  Postage, printing and supplies    1,379      1,426      4,184      4,146
  Professional fees                   938      1,174      3,168      3,283
  Amortization of intangibles         503        503      1,509      1,509
  Other                             3,844      3,947     10,767      9,645
                                ---------  ---------  ---------  ---------
    Total operating expenses       44,939     41,294    130,644    114,881
                                ---------  ---------  ---------  ---------
  Income before income taxes       27,425     22,252     79,409     64,606
  Income taxes                     10,012      7,954     29,028     23,094
                                ---------  ---------  ---------  ---------
    Net income                  $  17,413  $  14,298  $  50,381  $  41,512
                                =========  =========  =========  =========
    Net income available to
     common shareholders        $  17,408  $  14,293  $  50,366  $  41,494
                                =========  =========  =========  =========
Earnings per common share:
  Basic                         $    0.43  $    0.37  $    1.25  $    1.08
  Diluted                            0.42       0.36       1.22       1.05
Dividends per common share            .08        .07        .24        .21
Weighted average common shares
 outstanding:
  Basic                            40,223     38,345     40,156     38,272
  Diluted                          41,460     39,670     41,327     39,499
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
                                     -----------  -----------  -----------
                                      September     December    September
                                         30,          31,          30,
 (in thousands, except share and per    2006         2005         2005
  share data)                        -----------  -----------  -----------
                                     (unaudited)   (audited)   (unaudited)
 ASSETS
   Cash and due from banks           $   130,038  $   121,963  $   139,147
   Interest-bearing deposits in
    banks                                 16,032       20,607       28,935
                                     -----------  -----------  -----------
       Cash and cash equivalents         146,070      142,570      168,082
   Securities available for sale         980,273      990,687      945,922
   Mortgage loans held for sale           21,522       22,335       28,539
   Loans, net of unearned income       4,965,365    4,398,286    4,254,051
        Less allowance for loan
         losses                           60,901       53,595       51,888
                                     -----------  -----------  -----------
               Loans, net              4,904,464    4,344,691    4,202,163
   Premises and equipment, net           129,217      112,887      109,468
   Accrued interest receivable            47,336       37,197       36,108
   Goodwill and other intangible
    assets                               120,430      118,651      119,154
   Other assets                          105,978       96,738      100,230
                                     -----------  -----------  -----------
       Total assets                  $ 6,455,290  $ 5,865,756  $ 5,709,666
                                     ===========  ===========  ===========
 LIABILITIES AND SHAREHOLDERS'
  EQUITY
 Liabilities:
   Deposits:
        Demand                       $   666,891  $   602,525  $   637,296
        Interest-bearing demand        1,340,985    1,264,947    1,180,125
        Savings                          167,531      175,453      175,864
        Time:
             Less than $100,000        1,523,843    1,218,277    1,118,102
             Greater than $100,000     1,248,738      895,466      790,784
             Brokered                    361,231      320,932      294,198
                                     -----------  -----------  -----------
                      Total deposits   5,309,219    4,477,600    4,196,369
    Federal funds purchased,
     repurchase agreements, & other
     short-term borrowings                56,026      122,881      163,646
    Federal Home Loan Bank advances      412,572      635,616      775,251
    Long-term debt                       111,869      111,869      111,869
    Accrued expenses and other
     liabilities                          38,870       45,104       38,531
                                     -----------  -----------  -----------
         Total liabilities             5,928,556    5,393,070    5,285,666
                                     -----------  -----------  -----------
 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;
          40,268,604, 40,019,853 and
           38,407,874 shares issued       40,269       40,020       38,408
     Common stock issuable; 22,741
      and 9,948 shares as of
      September 30, 2006 and
          December 31, 2005,
           respectively                      638          271            -
     Capital surplus                     199,773      193,355      153,712
     Retained earnings                   291,281      250,563      238,144
     Treasury stock; 24,449 shares
      as of September 30, 2005, at
      cost                                     -            -         (671)
     Accumulated other comprehensive
      loss                                (5,549)     (11,845)      (5,965)
                                     -----------  -----------  -----------
         Total shareholders' equity      526,734      472,686      424,000
                                     -----------  -----------  -----------
         Total liabilities and
          shareholders' equity       $ 6,455,290  $ 5,865,756  $ 5,709,666
                                     ===========  ===========  ===========
UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 30,
                                                           2006
                                               ---------------------------
                                                 Average              Avg.
(dollars in thousands, taxable equivalent)       Balance    Interest  Rate
                                               -----------  --------- ----
Assets:
Interest-earning assets:
   Loans, net of unearned income (1)(2)        $ 4,865,886  $ 106,559 8.69%
   Taxable securities (3)                          984,189     11,822 4.80
   Tax-exempt securities (1) (3)                    45,792        780 6.81
   Federal funds sold and other
    interest-earning assets                         46,843        641 5.47
                                               -----------  ---------
      Total interest-earning assets              5,942,710    119,802 8.01
                                               -----------  ---------
Non-interest-earning assets:
   Allowance for loan losses                       (60,606)
   Cash and due from banks                         116,004
   Premises and equipment                          125,423
   Other assets (3)                                226,674
                                               -----------
      Total assets                             $ 6,350,205
                                               ===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
 Interest-bearing deposits:
   Transaction accounts                        $ 1,311,042     10,255 3.10
   Savings deposits                                170,079        226  .53
   Time deposits less than $100,000              1,446,388     16,503 4.53
   Time deposits greater than $100,000           1,162,207     14,382 4.91
   Brokered deposits                               340,301      3,809 4.44
                                               -----------  ---------
      Total interest-bearing deposits            4,430,017     45,175 4.05
                                               -----------  ---------
   Federal funds purchased & other borrowings      162,372      2,254 5.51
   Federal Home Loan Bank advances                 438,875      5,828 5.27
   Long-term debt                                  111,869      2,174 7.71
                                               -----------  ---------
      Total borrowed funds                         713,116     10,256 5.71
                                               -----------  ---------
      Total interest-bearing liabilities         5,143,133     55,431 4.28
                                                            ---------
Non-interest-bearing liabilities:
   Non-interest-bearing deposits                   655,151
   Other liabilities                                41,130
                                               -----------
      Total liabilities                          5,839,414
Shareholders' equity                               510,791
                                               -----------
      Total liabilities and shareholders'
       equity                                  $ 6,350,205
                                               ===========
Net interest revenue                                        $  64,371
                                                            =========
Net interest-rate spread                                              3.73%
                                                                      ====
Net interest margin (4)                                               4.30%
                                                                      ====
                                                           2005
                                               ---------------------------
                                                 Average              Avg.
(dollars in thousands, taxable equivalent)       Balance    Interest  Rate
                                               -----------  --------- ----
Assets:
Interest-earning assets:
   Loans, net of unearned income (1)(2)        $ 4,169,170  $  77,112 7.34%
   Taxable securities (3)                          960,513     10,340 4.31
   Tax-exempt securities (1) (3)                    48,174        856 7.10
   Federal funds sold and other
    interest-earning assets                         61,338        695 4.53
                                               -----------  ---------
      Total interest-earning assets              5,239,195     89,003 6.75
                                               -----------  ---------
Non-interest-earning assets:
   Allowance for loan losses                       (51,278)
   Cash and due from banks                         108,784
   Premises and equipment                          106,347
   Other assets (3)                                205,110
                                               -----------
      Total assets                             $ 5,608,158
                                               ===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
 Interest-bearing deposits:
   Transaction accounts                        $ 1,164,563      5,187 1.77
   Savings deposits                                175,833        223  .50
   Time deposits less than $100,000              1,074,926      8,439 3.11
   Time deposits greater than $100,000             736,217      6,779 3.65
   Brokered deposits                               307,531      2,435 3.14
                                               -----------  ---------
      Total interest-bearing deposits            3,459,070     23,063 2.65
                                               -----------  ---------
   Federal funds purchased & other borrowings      185,233      1,651 3.54
   Federal Home Loan Bank advances                 779,912      7,181 3.65
   Long-term debt                                  111,869      2,138 7.58
                                               -----------  ---------
      Total borrowed funds                       1,077,014     10,970 4.04
                                               -----------  ---------
      Total interest-bearing liabilities         4,536,084     34,033 2.98
                                                            ---------
Non-interest-bearing liabilities:
   Non-interest-bearing deposits                   619,367
   Other liabilities                                34,248
                                               -----------
      Total liabilities                          5,189,699
Shareholders' equity                               418,459
                                               -----------
      Total liabilities and shareholders'
       equity                                  $ 5,608,158
                                               ===========
Net interest revenue                                        $  54,970
                                                            =========
Net interest-rate spread                                              3.77%
                                                                      ====
Net interest margin (4)                                               4.17%
                                                                      ====
(1)  Interest revenue on tax-exempt securities and loans has been increased
     to reflect comparable interest on taxable securities and loans. The
     rate used was 39%, reflecting the statutory federal 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 $2.2 million 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 Nine Months Ended September 30,
                                                           2006
                                               ---------------------------
                                                 Average              Avg.
(dollars in thousands, taxable equivalent)       Balance    Interest  Rate
                                               -----------  --------- ----
Assets:
Interest-earning assets:
   Loans, net of unearned income (1)(2)        $ 4,688,512  $ 295,778 8.43%
   Taxable securities (3)                          988,504     34,661 4.68
   Tax-exempt securities (1) (3)                    47,588      2,463 6.90
   Federal funds sold and other
    interest-earning assets                         35,451      1,425 5.36
                                               -----------  ---------
      Total interest-earning assets              5,760,055    334,327 7.76
                                               -----------  ---------
Non-interest-earning assets:
   Allowance for loan losses                       (57,716)
   Cash and due from banks                         122,603
   Premises and equipment                          120,664
   Other assets (3)                                212,541
                                               -----------
      Total assets                             $ 6,158,147
                                               ===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
 Interest-bearing deposits:
    Transaction accounts                       $ 1,280,101  $  26,398 2.76
    Savings deposits                               173,448        680  .52
    Time deposits less than $100,000             1,354,421     42,604 4.21
    Time deposits greater than $100,000          1,068,376     36,938 4.62
    Brokered deposits                              327,877     10,137 4.13
                                               -----------  ---------
      Total interest-bearing deposits            4,204,223    116,757 3.71
                                               -----------  ---------
    Federal funds purchased & other borrowings     152,303      5,814 5.10
    Federal Home Loan Bank advances                510,168     18,837 4.94
    Long-term debt                                 111,868      6,495 7.76
                                               -----------  ---------
      Total borrowed funds                         774,339     31,146 5.38
                                               -----------  ---------
      Total interest-bearing liabilities         4,978,562    147,903 3.97
                                                            ---------
Non-interest-bearing liabilities:
   Non-interest-bearing deposits                   644,626
   Other liabilities                                41,652
                                               -----------
      Total liabilities                          5,664,840
Shareholders' equity                               493,307
                                               -----------
      Total liabilities and shareholders'
       equity                                  $ 6,158,147
                                               ===========
Net interest revenue                                        $ 186,424
                                                            =========
Net interest-rate spread                                              3.79%
                                                                      ====
Net interest margin (4)                                               4.32%
                                                                      ====
                                                           2005
                                               ---------------------------
                                                 Average              Avg.
(dollars in thousands, taxable equivalent)       Balance    Interest  Rate
                                               -----------  --------- ----
Assets:
Interest-earning assets:
   Loans, net of unearned income (1)(2)        $ 3,970,937  $ 209,378 7.05%
   Taxable securities (3)                          934,691     29,544 4.21
   Tax-exempt securities (1) (3)                    49,198      2,589 7.02
   Federal funds sold and other
    interest-earning assets                         61,876      1,842 3.97
                                               -----------  ---------
      Total interest-earning assets              5,016,702    243,353 6.48
                                               -----------  ---------
Non-interest-earning assets:
   Allowance for loan losses                       (49,681)
   Cash and due from banks                          98,615
   Premises and equipment                          104,079
   Other assets (3)                                202,251
                                               -----------
      Total assets                             $ 5,371,966
                                               ===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
 Interest-bearing deposits:
   Transaction accounts                        $ 1,116,573  $  13,093 1.57
   Savings deposits                                175,302        565  .43
   Time deposits less than $100,000              1,032,142     22,208 2.88
   Time deposits greater than $100,000             663,751     16,663 3.36
   Brokered deposits                               322,028      6,809 2.83
                                               -----------  ---------
      Total interest-bearing deposits            3,309,796     59,338 2.40
                                               -----------  ---------
   Federal funds purchased & other borrowings      158,249      3,723 3.15
   Federal Home Loan Bank advances                 778,750     19,403 3.33
   Long-term debt                                  111,868      6,386 7.63
                                               -----------  ---------
      Total borrowed funds                       1,048,867     29,512 3.76
                                               -----------  ---------
      Total interest-bearing liabilities         4,358,663     88,850 2.73
                                                            ---------
Non-interest-bearing liabilities:
   Non-interest-bearing deposits                   574,937
   Other liabilities                                29,967
                                               -----------
      Total liabilities                          4,963,567
Shareholders' equity                               408,399
                                               -----------
      Total liabilities and shareholders'
       equity                                  $ 5,371,966
                                               ===========
Net interest revenue                                        $ 154,503
                                                            =========
Net interest-rate spread                                              3.75%
                                                                      ====
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 $19.1 million in 2006 and pretax unrealized gains
     of $7,000 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=529A05E8BEBF8131




SOURCE: United Community Banks, Inc.