SEC Filing | United Community Banks, Inc.

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Form 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 23, 2010

United Community Banks, Inc.
(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)		(Zip Code)

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 23, 2010, United Community Banks, Inc. (the “Registrant”) issued a news release announcing its financial results for the quarter ended June 30, 2010 (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 23, 2010 at 11:00 a.m. EST, the Registrant intends to hold a conference call/webcast to discuss the News Release. In addition to the News Release, during the conference call the Registrant intends to discuss certain financial information contained in the June 30, 2010 Investor Presentation (the “Investor Presentation”) which will be posted to the Registrant’s website. The Investor Presentation is attached as Exhibit 99.2 to this report. The presentation of the Registrant’s financial results included operating performance measures and core earnings measures, which are measures of performance determined by methods other than in accordance with generally accepted accounting principles, or GAAP. Management included non-GAAP operating performance and core earnings measures because it believes they are useful for evaluating the Registrant’s operations and performance over periods of time, and uses operating performance and core earnings measures in managing and evaluating the Registrant’s business and intends to refer to them in discussions about the Registrant’s operations and performance. Operating performance measures for 2009 exclude the effects of $25 million and $70 million, non-cash goodwill impairment charges in the third and first quarters, respectively, (bringing the total goodwill impairment charge for the year 2009 to $95 million), $2.9 million in non-recurring severance charges related to a reduction in workforce recorded in the first quarter and an $11.4 million gain in the second quarter from the acquisition of Southern Community Bank that resulted from a bargain purchase. These items have been excluded from operating performance measures because management believes that the items are non-recurring in nature and do not reflect overall trends in the Registrant’s earnings. Additionally, core earnings measures exclude credit related costs such as the provision for loan losses, the loss from sale of nonperforming assets to Fletcher International in the second quarter of 2010 and foreclosed property expense, securities gains and losses, income taxes and other items of a non-recurring nature. Core earnings are useful in evaluating the underlying earnings performance trends of the Registrant. Management believes these non-GAAP performance measures may provide 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. Operating performance and core earnings measures should be viewed in addition to, and not as an alternative or substitute for, the Registrant’s performance measures 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 23, 2010 99.2 Investor Presentation, Second Quarter 2010

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.

/s/ Rex S. Schuette
Rex S. Schuette
Executive Vice President and

July 23, 2010

Chief Financial Officer

Exhibit 99.1

Exhibit 99.1

For Immediate Release

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

UNITED COMMUNITY BANKS, INC. REPORTS
NET OPERATING LOSS FOR SECOND QUARTER 2010

•

Completed sale of $103 million of nonperforming assets that resulted in a non-cash charge of $45.3 million

•

Nonperforming assets decline 17 percent from last quarter

•

Provision for loan losses was $61.5 million, down $13.5 million from last quarter

•

Allowance-to-loans ratio increases to 3.57 percent

•

Margin improves 11 basis points to 3.60 percent

BLAIRSVILLE, GA — July 23, 2010 — United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss from continuing operations of $59.5 million, or 66 cents per diluted share, for the second quarter of 2010. The second quarter operating loss included a non-cash charge of $45.3 million, or $30.0 million after-tax, resulting from the transaction with Fletcher International (“Fletcher”) to dispose of nonperforming assets. The charge increased the net loss for the quarter by 32 cents per diluted share.

United’s net operating losses from continuing operations for the first six months of 2010 and 2009 were $94.0 million, or $1.05 per diluted share, and $55.3 million, or $1.24 per diluted share, respectively. In the attached schedules, the results of operations for all periods presented have been restated to show earnings from continuing operations, which excludes Brintech’s fee revenue and operating expenses during the periods it was owned by United and the gain from the sale. The net income or loss from Brintech’s discontinued operations is reported as a separate line in the consolidated statement of

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income. Also, the net operating loss from continuing operations for the first six months of 2009 excludes a $70 million non-cash charge for impairment of goodwill and $1.8 million in severance costs, net of taxes, relating to a reduction in work force, both of which were incurred during the first quarter and the $7.1 million gain, net of taxes, on the acquisition of Southern Community Bank in the second quarter. These charges and gains were considered non-recurring items and therefore were excluded from operating earnings. Including these non-recurring items, United’s net loss for the first six months of 2010 and 2009 was $92.8 million, or $1.04 per diluted share, and $119.8 million, or $2.57 per diluted share, respectively.

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

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

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

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

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

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

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

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

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

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

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

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

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

Conference Call
United Community Banks will hold a conference call today, Friday, July 23, 2010, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the password ‘85745611.’ The conference call also will be webcast and can be accessed by selecting ‘Calendar of Events’ within the Investor Relations section of the company’s website at www.ucbi.com.

About United Community Banks, Inc.
Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $7.7 billion and operates 27 community banks with 106 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The company specializes in providing personalized community banking services to individuals and small to mid-size businesses. United Community Banks also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United Community Banks common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at the company’s web site at www.ucbi.com.

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Safe Harbor
This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled “Forward-Looking Statements” on page 3 of United Community Banks, Inc.’s annual report filed on Form 10-K with the Securities and Exchange Commission.

# # #

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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information


																Second
	2010						2009									Quarter			For the Six						YTD
(in thousands, except per share	Second			First			Fourth			Third			Second			2010-2009			Months Ended						2010-2009
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change			2010			2009			Change
INCOME SUMMARY
Interest revenue	$	87,699		$	89,849		$	97,481		$	101,181		$	102,737					$	177,548		$	206,299
Interest expense		26,072			28,570			33,552			38,177			41,855						54,642			88,005

Net interest revenue		61,627			61,279			63,929			63,004			60,882			1	%		122,906			118,294			4	%
Provision for loan losses		61,500			75,000			90,000			95,000			60,000						136,500			125,000
Operating fee revenue⁽¹⁾		11,579			11,666			14,447			13,389			11,305			2			23,245			23,128			1

Total operating revenue ⁽¹⁾		11,706			(2,055	)		(11,624	)		(18,607	)		12,187			(4	)		9,651			16,422			(41	)
Operating expenses⁽²⁾		58,308			54,820			60,126			51,426			53,710			9			113,128			105,498			7
Loss on sale of nonperforming assets		45,349			—			—			—			—						45,349			—

Operating loss from continuing operations before taxes		(91,951	)		(56,875	)		(71,750	)		(70,033	)		(41,523	)		(121	)		(148,826	)		(89,076	)		(67	)
Operating income tax benefit		(32,419	)		(22,417	)		(31,687	)		(26,252	)		(18,394	)					(54,836	)		(33,815	)

Net operating loss from continuing operations⁽¹⁾⁽²⁾		(59,532	)		(34,458	)		(40,063	)		(43,781	)		(23,129	)		(157	)		(93,990	)		(55,261	)		(70	)
Gain from acquisition, net of tax expense		—			—			—			—			7,062						—			7,062
Noncash goodwill impairment charges		—			—			—			(25,000	)		—						—			(70,000	)
Severance costs, net of tax benefit		—			—			—			—			—						—			(1,797	)
(Loss) income from discontinued operations		—			(101	)		228			63			66						(101	)		222
Gain from sale of subsidiary, net of income taxes and selling costs		—			1,266			—			—			—						1,266			—

Net loss		(59,532	)		(33,293	)		(39,835	)		(68,718	)		(16,001	)		(272	)		(92,825	)		(119,774	)		22
Preferred dividends and discount accretion		2,577			2,572			2,567			2,562			2,559						5,149			5,113

Net loss available to common shareholders	$	(62,109	)	$	(35,865	)	$	(42,402	)	$	(71,280	)	$	(18,560	)				$	(97,974	)	$	(124,887	)


PERFORMANCE MEASURES
Per common share:
Diluted operating loss from continuing operations⁽¹⁾⁽²⁾	$	(.66	)	$	(.39	)	$	(.45	)	$	(.93	)	$	(.53	)		(25	)	$	(1.05	)	$	(1.24	)		15
Diluted loss from continuing operations		(.66	)		(.39	)		(.45	)		(1.43	)		(.38	)		(74	)		(1.05	)		(2.58	)		59
Diluted loss		(.66	)		(.38	)		(.45	)		(1.43	)		(.38	)		(74	)		(1.04	)		(2.57	)		60
Stock dividends declared⁽⁶⁾		—			—			—		1 for 130			1 for 130							—		2 for 130
Book value		7.71			7.95			8.36			8.85			13.87			(44	)		7.71			13.87			(44	)
Tangible book value⁽⁴⁾		5.39			5.62			6.02			6.50			8.85			(39	)		5.39			8.85			(39	)

Key performance ratios:
Return on equity⁽³⁾⁽⁵⁾		(35.89	)%		(20.10	)%		(22.08	)%		(45.52	)%		(11.42	)%					(27.87	)%		(36.20	)%
Return on assets⁽⁵⁾		(3.10	)		(1.70	)		(1.91	)		(3.32	)		(.78	)					(2.39	)		(2.93	)
Net interest margin⁽⁵⁾		3.60			3.49			3.40			3.39			3.28						3.55			3.18
Operating efficiency ratio from continuing operations⁽¹⁾⁽²⁾		141.60			75.22			78.74			68.35			73.68						108.48			74.38
Equity to assets		11.84			11.90			11.94			10.27			10.71						11.87			11.20
Tangible equity to assets⁽⁴⁾		9.26			9.39			9.53			7.55			7.96						9.32			8.10
Tangible common equity to assets⁽⁴⁾		6.91			7.13			7.37			5.36			5.77						7.02			5.93
Tangible common equity to risk-weighted assets⁽⁴⁾		9.97			10.03			10.39			10.67			7.49						9.97			7.49

ASSET QUALITY *
Non-performing loans	$	224,335		$	280,802		$	264,092		$	304,381		$	287,848					$	224,335		$	287,848
Foreclosed properties		123,910			136,275			120,770			110,610			104,754						123,910			104,754

Total non-performing assets (NPAs)		348,245			417,077			384,862			414,991			392,602						348,245			392,602
Allowance for loan losses		174,111			173,934			155,602			150,187			145,678						174,111			145,678
Net charge-offs		61,323			56,668			84,585			90,491			58,312						117,991			101,593
Allowance for loan losses to loans		3.57	%		3.48	%		3.02	%		2.80	%		2.64	%					3.57	%		2.64	%
Net charge-offs to average loans⁽⁵⁾		4.98			4.51			6.37			6.57			4.18						4.75			3.64
NPAs to loans and foreclosed properties		6.97			8.13			7.30			7.58			6.99						6.97			6.99
NPAs to total assets		4.55			5.32			4.81			4.91			4.63						4.55			4.63

AVERAGE BALANCES ($ in millions)
Loans	$	5,011		$	5,173		$	5,357		$	5,565		$	5,597			(10	)	$	5,091		$	5,636			(10	)
Investment securities		1,532			1,518			1,529			1,615			1,771			(13	)		1,525			1,742			(12	)
Earning assets		6,854			7,085			7,487			7,401			7,442			(8	)		6,969			7,486			(7	)
Total assets		7,704			7,946			8,287			8,208			8,212			(6	)		7,825			8,291			(6	)
Deposits		6,375			6,570			6,835			6,690			6,545			(3	)		6,472			6,662			(3	)
Shareholders’ equity		912			945			989			843			879			4			929			923			1
Common shares — basic (thousands)		94,524			94,390			94,219			49,771			48,794			94			94,453			48,560			95
Common shares — diluted (thousands)		94,524			94,390			94,219			49,771			48,794			94			94,453			48,560			95

AT PERIOD END ($ in millions)
Loans *	$	4,873		$	4,992		$	5,151		$	5,363		$	5,513			(12	)	$	4,873		$	5,513			(12	)
Investment securities		1,488			1,527			1,530			1,533			1,817			(18	)		1,488			1,817			(18	)
Total assets		7,652			7,837			8,000			8,444			8,477			(10	)		7,652			8,477			(10	)
Deposits		6,330			6,488			6,628			6,821			6,849			(8	)		6,330			6,849			(8	)
Shareholders’ equity		904			926			962			1,007			855			6			904			855			6
Common shares outstanding (thousands)		94,281			94,176			94,046			93,901			48,933			93			94,281			48,933			93


⁽¹⁾		Excludes the gain from acquisition of $11.4 million, (income tax expense of $4.3 million) in the second quarter of 2009 and revenue generated by discontinued operations in all periods presented.

⁽²⁾		Excludes goodwill impairment charges of $25 million and $70 million in the third and first quarters of 2009, respectively, severance costs of $2.9 million, (income tax benefit of $1.1 million) in the first quarter of 2009 and expenses relating to discontinued operations for all periods presented.

⁽³⁾		Net loss available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).

⁽⁴⁾		Excludes effect of acquisition related intangibles and associated amortization.

⁽⁵⁾		Annualized.

⁽⁶⁾		Number of new shares issued for shares currently held.

*		Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.

UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information


	2010						2009									For the Six
(in thousands, except per share	Second			First			Fourth			Third			Second			Months Ended
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			2010			2009

Interest revenue reconciliation
Interest revenue — taxable equivalent	$	87,699		$	89,849		$	97,481		$	101,181		$	102,737		$	177,548		$	206,299
Taxable equivalent adjustment		(500	)		(493	)		(601	)		(580	)		(463	)		(993	)		(951	)

Interest revenue (GAAP)	$	87,199		$	89,356		$	96,880		$	100,601		$	102,274		$	176,555		$	205,348


Net interest revenue reconciliation
Net interest revenue — taxable equivalent	$	61,627		$	61,279		$	63,929		$	63,004		$	60,882		$	122,906		$	118,294
Taxable equivalent adjustment		(500	)		(493	)		(601	)		(580	)		(463	)		(993	)		(951	)

Net interest revenue (GAAP)	$	61,127		$	60,786		$	63,328		$	62,424		$	60,419		$	121,913		$	117,343


Fee revenue reconciliation
Operating fee revenue	$	11,579		$	11,666		$	14,447		$	13,389		$	11,305		$	23,245		$	23,128
Gain from acquisition		—			—			—			—			11,390			—			11,390

Fee revenue (GAAP)	$	11,579		$	11,666		$	14,447		$	13,389		$	22,695		$	23,245		$	34,518


Total revenue reconciliation
Total operating revenue	$	11,706		$	(2,055	)	$	(11,624	)	$	(18,607	)	$	12,187		$	9,651		$	16,422
Taxable equivalent adjustment		(500	)		(493	)		(601	)		(580	)		(463	)		(993	)		(951	)
Gain from acquisition		—			—			—			—			11,390			—			11,390

Total revenue (GAAP)	$	11,206		$	(2,548	)	$	(12,225	)	$	(19,187	)	$	23,114		$	8,658		$	26,861


Expense reconciliation
Operating expense	$	103,657		$	54,820		$	60,126		$	51,426		$	53,710		$	158,477		$	105,498
Noncash goodwill impairment charge		—			—			—			25,000			—			—			70,000
Severance costs		—			—			—			—			—			—			2,898

Operating expense (GAAP)	$	103,657		$	54,820		$	60,126		$	76,426		$	53,710		$	158,477		$	178,396


Loss from continuing operations before taxes reconciliation
Operating loss from continuing operations before taxes	$	(91,951	)	$	(56,875	)	$	(71,750	)	$	(70,033	)	$	(41,523	)	$	(148,826	)	$	(89,076	)
Taxable equivalent adjustment		(500	)		(493	)		(601	)		(580	)		(463	)		(993	)		(951	)
Gain from acquisition		—			—			—			—			11,390			—			11,390
Noncash goodwill impairment charge		—			—			—			(25,000	)		—			—			(70,000	)
Severance costs		—			—			—			—			—			—			(2,898	)

Loss from continuing operations before taxes (GAAP)	$	(92,451	)	$	(57,368	)	$	(72,351	)	$	(95,613	)	$	(30,596	)	$	(149,819	)	$	(151,535	)


Income tax benefit reconciliation
Operating income tax benefit	$	(32,419	)	$	(22,417	)	$	(31,687	)	$	(26,252	)	$	(18,394	)	$	(54,836	)	$	(33,815	)
Taxable equivalent adjustment		(500	)		(493	)		(601	)		(580	)		(463	)		(993	)		(951	)
Gain from acquisition, tax expense		—			—			—			—			4,328			—			4,328
Severance costs, tax benefit		—			—			—			—			—			—			(1,101	)

Income tax benefit (GAAP)	$	(32,919	)	$	(22,910	)	$	(32,288	)	$	(26,832	)	$	(14,529	)	$	(55,829	)	$	(31,539	)


Diluted loss from continuing operations per common share reconciliation
Diluted operating loss from continuing operations per common share	$	(.66	)	$	(.39	)	$	(.45	)	$	(.93	)	$	(.53	)	$	(1.05	)	$	(1.24	)
Gain from acquisition		—			—			—			—			.15			—			.15
Noncash goodwill impairment charge		—			—			—			(.50	)		—			—			(1.45	)
Severance costs		—			—			—			—			—			—			(.04	)

Diluted loss from continuing operations per common share (GAAP)	$	(.66	)	$	(.39	)	$	(.45	)	$	(1.43	)	$	(.38	)	$	(1.05	)	$	(2.58	)


Book value per common share reconciliation
Tangible book value per common share	$	5.39		$	5.62		$	6.02		$	6.50		$	8.85		$	5.39		$	8.85
Effect of goodwill and other intangibles		2.32			2.33			2.34			2.35			5.02			2.32			5.02

Book value per common share (GAAP)	$	7.71		$	7.95		$	8.36		$	8.85		$	13.87		$	7.71		$	13.87


Efficiency ratio from continuing operations reconciliation
Operating efficiency ratio from continuing operations		141.60	%		75.22	%		78.74	%		68.35	%		73.68	%		108.48	%		74.38	%
Gain from acquisition		—			—			—			—			(9.96	)		—			(5.53	)
Noncash goodwill impairment charge		—			—			—			33.22			—			—			45.69
Severance costs		—			—			—			—			—			—			1.89

Efficiency ratio from continuing operations (GAAP)		141.60	%		75.22	%		78.74	%		101.57	%		63.72	%		108.48	%		116.43	%


Average equity to assets reconciliation
Tangible common equity to assets		6.91	%		7.13	%		7.37	%		5.36	%		5.77	%		7.02	%		5.93	%
Effect of preferred equity		2.35			2.26			2.16			2.19			2.19			2.30			2.17

Tangible equity to assets		9.26			9.39			9.53			7.55			7.96			9.32			8.10
Effect of goodwill and other intangibles		2.58			2.51			2.41			2.72			2.75			2.55			3.10

Equity to assets (GAAP)		11.84	%		11.90	%		11.94	%		10.27	%		10.71	%		11.87	%		11.20	%


Actual tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets		9.97	%		10.03	%		10.39	%		10.67	%		7.49	%		9.97	%		7.49	%
Effect of other comprehensive income		(.87	)		(.85	)		(.87	)		(.90	)		(.72	)		(.87	)		(.72	)
Effect of deferred tax limitation		(2.47	)		(1.75	)		(1.27	)		(.58	)		(.22	)		(2.47	)		(.22	)
Effect of trust preferred		1.03			1.00			.97			.92			.90			1.03			.90
Effect of preferred equity		3.41			3.29			3.19			3.04			2.99			3.41			2.99

Tier I capital ratio (Regulatory)		11.07	%		11.72	%		12.41	%		13.15	%		10.44	%		11.07	%		10.44	%

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


	2010				2009						Linked			Year over
	Second		First		Fourth		Third		Second		Quarter			Year
(in millions)	Quarter⁽¹⁾		Quarter⁽¹⁾		Quarter⁽¹⁾		Quarter⁽¹⁾		Quarter⁽¹⁾		Change			Change
LOANS BY CATEGORY
Commercial (sec. by RE)	$	1,780	$	1,765	$	1,779	$	1,787	$	1,797	$	15		$	(17	)
Commercial construction		342		357		363		380		379		(15	)		(37	)
Commercial & industrial		441		381		390		403		399		60			42

Total commercial		2,563		2,503		2,532		2,570		2,575		60			(12	)
Residential construction		820		960		1,050		1,185		1,315		(140	)		(495	)
Residential mortgage		1,356		1,390		1,427		1,461		1,470		(34	)		(114	)
Consumer / installment		134		139		142		147		153		(5	)		(19	)

Total loans	$	4,873	$	4,992	$	5,151	$	5,363	$	5,513		(119	)		(640	)


LOANS BY MARKET
Atlanta MSA	$	1,373	$	1,404	$	1,435	$	1,526	$	1,605		(31	)		(232	)
Gainesville MSA		343		372		390		402		413		(29	)		(70	)
North Georgia		1,808		1,814		1,884		1,942		1,978		(6	)		(170	)
Western North Carolina		738		756		772		786		794		(18	)		(56	)
Coastal Georgia		356		388		405		440		455		(32	)		(99	)
East Tennessee		255		258		265		267		268		(3	)		(13	)

Total loans	$	4,873	$	4,992	$	5,151	$	5,363	$	5,513		(119	)		(640	)


RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development	$	214	$	290	$	332	$	380	$	413		(76	)		(199	)
Land loans		110		124		127		159		159		(14	)		(49	)
Lot loans		311		321		336		336		369		(10	)		(58	)

Total		635		735		795		875		941		(100	)		(306	)


House loans
Spec		125		153		178		218		268		(28	)		(143	)
Sold		60		72		77		92		106		(12	)		(46	)

Total		185		225		255		310		374		(40	)		(189	)

Total residential construction	$	820	$	960	$	1,050	$	1,185	$	1,315		(140	)		(495	)


RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
Acquisition & development	$	52	$	66	$	76	$	100	$	124		(14	)		(72	)
Land loans		32		43		43		61		63		(11	)		(31	)
Lot loans		39		47		52		54		81		(8	)		(42	)

Total		123		156		171		215		268		(33	)		(145	)


House loans
Spec		50		58		68		91		127		(8	)		(77	)
Sold		10		14		16		22		29		(4	)		(19	)

Total		60		72		84		113		156		(12	)		(96	)

Total residential construction	$	183	$	228	$	255	$	328	$	424		(45	)		(241	)


(1)		Excludes total loans of $80.8 million, $79.5 million, $85.1 million, $104.0 million and $109.9 million as of June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality ⁽¹⁾


	Second Quarter 2010									First Quarter 2010									Fourth Quarter 2009
	Non-performing			Foreclosed			Total			Non-performing			Foreclosed			Total			Non-performing			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs			Loans			Properties			NPAs			Loans			Properties			NPAs
NPAs BY CATEGORY
Commercial (sec. by RE)	$	56,013		$	13,297		$	69,310		$	45,918		$	21,597		$	67,515		$	37,040		$	15,842		$	52,882
Commercial construction		17,872			11,339			29,211			23,556			14,285			37,841			19,976			9,761			29,737
Commercial & industrial		7,245			—			7,245			3,610			—			3,610			3,946			—			3,946

Total commercial		81,130			24,636			105,766			73,084			35,882			108,966			60,962			25,603			86,565
Residential construction		88,375			74,444			162,819			147,326			74,220			221,546			142,332			76,519			218,851
Residential mortgage		53,175			24,830			78,005			57,920			26,173			84,093			58,767			18,648			77,415
Consumer / installment		1,655			—			1,655			2,472			—			2,472			2,031			—			2,031

Total NPAs	$	224,335		$	123,910		$	348,245		$	280,802		$	136,275		$	417,077		$	264,092		$	120,770		$	384,862


NPAs BY MARKET
Atlanta MSA	$	74,031		$	30,605		$	104,636		$	81,914		$	36,951		$	118,865		$	106,536		$	41,125		$	147,661
Gainesville MSA		10,730			2,750			13,480			17,058			3,192			20,250			5,074			2,614			7,688
North Georgia		102,198			60,597			162,795			109,280			63,128			172,408			87,598			53,072			140,670
Western North Carolina		22,776			11,473			34,249			31,353			8,588			39,941			29,610			5,096			34,706
Coastal Georgia		8,341			16,548			24,889			33,438			21,871			55,309			26,871			17,150			44,021
East Tennessee		6,259			1,937			8,196			7,759			2,545			10,304			8,403			1,713			10,116

Total NPAs	$	224,335		$	123,910		$	348,245		$	280,802		$	136,275		$	417,077		$	264,092		$	120,770		$	384,862


NPA ACTIVITY
Beginning Balance	$	280,802		$	136,275		$	417,077		$	264,092		$	120,770		$	384,862		$	304,381		$	110,610		$	414,991
Loans placed on non-accrual		155,007			—			155,007			139,030			—			139,030			174,898			—			174,898
Payments received		(12,189	)		—			(12,189	)		(5,733	)		—			(5,733	)		(26,935	)		—			(26,935	)
Loan charge-offs		(62,693	)		—			(62,693	)		(58,897	)		—			(58,897	)		(88,427	)		—			(88,427	)
Foreclosures		(66,994	)		66,994			—			(49,233	)		49,233			—			(79,983	)		79,983			—
Capitalized costs		—			305			305			—			320			320			—			981			981
Note / property sales		(69,598	)		(68,472	)		(138,070	)		(8,457	)		(25,951	)		(34,408	)		(19,842	)		(61,228	)		(81,070	)
Write downs		—			(6,094	)		(6,094	)		—			(4,579	)		(4,579	)		—			(2,209	)		(2,209	)
Net losses on sales		—			(5,098	)		(5,098	)		—			(3,518	)		(3,518	)		—			(7,367	)		(7,367	)

Ending Balance	$	224,335		$	123,910		$	348,245		$	280,802		$	136,275		$	417,077		$	264,092		$	120,770		$	384,862


	Second Quarter 2010					First Quarter 2010					Fourth Quarter 2009
			Net Charge-					Net Charge-					Net Charge-
			Offs to					Offs to					Offs to
	Net		Average			Net		Average			Net		Average
(in thousands)	Charge-Offs		Loans⁽²⁾			Charge-Offs		Loans⁽²⁾			Charge-Offs		Loans⁽²⁾
NET CHARGE-OFFS BY CATEGORY
Commercial (sec. by RE)	$	9,757		2.21	%	$	1,964		.45	%	$	3,896		.86	%
Commercial construction		1,460		1.67			2,206		2.48			4,717		5.03
Commercial & industrial		867		.85			4,110		4.31			153		.15

Total commercial		12,084		1.91			8,280		1.33			8,766		1.36
Residential construction		41,515		18.71			43,100		17.32			67,393		23.87
Residential mortgage		6,517		1.90			4,551		1.31			7,026		1.93
Consumer / installment		1,207		3.53			737		2.12			1,400		3.83

Total	$	61,323		4.98		$	56,668		4.51		$	84,585		6.37


NET CHARGE-OFFS BY MARKET
Atlanta MSA	$	16,926		4.85	%	$	15,545		4.32	%	$	43,595		12.07	%
Gainesville MSA		2,547		3.01			1,675		1.92			2,273		2.49
North Georgia		28,100		6.19			29,747		6.51			18,057		3.57
Western North Carolina		7,194		3.86			3,695		1.96			10,091		5.11
Coastal Georgia		5,581		6.07			5,649		5.74			8,109		7.72
East Tennessee		975		1.53			357		.55			2,460		3.67

Total	$	61,323		4.98		$	56,668		4.51		$	84,585		6.37


(1)		Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank. (2) Annualized.

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Income (Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands, except per share data)	2010			2009			2010			2009
Interest revenue:
Loans, including fees	$	70,611		$	81,691		$	142,826		$	163,571
Investment securities, including tax exempt of $295, $309, $606 and $628		15,829			20,485			32,032			41,237
Federal funds sold, commercial paper and deposits in banks		759			98			1,697			540

Total interest revenue		87,199			102,274			176,555			205,348


Interest expense:
Deposits:
NOW		1,745			2,843			3,599			6,180
Money market		1,829			2,269			3,586			4,506
Savings		83			121			167			248
Time		17,718			32,064			37,916			68,117

Total deposit interest expense		21,375			37,297			45,268			79,051
Federal funds purchased, repurchase agreements and other short-term borrowings		1,056			595			2,094			1,148
Federal Home Loan Bank advances		974			1,203			1,951			2,277
Long-term debt		2,667			2,760			5,329			5,529

Total interest expense		26,072			41,855			54,642			88,005

Net interest revenue		61,127			60,419			121,913			117,343
Provision for loan losses		61,500			60,000			136,500			125,000

Net interest revenue after provision for loan losses		(373	)		419			(14,587	)		(7,657	)


Fee revenue:
Service charges and fees		7,993			7,557			15,440			14,591
Mortgage loan and other related fees		1,601			2,825			3,080			5,476
Brokerage fees		586			497			1,153			1,186
Securities losses, net		—			(711	)		61			(408	)
Gain from acquisition		—			11,390			—			11,390
Other		1,399			1,137			3,511			2,283

Total fee revenue		11,579			22,695			23,245			34,518

Total revenue		11,206			23,114			8,658			26,861


Operating expenses:
Salaries and employee benefits		23,590			26,305			47,950			53,618
Communications and equipment		3,511			3,571			6,784			7,217
Occupancy		3,836			3,818			7,650			7,587
Advertising and public relations		1,352			1,125			2,395			2,169
Postage, printing and supplies		765			1,288			1,990			2,463
Professional fees		2,178			3,195			4,121			6,476
Foreclosed preoperty		14,540			5,737			25,353			10,056
FDIC assessments and other regulatory charges		3,566			6,810			7,192			9,492
Amortization of intangibles		794			739			1,596			1,478
Other		4,176			1,122			8,097			4,942
Loss on sale of nonperforming assets		45,349			—			45,349			—
Goodwill impairment		—			—			—			70,000
Severance costs		—			—			—			2,898

Total operating expenses		103,657			53,710			158,477			178,396

Loss from continuing operations before income taxes		(92,451	)		(30,596	)		(149,819	)		(151,535	)
Income tax benefit		(32,919	)		(14,529	)		(55,829	)		(31,539	)

Net loss from continuing operations		(59,532	)		(16,067	)		(93,990	)		(119,996	)
(Loss) income from discontinued operations, net of income taxes		—			66			(101	)		222
Gain from sale of subsidiary, net of income taxes and selling costs		—			—			1,266			—

Net loss		(59,532	)		(16,001	)		(92,825	)		(119,774	)
Preferred stock dividends and discount accretion		2,577			2,559			5,149			5,113

Net loss available to common shareholders	$	(62,109	)	$	(18,560	)	$	(97,974	)	$	(124,887	)


Loss from continuing operations per common share — Basic / Diluted	$	(.66	)	$	(.38	)	$	(1.05	)	$	(2.58	)
Loss per common share — Basic / Diluted		(.66	)		(.38	)		(1.04	)		(2.57	)
Weighted average common shares outstanding — Basic / Diluted		94,524			48,794			94,453			48,560

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet


	June 30,			December 31,		June 30,
(in thousands, except share and per share data)	2010			2009		2009
	(unaudited)			(audited)		(unaudited)
ASSETS
Cash and due from banks	$	115,088		$	126,265	$	110,943
Interest-bearing deposits in banks		105,183			120,382		70,474
Federal funds sold, commercial paper and short-term investments		148,227			129,720		—

Cash and cash equivalents		368,498			376,367		181,417

Securities available for sale		1,165,776			1,530,047		1,816,787
Securities held to maturity (fair value $327,497)		322,148			—		—
Mortgage loans held for sale		22,705			30,226		42,185
Loans, net of unearned income		4,873,030			5,151,476		5,513,087
Less allowance for loan losses		174,111			155,602		145,678

Loans, net		4,698,919			4,995,874		5,367,409

Assets covered by loss sharing agreements with the FDIC		156,611			185,938		230,125
Premises and equipment, net		180,125			182,038		178,983
Accrued interest receivable		29,650			33,867		41,405
Goodwill and other intangible assets		223,600			225,196		251,821
Foreclosed property		123,910			120,770		104,754
Other assets		360,542			319,591		262,469

Total assets	$	7,652,484		$	7,999,914	$	8,477,355


LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	779,934		$	707,826	$	714,630
NOW		1,326,861			1,335,790		1,273,368
Money market		756,370			713,901		573,463
Savings		185,176			177,427		180,368
Time:
Less than $100,000		1,575,211			1,746,511		1,992,056
Greater than $100,000		1,093,975			1,187,499		1,351,527
Brokered		611,985			758,880		763,348

Total deposits		6,329,512			6,627,834		6,848,760

Federal funds purchased, repurchase agreements, and other short-term borrowings		104,127			101,389		252,493
Federal Home Loan Bank advances		104,138			114,501		283,292
Long-term debt		150,106			150,066		150,026
Accrued expenses and other liabilities		60,184			43,803		87,512

Total liabilities		6,748,067			7,037,593		7,622,083


Shareholders’ equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series A; $10 stated value; 21,700 shares issued and outstanding		217			217		217
Series B; $1,000 stated value; 180,000 shares issued and outstanding		175,050			174,408		173,785
Common stock, $1 par value; 200,000,000 shares authorized;
94,280,925, 94,045,603 and 48,933,383 shares issued and outstanding		94,281			94,046		48,933
Common stock issuable; 284,771, 221,906 and 182,041 shares		3,898			3,597		3,383
Capital surplus		663,836			622,034		450,514
(Accumulated deficit) retained earnings		(77,590	)		20,384		136,624
Accumulated other comprehensive income		44,725			47,635		41,816

Total shareholders’ equity		904,417			962,321		855,272

Total liabilities and shareholders’ equity	$	7,652,484		$	7,999,914	$	8,477,355

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,


	2010								2009
	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⁾	$	5,010,937		$	70,640		5.65	%	$	5,597,259		$	81,567		5.85	%
Taxable securities ⁽³⁾		1,503,162			15,534		4.13			1,742,620			20,176		4.63
Tax-exempt securities ⁽¹⁾⁽³⁾		28,920			482		6.67			28,862			506		7.01
Federal funds sold and other interest-earning assets		311,475			1,043		1.34			73,437			488		2.66


Total interest-earning assets		6,854,494			87,699		5.13			7,442,178			102,737		5.53

Non-interest-earning assets:
Allowance for loan losses		(193,998	)							(147,691	)
Cash and due from banks		100,931								101,830
Premises and equipment		181,064								179,446
Other assets ⁽³⁾		761,803								636,377

Total assets	$	7,704,294							$	8,212,140


Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,325,099		$	1,745		.53		$	1,258,134		$	2,843		.91
Money market		746,039			1,829		.98			521,989			2,269		1.74
Savings		186,628			83		.18			178,435			121		.27
Time less than $100,000		1,605,308			7,887		1.97			1,894,071			15,342		3.25
Time greater than $100,000		1,110,010			6,102		2.20			1,325,757			11,513		3.48
Brokered		642,954			3,729		2.33			686,070			5,209		3.05

Total interest-bearing deposits		5,616,038			21,375		1.53			5,864,456			37,297		2.55


Federal funds purchased and other borrowings		104,637			1,056		4.05			220,376			595		1.08
Federal Home Loan Bank advances		107,948			974		3.62			309,962			1,203		1.56
Long-term debt		150,097			2,667		7.13			151,019			2,760		7.33

Total borrowed funds		362,682			4,697		5.19			681,357			4,558		2.68


Total interest-bearing liabilities		5,978,720			26,072		1.75			6,545,813			41,855		2.56

Non-interest-bearing liabilities:
Non-interest-bearing deposits		758,558								680,081
Other liabilities		54,931								107,036

Total liabilities		6,792,209								7,332,930
Shareholders’ equity		912,085								879,210

Total liabilities and shareholders’ equity	$	7,704,294							$	8,212,140


Net interest revenue				$	61,627							$	60,882

Net interest-rate spread							3.38	%							2.97	%


Net interest margin ⁽⁴⁾							3.60	%							3.28	%


(1)		Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.

(2)		Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued.

(3)		Securities available for sale are shown at amortized cost. Pretax unrealized gains of $43.6 million in 2010 and $14.7 million in 2009 are included in other assets for purposes of this presentation.

(4)		Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Six Months Ended June 30,


	2010								2009
	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⁾	$	5,091,445		$	142,859		5.66	%	$	5,635,942		$	163,316		5.84	%
Taxable securities ⁽³⁾		1,495,447			31,426		4.20			1,712,778			40,609		4.74
Tax-exempt securities ⁽¹⁾⁽³⁾		29,482			991		6.72			29,453			1,028		6.98
Federal funds sold and other interest-earning assets		352,683			2,272		1.29			107,788			1,346		2.50


Total interest-earning assets		6,969,057			177,548		5.13			7,485,961			206,299		5.55

Non-interest-earning assets:
Allowance for loan losses		(190,662	)							(138,297	)
Cash and due from banks		102,728								103,113
Premises and equipment		181,493								179,470
Other assets ⁽³⁾		762,014								661,520

Total assets	$	7,824,630							$	8,291,767


Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,343,297		$	3,599		.54		$	1,307,865		$	6,180		.95
Money market		734,817			3,586		.98			499,780			4,506		1.82
Savings		183,555			167		.18			175,587			248		.28
Time less than $100,000		1,648,739			16,778		2.05			1,918,349			32,559		3.42
Time greater than $100,000		1,132,767			12,872		2.29			1,359,286			24,338		3.61
Brokered		689,717			8,266		2.42			735,844			11,220		3.07

Total interest-bearing deposits		5,732,892			45,268		1.59			5,996,711			79,051		2.66


Federal funds purchased and other borrowings		103,355			2,094		4.09			185,639			1,148		1.25
Federal Home Loan Bank advances		111,150			1,951		3.54			257,742			2,277		1.78
Long-term debt		150,088			5,329		7.16			151,009			5,529		7.38

Total borrowed funds		364,593			9,374		5.18			594,390			8,954		3.04


Total interest-bearing liabilities		6,097,485			54,642		1.81			6,591,101			88,005		2.69

Non-interest-bearing liabilities:
Non-interest-bearing deposits		738,876								665,170
Other liabilities		59,605								112,382

Total liabilities		6,895,966								7,368,653
Shareholders’ equity		928,664								923,114

Total liabilities and shareholders’ equity	$	7,824,630							$	8,291,767


Net interest revenue				$	122,906							$	118,294

Net interest-rate spread							3.32	%							2.86	%


Net interest margin ⁽⁴⁾							3.55	%							3.18	%


(1)		Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.

(2)		Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued.

(3)		Securities available for sale are shown at amortized cost. Pretax unrealized gains of $43.4 million in 2010 and $12.7 million in 2009 are included in other assets for purposes of this presentation.

(4)		Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

Exhibit 99.2

Exhibit 99.2

United Community Banks, Inc. Investor Presentation Second Quarter 2010 Strong Bank. Strong Service. Strong Future. Jimmy C. Tallent President & CEO Rex S. Schuette EVP & CFO rex_schuette@ucbi.com (706) 781-2266 David P. Shearrow EVP & CRO

This presentation 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. 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 United Community Banks, Inc.'s Annual Report filed on Form 10-K with the Securities and Exchange Commission. Cautionary Statement 2

This presentation also contains non-GAAP financial measures determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). Such non-GAAP financial measures include the following: net interest margin - pre credit, core fee revenue, core operating expense, core earnings, net operating (loss) income and net operating (loss) earnings per share, tangible common equity to tangible assets, tangible equity to tangible assets and tangible common equity to risk-weighted assets. The most comparable GAAP measures to these measures are: net interest margin, fee revenue, operating expense, net (loss) income, diluted (loss) earnings per share and equity to assets. Management uses these non-GAAP financial measures because we believe it is useful for evaluating our operations and performance over periods of time, as well as in managing and evaluating our business and in discussions about our operations and performance. Management believes these non-GAAP financial measures provide users of our financial information with a meaningful measure for assessing our financial results and credit trends, as well as comparison to financial results for prior periods. These non-GAAP financial measures should not be considered as a substitute for financial measures determined in accordance with GAAP and may not be comparable to other similarly titled financial measures used by other companies. For a reconciliation of the differences between our non-GAAP financial measures and the most comparable GAAP measures, please refer to the 'Non-GAAP Reconcilement Tables' at the end of the Appendix of this presentation. We have not reconciled tangible common equity to tangible assets and core earnings to the extent such numbers are presented on a forward-looking basis based on management's internal stress test or SCAP methodology. Estimates that would be required for such reconciliations cannot reliably be produced without unreasonable effort. 3 Non-GAAP Measures

Highlights Second Quarter Credit Loan and Deposit Growth Core Earnings 4

5 LOAN PORTFOLIO & CREDIT QUALITY

Structure Centralized underwriting and approval process Segregated work-out teams Highly skilled ORE disposition group Seasoned regional credit professionals Process Continuous external loan review Intensive executive management involvement: Weekly past due meetings Weekly NPA/ORE meetings Quarterly criticized watch loan review meetings Quarterly pass commercial and CRE portfolio review meetings Internal loan review of new credit relationships Ongoing stress testing... commenced in 2007 Policy Ongoing enhancements to credit policy Periodic updates to portfolio limits 6 Proactively Addressing Credit Environment

North Georgia Atlanta MSA Western North Carolina Coastal Georgia Gainesville MSA Eastern Tennessee East 0.37 0.29 0.15 0.07 0.07 0.05 Geographic Diversity 7 Loan Portfolio (total $4.9 billion) $ in millions

Atlanta MSA North Georgia Western North Carolina Coastal Georgia Gainesville MSA Eastern Tennessee East 0.39 0.32 0.08 0.08 0.08 0.05 Commercial Construction Owner-Occupied Income Producing C & I East 13 38 32 17 Geographic Diversity Average Loan Size CRE: $450k C&I: $83k Comm. Constr. $710k 8 Commercial Loans (total $2.6 billion) $ in millions

54% owner-occupied Typical owner-occupied: small business, doctors, dentists, attorneys, CPAs $12 million project limit 61% LTV (1) $450k average loan size Portfolio Characteristics (1) Loan balance as of Jun 30, 2010 / most recent appraisal (in millions) June 30, 2010 % of Loan Type Amount Total Office Buildings $ 402 23 % Small Businesses 397 22 Single-Unit Retail/Strip Centers 221 12 Small Warehouses/Storage 177 10 Churches 133 7 Hotels/Motels 105 6 Convenience Stores 82 5 Franchise / Restaurants 76 4 Multi-Residential Properties 65 4 Farmland 46 3 Multi-Unit Retail 38 2 Miscellaneous 38 2 Total Commercial Real Estate $ 1,780 9 Commercial Real Estate (by loan type)

$710k Average loan size Average LTVs (1) Land Dev-Improved: 63% Raw Land-Unimpr: 48% Comm Land Dev: 61% Total: 61% Portfolio Characteristics (1) Loan balance as of Jun 30, 2010 / most recent appraisal (in millions) Jun 30, 2010 % of Loan Type Amount Total Land Development - Vacant (Improved) $ 129 38 % Raw Land - Vacant (Unimproved) 66 19 Commercial Land Development 56 16 Office Buildings 29 8 Retail Buildings 12 4 Churches 3 1 Miscellaneous 47 14 Total Commercial Construction $ 342 10 Commercial Construction (by loan type)

North Georgia Western North Carolina Atlanta MSA Coastal Georgia Gainesville MSA Eastern Tennessee East 0.39 0.26 0.14 0.08 0.07 0.06 Mortgage Home Equity East 73 27 Geographic Diversity Avg loan size: $47k Avg loan size: $97k Origination Characteristics No broker loans No sub-prime / Alt-A Policy Max LTV: 80-85% 51% of HE Primary Lien 11 Residential Mortgage (total $1.4 billion) $ in millions

North Georgia Atlanta MSA Western North Carolina Coastal Georgia Gainesville MSA Eastern Tennessee East 0.5 0.22 0.18 0.05 0.03 0.02 Geographic Diversity Developing Spec: $231k Sold: $150k Develop.: $677k Raw: $282k Lot: $128k Average Loan Size Lot Spec Sold Developing Raw East 0.38 0.16 0.07 0.26 0.13 Construction Land 12 Residential Construction (total $.8 billion) $ in millions

13 Atlanta MSA (residential construction)

14 North Georgia MSA (residential construction)

(in millions) 2Q10 1Q10 4Q 09 3Q 09 2Q 09 Net Charge-offs $ 61.3 $ 56.7 $ 84.6 $ 90.5 $ 58.3 as % of Average Loans 4.98 % 4.51 % 6.37 % 6.57 % 4.18 % Allowance for Loan Losses $ 174.1 $ 173.9 $ 155.6 $ 150.2 $ 145.7 as % of Total Loans 3.57 % 3.48 % 3.02 % 2.80 % 2.64 % as % of NPLs 78 62 59 49 51 as % of NPLs - Adjusted (1) 234 142 190 149 82 Past Due Loans (30 - 89 Days) 1.69 % 2.17 % 1.44 % 2.02 % 1.61 % Non-Performing Loans $ 224.3 $ 280.8 $ 264.1 $ 304.4 $ 287.8 OREO 123.9 136.3 120.8 110.6 104.8 Total NPAs $ 348.2 $ 417.1 $ 384.9 $ 415.0 $ 392.6 as % of Total Assets 4.55 % 5.32 % 4.81 % 4.91 % 4.63 % as % of Loans & OREO 6.97 8.13 7.30 7.58 6.99 Excluding loans with no allocated reserve Excluding loans with no allocated reserve and loans sold to Fletcher 15 Credit Quality

(1) Based on simple average of the four quarters 16 Net Charge-offs by Loan Category

Note: Dollars in thousands (1) Based on simple average of the four quarters 17 Net Charge-offs by Market

18 NPAs by Loan Category and Market

19 FINANCIAL RESULTS

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 16.5 21.5 26.7 31.7 29.9 28.9 29.4 Core Earnings 20 In millions

NPA Sale in 2Q Sold $103 Million NPA's - With a $65 Million Capital Option and Warrant Completed sale on April 30, 2010 Accelerates disposition of the more illiquid assets 21

NPA Sale - Fair Value Accounting Fair Value Accounting - Warrant / Option to Purchase Equity Increase to Capital Surplus - $39.8 million Pre-tax expense charge - $45.3 million; after-tax cost - $30.0 million GAAP Capital +$9.8million - Slight Negative to "Reg. Capital" (DTA) 22

Core Earnings Summary 23

2Q09 3Q09 4Q09 1Q10 2Q10 Net Interest Margin 0.0328 0.0339 0.034 0.0349 0.036 0.0052 0.0058 0.0064 0.0066 0.0064 Margin improvement 11 bps vs. 1Q10 32 bps vs. 2Q09 Improved CD pricing Maintained loan pricing Excess liquidity - lowered margin by 13 bps in 2Q NIM Characteristics 3.80% 3.97% 4.04% NIM Credit Costs - Impacting Margin(1) (1) Excluding impact of nonaccrual loans, OREO and interest reversals 4.15% 4.24% Net Interest Margin 24

As of June 30, 2010 Demand & NOW MMDA & Sav. Time <$100k Time >$100k Public Funds Brokered East 1560 931 1569 1028 630 612 25 Deposit Mix (total $6.3 billion)

Second Quarter 2010 Net Operating Loss - From Continuing Operations 26

Second Quarter 2010 Net Loss 27

Capital Ratios 28

29 APPENDIX

Assets $7.7 Billion Deposits $6.3 Billion Banks 27 Offices 106 30 United at a Glance

31 Experienced Proven Leadership Joined Years in UCBI Banking Jimmy Tallent President & CEO 1984 37 Guy Freeman Chief Operating Officer 1994 50 Rex Schuette Chief Financial Officer 2001 33 David Shearrow Chief Risk Officer 2007 29 Glenn White President, Atlanta Region 2007 36 Craig Metz Marketing 2002 18 Bill Gilbert Retail Banking 2000 34

Business and operating model Twenty-seven "community banks" Local CEOs with deep roots in their communities Resources of $7.7 billion bank Service is point of differentiation Golden rule of banking "The Bank That SERVICE Built" Ongoing customer surveys 95+% satisfaction rate Strategic footprint with substantial banking opportunities Operates in a number of the more demographically attractive markets in the U.S. Disciplined growth strategy Organic supported by de novos and selective acquisitions 32 "Community bank service, large bank resources"

33 Robust Demographics (fast growing markets)

2Q 09 3Q09 4Q09 1Q10 2Q10 Lost Interest on C/Os 0.001 0.0015 0.0017 0.002 0.002 Nonaccrual/OREO 0.0023 0.0027 0.0027 0.0026 0.0025 Interest Reversals 0.0019 0.0016 0.002 0.002 0.0019 Historically 8 to 12 bps Credit cycle - significant drag on margin and earnings Lost interest (avg. yield) on loans charged off Carry costs high with level of NPAs Cost 2Q10 vs. Historical - 52 bps (annual earnings impact of $36 million) Credit Costs Impacting Margin ..58% ..64% ..66% ..52% Lost Interest on C/Os Interest Reversals Carry Cost of NPAs ..64% Margin - Credit Costs 34

1 FDIC deposit market share and rank as of 6/09 for markets where United takes deposits. Source: SNL and FDIC 35 Market Share Opportunities (excellent growth prospects)

36 Leading Demographics

37 Small Business Market Growth Number of Businesses with 1 - 49 Employees

38 Performing Classified Loans

39 Business Mix Loans (at quarter-end)

40 Business Mix Loans (at year-end)

41 Residential Construction - Total Company

42 Residential Construction - Atlanta MSA

43 Residential Construction - North Georgia

44 Loans - Markets Served (at quarter-end)

45 Loans - Markets Served (at year-end)

Legal lending limit $196 House lending limit 20 Top 25 relationships 8.7% of total loans 425 Regional credit review Standard Underwriting (in millions) 46 Lending - Credit Summary (as of June 30, 2010)

47 NPAs by Loan Category, Market, and Activity

48 Net Charge-offs by Category and Market

49 Liquidity - Loans / Deposits

50 Liquidity - Wholesale Borrowings

51 Business Mix - Deposits (at quarter-end)

$ in millions 2Q 09 2Q 10 Geographic Diversity Atlanta MSA North Georgia Western North Carolina Gainesville MSA Coastal Georgia Eastern Tennessee 2Q10 918 677 461 167 144 124 2Q09 824 637 427 131 130 118 Atlanta MSA North Georgia Western North Carolina Gainesville MSA Coastal Georgia Eastern Tennessee 52 Core Transaction Deposits

53 Analyst Coverage

Southern Community Bank ($ in millions) Purchased - June 19, 2009 Nine years old - Enhances presence in southside metro Atlanta markets Four banking offices in southside metro Atlanta MSA - Fayetteville, Coweta and Henry counties 54 employees (Reduced by 17 after conversion in September 2009) $208 in customer deposits, including $53 core deposits FDIC assisted transaction: 80% guarantee on $109 loss threshold, 95% above Fully discounted bid with no credit exposure Accounted for credit related items (at FMV) as "covered assets" on balance sheet 2Q10 1Q10 4Q09 2Q09 Loans $ 81 $ 79 $ 85 $ 110 OREO 33 32 34 25 FDIC receivable 43 58 67 95 Total Covered Assets $ 157 $ 169 $ 186 $ 230 Pre-tax gain on acquisition of $11.4 Accretive to earnings per share 54

55 Non-GAAP Reconciliation Tables

56 Non-GAAP Reconciliation Tables