(Exact name of registrant as specified in its charter)

Georgia		No. 0-21656		No. 58-180-7304
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

63 Highway 515, P.O. Box 398
Blairsville, Georgia 30512
(Address of principal executive offices)

Registrant’s telephone number, including area code:
(706) 781-2265

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

     o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

 

 

Item 2.02 Results of Operation and Financial Condition

On July 24, 2007, United Community Banks, Inc. (the “Registrant”) issued a news release announcing its financial results for the first quarter ended June 30, 2007 (the “News Release”). The News Release, including financial schedules, is attached as Exhibit 99.1 to this report. In connection with issuing the News Release, on July 24, 2007 at 11:00 a.m. EST, the Registrant intends to hold a conference call/webcast to discuss the News Release.

The presentation of the Registrant’s financial results included net operating income, which is a measure of performance determined by methods other than in accordance with generally accepted accounting principles, or GAAP. Management included non-GAAP net operating income because it believes it is useful for evaluating the Registrant’s operations and performance over periods of time, and uses net operating income in managing and evaluating the Registrant’s business and intends to use it in discussions about the Registrant’s operations and performance. Net operating income excludes the pre-tax effect of the special $15 million fraud related provision for loan losses recorded in the second quarter of 2007 because management feels that the events leading to the taking of the special provision were isolated, non-recurring events and do not reflect overall trends in the Registrant’s earnings. Management believes this non-GAAP net operating income may provides users of the Registrant’s financial information with a meaningful measure for assessing the Registrant’s financial results and comparing those financial results to prior periods.

Net operating income should be viewed in addition to, and not as an alternative or substitute for, the Registrant’s reported net income determined in accordance with GAAP, and is not necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Item 9.01 Financial Statements and Exhibits

(a) Financial statements: None

(b) Pro forma financial information: None

(c) Exhibits:

99.1 Press Release, dated July 24, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

For Immediate Release

For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Rex_Schuette@ucbi.com

UNITED COMMUNITY BANKS, INC. REPORTS
12 PERCENT GAIN IN DILUTED OPERATING EARNINGS
PER SHARE FOR SECOND QUARTER 2007

HIGHLIGHTS:

•

Record Second Quarter Operating Earnings

Diluted Operating Earnings per Share of 46 Cents — Up 12 Percent

Operating Net Income of $21.1 Million — Up 24 Percent

Loan and Fee Revenue Growth Drive Performance

•

Net Income of $11.9 million, Includes Special $15 Million Provision for Loan Losses

•

Completed Acquisition of Gwinnett Commercial Group

•

Opened Two De Novo Offices

BLAIRSVILLE, GA, July 24, 2007 — United Community Banks, Inc. (NASDAQ: UCBI) today announced record operating earnings for the second quarter of 2007. Compared with the second quarter of 2006, the company achieved a 21 percent increase in total operating revenue, a 24 percent rise in net operating income and a 12 percent gain in diluted operating earnings per share.

Reported earnings of $11.9 million included a special $15 million provision for fraud-related loan losses. The after-tax impact of this provision was $9.2 million, or 20 cents per diluted share.

“In a press release and conference call earlier this month, we discussed the $15 million provision for fraud-related loan losses in two developments near Spruce Pine, North Carolina,” said Jimmy

Tallent, United’s President and Chief Executive Officer. “We also stated that we classified the entire $23.6 million of loans as non-accrual and reversed the accrued interest. Because this fraud-related matter was isolated and a non-recurring event, we have shown the special provision separate from the regular provision for loan losses. We will highlight operating earnings measures, which exclude this provision, for the balance of 2007 to provide a better understanding of our underlying core earnings and credit trends. With that, we continued to deliver solid operating performance for the second quarter and our dedicated employees, community bank business model, unique footprint and service-oriented culture position us well to meet our challenges. In fact, our customer satisfaction scores in June of 93.3 percent reached the highest level since we began measuring them in March of 2003. This is strong evidence that our employees are focused on service and our community banking business model is working.”

Total operating revenue on a taxable equivalent basis was $80.8 million for the quarter compared with $66.8 million for the second quarter of 2006, a 21 percent increase. Total revenue was $156.6 million year-to-date versus $131.0 million for 2006. Net operating income for the second quarter of 2007 was $21.1 million, compared with $16.9 million for the same period of 2006, a 24 percent increase. Net operating income for the first six months was $40.4 million for 2007 compared with $33.0 million for 2006. Diluted operating earnings per share for the second quarter increased 12 percent to 46 cents from 41 cents a year ago. For the first six months, diluted operating earnings per share increased 13 percent from 80 cents to 90 cents. Operating return on tangible equity was 17.54 percent and operating return on assets was 1.12 percent for the second quarter, compared with 17.68 percent and 1.10 percent a year ago, respectively.

Loans increased by $1.2 billion, or 25 percent, from a year ago. This increase included $267 million from the Southern National Bank acquisition, which closed in December 2006, and $534 million from the First Bank of the South acquisition, which closed in June 2007. Excluding acquired loans, core loan growth was 8 percent for the past twelve months and 5 percent annualized, or $63 million, on a linked quarter basis. “While we’ve experienced slower growth in 2007, the pace increased from the first quarter and we are targeting loan growth in the 4 to 8 percent range for the remainder of the year,” said Tallent.

“The company was able to fund year-over-year loan growth by adding $450 million in customer deposits, which excludes deposits from acquisitions,” noted Tallent. “During 2007, we have shifted to lower-cost wholesale funding with customer deposits decreasing slightly during the second quarter. However, for the first six months we continued to fund our loan growth with core customer deposits, adding $143 million of transaction, savings and money market accounts while letting more expensive time deposits run off.”

United continued de novo expansion during the quarter by opening two offices in Georgia, one in Hall County outside of Gainesville and another in Cherokee County near Interstate 575 approaching Atlanta. “While we will continue to look for expansion opportunities that make sense, we will also be prudent as we monitor loan growth trends,” said Tallent.

United also completed the acquisition of metro Atlanta-based First Bank of the South during the second quarter. The transaction added three offices in Gwinnett County and one each in DeKalb and north Fulton counties. The population of Gwinnett, the second-largest county in the Atlanta MSA, is projected to grow at four times the national average, or 26 percent, over the next five years. United now has 11 community banks with 47 offices and approximately $3.5 billion in assets in the Atlanta Region, which includes the Atlanta and Gainesville MSAs.

For the second quarter of 2007, taxable equivalent net interest revenue of $68.0 million reflected an increase of $9.5 million, or 16 percent, from the second quarter of 2006. The year-to-date increase was $18.6 million, or 16 percent, compared to the first half of 2006. Taxable equivalent net interest margin was 3.94 percent for the second quarter, compared with 3.99 percent for the first quarter of 2007 and 4.07 percent for the second quarter of 2006. “Consistent with the industry, our net interest margin has been under pressure due to the flat yield curve,” stated Tallent. “The slight decrease from last quarter was due to the increase in non-accrual loans and a slight change in the mix of earning assets. With the addition of First Bank of the South, we expect our margin to move up a few basis points during the second half of 2007. Our focus remains on generating high-quality loans and attracting low-cost customer deposits while keeping discretionary spending at a minimum.”

The second quarter provision for loan losses was $3.7 million, excluding the special $15 million fraud loss provision. Annualized net charge-offs to average loans was 15 basis points for the second quarter compared to 11 basis points for the first quarter and 9 basis points for the second quarter of 2006. At quarter-end, non-performing assets totaled $43.6 million, including $23.6 million of fraud-related loans associated with the Spruce Pine developments. Excluding Spruce Pine loans, non-performing assets were $20.0 million, compared with $8.8 million a year ago and $14.3 million at the end of the first quarter of 2007. Excluding Spruce Pine, non-performing assets, as a percentage of total assets was 25 basis points at quarter-end, compared with 20 basis points at March 31, 2007 and 14 basis points at June 30, 2006. The Spruce Pine non-performing assets as a percentage of total assets was 29 basis points, bringing the combined total to 54 basis points at June 30, 2007.

“Throughout most of 2006 and into 2007 we were at unsustainably low levels of non-performing assets,” Tallent said. “Non-performing assets, excluding Spruce Pine, were at the lower end of our long-term historic range of 20 to 35 basis points. While these non-performing Spruce Pine loans and the fraud-related loan loss provision this quarter are real, and at the end of the day affect our bottom line, they are not a typical occurrence for this company. This was an isolated event, and our long-standing principle of strong credit quality with loans secured by hard assets continues.”

Fee revenue of $16.6 million for the second quarter grew by $4.6 million, or 38 percent, from the $12.0 million for the second quarter of 2006. The linked quarter increase was $2.2 million. Service charges and fees on deposit accounts of $8.0 million increased $1.1 million, or 17 percent, from the second quarter of 2006, primarily due to growth in transactions and new accounts resulting from core deposit programs and higher ATM and debit card usage. Mortgage fees rose $768,000 to $2.5 million due to higher volumes and pricing of mortgages sold. Mortgage loans closed during the second quarter were $122 million compared with $92 million for the second quarter of 2006. Consulting fees of $2.2 million were up $669,000 from a year ago, or 43 percent, reflecting strong growth in our advisory services practice. During the quarter there were securities gains of $1.4 million, partially offset by a $1.2 million charge on the

prepayment of higher-cost borrowings. Both transactions were part of United’s ongoing balance sheet management activities.

Operating expenses of $47.7 million increased $8.1 million, or 20 percent, from the second quarter of 2006. The acquisitions of Southern National Bank and First Bank of the South accounted for approximately $2.3 million of the total increase. Salaries and employee benefit costs totaled $30.0 million, which was $5.6 million, or 23 percent, higher than the second quarter of 2006. Acquisitions accounted for about $1.5 million of the increase, with the rest primarily due to staffing de novo locations and business growth. Professional fees increased $941,000 to $2.0 million reflecting higher fees associated with corporate initiatives and loan foreclosures.. Occupancy expense increased $400,000 to $3.3 million reflecting higher costs to operate additional banking offices. Postage, printing and supplies expense rose $391,000 to $1.7 million due to business growth and marketing campaigns.

“Our operating efficiency ratio for the quarter of 56.6 percent was within our long-term efficiency goal of 56 to 58 percent,” Tallent said. “The efficiency ratio shows that despite the difficult environment that we are operating in, strong revenue growth coupled with disciplined expense controls are offsetting the significant expansion cost of reinvesting for the future.”

“The Board of Directors approved a one million share increase in our stock purchase program that expires in December 2007, raising the total authorized level to two million shares,” stated Tallent. “With the recent drop in our stock price, management and the Board felt it was appropriate for the company to demonstrate its support and commitment to enhancing shareholder value. We plan to start the purchase program immediately.”

“With the slower pace of loan growth, our outlook for 2007 is for operating earnings per share growth of 10 to 12 percent,” said Tallent. “We remain committed to building shareholder value through our ability to deliver consistent double-digit growth in operating earnings per share, expand the franchise and provide superior customer service. It’s no secret that we encountered some challenges in the first half of 2007, but we are optimistic that we will deliver another year of superior operating performance.”

Conference Call

United Community Banks will hold a conference call on Tuesday, July 24, 2007, 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 2007. The telephone number for the conference call is (866) 383-7989 and the pass code is “UCBI.” The conference call will also be available by web cast within the Investor Relations section of the company’s web site at www.ucbi.com.

About United Community Banks, Inc.

Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $8.1 billion and operates 27 community banks with 110 banking offices located throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The company specializes in providing personalized community banking services to individuals and small to mid-size businesses. United Community Banks also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United Community Banks common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at the company’s web site at www.ucbi.com.

Safe Harbor

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

(Tables Follow)

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

																						Second
		2007								2006												Quarter				For the Six								YTD
(in thousands, except per share		Second				First				Fourth				Third				Second				2007-2006				Months Ended								2007-2006
data; taxable equivalent)		Quarter				Quarter				Quarter				Quarter				Quarter				Change				2007				2006				Change
INCOME SUMMARY
Interest revenue		$	136,237			$	129,028			$	123,463			$	116,304			$	107,890							$	265,265			$	206,928
Interest expense			68,270				63,923				60,912				55,431				49,407								132,193				92,472
Net interest revenue			67,967				65,105				62,551				60,873				58,483				16	%			133,072				114,456				16	%
Provision for loan losses (1)			3,700				3,700				3,700				3,700				3,700								7,400				7,200
Fee revenue			16,554				14,382				13,215				12,146				11,976				38				30,936				23,734				30
Total operating revenue			80,821				75,787				72,066				69,319				66,759				21				156,608				130,990				20
Operating expenses			47,702				44,841				42,521				41,441				39,645				20				92,543				78,108				18
Income before taxes			33,119				30,946				29,545				27,878				27,114				22				64,065				52,882				21
Income taxes			12,043				11,601				11,111				10,465				10,185								23,644				19,914
Net operating income			21,076				19,345				18,434				17,413				16,929				24				40,421				32,968				23
Fraud loss provision, net of tax (1)			9,165				—				—				—				—								9,165				—
Net income		$	11,911			$	19,345			$	18,434			$	17,413			$	16,929				(30	)		$	31,256			$	32,968				(5	)
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic		$	.47			$	.45			$	.45			$	.43			$	.42				12			$	.92			$	.82				12
Diluted			.46				.44				.44				.42				.41				12				.90				.80				13
Return on tangible equity (2)(3)(4)			17.54	%			17.18	%			17.49	%			17.29	%			17.68	%							17.36	%			17.67	%
Return on assets (4)			1.12				1.11				1.10				1.09				1.10								1.12				1.10
Dividend payout ratio			19.15				20.00				17.78				18.60				19.05								19.57				19.51
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings		$	.26			$	.45			$	.45			$	.43			$	.42				(38	)		$	.71			$	.82				(13	)
Diluted earnings			.26				.44				.44				.42				.41				(37	)			.70				.80				(13	)
Cash dividends declared			.09				.09				.08				.08				.08				13				.18				.16				13
Book value			16.98				14.83				14.37				13.07				12.34				38				16.98				12.34				38
Tangible book value (3)			10.44				11.06				10.57				10.16				9.50				10				10.44				9.50				10
Key performance ratios:
Return on equity (2)(4)			7.05				12.48				13.26				13.22				13.41								9.64				13.33
Return on assets (4)			.64				1.11				1.10				1.09				1.10								.86				1.10
Net interest margin (4)			3.94				3.99				3.99				4.07				4.07								3.96				4.07
Efficiency ratio			56.59				56.56				55.93				56.46				56.04								56.57				56.40
Dividend payout ratio			34.62				20.00				17.78				18.60				19.05								25.35				19.51
Equity to assets			8.94				8.80				8.21				8.04				7.95								8.87				7.99
Tangible equity to assets (3)			6.65				6.66				6.46				6.35				6.22								6.65				6.23
ASSET QUALITY (5)
Allowance for loan losses		$	92,471			$	68,804			$	66,566			$	60,901			$	58,508							$	92,471			$	58,508
Non-performing assets			43,601				14,290				13,654				9,347				8,805								43,601				8,805
Net charge-offs			2,124				1,462				1,930				1,307				1,042								3,586				2,287
Allowance for loan losses to loans			1.54	%			1.27	%			1.24	%			1.23	%			1.22	%							1.54	%			1.22	%
Non-performing assets to total assets			.54				.20				.19				.14				.14								.54				.14
Net charge-offs to average loans (4)			.15				.11				.15				.11				.09								.13				.10
AVERAGE BALANCES
Loans		$	5,619,950			$	5,402,860			$	5,134,721			$	4,865,886			$	4,690,196				20			$	5,512,005			$	4,598,355				20
Investment securities			1,242,448				1,153,208				1,059,125				1,029,981				1,039,707				19				1,198,075				1,039,198				15
Earning assets			6,915,134				6,599,035				6,225,943				5,942,710				5,758,697				20				6,757,959				5,667,213				19
Total assets			7,519,392				7,092,710				6,669,950				6,350,205				6,159,152				22				7,307,231				6,060,526				21
Deposits			5,945,633				5,764,426				5,517,696				5,085,168				4,842,389				23				5,855,530				4,728,730				24
Shareholders’ equity			672,348				624,100				547,419				510,791				489,821				37				648,358				484,420				34
Common shares — basic			44,949				43,000				41,096				40,223				40,156								43,980				40,122
Common shares — diluted			45,761				43,912				42,311				41,460				41,328								44,842				41,259
AT PERIOD END
Loans		$	5,999,093			$	5,402,198			$	5,376,538			$	4,965,365			$	4,810,277				25			$	5,999,093			$	4,810,277				25
Investment securities			1,213,659				1,150,424				1,107,153				980,273				974,524				25				1,213,659				974,524				25
Total assets			8,087,667				7,186,602				7,101,249				6,455,290				6,331,136				28				8,087,667				6,331,136				28
Deposits			6,361,269				5,841,687				5,772,886				5,309,219				4,976,650				28				6,361,269				4,976,650				28
Shareholders’ equity			828,731				638,456				616,767				526,734				496,297				67				828,731				496,297				67
Common shares outstanding			48,781				43,038				42,891				40,269				40,179								48,781				40,179

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End

																						Linked Quarter
		2007								2006												Change(3)								Year over Year Change
		Second				First				Fourth				Third				Second								Excluding								Excluding
(in millions)		Quarter(1)				Quarter				Quarter(2)				Quarter				Quarter				Actual				Acquired				Actual				Acquired
LOANS BY CATEGORY
Commercial (sec. by RE)		$	1,461			$	1,227			$	1,230			$	1,157			$	1,130				76	%			5	%			29	%			7	%
Commercial & industrial			421				315				296				272				255				135				18				65				27
Total commercial			1,882				1,542				1,526				1,429				1,385				88				8				36				10
Construction & land dev			2,522				2,336				2,333				2,065				1,995				32				(1	)			26				7
Residential mortgage			1,413				1,354				1,338				1,299				1,261				17				10				12				8
Consumer / installment			182				170				180				172				169				28				20				8				1
Total loans		$	5,999			$	5,402			$	5,377			$	4,965			$	4,810				44				5				25				8
LOANS BY MARKET
Atlanta Region		$	2,517			$	2,015			$	2,005			$	1,696			$	1,625				100	%			(7	)%			55	%			6	%
North Georgia			2,032				2,010				2,034				1,984				1,952				4				4				4				4
Coastal Georgia			396				372				358				343				336				26				26				18				18
Western North Carolina			816				782				773				752				717				17				17				14				14
Eastern Tennessee			238				223				207				190				180				27				27				32				32
Total loans		$	5,999			$	5,402			$	5,377			$	4,965			$	4,810				44				5				25				8

UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)

		Second				Six Months Ended
		Quarter				June 30,
		2007				2007
Special provision for fraud related loan losses		$	15,000			$	15,000
Income tax effect of special provision			5,835				5,835
After-tax effect of special provision		$	9,165			$	9,165
Net Income Reconciliation
Operating net income		$	21,076			$	40,421
After-tax effect of special provision			(9,165	)			(9,165	)
Net income (GAAP)		$	11,911			$	31,256
Basic Earnings Per Share Reconciliation
Basic operating earnings per share		$	.47			$	.92
Per share effect of special provision			(.21	)			(.21	)
Basic earnings per share (GAAP)		$	.26			$	.71
Diluted Earnings Per Share Reconciliation
Diluted operating earnings per share		$	.46			$	.90
Per share effect of special provision			(.20	)			(.20	)
Diluted earnings per share (GAAP)		$	.26			$	.70

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income (unaudited)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
(in thousands, except per share data)		2007				2006				2007				2006
Interest revenue:
Loans, including fees		$	119,799			$	95,242			$	233,872			$	181,848
Investment securities:
Taxable			15,476				11,521				29,444				22,839
Tax exempt			438				509				885				1,023
Federal funds sold and deposits in banks			80				162				138				320
Total interest revenue			135,793				107,434				264,339				206,030
Interest expense:
Deposits:
NOW			11,470				7,342				22,097				13,329
Money market			3,540				1,614				6,080				2,814
Savings			374				226				683				454
Time			41,979				29,599				83,604				54,985
Total deposit interest expense			57,363				38,781				112,464				71,582
Federal funds purchased, repurchase agreements, & other short-term borrowings			3,671				2,078				5,488				3,560
Federal Home Loan Bank advances			5,035				6,380				9,836				13,009
Long-term debt			2,201				2,168				4,405				4,321
Total interest expense			68,270				49,407				132,193				92,472
Net interest revenue			67,523				58,027				132,146				113,558
Provision for loan losses			18,700				3,700				22,400				7,200
Net interest revenue after provision for loan losses			48,823				54,327				109,746				106,358
Fee revenue:
Service charges and fees			7,975				6,828				15,228				13,181
Mortgage loan and other related fees			2,476				1,708				4,699				3,221
Consulting fees			2,241				1,572				3,988				3,156
Brokerage fees			1,192				796				2,136				1,646
Securities gains (losses), net			1,386				—				1,593				(3	)
Losses on prepayment of borrowings			(1,164	)			(290	)			(1,164	)			(290	)
Other			2,448				1,362				4,456				2,823
Total fee revenue			16,554				11,976				30,936				23,734
Total revenue			65,377				66,303				140,682				130,092
Operating expenses:
Salaries and employee benefits			30,022				24,469				58,339				48,353
Communications and equipment			3,845				3,731				7,657				7,107
Occupancy			3,316				2,916				6,507				5,848
Advertising and public relations			2,098				1,948				4,114				3,836
Postage, printing and supplies			1,680				1,289				3,340				2,805
Professional fees			2,010				1,069				3,489				2,230
Amortization of intangibles			633				503				1,197				1,006
Other			4,098				3,720				7,900				6,923
Total operating expenses			47,702				39,645				92,543				78,108
Income before income taxes			17,675				26,658				48,139				51,984
Income taxes			5,764				9,729				16,883				19,016
Net income		$	11,911			$	16,929			$	31,256			$	32,968
Net income available to common shareholders		$	11,906			$	16,924			$	31,246			$	32,958
Earnings per common share:
Basic		$	.26			$	.42			$	.71			$	.82
Diluted			.26				.41				.70				.80
Dividends per common share			.09				.08				.18				.16
Weighted average common shares outstanding:
Basic			44,949				40,156				43,980				40,122
Diluted			45,761				41,328				44,842				41,259

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet

		June 30,				December 31,				June 30,
(in thousands, except share and per share data)		2007				2006				2006
		(unaudited)				(audited)				(unaudited)
ASSETS
Cash and due from banks		$	171,095			$	158,348			$	159,954
Interest-bearing deposits in banks			23,146				12,936				21,948
Cash and cash equivalents			194,241				171,284				181,902
Securities available for sale			1,213,659				1,107,153				974,524
Mortgage loans held for sale			30,615				35,325				24,000
Loans, net of unearned income			5,999,093				5,376,538				4,810,277
Less allowance for loan losses			92,471				66,566				58,508
Loans, net			5,906,622				5,309,972				4,751,769
Premises and equipment, net			171,327				139,716				124,018
Accrued interest receivable			64,538				58,291				44,187
Goodwill and other intangible assets			326,467				167,058				117,646
Other assets			180,198				112,450				113,090
Total assets		$	8,087,667			$	7,101,249			$	6,331,136
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand		$	773,435			$	659,892			$	662,463
NOW			1,447,789				1,307,654				1,106,988
Money market			504,730				255,862				198,491
Savings			207,468				175,631				173,985
Time:
Less than $100,000			1,651,486				1,650,906				1,388,009
Greater than $100,000			1,428,841				1,397,245				1,106,359
Brokered			347,520				325,696				340,355
Total deposits			6,361,269				5,772,886				4,976,650
Federal funds purchased, repurchase agreements, and other short-term borrowings			238,429				65,884				249,552
Federal Home Loan Bank advances			499,060				489,084				458,587
Long-term debt			113,151				113,151				111,869
Accrued expenses and other liabilities			47,027				43,477				38,181
Total liabilities			7,258,936				6,484,482				5,834,839
Shareholders’ equity:
Preferred stock, $1 par value; $10 stated value; 10,000,000 shares authorized; 32,200, 32,200 and 32,200 shares issued and outstanding			322				322				322
Common stock, $1 par value; 100,000,000 shares authorized; 48,781,351, 42,890,863 and 40,178,533 shares issued and outstanding			48,781				42,891				40,179
Common stock issuable; 60,761, 29,821 and 19,712 shares			1,816				862				544
Capital surplus			461,226				270,383				197,235
Retained earnings			329,229				306,261				277,086
Accumulated other comprehensive loss			(12,643	)			(3,952	)			(19,069	)
Total shareholders’ equity			828,731				616,767				496,297
Total liabilities and shareholders’ equity		$	8,087,667			$	7,101,249			$	6,331,136

For the Three Months Ended June 30,

		2007												2006
		Average								Avg.				Average								Avg.
(dollars in thousands, taxable equivalent)		Balance				Interest				Rate				Balance				Interest				Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2)		$	5,619,950			$	119,569				8.53	%		$	4,690,196			$	95,127				8.14	%
Taxable securities (3)			1,200,268				15,476				5.16				991,701				11,521				4.65
Tax-exempt securities (1) (3)			42,180				721				6.83				48,006				837				6.97
Federal funds sold and other interest-earning assets			52,736				471				3.57				28,794				405				5.63
Total interest-earning assets			6,915,134				136,237				7.90				5,758,697				107,890				7.51
Non-interest-earning assets:
Allowance for loan losses			(73,323	)											(57,654	)
Cash and due from banks			130,046												129,389
Premises and equipment			158,290												120,870
Other assets (3)			389,245												207,850
Total assets		$	7,519,392											$	6,159,152
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW		$	1,379,423			$	11,470				3.34			$	1,102,041			$	7,342				2.67
Money market			354,815				3,540				4.00				180,757				1,614				3.58
Savings			186,490				374				.80				174,533				226				.52
Time less than $100,000			1,627,708				19,978				4.92				1,344,861				14,066				4.20
Time greater than $100,000			1,372,410				17,892				5.23				1,061,249				12,147				4.59
Brokered			332,857				4,109				4.95				327,962				3,386				4.14
Total interest-bearing deposits			5,253,703				57,363				4.38				4,191,403				38,781				3.71
Federal funds purchased and other borrowings			275,319				3,671				5.35				165,563				2,078				5.03
Federal Home Loan Bank advances			419,287				5,035				4.82				506,531				6,380				5.05
Long-term debt			113,270				2,201				7.79				111,869				2,168				7.77
Total borrowed funds			807,876				10,907				5.42				783,963				10,626				5.44
Total interest-bearing liabilities			6,061,579				68,270				4.52				4,975,366				49,407				3.98
Non-interest-bearing liabilities:
Non-interest-bearing deposits			691,930												650,986
Other liabilities			93,535												42,979
Total liabilities			6,847,044												5,669,331
Shareholders’ equity			672,348												489,821
Total liabilities and shareholders’ equity			7,519,392												6,159,152
Net interest revenue						$	67,967											$	58,483
Net interest-rate spread											3.38	%											3.53	%
Net interest margin (4)											3.94	%											4.07	%