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): October 28, 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 October 28, 2010, United Community Banks, Inc. (the “Registrant”) issued a news release announcing its financial results for the quarter ended September 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 October 28, 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 September 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 the third quarter and first nine months of 2010 exclude the effects of a $210.6 million non-cash goodwill impairment charge. Operating performance measures for 2009 exclude the effects of $25 million and $70 million, in 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

99.1 Press Release, dated October 28, 2010

99.2 Investor Presentation, Third 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*

October 28, 2010		Rex S. Schuette Executive Vice President and 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 OF $25.8 MILLION FOR THIRD QUARTER 2010

	•		Net operating loss at lowest level since second quarter 2009

	•		Net charge offs and nonperforming assets continue downward trend — to lowest level since first quarter of 2009

	•		Provision for loan losses of $50.5 million is the lowest level since the second quarter of 2008

	•		Allowance-to-loans ratio increases to 3.67 percent

	•		Core transaction deposits this quarter up 11 percent on annualized basis

BLAIRSVILLE, GA — October 28, 2010 — United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss from continuing operations of $25.8 million, or 30 cents per diluted share, for the third quarter of 2010. The third quarter operating loss excludes a non-cash charge for goodwill impairment of $210.6 million, or $2.22 per diluted share. Including the goodwill impairment charge, the third quarter net loss was $236.4 million, or $2.52 per diluted share.

United’s net operating loss from continuing operations for the first nine months of 2010 and 2009 was $119.8 million and $99.0 million, or $1.35 and $2.18 per diluted share, respectively. In the attached schedules, operating loss from continuing operations for all periods excludes consulting fee revenue and operating expenses of Brintech, Inc. during the periods it was owned by United, and the gain from the sale of the company in the first quarter of 2010. The net income or loss from Brintech’s discontinued operations is reported as a separate line in the consolidated statement of income.

-1-

The net operating loss from continuing operations for the first nine months of 2010 excludes the $210.6 million non-cash charge for goodwill impairment. Including the goodwill impairment charge, United’s net loss for the first nine months of 2010 was $329.2 million, or $3.56 per diluted share.

The net operating loss from continuing operations for the first nine months of 2009 excludes $95 million in non-cash charges for impairment of goodwill and $1.8 million in severance costs, net of taxes, relating to a reduction in work force. Also excluded is the $7.1 million gain, net of taxes, on the acquisition of Southern Community Bank in the second quarter 2009. These charges and gains were considered non-operating items and therefore were excluded from operating earnings. Including these non-operating items, United’s net loss for the first nine months of 2009 was $188.5 million, or $4.01 per diluted share.

“We are seeing several positive trends emerging in our credit quality indicators,” stated Jimmy Tallent, president and chief executive officer. “Our nonperforming assets, net charge-offs and provision for loan losses continue to decline, appearing to confirm that the worst is behind us. While credit challenges remain, we are optimistic about the opportunities that lie ahead within our geographic footprint.”

Tallent further commented, “With the United stock price falling in the third quarter and remaining at a substantial discount to tangible book value for an extended period, the Company could no longer support the $210.6 million balance of goodwill on its books. While reporting a charge of this magnitude is discouraging, I want to emphasize that goodwill impairment is a non-cash charge that has no impact on our regulatory capital ratios or our ability to return to profitability.”

Total loans were $4.8 billion at quarter-end, down $113 million from the end of the second quarter and down $603 million from a year ago. As of quarter-end, residential construction loans were $764 million, or 16 percent of total loans, down $56 million from the prior quarter-end and down $421 million from a year ago. This decline was net of new lending during the quarter that totaled $85 million, primarily commercial and small business loans in metropolitan Atlanta and north Georgia.

-2-

Taxable equivalent net interest revenue of $60 million was $3 million lower than the third quarter of 2009 due to the lower level of interest-earning assets. Average loans and securities declined $669 million and $204 million, respectively, from the third quarter of 2009. The net interest margin was 3.57 percent for the third quarter of 2010, up 18 basis points from a year ago but down three basis points from the second quarter. “By staying focused on deposit and loan pricing, we’ve been able to hold net interest revenue above $60 million despite continuing attrition in the loan portfolio,” Tallent said.

“We grew core transaction deposits for the seventh consecutive quarter with an increase of $67 million over the second quarter, or 11 percent on an annualized basis,” Tallent stated. “That compares to core deposit growth of $94 million during the second quarter of 2010 and $219 million from a year ago. There are outstanding opportunities to gain new deposit business due to disruption in the banking industry, particularly within our markets, and our strong service culture. The exceptional growth in our core transaction deposits and our loyal customer base are a testament to the underlying value of our franchise, which I believe is not reflected in our current stock price.”

The third quarter 2010 provision for loan losses decreased to $50.5 million from $61.5 million in the second quarter and $95 million a year ago. Net charge-offs were at their lowest level since the first quarter of 2009, down $11.3 million from second quarter of 2010 and down $40.5 million from the third quarter of 2009. Non-performing assets decreased to $348 million at quarter-end from $415 million at September 30, 2009, the lowest level since the first quarter of 2009. The level of nonperforming assets has declined by $69 million from its peak in the first quarter of 2010.

-3-

Operating fee revenue was $12.9 million in the third quarter of 2010, compared to $13.4 million a year ago. The decrease was caused by net gains related to balance sheet management activities that resulted from the sale of securities in both periods and losses from the prepayment of Federal Home Loan Bank advances in the third quarter of 2010. Excluding the net effect of the balance sheet management activities, operating fee revenue increased $363,000 from the third quarter of 2009. Service charges and fees of $7.6 million were down $490,000, due primarily to lower overdraft fees resulting from recent regulatory changes that require customers to give consent before using United’s overdraft services. Mortgage loan fees of $2.1 million were up $239,000 from a year ago as refinancing activity increased with lower long-term rates. Other fee revenue increased $339,000 to $2.2 million, due primarily to the acceleration of deferred gains relating to the ineffectiveness of terminated cash flow hedges on certain prime-based loans.

Third quarter operating expenses were $64.9 million, excluding non-cash goodwill impairment charges, an increase of $13.5 million from a year ago. Foreclosed property costs of $19.8 million increased $11.8 million from the third quarter of 2009 and accounted for most of the year-over-year increase in total operating expenses. The third quarter 2010 foreclosed property costs included $5.6 million for maintenance, property taxes and other related costs, compared to $3.8 million last year. In addition, losses relating to the sale of properties totaled $7.1 million and write-downs of other foreclosed properties also totaled $7.1 million, both to help expedite sales of foreclosed properties. Salary and benefit costs totaled $24.9 million, an increase of $1.0 million from last year due primarily to decreased capitalization of direct loan origination costs and higher group medical insurance costs. Other operating expenses increased $759,000 to $4.6 million from a year ago due to an increase in collections expenses and loan workout costs.

“We continued to focus on reducing expenses; most of our controllable costs were either flat or down compared to a year ago,” commented Tallent. “The rise in foreclosed property costs and collection expenses resulted from the increase in the number of properties we are managing, as well as the decline in values of properties sold and held for disposition.”

-4-

Excluding the goodwill impairment charge, the effective tax rate for the third quarter of 2010 was 40 percent, which was consistent with the prior quarter. The effective tax rate for the remainder of 2010 is expected to be 40 percent, slightly higher than the effective tax rate for the full year 2009.

As of September 30, 2010, the capital ratios for United were as follows: Tier 1 Risk Based Capital of 10.4 percent; Leverage of 7.3 percent; and, Total Risk Based Capital of 13.0 percent. The quarterly average tangible equity-to-assets ratio was 9.2 percent and the tangible common equity-to-assets ratio was 6.8 percent.

“While the Company is above the regulatory well-capitalized levels, we continue to evaluate and analyze various capital alternatives to further strengthen our capital position which we believe is prudent in light of the current operating and regulatory environment,” stated Tallent.

“There are many positive trends that are encouraging,” Tallent said. “Our credit metrics are moving in the right direction with several of them approaching the lowest level since the beginning of the credit cycle in 2008. Also, core customer deposit growth has been the strongest in our company’s history. Aside from special items like the non-cash impairment charge this quarter and the loss on sale of nonperforming assets to a private equity firm last quarter, our net operating loss from continuing operations has declined each quarter for the past four consecutive quarters. Residential construction loans, where most of the problems have been, have decreased from a high of 35 percent to 16 percent of total loans. We have widened our net interest margin by growing core deposits and obtaining more favorable loan and time deposit pricing. All the while, our customer satisfaction scores lead the industry, which is a remarkable tribute to 1,821 United bankers serving customers throughout our communities.”

-5-

Conference Call
United Community Banks will hold a conference call today, Thursday, October 28, 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 ‘16060267.’ 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 $7.0 billion and operates 27 community banks with 106 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The Company specializes in providing personalized community banking services to individuals and small to mid-size businesses. United Community Banks also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United Community Banks common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at the Company’s web site at www.ucbi.com.

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

# # #

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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information


																Third
	2010									2009						Quarter			For the Nine						YTD
(in thousands, except per share	Third			Second			First			Fourth			Third			2010-2009			Months Ended						2010-2009
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change			2010			2009			Change
INCOME SUMMARY
Interest revenue	$	84,360		$	87,699		$	89,849		$	97,481		$	101,181					$	261,908		$	307,480
Interest expense		24,346			26,072			28,570			33,552			38,177						78,988			126,182

Net interest revenue		60,014			61,627			61,279			63,929			63,004			(5	)%		182,920			181,298			1	%
Provision for loan losses		50,500			61,500			75,000			90,000			95,000						187,000			220,000
Operating fee revenue⁽¹⁾		12,861			11,579			11,666			14,447			13,389			(4	)		36,106			36,517			(1	)

Total operating revenue ⁽¹⁾		22,375			11,706			(2,055	)		(11,624	)		(18,607	)					32,026			(2,185	)
Operating expenses⁽²⁾		64,906			58,308			54,820			60,126			51,426			26			178,034			156,924			13
Loss on sale of nonperforming assets		—			45,349			—			—			—						45,349			—

Operating loss from continuing operations before taxes		(42,531	)		(91,951	)		(56,875	)		(71,750	)		(70,033	)		39			(191,357	)		(159,109	)		(20	)
Operating income tax benefit		(16,706	)		(32,419	)		(22,417	)		(31,687	)		(26,252	)					(71,542	)		(60,067	)

Net operating loss from continuing operations⁽¹⁾⁽²⁾		(25,825	)		(59,532	)		(34,458	)		(40,063	)		(43,781	)		41			(119,815	)		(99,042	)		(21	)
Gain from acquisition, net of tax expense		—			—			—			—			—						—			7,062
Noncash goodwill impairment charges		(210,590	)		—			—			—			(25,000	)					(210,590	)		(95,000	)
Severance costs, net of tax benefit		—			—			—			—			—						—			(1,797	)
(Loss) income from discontinued operations		—			—			(101	)		228			63						(101	)		285
Gain from sale of subsidiary, net of income taxes and selling costs		—			—			1,266			—			—						1,266			—

Net loss		(236,415	)		(59,532	)		(33,293	)		(39,835	)		(68,718	)		(244	)		(329,240	)		(188,492	)		(75	)
Preferred dividends and discount accretion		2,581			2,577			2,572			2,567			2,562						7,730			7,675

Net loss available to common shareholders	$	(238,996	)	$	(62,109	)	$	(35,865	)	$	(42,402	)	$	(71,280	)				$	(336,970	)	$	(196,167	)

PERFORMANCE MEASURES
Per common share:
Diluted operating loss from continuing operations⁽¹⁾⁽²⁾	$	(.30	)	$	(.66	)	$	(.39	)	$	(.45	)	$	(.93	)		68		$	(1.35	)	$	(2.18	)		38
Diluted loss from continuing operations		(2.52	)		(.66	)		(.39	)		(.45	)		(1.43	)		(76	)		(3.58	)		(4.01	)		11
Diluted loss		(2.52	)		(.66	)		(.38	)		(.45	)		(1.43	)		(76	)		(3.56	)		(4.01	)		11
Stock dividends declared⁽⁶⁾		—			—			—			—		1 for 130							—		3 for 130
Book value		5.14			7.71			7.95			8.36			8.85			(42	)		5.14			8.85			(42	)
Tangible book value⁽⁴⁾		5.05			5.39			5.62			6.02			6.50			(22	)		5.05			6.50			(22	)
Key performance ratios:
Return on equity⁽³⁾⁽⁵⁾		(148.04	)%		(35.89	)%		(20.10	)%		(22.08	)%		(45.52	)%					(65.69	)%		(39.11	)%
Return on assets⁽⁵⁾		(12.47	)		(3.10	)		(1.70	)		(1.91	)		(3.32	)					(5.70	)		(3.05	)
Net interest margin⁽⁵⁾		3.57			3.60			3.49			3.40			3.39						3.56			3.25
Operating efficiency ratio from continuing operations⁽¹⁾⁽²⁾		89.38			141.60			75.22			78.74			68.35						102.14			72.29
Equity to assets		11.37			11.84			11.90			11.94			10.27						11.70			10.84
Tangible equity to assets⁽⁴⁾		9.19			9.26			9.39			9.53			7.55						9.28			7.92
Tangible common equity to assets⁽⁴⁾		6.78			6.91			7.13			7.37			5.36						6.94			5.74
Tangible common equity to risk-weighted assets⁽⁴⁾		9.60			9.97			10.03			10.39			10.67						9.60			10.67
ASSET QUALITY *
Non-performing loans	$	217,766		$	224,335		$	280,802		$	264,092		$	304,381					$	217,766		$	304,381
Foreclosed properties		129,964			123,910			136,275			120,770			110,610						129,964			110,610

Total non-performing assets (NPAs)		347,730			348,245			417,077			384,862			414,991						347,730			414,991
Allowance for loan losses		174,613			174,111			173,934			155,602			150,187						174,613			150,187
Net charge-offs		49,998			61,323			56,668			84,585			90,491						167,989			192,084
Allowance for loan losses to loans		3.67	%		3.57	%		3.48	%		3.02	%		2.80	%					3.67	%		2.80	%
Net charge-offs to average loans⁽⁵⁾		4.12			4.98			4.51			6.37			6.57						4.54			4.60
NPAs to loans and foreclosed properties		7.11			6.97			8.13			7.30			7.58						7.11			7.58
NPAs to total assets		4.96			4.55			5.32			4.81			4.91						4.96			4.91
AVERAGE BALANCES ($ in millions)
Loans	$	4,896		$	5,011		$	5,173		$	5,357		$	5,565			(12	)	$	5,026		$	5,612			(10	)
Investment securities		1,411			1,532			1,518			1,529			1,615			(13	)		1,487			1,700			(13	)
Earning assets		6,676			6,854			7,085			7,487			7,401			(10	)		6,870			7,457			(8	)
Total assets		7,522			7,704			7,946			8,287			8,208			(8	)		7,723			8,264			(7	)
Deposits		6,257			6,375			6,570			6,835			6,690			(6	)		6,399			6,671			(4	)
Shareholders’ equity		855			912			945			989			843			1			904			896			1
Common shares — basic (thousands)		94,679			94,524			94,390			94,219			49,771						94,527			48,968
Common shares — diluted (thousands)		94,679			94,524			94,390			94,219			49,771						94,527			48,968
AT PERIOD END ($ in millions)
Loans *	$	4,760		$	4,873		$	4,992		$	5,151		$	5,363			(11	)	$	4,760		$	5,363			(11	)
Investment securities		1,310			1,488			1,527			1,530			1,533			(15	)		1,310			1,533			(15	)
Total assets		7,013			7,652			7,837			8,000			8,444			(17	)		7,013			8,444			(17	)
Deposits		5,999			6,330			6,488			6,628			6,821			(12	)		5,999			6,821			(12	)
Shareholders’ equity		662			904			926			962			1,007			(34	)		662			1,007			(34	)
Common shares outstanding (thousands)		94,433			94,281			94,176			94,046			93,901						94,433			93,901


⁽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 $211 million in the third quarter of 2010 and $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 Nine
(in thousands, except per share	Third			Second			First			Fourth			Third			Months Ended
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			2010			2009

Interest revenue reconciliation
Interest revenue — taxable equivalent	$	84,360		$	87,699		$	89,849		$	97,481		$	101,181		$	261,908		$	307,480
Taxable equivalent adjustment		(511	)		(500	)		(493	)		(601	)		(580	)		(1,504	)		(1,531	)

Interest revenue (GAAP)	$	83,849		$	87,199		$	89,356		$	96,880		$	100,601		$	260,404		$	305,949


Net interest revenue reconciliation
Net interest revenue — taxable equivalent	$	60,014		$	61,627		$	61,279		$	63,929		$	63,004		$	182,920		$	181,298
Taxable equivalent adjustment		(511	)		(500	)		(493	)		(601	)		(580	)		(1,504	)		(1,531	)

Net interest revenue (GAAP)	$	59,503		$	61,127		$	60,786		$	63,328		$	62,424		$	181,416		$	179,767


Fee revenue reconciliation
Operating fee revenue	$	12,861		$	11,579		$	11,666		$	14,447		$	13,389		$	36,106		$	36,517
Gain from acquisition		—			—			—			—			—			—			11,390

Fee revenue (GAAP)	$	12,861		$	11,579		$	11,666		$	14,447		$	13,389		$	36,106		$	47,907


Total revenue reconciliation
Total operating revenue	$	22,375		$	11,706		$	(2,055	)	$	(11,624	)	$	(18,607	)	$	32,026		$	(2,185	)
Taxable equivalent adjustment		(511	)		(500	)		(493	)		(601	)		(580	)		(1,504	)		(1,531	)
Gain from acquisition		—			—			—			—			—			—			11,390

Total revenue (GAAP)	$	21,864		$	11,206		$	(2,548	)	$	(12,225	)	$	(19,187	)	$	30,522		$	7,674


Expense reconciliation
Operating expense	$	64,906		$	103,657		$	54,820		$	60,126		$	51,426		$	223,383		$	156,924
Noncash goodwill impairment charge		210,590			—			—			—			25,000			210,590			95,000
Severance costs		—			—			—			—			—			—			2,898

Operating expense (GAAP)	$	275,496		$	103,657		$	54,820		$	60,126		$	76,426		$	433,973		$	254,822


Loss from continuing operations before taxes reconciliation
Operating loss from continuing operations before taxes	$	(42,531	)	$	(91,951	)	$	(56,875	)	$	(71,750	)	$	(70,033	)	$	(191,357	)	$	(159,109	)
Taxable equivalent adjustment		(511	)		(500	)		(493	)		(601	)		(580	)		(1,504	)		(1,531	)
Gain from acquisition		—			—			—			—			—			—			11,390
Noncash goodwill impairment charge		(210,590	)		—			—			—			(25,000	)		(210,590	)		(95,000	)
Severance costs		—			—			—			—			—			—			(2,898	)

Loss from continuing operations before taxes (GAAP)	$	(253,632	)	$	(92,451	)	$	(57,368	)	$	(72,351	)	$	(95,613	)	$	(403,451	)	$	(247,148	)


Income tax benefit reconciliation
Operating income tax benefit	$	(16,706	)	$	(32,419	)	$	(22,417	)	$	(31,687	)	$	(26,252	)	$	(71,542	)	$	(60,067	)
Taxable equivalent adjustment		(511	)		(500	)		(493	)		(601	)		(580	)		(1,504	)		(1,531	)
Gain from acquisition, tax expense		—			—			—			—			—			—			4,328
Severance costs, tax benefit		—			—			—			—			—			—			(1,101	)

Income tax benefit (GAAP)	$	(17,217	)	$	(32,919	)	$	(22,910	)	$	(32,288	)	$	(26,832	)	$	(73,046	)	$	(58,371	)


Diluted loss from continuing operations per common share reconciliation
Diluted operating loss from continuing operations per common share	$	(.30	)	$	(.66	)	$	(.39	)	$	(.45	)	$	(.93	)	$	(1.35	)	$	(3.04	)
Gain from acquisition		—			—			—			—			—			—			.14
Noncash goodwill impairment charge		(2.22	)		—			—			—			(.50	)		(2.23	)		(1.93	)
Severance costs		—			—			—			—			—			—			(.04	)

Diluted loss from continuing operations per common share (GAAP)	$	(2.52	)	$	(.66	)	$	(.39	)	$	(.45	)	$	(1.43	)	$	(3.58	)	$	(4.01	)


Book value per common share reconciliation
Tangible book value per common share	$	5.05		$	5.39		$	5.62		$	6.02		$	6.50		$	5.05		$	6.50
Effect of goodwill and other intangibles		0.09			2.32			2.33			2.34			2.35			0.09			2.35

Book value per common share (GAAP)	$	5.14		$	7.71		$	7.95		$	8.36		$	8.85		$	5.14		$	8.85


Efficiency ratio from continuing operations reconciliation
Operating efficiency ratio from continuing operations		89.38	%		141.60	%		75.22	%		78.74	%		68.35	%		102.14	%		72.29	%
Gain from acquisition		—			—			—			—			—			—			(3.60	)
Noncash goodwill impairment charge		290.00			—			—			—			33.22			96.29			41.58
Severance costs		—			—			—			—			—			—			1.27

Efficiency ratio from continuing operations (GAAP)		379.38	%		141.60	%		75.22	%		78.74	%		101.57	%		198.43	%		111.54	%


Average equity to assets reconciliation
Tangible common equity to assets		6.78	%		6.91	%		7.13	%		7.37	%		5.36	%		6.94	%		5.74	%
Effect of preferred equity		2.41			2.35			2.26			2.16			2.19			2.34			2.18

Tangible equity to assets		9.19			9.26			9.39			9.53			7.55			9.28			7.92
Effect of goodwill and other intangibles		2.18			2.58			2.51			2.41			2.72			2.42			2.92

Equity to assets (GAAP)		11.37	%		11.84	%		11.90	%		11.94	%		10.27	%		11.70	%		10.84	%


Actual tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets		9.60	%		9.97	%		10.03	%		10.39	%		10.67	%		9.60	%		10.67	%
Effect of other comprehensive income		(.81	)		(.87	)		(.85	)		(.87	)		(.90	)		(.81	)		(.90	)
Effect of deferred tax limitation		(2.94	)		(2.47	)		(1.75	)		(1.27	)		(.58	)		(2.94	)		(.58	)
Effect of trust preferred		1.06			1.03			1.00			.97			.92			1.06			.92
Effect of preferred equity		3.51			3.41			3.29			3.19			3.04			3.51			3.04

Tier I capital ratio (Regulatory)		10.42	%		11.07	%		11.72	%		12.41	%		13.15	%		10.42	%		13.15	%

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End ⁽¹⁾


	2010						2009				Linked			Year over
	Third		Second		First		Fourth		Third		Quarter			Year
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter		Change			Change
LOANS BY CATEGORY
Commercial (sec. by RE)	$	1,781	$	1,780	$	1,765	$	1,779	$	1,787	$	1		$	(6	)
Commercial construction		310		342		357		363		380		(32	)		(70	)
Commercial & industrial		456		441		381		390		403		15			53

Total commercial		2,547		2,563		2,503		2,532		2,570		(16	)		(23	)
Residential construction		764		820		960		1,050		1,185		(56	)		(421	)
Residential mortgage		1,316		1,356		1,390		1,427		1,461		(40	)		(145	)
Consumer / installment		133		134		139		142		147		(1	)		(14	)

Total loans	$	4,760	$	4,873	$	4,992	$	5,151	$	5,363		(113	)		(603	)


LOANS BY MARKET
Atlanta MSA	$	1,365	$	1,373	$	1,404	$	1,435	$	1,526		(8	)		(161	)
Gainesville MSA		316		343		372		390		402		(27	)		(86	)
North Georgia		1,755		1,808		1,814		1,884		1,942		(53	)		(187	)
Western North Carolina		719		738		756		772		786		(19	)		(67	)
Coastal Georgia		345		356		388		405		440		(11	)		(95	)
East Tennessee		260		255		258		265		267		5			(7	)

Total loans	$	4,760	$	4,873	$	4,992	$	5,151	$	5,363		(113	)		(603	)


RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development	$	190	$	214	$	290	$	332	$	380		(24	)		(190	)
Land loans		104		110		124		127		159		(6	)		(55	)
Lot loans		303		311		321		336		336		(8	)		(33	)

Total		597		635		735		795		875		(38	)		(278	)


House loans
Spec		109		125		153		178		218		(16	)		(109	)
Sold		58		60		72		77		92		(2	)		(34	)

Total		167		185		225		255		310		(18	)		(143	)

Total residential construction	$	764	$	820	$	960	$	1,050	$	1,185		(56	)		(421	)


RESIDENTIAL CONSTRUCTION — ATLANTA MSA
Dirt loans
Acquisition & development	$	34	$	40	$	66	$	76	$	100		(6	)		(66	)
Land loans		27		32		43		43		61		(5	)		(34	)
Lot loans		45		39		47		52		54		6			(9	)

Total		106		111		156		171		215		(5	)		(109	)


House loans
Spec		42		48		58		68		91		(6	)		(49	)
Sold		11		10		14		16		22		1			(11	)

Total		53		58		72		84		113		(5	)		(60	)

Total residential construction	$	159	$	169	$	228	$	255	$	328		(10	)		(169	)


(1)		Excludes total loans of $75.2 million, $80.8 million, $79.5 million, $85.1 million and $104.0 million as of September 30, 2010, June 30, 2010, March 31, 2010, December 31, 2009 and September 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⁾


	Third Quarter 2010									Second Quarter 2010									First Quarter 2010
	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)	$	53,646		$	14,838		$	68,484		$	56,013		$	13,297		$	69,310		$	45,918		$	21,597		$	67,515
Commercial construction		17,279			15,125			32,404			17,872			11,339			29,211			23,556			14,285			37,841
Commercial & industrial		7,670			—			7,670			7,245			—			7,245			3,610			—			3,610

Total commercial		78,595			29,963			108,558			81,130			24,636			105,766			73,084			35,882			108,966
Residential construction		79,321			73,206			152,527			88,375			74,444			162,819			147,326			74,220			221,546
Residential mortgage		58,107			26,795			84,902			53,175			24,830			78,005			57,920			26,173			84,093
Consumer / installment		1,743			—			1,743			1,655			—			1,655			2,472			—			2,472

Total NPAs	$	217,766		$	129,964		$	347,730		$	224,335		$	123,910		$	348,245		$	280,802		$	136,275		$	417,077

Balance as a % of Unpaid Principal		70.0	%		65.9	%		68.4	%		69.4	%		71.9	%		70.3	%		71.6	%		67.5	%		70.2	%

NPAs BY MARKET
Atlanta MSA	$	65,304		$	32,785		$	98,089		$	74,031		$	30,605		$	104,636		$	81,914		$	36,951		$	118,865
Gainesville MSA		11,905			5,685			17,590			10,730			2,750			13,480			17,058			3,192			20,250
North Georgia		92,295			67,439			159,734			102,198			60,597			162,795			109,280			63,128			172,408
Western North Carolina		31,545			11,559			43,104			22,776			11,473			34,249			31,353			8,588			39,941
Coastal Georgia		10,611			10,951			21,562			8,341			16,548			24,889			33,438			21,871			55,309
East Tennessee		6,106			1,545			7,651			6,259			1,937			8,196			7,759			2,545			10,304

Total NPAs	$	217,766		$	129,964		$	347,730		$	224,335		$	123,910		$	348,245		$	280,802		$	136,275		$	417,077


NPA ACTIVITY
Beginning Balance	$	224,335		$	123,910		$	348,245		$	280,802		$	136,275		$	417,077		$	264,092		$	120,770		$	384,862
Loans placed on non-accrual		119,783			—			119,783			155,007			—			155,007			139,030			—			139,030
Payments received		(11,469	)		—			(11,469	)		(12,189	)		—			(12,189	)		(5,733	)		—			(5,733	)
Loan charge-offs		(52,647	)		—			(52,647	)		(62,693	)		—			(62,693	)		(58,897	)		—			(58,897	)
Foreclosures		(59,844	)		59,844			—			(66,994	)		66,994			—			(49,233	)		49,233			—
Capitalized costs		—			601			601			—			305			305			—			320			320
Note / property sales		(2,392	)		(40,203	)		(42,595	)		(69,598	)		(68,472	)		(138,070	)		(8,457	)		(25,951	)		(34,408	)
Write downs		—			(7,051	)		(7,051	)		—			(6,094	)		(6,094	)		—			(4,579	)		(4,579	)
Net losses on sales		—			(7,137	)		(7,137	)		—			(5,098	)		(5,098	)		—			(3,518	)		(3,518	)

Ending Balance	$	217,766		$	129,964		$	347,730		$	224,335		$	123,910		$	348,245		$	280,802		$	136,275		$	417,077


	Third Quarter 2010					Second Quarter 2010					First Quarter 2010
			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)	$	14,212		3.16	%	$	9,757		2.21	%	$	1,964		.45	%
Commercial construction		1,972		2.40			1,460		1.67			2,206		2.48
Commercial & industrial		1,207		1.07			867		.85			4,110		4.31

Total commercial		17,391		2.70			12,084		1.91			8,280		1.33
Residential construction		23,934		11.99			41,515		18.71			43,100		17.32
Residential mortgage		7,695		2.29			6,517		1.90			4,551		1.31
Consumer / installment		978		2.90			1,207		3.53			737		2.12

Total	$	49,998		4.12		$	61,323		4.98		$	56,668		4.51


NET CHARGE-OFFS BY MARKET
Atlanta MSA	$	13,753		3.97	%	$	16,926		4.85	%	$	15,545		4.32	%
Gainesville MSA		1,143		1.40			2,547		3.01			1,675		1.92
North Georgia		26,554		5.92			28,100		6.19			29,747		6.51
Western North Carolina		5,509		2.99			7,194		3.86			3,695		1.96
Coastal Georgia		2,702		3.05			5,581		6.07			5,649		5.74
East Tennessee		337		.52			975		1.53			357		.55

Total	$	49,998		4.12		$	61,323		4.98		$	56,668		4.51


(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						Nine Months Ended
	September 30,						September 30,
(in thousands, except per share data)	2010			2009			2010			2009

Interest revenue:
Loans, including fees	$	68,419		$	80,874		$	211,245		$	244,445
Investment securities, including tax exempt of $280, $328, $886 and $956		14,711			18,820			46,743			60,057
Federal funds sold, commercial paper and deposits in banks		719			907			2,416			1,447

Total interest revenue		83,849			100,601			260,404			305,949


Interest expense:
Deposits:
NOW		1,705			2,528			5,304			8,708
Money market		1,930			2,711			5,516			7,217
Savings		83			130			250			378
Time		16,099			28,183			54,015			96,300

Total deposit interest expense		19,817			33,552			65,085			112,603
Federal funds purchased, repurchase agreements and other short-term borrowings		1,068			613			3,162			1,761
Federal Home Loan Bank advances		796			1,300			2,747			3,577
Long-term debt		2,665			2,712			7,994			8,241

Total interest expense		24,346			38,177			78,988			126,182

Net interest revenue		59,503			62,424			181,416			179,767
Provision for loan losses		50,500			95,000			187,000			220,000

Net interest revenue after provision for loan losses		9,003			(32,576	)		(5,584	)		(40,233	)


Fee revenue:
Service charges and fees		7,648			8,138			23,088			22,729
Mortgage loan and other related fees		2,071			1,832			5,151			7,308
Brokerage fees		731			456			1,884			1,642
Securities gains, net		2,491			1,149			2,552			741
Gain from acquisition		—			—			—			11,390
Losses from prepayment of borrowings		(2,233	)		—			(2,233	)		—
Other		2,153			1,814			5,664			4,097

Total fee revenue		12,861			13,389			36,106			47,907

Total revenue		21,864			(19,187	)		30,522			7,674


Operating expenses:
Salaries and employee benefits		24,891			23,889			72,841			77,507
Communications and equipment		3,620			3,640			10,404			10,857
Occupancy		3,720			4,063			11,370			11,650
Advertising and public relations		1,128			823			3,523			2,992
Postage, printing and supplies		1,019			1,270			3,009			3,733
Professional fees		2,117			2,358			6,238			8,834
Foreclosed property		19,752			7,918			45,105			17,974
FDIC assessments and other regulatory charges		3,256			2,801			10,448			12,293
Amortization of intangibles		793			813			2,389			2,291
Other		4,610			3,851			12,707			8,793
Loss on sale of nonperforming assets		—			—			45,349			—
Goodwill impairment		210,590			25,000			210,590			95,000
Severance costs		—			—			—			2,898

Total operating expenses		275,496			76,426			433,973			254,822

Loss from continuing operations before income taxes		(253,632	)		(95,613	)		(403,451	)		(247,148	)
Income tax benefit		(17,217	)		(26,832	)		(73,046	)		(58,371	)

Net loss from continuing operations		(236,415	)		(68,781	)		(330,405	)		(188,777	)
(Loss) income from discontinued operations, net of income taxes		—			63			(101	)		285
Gain from sale of subsidiary, net of income taxes and selling costs		—			—			1,266			—

Net loss		(236,415	)		(68,718	)		(329,240	)		(188,492	)
Preferred stock dividends and discount accretion		2,581			2,562			7,730			7,675

Net loss available to common shareholders	$	(238,996	)	$	(71,280	)	$	(336,970	)	$	(196,167	)


Loss from continuing operations per common share — Basic / Diluted	$	(2.52	)	$	(1.43	)	$	(3.58	)	$	(4.01	)
Loss per common share — Basic / Diluted		(2.52	)		(1.43	)		(3.56	)		(4.01	)
Weighted average common shares outstanding — Basic / Diluted		94,679			49,771			94,527			48,968

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet


	September 30,			December 31,		September 30,
(in thousands, except share and per share data)	2010			2009		2009
	(unaudited)			(audited)		(unaudited)
ASSETS
Cash and due from banks	$	104,033		$	126,265	$	195,559
Interest-bearing deposits in banks		64,408			120,382		78,589
Federal funds sold, commercial paper and short-term investments		108,579			129,720		397,361

Cash and cash equivalents		277,020			376,367		671,509

Securities available for sale		1,053,518			1,530,047		1,532,514
Securities held to maturity (fair value $263,012)		256,694			—		—
Mortgage loans held for sale		20,630			30,226		20,460
Loans, net of unearned income		4,759,504			5,151,476		5,362,689
Less allowance for loan losses		174,613			155,602		150,187

Loans, net		4,584,891			4,995,874		5,212,502

Assets covered by loss sharing agreements with the FDIC		144,581			185,938		197,914
Premises and equipment, net		178,842			182,038		179,467
Accrued interest receivable		24,672			33,867		35,679
Goodwill and other intangible assets		12,217			225,196		226,008
Foreclosed property		129,964			120,770		110,610
Other assets		330,020			319,591		256,954

Total assets	$	7,013,049		$	7,999,914	$	8,443,617


LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	783,251		$	707,826	$	703,054
NOW		1,338,371			1,335,790		1,318,264
Money market		804,644			713,901		687,780
Savings		186,617			177,427		180,738
Time:
Less than $100,000		1,498,379			1,746,511		1,854,726
Greater than $100,000		1,033,132			1,187,499		1,237,172
Brokered		354,243			758,880		839,572

Total deposits		5,998,637			6,627,834		6,821,306

Federal funds purchased, repurchase agreements, and other short-term borrowings		103,780			101,389		101,951
Federal Home Loan Bank advances		55,125			114,501		314,704
Long-term debt		150,126			150,066		150,046
Accrued expenses and other liabilities		42,906			43,803		48,972

Total liabilities		6,350,574			7,037,593		7,436,979


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		175,378			174,408		174,095
Common stock, $1 par value; 200,000,000 shares authorized; 94,433,300, 94,045,603 and 93,901,492 shares issued and outstanding		94,433			94,046		93,901
Common stock issuable; 305,594, 221,906 and 196,818 shares		3,961			3,597		3,471
Capital surplus		664,605			622,034		620,494
(Accumulated deficit) retained earnings		(316,587	)		20,384		62,786
Accumulated other comprehensive income		40,468			47,635		51,674

Total shareholders’ equity		662,475			962,321		1,006,638

Total liabilities and shareholders’ equity	$	7,013,049		$	7,999,914	$	8,443,617

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 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⁾	$	4,896,471		$	68,540		5.55	%	$	5,565,498		$	80,880		5.77	%
Taxable securities⁽³⁾		1,384,682			14,431		4.17			1,585,154			18,492		4.67
Tax-exempt securities⁽¹⁾⁽³⁾		26,481			459		6.93			30,345			537		7.08
Federal funds sold and other interest-earning assets		368,108			930		1.01			219,542			1,272		2.32


Total interest-earning assets		6,675,742			84,360		5.02			7,400,539			101,181		5.43

Non-interest-earning assets:
Allowance for loan losses		(194,300	)							(147,074	)
Cash and due from banks		107,825								107,062
Premises and equipment		179,839								179,764
Other assets⁽³⁾		752,780								667,908

Total assets	$	7,521,886							$	8,208,199


Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,318,779		$	1,705		.51		$	1,238,596		$	2,528		.81
Money market		781,903			1,930		.98			628,392			2,711		1.71
Savings		186,123			83		.18			180,216			130		.29
Time less than $100,000		1,541,772			7,190		1.85			1,918,439			13,300		2.75
Time greater than $100,000		1,065,789			5,506		2.05			1,292,786			10,106		3.10
Brokered		573,606			3,403		2.35			707,678			4,777		2.68

Total interest-bearing deposits		5,467,972			19,817		1.44			5,966,107			33,552		2.23


Federal funds purchased and other borrowings		104,370			1,068		4.06			234,211			613		1.04
Federal Home Loan Bank advances		80,220			796		3.94			210,625			1,300		2.45
Long-term debt		150,119			2,665		7.04			150,353			2,712		7.16

Total borrowed funds		334,709			4,529		5.37			595,189			4,625		3.08


Total interest-bearing liabilities		5,802,681			24,346		1.66			6,561,296			38,177		2.31

Non-interest-bearing liabilities:
Non-interest-bearing deposits		789,231								723,841
Other liabilities		74,482								79,932

Total liabilities		6,666,394								7,365,069
Shareholders’ equity		855,492								843,130

Total liabilities and shareholders’ equity	$	7,521,886							$	8,208,199


Net interest revenue				$	60,014							$	63,004

Net interest-rate spread							3.36	%							3.12	%


Net interest margin⁽⁴⁾							3.57	%							3.39	%


(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 $45.4 million in 2010 and $13.8 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 Nine Months Ended September 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⁾	$	5,025,739		$	211,399		5.62	%	$	5,612,202		$	244,196		5.82	%
Taxable securities⁽³⁾		1,458,120			45,857		4.19			1,669,768			59,101		4.72
Tax-exempt securities⁽¹⁾⁽³⁾		28,470			1,450		6.79			29,754			1,565		7.01
Federal funds sold and other interest-earning assets		357,881			3,202		1.19			145,449			2,618		2.40


Total interest-earning assets		6,870,210			261,908		5.09			7,457,173			307,480		5.51

Non-interest-earning assets:
Allowance for loan losses		(191,888	)							(141,255	)
Cash and due from banks		104,446								104,444
Premises and equipment		180,936								179,569
Other assets⁽³⁾		758,903								663,674

Total assets	$	7,722,607							$	8,263,605


Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,335,034		$	5,304		.53		$	1,284,522		$	8,708		.91
Money market		750,685			5,516		.98			543,122			7,217		1.78
Savings		184,420			250		.18			177,147			378		.29
Time less than $100,000		1,612,691			23,968		1.99			1,918,379			45,859		3.20
Time greater than $100,000		1,110,195			18,378		2.21			1,336,876			34,444		3.44
Brokered		650,588			11,669		2.40			726,352			15,997		2.94

Total interest-bearing deposits		5,643,613			65,085		1.54			5,986,398			112,603		2.51


Federal funds purchased and other borrowings		103,697			3,162		4.08			202,008			1,761		1.17
Federal Home Loan Bank advances		100,727			2,747		3.65			241,863			3,577		1.98
Long-term debt		150,098			7,994		7.12			150,788			8,241		7.31

Total borrowed funds		354,522			13,903		5.24			594,659			13,579		3.05


Total interest-bearing liabilities		5,998,135			78,988		1.76			6,581,057			126,182		2.56

Non-interest-bearing liabilities:
Non-interest-bearing deposits		755,845								684,942
Other liabilities		64,622								101,447

Total liabilities		6,818,602								7,367,446
Shareholders’ equity		904,005								896,159

Total liabilities and shareholders’ equity	$	7,722,607							$	8,263,605


Net interest revenue				$	182,920							$	181,298

Net interest-rate spread							3.33	%							2.95	%


Net interest margin⁽⁴⁾							3.56	%							3.25	%


(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 $44.1 million in 2010 and $13.0 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 Third 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 Third Quarter CreditLoan and Deposit GrowthCore EarningsCapital 4

5 LOAN PORTFOLIO & CREDIT QUALITY

Structure Centralized underwriting and approval processSegregated work-out teamsHighly skilled ORE disposition groupSeasoned regional credit professionalsProcessContinuous external loan review Intensive executive management involvement:Weekly past due meetingsWeekly NPA/ORE meetingsQuarterly criticized watch loan review meetingsQuarterly pass commercial and CRE portfolio review meetingsInternal loan review of new credit relationshipsOngoing stress testing... commenced in 2007PolicyOngoing 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 $4.76 billion) $ in millions

Atlanta MSA North Georgia Western North Carolina Coastal Georgia Gainesville MSA Eastern Tennessee East 0.39 0.31 0.08 0.08 0.08 0.06 Commercial Construction Owner-Occupied Income Producing C & I East 12 39 31 18 Geographic Diversity Average Loan SizeCRE: $451kC&I: $86kComm. Constr. $650k 8 Commercial Loans (total $2.55 billion) $ in millions

56% owner-occupiedTypical owner-occupied: small business, doctors, dentists, attorneys, CPAs$12 million project limit$451K average loan size Portfolio Characteristics (in millions) September 30, 2010 Loan Type Amount Percent Office Buildings $ 397 22 %Other Small Business 305 17 Retail 261 15Small Warehouses/Storage 174 10Churches 143 7Hotels/Motels 95 6Convenience Stores 77 4Franchise / Restaurants 74 4Multi-Residential Properties 66 4Farmland 46 3Manufacturing Facility 41 2Golf Course/Recreation 34 2Auto Dealership/Service 33 2Miscellaneous 35 2 Total Commercial Real Estate $ 1,781 100 % 9 Commercial Real Estate (by loan type)

$650k Average loan size Portfolio Characteristics (in millions) Sep 30, 2010 Loan Type Amount Percent Land Development - Vacant (Improved) $ 114 37 %Raw Land - Vacant (Unimproved) 67 22 Commercial Land Development 57 18Office Buildings 34 11Miscellaneous Construction 26 8Retail Buildings 9 3Churches 3 1 Total Commercial Construction $ 310 100 % 10 Commercial Construction (by loan type)

North Georgia Western North Carolina Atlanta MSA Coastal Georgia Gainesville MSA Eastern Tennessee East 0.4 0.26 0.14 0.07 0.07 0.06 Mortgage Home Equity East 74 26 Geographic Diversity Avg loan size: $45k Avg loan size: $96k Origination CharacteristicsNo broker loansNo sub-prime / Alt-APolicy Max LTV: 80-85%51% of HE Primary Lien 11 Residential Mortgage (total $1.32 billion) $ in millions

North Georgia Atlanta MSA Western North Carolina Coastal Georgia Gainesville MSA Eastern Tennessee East 0.48 0.21 0.19 0.05 0.05 0.02 Geographic Diversity Developing Spec $242kSold $153k Develop $669kRaw Land $270kLot $124k Average Loan Size Lot Spec Sold Developing Raw East 0.4 0.14 0.08 0.25 0.14 Construction Land 12 Residential Construction (total $.76 billion) $ in millions

13 Atlanta MSA (residential construction)

14 North Georgia MSA (residential construction)

Credit Quality (in millions) 3Q10 2Q10 1Q10 4Q 09 3Q 09 2Q 09 Net Charge-offs $ 50.0 $ 61.3 $ 56.7 $ 84.6 $ 90.5 $ 58.3 as % of Average Loans 4.12 % 4.98 % 4.51 % 6.37 % 6.57 % 4.18 %Allowance for Loan Losses $ 174.6 $ 174.1 $ 173.9 $ 155.6 $ 150.2 $ 145.7 as % of Total Loans 3.67 % 3.57 % 3.48 % 3.02 % 2.80 % 2.64 % as % of NPLs 80 78 62 59 49 51 as % of NPLs - Adjusted (1) 257 234 142 190 149 82 Past Due Loans (30 - 89 Days) 1.24 % 1.69 % 2.17 % 1.44 % 2.02 % 1.61 %Non-Performing Loans $ 217.8 $ 224.3 $ 280.8 $ 264.1 $ 304.4 $ 287.8 OREO 129.9 123. 9 136.3 120.8 110.6 104.8 Total NPAs $ 347.7 $ 348.2 $ 417.1 $ 384.9 $ 415.0 $ 392.6 As % of Original Principal Balance Non-Performing Loans 70.0 % 69.4 % 71.6 % 70.4 % 73.8 % 80.1 % OREO 65.9 71.9 67.4 66.6 64.4 % 64.3 %Total NPAs as % of Total Assets 4.96 % 4.55 % 5.32 % 4.81 % 4.91 % 4.63 % as % of Loans & OREO 7.11 6.97 8.13 7.30 7.58 6.99 Excluding loans with no allocated reserve 15

(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 3Q10 16.5 21.5 26.7 31.7 29.9 28.9 29.4 27.5 Core Earnings 20 In millions

Core Earnings Summary 21

3Q09 4Q09 1Q10 2Q10 3Q10 Net Interest Margin 0.0339 0.034 0.0349 0.036 0.0357 0.0058 0.0064 0.0066 0.0064 0.0056 Net Interest Margin Margin changes -3 bps vs. 2Q10 +18 bps vs. 3Q09Maintained loan & CD pricing3Q Excess liquidity - lowered Margin by 12 bpsImpact of credit costs - 56 bps + Historically 8 to 12 bps Significant opportunity after credit cycle - 1 bps = $.7M NIR NIM Characteristics 3.97% 4.04% 4.15% NIM NIM - Pre Credit (1) (1) Excluding impact of nonaccrual loans, OREO and interest reversals 4.24% 4.13% Net Interest Margin 22

3Q09 4Q09 1Q10 2Q10 3Q10 Lost Interest on C/Os 0.0015 0.0017 0.002 0.002 0.002 Nonaccrual/OREO 0.0027 0.0027 0.0026 0.0025 0.0022 Interest Reversals 0.0016 0.002 0.002 0.0019 0.0014 Historically 8 to 12 bpsCredit cycle - significant drag on margin but improvingCost 3Q10 vs. Historical - 44 bps (annual earnings impact of $29 million)1 bps = $667K NIR Credit CostsImpacting Margin ..64% ..66% ..64% ..58% Lost Interest on C/Os Interest Reversals Carry Cost of NPAs ..56% Margin - Credit Costs 23

As of September 30, 2010 Demand & NOW MMDA & Sav. Time <$100k Time >$100k Public Funds Brokered East 1582 977 1492 971 623 354 24 Deposit Mix (total $6.0 billion)

Third Quarter 2010 Net Operating Loss - From Continuing Operations 25

Third Quarter 2010 Net Loss 26

Capital Ratios 27

28 APPENDIX

Assets $7.0 BillionDeposits $6.0 Billion Banks 27Offices 106 29 United at a Glance

30 Experienced Proven Leadership Joined Years in UCBI BankingJimmy Tallent President & CEO 1984 36Guy Freeman Chief Operating Officer 1992 52Rex Schuette Chief Financial Officer 2001 33David Shearrow Chief Risk Officer 2007 29Glenn White President, Atlanta Region 2007 36Craig Metz Marketing 2002 18Bill Gilbert Retail Banking 2000 34

Business and Operating Model Twenty-seven "community banks" Local CEOs with deep roots in their communitiesResources of $7.0 billion bankService is point of differentiationGolden rule of banking"The Bank That SERVICE Built"Ongoing customer surveys95+% satisfaction rateStrategic footprint with substantial banking opportunitiesOperates in a number of the more demographically attractive markets in the U.S.Disciplined growth strategy Organic supported by de novos and selective acquisitions 31 "Community bank service, large bank resources"

32 Robust Demographics (fast growing markets)

1 FDIC deposit market share and rank as of 6/10 for markets where United takes deposits. Source: SNL and FDIC.2 Based on current quarter. 33 Market Share Opportunities (excellent growth prospects)

34 Leading Demographics

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

36 Performing Classified Loans

37 Business Mix Loans (at quarter-end)

38 Loans - Markets Served (at quarter-end)

39 Residential Construction - Total Company

40 Residential Construction - Atlanta MSA

41 Residential Construction - North Georgia

42 Business Mix Loans (at year-end)

43 Loans - Markets Served (at year-end)

(in millions) 44 Lending - Credit Summary (as of September 30, 2010) Legal lending limit $188House lending limit 20Project lending limit 12Top 25 relationships 4479.4% of total loansRegional credit review - Standard underwriting

45 NPAs by Loan Category, Market, and Activity

46 Net Charge-offs by Category and Market

47 Loans / Deposits - Liquidity

48 Wholesale Borrowings - Liquidity

49 Business Mix - Deposits (at quarter-end)

$ in millions 3Q 09 3Q 10 Geographic Diversity Atlanta MSA North Georgia Western North Carolina Gainesville MSA Coastal Georgia Eastern Tennessee 3Q10 945 692 480 164 147 131 3Q09 863 638 444 142 136 117 Atlanta MSA North Georgia Western North Carolina Gainesville MSA Coastal Georgia Eastern Tennessee 50 Core Transaction Deposits

NPA Sale in 2Q Sold $103 Million NPA's - With a $65 Million Capital Option and WarrantCompleted sale on April 30, 2010Accelerates disposition of the more illiquid assets 51

NPA Sale - Fair Value Accounting Fair Value Accounting - Warrant / Option to Purchase EquityIncrease to Capital Surplus - $39.8 millionPre-tax expense charge - $45.3 million; after-tax cost - $30.0 millionGAAP Capital +$9.8million - Slight Negative to "Regulatory Capital" (DTA) 52

Southern Community Bank ($ in millions)Purchased - June 19, 2009 Nine years old - Enhances presence in southside metro Atlanta marketsFour banking offices in southside metro Atlanta MSA - Fayetteville, Coweta and Henry counties54 employees (Reduced by 17 after conversion in September 2009)$208 in customer deposits, including $53 core depositsFDIC assisted transaction: 80% guarantee on $109 loss threshold, 95% aboveFully discounted bid with no credit exposureAccounted for credit related items (at FMV) as "covered assets" on balance sheet 3Q10 2Q10 1Q10 4Q09 2Q09 Loans $ 75 $ 81 $ 79 $ 85 $ 110 OREO 30 33 32 34 25 FDIC receivable 40 43 58 67 95 Total Covered Assets $ 145 $ 157 $ 169 $ 186 $ 230Pre-tax gain on acquisition of $11.4Accretive to earnings per share 53

54 Non-GAAP Reconciliation Tables

55 Non-GAAP Reconciliation Tables

56 Analyst Coverage