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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2011	Feb. 29, 2012	Jun. 30, 2011
Entity Registrant Name	UNITED COMMUNITY BANKS INC
Entity Central Index Key	0000857855
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 594,196,291
Entity Common Stock, Shares Outstanding		41,667,260
Non-Voting Common Stock
Entity Common Stock, Shares Outstanding		15,914,209

Consolidated Statement of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Interest revenue:
Loans, including fees	$ 239,056	$ 277,904	$ 322,509
Investment securities:
Taxable	55,251	58,821	76,048
Tax exempt	1,009	1,137	1,322
Federal funds sold, commercial paper reverse repurchase agreements and deposits in banks	2,321	3,260	2,950
Total interest revenue	297,637	341,122	402,829
Deposits:
NOW	3,998	6,966	11,023
Money market	5,456	7,552	9,545
Savings	234	331	483
Time	39,151	66,883	120,326
Total deposit interest expense	48,839	81,732	141,377
Federal funds purchased, repurchase agreements and other short-term borrowings	4,250	4,235	2,842
Federal Home Loan Bank advances	2,042	3,355	4,622
Long-term debt	10,544	10,749	10,893
Total interest expense	65,675	100,071	159,734
Net interest revenue	231,962	241,051	243,095
Provision for loan losses	251,000	223,000	310,000
Net interest revenue after provision for loan losses	(19,038)	18,051	(66,905)
Fee revenue:
Service charges and fees	29,110	30,127	30,986
Mortgage loan and other related fees	5,419	7,019	8,959
Brokerage fees	2,986	2,662	2,085
Securities gains, net	842	2,552	2,756
Losses on prepayment of borrowings	(791)	(2,233)
Gain from acquisition			11,390
Other	12,342	8,421	6,178
Total fee revenue	49,908	48,548	62,354
Total revenue	30,870	66,599	(4,551)
Operating expenses:
Salaries and employee benefits	100,095	96,618	101,568
Communications and equipment	13,135	13,781	14,676
Occupancy	15,645	15,394	15,653
Advertising and public relations	4,291	4,625	3,950
Postage, printing and supplies	4,256	4,072	5,040
Professional fees	9,727	9,254	11,480
Foreclosed property	78,905	65,707	32,365
FDIC assessments and other regulatory charges	14,259	13,747	16,004
Amortization of intangibles	3,016	3,160	3,104
Goodwill impairment		210,590	95,000
Loss on sale of nonperforming assets		45,349
Severance costs			2,898
Other	18,270	16,594	13,210
Total operating expenses	261,599	498,891	314,948
Loss from continuing operations before income taxes	(230,729)	(432,292)	(319,499)
Income tax (benefit) expense	(3,983)	71,217	(90,659)
Net loss from continuing operations	(226,746)	(503,509)	(228,840)
(Loss) income from discontinued operations, net of income taxes		(101)	513
Gain from sale of subsidiary, net of income taxes and selling costs		1,266
Net loss	(226,746)	(502,344)	(228,327)
Preferred stock dividends	11,838	10,316	10,242
Net loss available to common shareholders	$ (238,584)	$ (512,660)	$ (238,569)
Loss from continuing operations per common share - basic / diluted	$ (5.97)	$ (27.15)	$ (19.80)
Loss per common share - basic / diluted	$ (5.97)	$ (27.09)	$ (19.76)
Weighted average common shares outstanding - basic / diluted	39,943	18,925	12,075

Consolidated Balance Sheet - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
ASSETS
Cash and due from banks	$ 53,807	$ 95,994
Interest-bearing deposits in banks	139,609	111,901
Federal funds sold, commercial paper, reverse repurchase agreements and short-term investments	185,000	441,562
Cash and cash equivalents	378,416	649,457
Securities available for sale	1,790,047	1,224,417
Securities held to maturity (fair value $343,531 and $ 267,988)	330,203	265,807
Mortgage loans held for sale	23,881	35,908
Loans, net of unearned income	4,109,614	4,604,126
Less allowance for loan losses	114,468	174,695
Loans, net	3,995,146	4,429,431
Assets covered by loss sharing agreements with the FDIC	78,145	131,887
Premises and equipment, net	175,088	178,239
Accrued interest receivable	20,693	24,299
Goodwill and other intangible assets	8,428	11,446
Foreclosed property	32,859	142,208
Other assets	150,514	183,160
Total assets	6,983,420	7,276,259
Deposits:
Demand	992,109	793,414
NOW	1,509,896	1,424,781
Money market	1,038,778	891,252
Savings	199,007	183,894
Time:
Less than $100,000	1,332,394	1,496,700
Greater than $100,000	847,152	1,002,359
Brokered	178,647	676,772
Total deposits	6,097,983	6,469,172
Federal funds purchased, repurchase agreements and other short-term borrowings	102,577	101,067
Federal Home Loan Bank advances	40,625	55,125
Long-term debt	120,225	150,146
Unsettled securities purchases	10,325	0
Accrued expenses and other liabilities	36,199	32,171
Total liabilities	6,407,934	6,807,681
Commitments and Contingencies
Shareholders equity:
Common stock, $1 par value; 100,000,000 shares authorized; 41,647,100 and 18,937,001 shares issued and outstanding	41,647	18,937
Common stock issuable; 93,681 and 67,287 shares	3,233	3,894
Capital surplus	1,054,940	741,244
Accumulated deficit	(730,861)	(492,276)
Accumulated other comprehensive (loss) income	(3,309)	20,851
Total shareholders' equity	575,486	468,578
Total liabilities and shareholders' equity	6,983,420	7,276,259
Series A Preferred Stock
Shareholders equity:
Preferred stock	217	217
Total shareholders' equity	217	217
Series B Preferred Stock
Shareholders equity:
Preferred stock	177,092	175,711
Total shareholders' equity	177,092	175,711
Series D Preferred Stock
Shareholders equity:
Preferred stock	16,613	0
Total shareholders' equity	16,613	0
Non-Voting Common Stock
Shareholders equity:
Common stock, $1 par value; 100,000,000 shares authorized; 41,647,100 and 18,937,001 shares issued and outstanding	15,914	0
Total shareholders' equity	$ 15,914	$ 0

Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Fair value of securities held to maturity	$ 343,531	$ 267,988
Preferred stock, par value	$ 1	$ 1
Preferred stock, shares authorized	10,000,000	10,000,000
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	41,647,100	18,937,001
Common stock, shares outstanding	41,647,100	18,937,001
Common stock issuable, shares	93,681	67,287
Series A Preferred Stock
Preferred stock, par value	$ 10	$ 10
Preferred stock, shares issued	21,700	21,700
Preferred stock, shares outstanding	21,700	21,700
Series B Preferred Stock
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, shares issued	180,000	180,000
Preferred stock, shares outstanding	180,000	180,000
Series D Preferred Stock
Preferred stock, par value	$ 1,000	$ 0
Preferred stock, shares issued	16,613	0
Preferred stock, shares outstanding	16,613	0
Non-Voting Common Stock
Common stock, par value	$ 1	$ 0
Common stock, shares authorized	30,000,000	0
Common stock, shares issued	15,914,209	0
Common stock, shares outstanding	15,914,209	0

Consolidated Statement of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Series A Preferred Stock	Series B Preferred Stock	Series D Preferred Stock	Series F Preferred Stock	Series G Preferred Stock	Non-Voting Common Stock	Common Stock	Common Stock Issuable	Capital Surplus	Retained Earnings (Accumulated Deficit)	Treasury Stock	Accumulated Other Comprehensive (Loss) Income
Beginning balance at Dec. 31, 2008	$ 989,382	$ 258	$ 173,180	$ 0	$ 0	$ 0	$ 0	$ 9,762	$ 2,908	$ 499,755	$ 265,405	$ (16,465)	$ 54,579
Comprehensive loss:
Net loss	(228,327)										(228,327)
Other comprehensive income
Unrealized holding gains/losses on available for sale securities, (net of deferred tax expense of $ 9635)	16,277												16,277
Reclassification adjustment for gains on securities available for sale included in fee revenue (net of tax expense of $1,072)	(1,684)												(1,684)
Unrealized losses on derivative financial instruments qualifying as cash flow hedges, (net of deferred tax benefit of $13,712)	(21,537)												(21,537)
Comprehensive loss	(235,271)										(228,327)		(6,944)
Retirement of Series A preferred stock	(41)	(41)
Stock dividends declared on common stock (222,304 common shares)	(52)							96		(6,345)	(6,452)	12,649
Exercise of stock options, net of shares exchanged (87 common shares)	2									(6)		8
Common stock issued to Dividend Reinvestment Plan and employee benefit plans (80,220 common shares in 2009; 121,777 common shares in 2010 and 156,816 common shares in 2011)	2,154							49		(1,329)		3,434
Common stock issued (8,901,000 common shares)	211,089							8,901		202,188
Amortization of stock options and restricted stock	3,704									3,704
Vesting of restricted stock awards (2,489 common shares issued, 3656 common shares deferred in 2009; 2,113 common shares issued, 8,304 common shares deferred in 2010 and 12,239 common share issued, 6,382 common share deferred in 2011)								1	446	(687)		240
Deferred compensation plan, net, including dividend equivalents	398								398
Shares issued from deferred compensation plan (1,137 common shares in 2009; 3,990 common shares in 2010 and 6,266 common share in 2011)									(155)	21		134
Tax on option exercise and restricted stock vesting	(30)									(30)
Cash dividends on Series A preferred stock	(14)										(14)
Cash dividends on Series B preferred stock, including discount accretion	(9,000)		1,228								(10,228)
Ending balance at Dec. 31, 2009	962,321	217	174,408	0	0	0	0	18,809	3,597	697,271	20,384		47,635
Comprehensive loss:
Net loss	(502,344)										(502,344)
Other comprehensive income
Unrealized holding gains/losses on available for sale securities, (net of deferred tax expense of $ 9635)	(8,151)												(8,151)
Reclassification adjustment for gains on securities available for sale included in fee revenue (net of tax expense of $1,072)	(2,552)												(2,552)
Unrealized losses on derivative financial instruments qualifying as cash flow hedges, (net of deferred tax benefit of $13,712)	(16,081)												(16,081)
Comprehensive loss	(529,128)										(502,344)		(26,784)
Issuance of equity instruments in private equity transaction	39,813									39,813
Common stock issued to Dividend Reinvestment Plan and employee benefit plans (80,220 common shares in 2009; 121,777 common shares in 2010 and 156,816 common shares in 2011)	1,835							122		1,713
Amortization of stock options and restricted stock	2,459									2,459
Vesting of restricted stock awards (2,489 common shares issued, 3656 common shares deferred in 2009; 2,113 common shares issued, 8,304 common shares deferred in 2010 and 12,239 common share issued, 6,382 common share deferred in 2011)								2	607	(609)
Deferred compensation plan, net, including dividend equivalents	295								295
Shares issued from deferred compensation plan (1,137 common shares in 2009; 3,990 common shares in 2010 and 6,266 common share in 2011)	(4)							4	(605)	597
Cash dividends on Series A preferred stock	(13)										(13)
Cash dividends on Series B preferred stock, including discount accretion	(9,000)		1,303								(10,303)
Ending balance at Dec. 31, 2010	468,578	217	175,711	0	0	0	0	18,937	3,894	741,244	(492,276)		20,851
Comprehensive loss:
Net loss	(226,746)										(226,746)
Other comprehensive income
Unrealized holding gains/losses on available for sale securities, (net of deferred tax expense of $ 9635)	(3,452)												(3,452)
Reclassification adjustment for gains on securities available for sale included in fee revenue (net of tax expense of $1,072)	(842)												(842)
Unrealized losses on derivative financial instruments qualifying as cash flow hedges, (net of deferred tax benefit of $13,712)	(15,116)												(15,116)
Actuarial gains and losses and prior service costs under defined benefit plans net of amortization	(4,750)												(4,750)
Comprehensive loss	(250,906)										(226,746)		(24,160)
Penalty received on incomplete private equity transaction	3,250									3,250
Preferred for common equity exchange related to tax benefits preservation plan (1,551,126 common shares)				16,613				(1,551)		(15,062)
Common and preferred stock issued (3,467,699 common shares)	361,560				195,872	151,185		3,468		11,035
Conversion of Series F and Series G preferred stock (20,618,156 voting and 15,914,209 non-voting common shares)					(195,872)	(151,185)	15,914	20,618		310,525
Common stock issued to Dividend Reinvestment Plan and employee benefit plans (80,220 common shares in 2009; 121,777 common shares in 2010 and 156,816 common shares in 2011)	1,453							156		1,297
Amortization of stock options and restricted stock	2,144									2,144
Vesting of restricted stock awards (2,489 common shares issued, 3656 common shares deferred in 2009; 2,113 common shares issued, 8,304 common shares deferred in 2010 and 12,239 common share issued, 6,382 common share deferred in 2011)								13	54	(67)
Deferred compensation plan, net, including dividend equivalents	241								241
Shares issued from deferred compensation plan (1,137 common shares in 2009; 3,990 common shares in 2010 and 6,266 common share in 2011)								6	(956)	950
Tax on option exercise and restricted stock vesting	(376)									(376)
Cash dividends on Series A preferred stock	(13)										(13)
Cash dividends on Series B preferred stock, including discount accretion	(9,020)		1,381								(10,401)
Cash dividends on Series D preferred stock	(1,425)										(1,425)
Ending balance at Dec. 31, 2011	$ 575,486	$ 217	$ 177,092	$ 16,613	$ 0	$ 0	$ 15,914	$ 41,647	$ 3,233	$ 1,054,940	$ (730,861)	$ 0	$ (3,309)

Consolidated Statement of Changes in Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Deferred tax expense related to available for sale securities			$ 9,635
Reclassification net of tax expense			1,072
Deferred tax benefit related to derivative financial instruments			$ 13,712
Stock dividends declared on common shares			222,304
Exercise of stock options common shares			87
Number of common stock issued to dividend reinvestment plan and employee benefit plans	156,816	121,777	80,220
Common stock, shares issued			8,901,000
Number of shares issued from deferred compensation plan		3,990
Common and preferred stock, shares issued	3,467,699
Series B Preferred Stock
Exercise of stock options common shares			87
Series D Preferred Stock
Preferred for common stock equity exchange related to tax preservation plan, shares	1,551,126
Series F Preferred Stock
Common and preferred stock, shares issued	3,467,699
Number of voting common shares in conversion of series F and series G preferred stock	20,618,156
Number of non- voting common shares in conversion of series F and series G preferred stock	15,914,209
Series G Preferred Stock
Common and preferred stock, shares issued	3,467,699
Number of voting common shares in conversion of series F and series G preferred stock	20,618,156
Number of non- voting common shares in conversion of series F and series G preferred stock	15,914,209
Non-Voting Common Stock
Number of voting common shares in conversion of series F and series G preferred stock	20,618,156
Number of non- voting common shares in conversion of series F and series G preferred stock	15,914,209
Common Stock
Stock dividends declared on common shares			222,304
Number of common stock issued to dividend reinvestment plan and employee benefit plans	156,816	121,777	80,220
Common stock, shares issued			8,901,000
Vesting of restricted stock, shares issued	12,239	2,113
Vesting of restricted stock, shares deferred	6,382	8,304
Number of shares issued from deferred compensation plan	6,266	3,990
Preferred for common stock equity exchange related to tax preservation plan, shares	1,551,126
Common and preferred stock, shares issued	3,467,699
Number of voting common shares in conversion of series F and series G preferred stock	20,618,156
Number of non- voting common shares in conversion of series F and series G preferred stock	15,914,209
Common Stock Issuable
Vesting of restricted stock, shares issued	12,239	2,113	2,489
Vesting of restricted stock, shares deferred	6,382	8,304	3,656
Number of shares issued from deferred compensation plan	6,266	3,990	1,137
Capital Surplus
Stock dividends declared on common shares			222,304
Exercise of stock options common shares			87
Number of common stock issued to dividend reinvestment plan and employee benefit plans	156,816	121,777	80,220
Common stock, shares issued			8,901,000
Vesting of restricted stock, shares issued	12,239	2,113	2,489
Vesting of restricted stock, shares deferred	6,382	8,304	3,656
Number of shares issued from deferred compensation plan	6,266	3,990	1,137
Preferred for common stock equity exchange related to tax preservation plan, shares	1,551,126
Common and preferred stock, shares issued	3,467,699
Number of voting common shares in conversion of series F and series G preferred stock	20,618,156
Number of non- voting common shares in conversion of series F and series G preferred stock	15,914,209
Retained Earnings (Accumulated Deficit)
Stock dividends declared on common shares			222,304
Treasury Stock
Stock dividends declared on common shares			222,304
Exercise of stock options common shares			87
Number of common stock issued to dividend reinvestment plan and employee benefit plans			80,220
Vesting of restricted stock, shares issued			2,489
Vesting of restricted stock, shares deferred			3,656
Number of shares issued from deferred compensation plan			1,137
Accumulated Other Comprehensive (Loss) Income
Deferred tax expense related to available for sale securities			$ 9,635
Reclassification net of tax expense			1,072
Deferred tax benefit related to derivative financial instruments			$ 13,712

Consolidated Statement of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating activities, net of effects of business combinations:
Net loss	$ (226,746)	$ (502,344)	$ (228,327)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, amortization and accretion	21,084	16,388	14,553
Provision for loan losses	251,000	223,000	310,000
Goodwill impairment charges		210,590	95,000
Stock based compensation	2,144	2,459	3,704
Deferred income tax expense (benefit)	0	69,254	(49,992)
Securities gains, net	(842)	(2,552)	(2,756)
Losses on prepayment of borrowings	791	2,233
Losses and write downs on sales of other real estate owned	68,406	49,326	17,881
Gain from sale of subsidiary		(2,110)
Gain from acquisition			(11,390)
Loss on sale of nonperforming assets		45,349
Funds collected from FDIC under loss sharing agreements	33,572	27,562	26,208
Changes in assets and liabilities:
Other assets and accrued interest receivable	27,188	25,881	(41,776)
Accrued expenses and other liabilities	(3,171)	(8,406)	16,348
Mortgage loans held for sale	12,027	(5,682)	(9,892)
Net cash provided by operating activities	185,453	150,948	139,561
Investment securities held to maturity:
Proceeds from maturities and calls of securities held to maturity	76,764	102,567
Purchases of securities held to maturity	(144,506)	(55,513)
Investment securities available for sale:
Proceeds from sales of securities available for sale	128,217	75,528	328,968
Proceeds from maturities and calls of securities available for sale	493,276	779,963	693,064
Purchases of securities available for sale	(1,184,013)	(872,513)	(884,815)
Net decrease in loans	53,104	160,217	35,071
Proceeds from loan sales	99,298	27,823	27,893
Purchases of premises and equipment	(7,210)	(7,128)	(14,868)
Proceeds from sales of premises and equipment	737	103	634
Net cash received from sale of subsidiary		2,842
Net cash received from acquisition			63,617
Net cash received from sale of nonperforming assets		20,618
Proceeds from sale of other real estate	86,789	111,222	154,381
Net cash (used in) provided by investing activities	(397,544)	345,729	403,945
Financing activities, net of effects of business combinations:
Net change in deposits	(371,189)	(154,902)	(682,236)
Net change in federal funds purchased, repurchase agreements and other short-term borrowings	1,510	(322)	(9,692)
Proceeds from new Federal Home Loan Bank advances			330,000
Repayments of Federal Home Loan Bank advances	(15,291)	(61,181)	(503,322)
Repayments of long-term debt	(30,000)
Proceeds from issuance of common stock for dividend reinvestment and employee benefit plans	1,453	1,831	2,154
Proceeds from issuance of common and preferred stock, net of offering costs	361,560		211,089
Proceeds from penalty on incomplete private equity transaction	3,250
Proceeds from exercise of stock options			2
Retirement of Series A preferred stock			(41)
Cash dividends on Series A preferred stock	(13)	(13)	(14)
Cash dividends on Series B preferred stock	(9,020)	(9,000)	(8,500)
Cash dividends on Series D preferred stock	(1,210)
Net cash used in financing activities	(58,950)	(223,587)	(660,560)
Net change in cash and cash equivalents	(271,041)	273,090	(117,054)
Cash and cash equivalents at beginning of year	649,457	376,367	493,421
Cash and cash equivalents at end of year	378,416	649,457	376,367
Cash paid during the period for:
Interest	68,068	112,171	177,297
Income taxes paid (refunds received)	$ 138	$ (37,184)	$ (25,213)

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

(1)

Summary of Significant Accounting Policies

The accounting principles followed by United Community Banks, Inc. (“United”) and its subsidiaries and the methods of applying these principles conform with accounting principles generally accepted in the United States of America (“GAAP”) and with general practices within the banking industry. The following is a description of the more significant of those policies.

Organization and Basis of Presentation

At December 31, 2011, United was a bank holding company whose principal business was conducted by its wholly-owned commercial bank subsidiary (the “Bank”). United is subject to regulation under the Bank Holding Company Act of 1956. The consolidated financial statements include the accounts of United Community Banks, Inc., the Bank and other wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

The Bank is a Georgia state chartered commercial bank that serves markets throughout north Georgia, coastal Georgia, the Atlanta, Georgia MSA, the Gainesville, Georgia MSA, western North Carolina and east Tennessee and provides a full range of banking services. The Bank is insured and subject to the regulation of the Federal Deposit Insurance Corporation (“FDIC”) and is also subject to the regulation of the Georgia Department of Banking and Finance.

Use of Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the balance sheet and revenue and expenses for the years then ended. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change are the determination of the allowance for loan losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, the valuation of goodwill and separately identifiable intangible assets associated with mergers and acquisitions and the valuation of deferred tax assets.

Operating Segments

Operating segments are components of a business about which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. Public companies are required to report certain financial information about operating segments in interim and annual financial statements. Although United’s operations are divided among 27 community banks, those banks have similar economic characteristics and are therefore aggregated into one operating segment for purposes of segment reporting. Because United has only one operating segment, segment information is not provided separately from the consolidated financial statements.

Discontinued Operations

Effective March 31, 2010, United completed the sale if its consulting subsidiary, Brintech, Inc. (“Brintech”). The sales price was $2.9 million with United covering certain costs related to the sale transaction resulting in a net, pre-tax gain of $2.1 million. As a result of the sale, Brintech is presented in the consolidated statement of operations as a discontinued operation with all revenue and expenses related to the sold operations deconsolidated from the consolidated statement of operations for all periods presented. The results of operations from Brintech are reported on a separate line on the consolidated statement of operations titled “(Loss) income from discontinued operations, net of income taxes.” The gain from the sale, net of income taxes and selling costs, is presented on a separate line titled “Gain from sale of subsidiary, net of income taxes and selling costs.”

Cash and Cash Equivalents

Cash equivalents include amounts due from banks, interest-bearing deposits in banks, federal funds sold, commercial paper, reverse repurchase agreements and short-term investments and are carried at cost. Federal funds are generally sold for one-day periods, interest-bearing deposits in banks are available on demand and commercial paper investments mature within a period of less than 30 days.

Investment Securities

United classifies its securities in one of three categories: held to maturity, available for sale, or trading. Trading securities are bought and held principally for the purpose of selling them in the near term. Held to maturity securities are those securities for which United has the ability and intent to hold until maturity. All other securities are classified as available for sale. In 2010, United transferred securities with a fair value of $315 million from available for sale to held to maturity. The securities were transferred at their fair value on the date of transfer. The unrealized gain of $7.1 million on the transferred securities on the date of transfer is being amortized into interest revenue as an adjustment to the yield on those securities over the remaining life of the transferred securities.

Held to maturity securities are recorded at cost, adjusted for the amortization or accretion of premiums or discounts. Available for sale securities are recorded at fair value. Unrealized holding gains and losses, net of the related tax effect, on available for sale securities are excluded from net income and are reported in other comprehensive income as a separate component of shareholders’ equity until realized. Transfers of securities between categories are recorded at fair value at the date of transfer. Unrealized holding gains or losses associated with transfers of securities from available for sale to held to maturity are included in the balance of accumulated other comprehensive income in the consolidated balance sheet. These unrealized holding gains or losses are amortized into income over the remaining life of the security as an adjustment to the yield in a manner consistent with the amortization or accretion of the original purchase premium or discount on the associated security.

Management evaluates investment securities for other than temporary impairment on a quarterly basis. A decline in the fair value of available for sale and held to maturity securities below cost that is deemed other than temporary is charged to earnings for a decline in value deemed to be credit related. The decline in value attributed to non credit related factors is recognized in other comprehensive income and a new cost basis for the security is established. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to the yield. Realized gains and losses for securities classified as available for sale and held to maturity are included in net income and derived using the specific identification method for determining the cost of the securities sold.

Federal Home Loan Bank (“FHLB”) stock is included in other assets at its original cost basis, as cost approximates fair value as there is no ready market for such investments.

Mortgage Loans Held for Sale

Mortgage loans held for sale are carried at the lower of aggregate cost or market value. The amount by which cost exceeds market value is accounted for as a valuation allowance. Changes in the valuation allowance are included in the determination of net income for the period in which the change occurs. No market valuation allowances were required at December 31, 2011 or 2010 since those loans have market values that approximated the recorded basis.

Loans

With the exception of purchased loans that are recorded at fair value on the date of acquisition, loans are stated at principal amount outstanding, net of any unearned revenue and net of any deferred loan fees and costs. Interest on loans is primarily calculated by using the simple interest method on daily balances of the principal amount outstanding.

The accrual of interest is discontinued when a loan becomes 90 days past due and is not both well collateralized and in the process of collection, or when management believes, after considering economic and business conditions and collection efforts, that the principal or interest will not be collectible in the normal course of business. Past due status is based on contractual terms of the loan. When a loan is placed on nonaccrual status, previously accrued and uncollected interest is charged against interest revenue on loans. Interest payments are applied to reduce the principal balance on nonaccrual loans. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

A loan is considered impaired when, based on current events and circumstances, it is probable that all amounts due, according to the contractual terms of the loan, will not be collected. Impaired loans are measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, at the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. Interest revenue on impaired loans is discontinued when the loans meet the criteria for nonaccrual status described above. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not considered impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Concentration of Credit Risk: Most of United’s business activity is with customers located within the markets where it has banking operations. Therefore, United’s exposure to credit risk is significantly affected by changes in the economy within its markets. More than 85% of United’s loan portfolio is secured by real estate and is therefore susceptible to changes in real estate valuations.

Certain Purchased Loans: United from time to time purchases loans, primarily through business combination transactions. Some of those purchased loans show evidence of credit deterioration since origination. Purchased loans are recorded at their estimated fair value such that there is no carryover of the seller’s allowance for loan losses. After acquisition, further losses are recognized by an increase in the allowance for loan losses.

Such purchased loans are accounted for individually or aggregated into pools of loans based on common risk characteristics such as the type of loan. United estimates the amount and timing of expected cash flows for each purchased loan or pool and the expected cash flows in excess of the amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference).

Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest revenue.

Allowance for Loan Losses

The allowance for loan losses is established through a provision for loan losses charged to income. Loans are charged against the allowance for loan losses when available information confirms that the collectability of the principal is unlikely. The allowance represents an amount, which, in management’s judgment, is adequate to absorb probable losses on existing loans as of the date of the balance sheet.

The allowance is composed of general reserves and specific reserves. General reserves are determined by applying loss percentages to the individual loan categories that are based on actual historical loss experience. United uses an eight-quarter weighted average historical loss rate for each major loan category, weighted toward the most recent quarters’ losses. Additionally, the general economic and business conditions affecting key lending areas, credit quality trends, collateral values, loan volumes and concentrations, seasoning of the loan portfolio, the findings of internal and external credit reviews and results from external bank regulatory examinations are considered in this evaluation. The need for specific reserves is evaluated on impaired loan relationships greater than $500,000, accruing relationships rated substandard that are greater than $2 million and all Troubled Debt Restructurings (“TDRs”). The specific reserves are determined on a loan-by-loan basis based on management’s evaluation of United’s exposure for each credit, given the current payment status of the loan and the value of any underlying collateral. Loans for which specific reserves are provided are excluded from the calculation of general reserves.

For purposes of determining general reserves, United segments the loan portfolio into broad categories with similar risk elements. Those categories and their specific risks are described below.

Commercial (secured by real estate) – Loans in this category are susceptible to declines in general economic conditions and occupancy rates. Business failure, lack of a suitable alternative use for the property and environmental contamination are also risks common to this segment of the loan portfolio.

Commercial & industrial – Risks to this loan category include industry concentrations and the inability to monitor the condition of the collateral which often consists of inventory, accounts receivable and other non real estate assets. Equipment and inventory obsolescence can also pose a risk. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service debt.

Commercial construction – Risks common to commercial construction loans are cost overruns, changes in market demand for property and inadequate long-term financing arrangements.

Residential mortgage – Residential mortgage loans are susceptible to weakening general economic conditions and increases in unemployment rates. Declining real estate values can reduce or eliminate the borrower’s home equity which can be particularly troubling for home equity lines.

Residential construction – Residential construction loans are susceptible to the same risks as commercial construction loans. Changes in market demand for property leads to longer marketing times resulting in higher carrying costs and declining values.

Consumer installment – Risks common to consumer installment loans include unemployment and changes in local economic conditions as well as the inability to monitor collateral consisting of personal property.

Management outsources loan review on a rotating basis to ensure objectivity in the loan review process and to challenge and corroborate the loan grading system. The loan review function provides additional analysis used in determining the adequacy of the allowance for loan losses. To supplement the outsourced loan review, management also has an internal loan review department that is independent of the lending function.

Management believes the allowance for loan losses is appropriate at December 31, 2011. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review United’s allowance for loan losses. Such agencies may require United to recognize additions or deductions to the allowance based on their judgment and information available to them at the time of their examination.

Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the related assets. Costs incurred for maintenance and repairs are expensed as incurred. The range of estimated useful lives for buildings and improvements is 15 to 40 years, for land improvements, 10 to 35 years, and for furniture and equipment, 3 to 10 years.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill and other intangible assets deemed to have an indefinite useful life are not amortized but instead are subject to an annual review for impairment. Impairment tests may be performed more often if events or circumstances indicate impairment may exist.

Also in connection with business combinations involving banks and branch locations, United generally records core deposit intangibles representing the value of the acquired core deposit base. Core deposit intangibles are amortized over the estimated useful life of the deposit base, generally on a straight-line or accelerated basis not exceeding 10 years. The remaining useful lives of core deposit intangibles are evaluated periodically to determine whether events and circumstances warrant a revision to the remaining period of amortization.

Foreclosed Properties

Foreclosed property is initially recorded at fair value, less cost to sell. If the fair value, less cost to sell at the time of foreclosure is less than the loan balance, the deficiency is recorded as a loan charge-off against the allowance for loan losses. If the fair value, less cost to sell, of the foreclosed property decreases during the holding period, a valuation allowance is established with a charge to operating expenses. When the foreclosed property is sold, a gain or loss is recognized on the sale for the difference between the sales proceeds and the carrying amount of the property. Financed sales of foreclosed property are accounted for in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Topic 360, Subtopic 20, Real Estate Sales (“ASC 360-20”).

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from United, the transferee obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets and United does not maintain effective control over the transferred assets through an agreement to repurchase them before maturity.

FHLB Stock

The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on the ultimate recovery of par value. Both cash and stock dividends are reported as income. United’s FHLB stock is included in the balance of “other assets” in the consolidated balance sheet.

Bank Owned Life Insurance

United has purchased life insurance policies on certain key executives and members of management. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other changes or other amounts due that are probable at settlement.

Loan Commitments and Related Financial Instruments

Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The face amount for these items represents the exposure to loss before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Income Taxes

Deferred tax assets and liabilities are recorded for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the assets and liabilities are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income taxes during the period that includes the enactment date.

In the event the future tax consequences of differences between the financial reporting bases and the tax bases of United’s assets and liabilities results in deferred tax assets, an evaluation of the probability of being able to realize the future benefits indicated by such asset is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than not that some or all of the deferred tax asset will not be realized. In assessing the realizability of the deferred tax assets, management considers the scheduled reversals of deferred tax liabilities, projected future taxable earnings and prudent and feasible tax planning strategies. Management weighs both the positive and negative evidence, giving more weight to evidence that can be objectively verified.

The income tax benefit or expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50 percent likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

United recognizes interest and / or penalties related to income tax matters in income tax expense.

Mortgage Banking Derivatives

Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free standing derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest rate on the loan is locked. United enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into in order to hedge the change in interest rates resulting from its commitments to fund the loans. United’s forward commitments for the future delivery of mortgage loans are based on United’s “best efforts” and therefore United is not penalized if a loan is not delivered to the investor if the loan did not get originated. Changes in the fair values of these derivatives generally offset each other and are included in “mortgage loan and other related fees” in the consolidated statement of operations.

Derivative Instruments and Hedging Activities

United’s interest rate risk management strategy incorporates the use of derivative instruments to minimize fluctuations in net income that are caused by interest rate volatility. United’s goal is to manage interest rate sensitivity by modifying the repricing or maturity characteristics of certain balance sheet assets and liabilities so that the net interest margin is not, on a material basis, adversely affected by movements in interest rates. United views this strategy as a prudent management of interest rate risk, such that net income is not exposed to undue risk presented by changes in interest rates.

In carrying out this part of its interest rate risk management strategy, United uses interest rate derivative contracts. The two primary types of derivative contracts used by United to manage interest rate risk are interest rate swaps and interest rate floors.

Interest rate swaps generally involve the exchange of fixed- and variable-rate interest payments between two parties, based on a common notional principal amount and maturity date.

Interest rate floors are options that entitle the purchaser to receive payments from the counterparty equal to the difference between the rate in an underlying index (i.e. LIBOR, Prime) and a strike rate when the index falls below the strike rate. Similar to swaps, interest rate floors are based on a common notional principal amount and maturity date. The premium paid to the counterparty to purchase the floor is amortized into earnings over the life of the contract. United’s hedging strategies involving interest rate derivatives are classified as either Fair Value Hedges or Cash Flow Hedges, depending on the rate characteristics of the hedged item.

Fair Value Hedge: As a result of interest rate fluctuations, fixed-rate assets and liabilities will appreciate or depreciate in fair value. When effectively hedged, this appreciation or depreciation will generally be offset by fluctuations in the fair value of the derivative instruments that are linked to the hedged assets and liabilities. This strategy is referred to as a fair value hedge.

Cash Flow Hedge: Cash flows related to floating-rate assets and liabilities will fluctuate with changes in an underlying rate index. When effectively hedged, the increases or decreases in cash flows related to the floating rate asset or liability will generally be offset by changes in cash flows of the derivative instrument designated as a hedge. This strategy is referred to as a cash flow hedge.

By using derivative instruments, United is exposed to credit and market risk. If the counterparty fails to perform, credit risk is equal to the fair value gain in a derivative. When the fair value of a derivative contract is positive, this situation generally indicates that the counterparty is obligated to pay United, and, therefore, creates a repayment risk for United. When the fair value of a derivative contract is negative, United is obligated to pay the counterparty and, therefore, has no repayment risk. United minimizes the credit risk in derivative instruments by entering into transactions with high-quality counterparties that are reviewed periodically by United. From time to time, United may require the counterparties to pledge securities as collateral to cover the net exposure.

United’s derivative activities are monitored by its asset/liability management committee as part of that committee’s oversight of United’s asset/liability and treasury functions. United’s asset/liability committee is responsible for implementing various hedging strategies that are developed through its analysis of data from financial simulation models and other internal and industry sources. The resulting hedging strategies are then incorporated into the overall interest-rate risk management process.

United recognizes the fair value of derivatives as assets or liabilities in the financial statements. The accounting for the changes in the fair value of a derivative depends on the intended use of the derivative instrument at inception. The change in fair value of instruments used as fair value hedges is accounted for in the net income of the period simultaneous with accounting for the fair value change of the item being hedged. The change in fair value of the effective portion of cash flow hedges is accounted for in other comprehensive income rather than net income. Changes in fair value of derivative instruments that are not intended as a hedge are accounted for in the net income of the period of the change.

Earnings Per Common Share

Basic earnings per common share is net loss available to common shareholders divided by the weighted average number of common shares outstanding during the period. All outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities for this calculation. Additionally, shares issuable to participants in United’s deferred compensation plan are considered to be participating securities for purposes of calculating basic earnings per share. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options, warrants and securities convertible into common stock.

Loss Contingencies

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are such matters that will have a material effect on the financial statements.

Restrictions on Cash

A portion of the cash on hand and on deposit with the Federal Reserve Bank was required to meet regulatory reserve requirements.

Dividend Restrictions

Banking regulations require maintaining certain capital levels and may limit dividends paid by the Bank to United or by United to shareholders. United is currently required to obtain approval of the Federal Reserve Bank before declaring any dividends from the holding company.

Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions as more fully disclosed in Note 22. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Stock-Based Compensation

United uses the fair value method of recognizing expense for stock-based compensation based on the fair value of option and restricted stock awards at the date of grant as prescribed by Accounting Standards Codification Topic 781-10 Compensation-Stock Compensation.

Comprehensive Income

GAAP normally requires that recognized revenues, expenses, gains and losses be included in net income. In addition to net income, other components of comprehensive income include the after-tax effect of changes in unrealized gains and losses on available for sale securities and derivative financial instruments accounted for as cash flow hedges. These items are reported as a separate component of shareholders’ equity. United presents comprehensive income as a component of the statement of changes in shareholders’ equity.

Reclassifications and Reverse Stock Split

Certain 2010 and 2009 amounts have been reclassified to conform to the 2011 presentation. On June 17, 2011, United completed a 1-for-5 reverse stock split, whereby each 5 shares of United’s common stock was reclassified into one share of common stock, and each 5 shares of United’s non-voting common stock was reclassified into one share of non-voting common stock. All share and per share amounts for all periods presented have been adjusted to reflect the reverse split as though it had occurred prior to the earliest period presented.

Accounting Standards Updates

12 Months Ended

Dec. 31, 2011

Accounting Standards Updates [Abstract]

Accounting Standards Updates

(2)

Accounting Standards Updates

In December 2011, the FASB issued Accounting Standards Update No. 2011-10, Derecognition of in Substance Real Estate – a Scope Clarification (“ASU No. 2011-10”). ASU No. 2011-10 addresses when a parent ceases to have a controlling interest in a subsidiary that is in substance real estate due to default on the subsidiary’s nonrecourse debt. Generally the parent would not satisfy the requirements to derecognize the in substance real estate before the legal transfer of the real estate to the lender and the extinguishment of the related debt. Therefore, the parent would continue to include the subsidiary’s real estate, debt and results of operations in its consolidated financial statements until the legal title to the real estate is transferred, even if the parent ceases to have a controlling interest under Subtopic 810-10. This guidance is effective for fiscal years and interim periods beginning after June 15, 2012, and should be applied on a prospective basis to deconsolidation events occurring after the effective date. It is not expected to have a material impact on United’s financial position, results of operation or disclosures.

In December 2011, the FASB issued Accounting Standards Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities (“ASU No. 2011-11”). ASU No. 2011-11 requires disclosures to provide information to help reconcile differences in offsetting requirements under U.S. GAAP and International Financial Reporting Standards (“IFRS”). The new disclosure requirements mandate that entities disclose both gross and net information about instruments and transactions eligible for offset as well as collateral received and posted in connection with master netting agreements or similar arrangements. The guidance is effective for annual reporting periods beginning January 1, 2013 and interim periods within those annual periods. It is not expected to have a material impact on United’s financial position or results of operations.

In December 2011, the FASB issued Accounting Standards Update No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (“ASU No. 2011-12”). ASU No. 2011-12 defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. While the FASB is considering the operational concerns about the presentation requirements for classification adjustments, entities will continue to report reclassifications out of accumulated comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. The amendments in ASU No. 2011-12 are effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2011. It is not expected to have a material impact on United’s financial position or results of operations, or even disclosures, since it is deferring a previously required disclosure item until further deliberations are complete.

- Definition

The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period.

+ References + Details

Mergers and Acquisitions

12 Months Ended

Dec. 31, 2011

Mergers and Acquisitions [Abstract]

Mergers and Acquisitions

(3)

Mergers and Acquisitions

On June 19, 2009, the Bank purchased substantially all the assets and assumed substantially all the liabilities of Southern Community Bank (“SCB”) from the FDIC, as Receiver of SCB. SCB operated five commercial banking branches on the south side of Atlanta in Fayetteville, Peachtree City, Locust Grove and Newnan, Georgia. The FDIC took SCB under receivership upon SCB’s closure by the Georgia Department of Banking and Finance at the close of business on June 19, 2009. The transaction resulted in a cash payment of $31 million from the FDIC to the Bank. Further, the Bank and the FDIC entered loss sharing agreements regarding future losses incurred on loans and foreclosed loan collateral existing at June 19, 2009. Under the terms of the loss sharing agreements, the FDIC will absorb 80 percent of losses and share 80 percent of loss recoveries on the first $109 million of losses and, absorb 95 percent of losses and share in 95 percent of loss recoveries on losses exceeding $109 million. The term for loss sharing on 1-4 Family loans is ten years, while the term for loss sharing on all other loans is five years.

Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date. The carryover of the related allowance for loan losses is prohibited. Purchased loans are accounted for under Accounting Standards Codification Topic 310, Subtopic 30, Loans or Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”), when the loans have evidence of credit deterioration since origination and it is probable at the date of acquisition that United will not collect all contractually required principal and interest payments. Evidence of credit quality deterioration as of the purchase date may include statistics such as past due and non-accrual status. Generally, acquired loans that meet United’s definition of non-accrual status fall within the scope of ASC 310-30. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the non-accretable difference, which is deducted from the carrying amount of loans. Subsequent decreases to the expected cash flows will generally result in a provision for loan losses. Subsequent increases in cash flows result in a reversal of the provision for loan losses to the extent of prior charges or a reversal of the non-accretable difference with a positive impact on interest revenue. Further, any excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable yield and is recognized into interest revenue over the remaining life of the loan, when there is reasonable expectation about the amount and timing of such cash flows.

Under the loss sharing agreements, the portion of the losses expected to be indemnified by the FDIC is considered an indemnification asset in accordance with ASC 805, Business Combinations. The indemnification asset, referred to as “estimated loss reimbursement from the FDIC” is included in the balance of “assets covered by loss sharing agreements with the FDIC” on the consolidated balance sheet. The indemnification asset was recognized at fair value, which was estimated at the acquisition date based on the terms of the loss sharing agreement, which calls for the FDIC to reimburse 80 percent of the losses on acquired loans and foreclosed properties up to $109 million, and 95 percent of any losses that exceed $109 million. The indemnification asset is expected to be collected over a four year average life. No valuation allowance was required.

Loans, foreclosed property and the estimated FDIC reimbursement resulting from the loss share agreements with the FDIC are reported as “assets covered by loss sharing agreements with the FDIC” in the consolidated balance sheet.

The table below shows the components of covered assets at December 31, 2011 (in thousands):

		September 30,		September 30,		September 30,		September 30,
Assets Covered by Loss Sharing Agreements with the FDIC	Purchased Impaired Loans		Other Purchased Loans		Other		Total

Construction and land development	$	547	$	10,592	$	—	$	11,139
Commercial (secured by real estate)		—		32,934		—		32,934
Residential mortgage		145		7,970		—		8,115
Commercial & industrial		—		2,133		—		2,133
Consumer installment		5		156		—		161

Total covered loans		697		53,785		—		54,482
Covered foreclosed property		—		—		10,371		10,371
Estimated loss reimbursement from the FDIC		—		—		13,292		13,292

Total covered assets	$	697	$	53,785	$	23,663	$	78,145

Covered loans are initially recorded at fair value at the acquisition date. Subsequent decreases in the amount expected to be collected results in a provision for loan losses charged to earnings and an increase in the estimated FDIC reimbursement. Covered foreclosed property is initially recorded at its estimated fair value.

On the acquisition date, the preliminary estimate of the contractually required payments receivable for all ASC 310-30 loans acquired was $70.8 million, the cash flows expected to be collected were $24.5 million including interest, and the estimated fair value of the loans was $23.6 million. These amounts were determined based upon the estimated remaining life of the underlying loans, which includes the effects of estimated prepayments. A majority of these loans were valued based on the liquidation value of the underlying collateral, because the expected cash flows are primarily based on the liquidation of the underlying collateral and the timing and amount of the cash flows could not be reasonably estimated.

Core deposit intangibles related to this acquisition are being amortized over a period of 10 years.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Appendix F
-Paragraph F4
-Subparagraph e

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e6927-128479

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1490-128463

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e7008-128479

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1500-128463

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e6996-128479

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1524-128463

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1392-128463

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e7000-128479

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1497-128463

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1486-128463

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1383-128463

+ Details

Cash Flows

12 Months Ended

Dec. 31, 2011

Cash Flows [Abstract]

Cash Flows

(4)

Cash Flows

In connection with United’s 2009 acquisition of SCB, assets with a fair value of $378 million were acquired and liabilities totaling approximately $367 million were assumed.

During 2011, 2010 and 2009, non-accrual loans having a value of $65.7 million, $238 million and $240 million, respectively, were transferred to foreclosed property. Also, during 2011, 2010 and 2009, United financed the sale of foreclosed properties with loans totaling $21.1 million, $56.9 million and $10.8 million, respectively.

At December 31, 2011, United had $10.3 million in securities purchases that had not settled.

Investment Securities

12 Months Ended

Dec. 31, 2011

Securities and Investment Securities [Abstract]

Investment Securities

(5)

Investment Securities

In 2010, securities available for sale with a fair value of $315 million were transferred to held to maturity. The securities were transferred at their fair value on the date of transfer. The unrealized gain of $7.1 million on the transferred securities is being amortized into interest revenue as an adjustment to the yield on those securities over the remaining life of the transferred securities.

At both December 31, 2011 and 2010, securities with a carrying value of $1.72 billion and $1.43 billion, respectively, were pledged to secure public deposits and FHLB advances.

The cost basis, unrealized gains and losses, and fair value of securities held to maturity at December 31, 2011 and 2010 are listed below (in thousands):

		September 30,		September 30,		September 30,		September 30,
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of December 31, 2011
U.S. Government agencies	$	5,000	$	6	$	—	$	5,006
State and political subdivisions		51,903		4,058		13		55,948
Mortgage-backed securities⁽¹⁾		273,300		9,619		342		282,577

Total	$	330,203	$	13,683	$	355	$	343,531


As of December 31, 2010
U.S. Government agencies	$	11,939	$	79	$	—	$	12,018
State and political subdivisions		47,007		416		1,005		46,418
Mortgage-backed securities⁽¹⁾		206,861		2,700		9		209,552

Total	$	265,807	$	3,195	$	1,014	$	267,988

⁽¹⁾	All are residential type mortgage-backed securities

The cost basis, unrealized gains and losses, and fair value of securities available for sale at December 31, 2011 and 2010 are listed below (in thousands):

		September 30,		September 30,		September 30,		September 30,
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of December 31, 2011
U.S. Government agencies	$	43,592	$	158	$	—	$	43,750
State and political subdivisions		24,997		1,345		3		26,339
Mortgage-backed securities⁽¹⁾		1,576,064		33,988		143		1,609,909
Corporate bonds		119,110		—		11,432		107,678
Other		2,371		—		—		2,371

Total	$	1,766,134	$	35,491	$	11,578	$	1,790,047

As of December 31, 2010
U.S. Government agencies	$	99,969	$	67	$	1,556	$	98,480
State and political subdivisions		27,600		878		36		28,442
Mortgage-backed securities⁽¹⁾		963,475		29,204		1,671		991,008
Corporate bonds		105,359		192		1,516		104,035
Other		2,452		—		—		2,452

Total	$	1,198,855	$	30,341	$	4,779	$	1,224,417

⁽¹⁾	All are residential type mortgage-backed securities

The following summarizes securities held to maturity in an unrealized loss position as of December 31, 2011 (in thousands):

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of December 31, 2011

State and political subdivisions	$	—	$	—	$	363	$	13	$	363	$	13
Mortgage-backed securities		10,967		342		—				10,967		342

Total unrealized loss position	$	10,967	$	342	$	363	$	13	$	11,330	$	355


As of December 31, 2010

State and political subdivisions	$	28,949	$	1,005	$	—	$	—	$	28,949	$	1,005
Mortgage-backed securities		1,951		9		—		—		1,951		9

Total unrealized loss position	$	30,900	$	1,014	$	—	$	—	$	30,900	$	1,014

The following summarizes securities available for sale in an unrealized loss position as of December 31, 2011 and 2010 (in thousands):

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of December 31, 2011

State and political subdivisions	$	—	$	—	$	11	$	3	$	11	$	3
Mortgage-backed securities		98,687		110		22,719		33		121,406		143
Corporate bonds		42,864		5,197		64,765		6,235		107,629		11,432

Total unrealized loss position	$	141,551	$	5,307	$	87,495	$	6,271	$	229,046	$	11,578


As of December 31, 2010

U.S. Government agencies	$	68,412	$	1,556	$	—	$	—	$	68,412	$	1,556
State and political subdivisions		1,082		30		12		6		1,094		36
Mortgage-backed securities		59,505		1,630		2,799		41		62,304		1,671
Corporate bonds		69,985		1,516		—		—		69,985		1,516

Total unrealized loss position	$	198,984	$	4,732	$	2,811	$	47	$	201,795	$	4,779

At December 31, 2011, there were 24 available for sale securities and 3 held to maturity securities that were in an unrealized loss position. United does not intend to sell nor believes it will be required to sell securities in an unrealized loss position prior to the recovery of its amortized cost basis. Unrealized losses at December 31, 2011 are primarily related to changes in interest rates, however the unrealized losses in corporate bonds also reflect downgrades in the underlying securities ratings. The bonds remain above investment grade and United does not consider them to be impaired. Unrealized losses at December 31, 2010 were primarily attributable to changes in interest rates.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, among other factors. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analyst’s reports. During 2010 and 2009, United recorded impairment losses of $950,000 and $1.24 million, respectively, on investments in financial institutions that failed or otherwise showed evidence of other-than-temporary impairment. No impairment charges were recognized during 2011.

Realized gains and losses are derived using the specific identification method for determining the cost of the securities sold.

The following summarizes securities sales activities for the years ended December 31, 2011, 2010 and 2009 (in thousands):

		September 30,			September 30,			September 30,
	2011			2010			2009

Proceeds from sales	$	128,217		$	75,528		$	328,968


Gross gains on sales	$	1,173		$	3,751		$	5,291
Gross losses on sales		(331	)		(249	)		(1,291	)
Impairment losses		—			(950	)		(1,244	)


Net gains on sales of securities	$	842		$	2,552		$	2,756


Income tax expense attributable to sales	$	328		$	993		$	1,072

At year-end 2011 and 2010, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

The amortized cost and fair value of available for sale and held to maturity securities at December 31, 2011, by contractual maturity, are presented in the following table (in thousands):

		September 30,		September 30,		September 30,		September 30,
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Government agencies:
5 to 10 years	$	34,995	$	35,120	$	—	$	—
More than 10 years		8,597		8,630		5,000		5,006

		43,592		43,750		5,000		5,006


State and political subdivisions:
Within 1 year		4,467		4,481		—		—
1 to 5 years		14,217		15,080		4,817		5,108
5 to 10 years		5,465		5,872		20,978		22,836
More than 10 years		848		906		26,108		28,004

		24,997		26,339		51,903		55,948


Corporate bonds:
1 to 5 years		18,571		16,596		—		—
5 to 10 years		99,539		90,782		—		—
More than 10 years		1,000		300		—		—

		119,110		107,678		—		—


Other:
More than 10 years		2,371		2,371		—		—

		2,371		2,371		—		—


Total securities other than mortgage-backed securities:
Within 1 year		4,467		4,481		—		—
1 to 5 years		32,788		31,676		4,817		5,108
5 to 10 years		139,999		131,774		20,978		22,836
More than 10 years		12,816		12,207		31,108		33,010
Mortgage-backed securities		1,576,064		1,609,909		273,300		282,577


	$	1,766,134	$	1,790,047	$	330,203	$	343,531

Maturities of mortgage-backed securities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Loans and Allowance for Loan Losses

12 Months Ended

Dec. 31, 2011

Loans and Allowance for Loan Losses [Abstract]

Loans and Allowance for Loan Losses

(6)

Loans and Allowance for Loan Losses

Major classifications of loans at December 31, 2011 and 2010 are summarized as follows (in thousands):

		September 30,		September 30,
	2011		2010
Commercial (secured by real estate)	$	1,821,414	$	1,761,424
Commercial & industrial		428,249		441,518
Commercial construction		164,155		296,582

Total commercial		2,413,818		2,499,524
Residential mortgage		1,134,902		1,278,780
Residential construction		448,391		695,166
Consumer installment		112,503		130,656


Total loans		4,109,614		4,604,126

Less allowance for loan losses		114,468		174,695


Loans, net	$	3,995,146	$	4,429,431

The Bank makes loans and extensions of credit to individuals and a variety of firms and corporations located primarily in counties in north Georgia, the Atlanta, Georgia MSA, the Gainesville, Georgia MSA, coastal Georgia, western North Carolina and east Tennessee. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate and is dependent upon the real estate market.

Changes in the allowance for loan losses are summarized as follows (in thousands):

		September 30,		September 30,		September 30,
	2011		2010		2009
Balance beginning of period	$	174,695	$	155,602	$	122,271
Provision for loan losses		251,000		223,000		310,000
Charge-offs:
Commercial (secured by real estate)		59,468		33,593		21,796
Commercial & industrial		24,890		10,837		11,322
Commercial construction		55,730		9,993		9,908
Residential mortgage		53,707		28,806		18,997
Residential construction		118,916		136,666		219,168
Consumer installment		3,594		4,828		5,115

Total loans charged-off		316,305		224,723		286,306

Recoveries:
Commercial (secured by real estate)		448		1,167		520
Commercial & industrial		967		1,762		5,397
Commercial construction		203		431		12
Residential mortgage		738		867		411
Residential construction		1,678		15,370		2,253
Consumer installment		1,044		1,219		1,044

Total recoveries		5,078		20,816		9,637

Net charge-offs		311,227		203,907		276,669

Balance end of period	$	114,468	$	174,695	$	155,602

At December 31, 2011 and 2010, loans with a carrying value of $1.52 billion and $1.02 billion were pledged as collateral to secure FHLB advances and other contingent funding sources.

The following table presents the balance and activity in the allowance for loan losses by portfolio segment and the recorded investment in loans by portfolio segment based on the impairment method as of December 31, 2011and December 31, 2010 (in thousands):

		Sep 30,			Sep 30,			Sep 30,			Sep 30,			Sep 30,			Sep 30,			Sep 30,			Sep 30,
	Commercial (Secured by Real Estate)			Commercial & Industrial			Commercial Construction			Residential Mortgage			Residential Construction			Consumer Installment			Unallocated			Total
Year Ended December 31, 2011

Allowance for loan losses:
Beginning balance	$	31,191		$	7,580		$	6,780		$	22,305		$	92,571		$	3,030		$	11,238		$	174,695
Charge-offs		(59,468	)		(24,890	)		(55,730	)		(53,707	)		(118,916	)		(3,594	)		—			(316,305	)
Recoveries		448			967			203			738			1,678			1,044			—			5,078
Provision		59,473			22,024			54,844			59,740			55,046			1,644			(1,771	)		251,000

Ending balance	$	31,644		$	5,681		$	6,097		$	29,076		$	30,379		$	2,124		$	9,467		$	114,468

Ending allowance attributable to loans:
Individually evaluated for impairment	$	7,491		$	1,117		$	236		$	2,234		$	3,731		$	16		$	—		$	14,825
Collectively evaluated for impairment		24,153			4,564			5,861			26,842			26,648			2,108			9,467			99,643

Total ending allowance balance	$	31,644		$	5,681		$	6,097		$	29,076		$	30,379		$	2,124		$	9,467		$	114,468

Loans:
Individually evaluated for impairment	$	107,831		$	57,828		$	26,245		$	18,376		$	46,687		$	292		$	—		$	257,259
Collectively evaluated for impairment		1,713,583			370,421			137,910			1,116,526			401,704			112,211			—			3,852,355

Total loans	$	1,821,414		$	428,249		$	164,155		$	1,134,902		$	448,391		$	112,503		$	—		$	4,109,614

Year Ended December 31, 2010

Allowance for loan losses:
Beginning balance	$	19,208		$	6,892		$	5,861		$	17,266		$	93,585		$	2,545		$	10,245		$	155,602
Charge-offs		(33,593	)		(10,837	)		(9,993	)		(28,806	)		(136,666	)		(4,828	)		—			(224,723	)
Recoveries		1,167			1,762			431			867			15,370			1,219			—			20,816
Provision		44,409			9,763			10,481			32,978			120,282			4,094			993			223,000

Ending balance	$	31,191		$	7,580		$	6,780		$	22,305		$	92,571		$	3,030		$	11,238		$	174,695

Ending allowance attributable to loans:
Individually evaluated for impairment	$	268		$	—		$	—		$	137		$	644		$	—		$	—		$	1,049
Collectively evaluated for impairment		30,923			7,580			6,780			22,168			91,927			3,030			11,238			173,646

Total ending allowance balance	$	31,191		$	7,580		$	6,780		$	22,305		$	92,571		$	3,030		$	11,238		$	174,695

Loans:
Individually evaluated for impairment	$	41,818		$	5,874		$	20,311		$	15,468		$	39,505		$	—		$	—		$	122,976
Collectively evaluated for impairment		1,719,606			435,644			276,271			1,263,312			655,661			130,656			—			4,481,150

Total loans	$	1,761,424		$	441,518		$	296,582		$	1,278,780		$	695,166		$	130,656		$	—		$	4,604,126

In the ordinary course of business, the Bank grants loans to executive officers, and directors of the holding company and the Bank, including their immediate families and companies with which they are associated. Management believes that such loans are made on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with other customers. The following is a summary of such loans outstanding and the activity in these loans for the year ended December 31, 2011 (in thousands):

		September 30,
Balances at December 31, 2010	$	12,176
New loans and advances		3,064
Repayments		(9,475	)

Balances at December 31, 2011	$	5,765

United reviews all loans that are on nonaccrual with a balance of $500,000 or greater for impairment as well as accruing substandard relationships greater than $2 million and all TDRs. A loan is considered impaired when, based on current events and circumstances, it is probable that all amounts due, according to the contractual terms of the loan, will not be collected. All troubled debt restructurings are considered impaired regardless of accrual status. Impaired loans are measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, at the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. Interest payments received on impaired loans that are on nonaccrual status are applied as a reduction of the outstanding principal balance. For impaired loans not on nonaccrual status, interest is accrued according to the terms of the loan agreement. Impairment amounts are recorded quarterly and specific reserves are recorded in the allowance for loan losses.

In the first quarter of 2011, United’s Board of Directors adopted an accelerated problem asset disposition plan which included the bulk sale of $267 million in classified loans. Those loans were classified as held for sale at the end of the first quarter and were written down to the expected proceeds from the sale. The charge-offs on the loans transferred to held for sale in anticipation of the bulk loan sale which closed on April 18, 2011, increased first quarter 2011 loan charge-offs by $186 million. The actual loss on the bulk loan sale at closing was less than the amount charged-off in the first quarter, resulting in a $7.27 million reduction of second quarter 2011 charge-offs.

The recorded investments in individually evaluated impaired loans at December 31, 2011 and 2010 were as follows (in thousands):

		September 30,		September 30,
	2011		2010
Year-end loans with no allocated allowance for loan losses	$	188,509	$	115,338
Year-end loans with allocated allowance for loan losses		68,750		7,638

Total	$	257,259	$	122,976


Amount of allowance for loan losses allocated	$	14,825	$	1,049

The average balances of impaired loans and income recognized on impaired loans while they were considered impaired is presented below for the last three years (in thousands):

		September 30,		September 30,		September 30,
	2011		2010		2009

Average of individually impaired loans during year	$	126,640	$	170,039	$	229,109
Interest income recognized during impairment		2,662		—		—
Cash-basis interest income recognized		3,483		—		—

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2011 and 2010 (in thousands):

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	December 31, 2011						December 31, 2010
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial (secured by real estate)	$	82,887	$	76,215	$	—	$	60,238	$	39,588	$	—
Commercial & industrial		77,628		52,628		—		10,115		5,874		—
Commercial construction		24,927		23,609		—		33,898		20,311		—

Total commercial		185,442		152,452		—		104,251		65,773		—
Residential mortgage		13,845		10,804		—		21,528		14,968		—
Residential construction		38,955		25,190		—		59,502		34,597		—
Consumer installment		63		63		—		—		—		—

Total with no related allowance recorded		238,305		188,509		—		185,281		115,338		—


With an allowance recorded:
Commercial (secured by real estate)		31,806		31,616		7,491		2,230		2,230		268
Commercial & industrial		5,200		5,200		1,117		—		—		—
Commercial construction		2,636		2,636		236		—		—		—

Total commercial		39,642		39,452		8,844		2,230		2,230		268
Residential mortgage		7,642		7,572		2,234		500		500		137
Residential construction		21,629		21,497		3,731		14,480		4,908		644
Consumer installment		235		229		16		—		—		—

Total with an allowance recorded		69,148		68,750		14,825		17,210		7,638		1,049

Total	$	307,453	$	257,259	$	14,825	$	202,491	$	122,976	$	1,049

There were no loans more than 90 days past due and still accruing interest at December 31, 2011 and 2010. Nonaccrual loans at December 31, 2011 and 2010 were $127 million and $179 million, respectively. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually evaluated impaired loans with larger balances.

The following table presents the recorded investment (unpaid principal less amounts charged-off) in nonaccrual loans by loan class as of December 31, 2011 and 2010 (in thousands):

		September 30,		September 30,
	2011		2010
Commercial (secured by real estate)	$	27,322	$	44,927
Commercial & industrial		34,613		5,611
Commercial construction		16,655		21,374

Total commercial		78,590		71,912
Residential mortgage		22,358		51,083
Residential construction		25,523		54,505
Consumer installment		1,008		1,594

Total	$	127,479	$	179,094

The following table presents the aging of the recorded investment in past due loans as of December 31, 2011 and 2010 by class of loans (in thousands):

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	Loans Past Due								Loans Not Past Due
	30 - 59 Days		60 - 89 Days		> 90 Days		Total		Loans Not Past Due		Total
As of December 31, 2011

Commercial (secured by real estate)	$	8,036	$	4,182	$	10,614	$	22,832	$	1,798,582	$	1,821,414
Commercial & industrial		3,869		411		407		4,687		423,562		428,249
Commercial construction		166		—		1,128		1,294		162,861		164,155

Total commercial		12,071		4,593		12,149		28,813		2,385,005		2,413,818
Residential mortgage		15,185		4,617		9,071		28,873		1,106,029		1,134,902
Residential construction		3,940		2,636		10,270		16,846		431,545		448,391
Consumer installment		1,534		308		430		2,272		110,231		112,503

Total loans	$	32,730	$	12,154	$	31,920	$	76,804	$	4,032,810	$	4,109,614

As of December 31, 2010

Commercial (secured by real estate)	$	10,697	$	3,672	$	19,457	$	33,826	$	1,727,598	$	1,761,424
Commercial & industrial		2,016		2,620		3,092		7,728		433,790		441,518
Commercial construction		4,616		2,917		9,189		16,722		279,860		296,582

Total commercial		17,329		9,209		31,738		58,276		2,441,248		2,499,524
Residential mortgage		24,375		7,780		38,209		70,364		1,208,416		1,278,780
Residential construction		13,599		5,158		34,673		53,430		641,736		695,166
Consumer installment		2,104		462		808		3,374		127,282		130,656

Total loans	$	57,407	$	22,609	$	105,428	$	185,444	$	4,418,682	$	4,604,126

As of December 31, 2011 and 2010, United has allocated $8.65 million and $173,000, respectively, of specific reserves to customers whose loan terms have been modified in troubled debt restructurings. United committed to lend additional amounts totaling up to $1.12 million and $1.17 million as of December 31, 2011 and 2010, respectively, to customers with outstanding loans that are classified as troubled debt restructurings.

The modification of the terms of troubled debt restructurings included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date or an extension of the amortization period at a stated rate lower than the current market rate for new debt with similar risk; or a permanent reduction of the principal amount.

The following table presents additional information on troubled debt restructurings including the number of loan contracts restructured and the pre and post modification recorded investment (dollars in thousands):

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	December 31, 2011						December 31, 2010
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial (secured by real estate)		74	$	70,380	$	69,054		41	$	40,649	$	36,759
Commercial & industrial		18		806		806		7		645		364
Commercial construction		11		18,053		18,053		16		37,980		37,067

Total commercial		103		89,239		87,913		64		79,274		74,190
Residential mortgage		80		11,943		11,379		43		6,574		6,285
Residential construction		54		24,921		24,145		63		22,012		20,782
Consumer installment		34		298		293		7		124		124

Total loans		271	$	126,401	$	123,730		177	$	107,984	$	101,381

The following table presents new troubled debt restructurings during the year ended December 31, 2011 and those troubled debt restructurings that have subsequently defaulted, which we define as 90 days or more past due (dollars in thousands):

		September 30,		September 30,		September 30,		September 30,		September 30,
			Pre- Modification Outstanding		Post- Modification Outstanding		Troubled Debt Restructurings That Have Subsequently Defaulted Within the Previous Twelve Months
New Troubled Debt Restructurings for the Year ended December 31, 2011	Number of Contracts		Recorded Investment		Recorded Investment		Number of Contracts		Recorded Investment

Commercial (secured by real estate)		57	$	56,981	$	56,031		4	$	1,447
Commercial & industrial		15		767		767		2		52
Commercial construction		9		16,243		16,243		—		—

Total commercial		81		73,991		73,041		6		1,499
Residential mortgage		75		11,008		10,444		9		718
Residential construction		44		22,584		21,821		9		1,289
Consumer installment		31		205		200		13		68

Total loans		231	$	107,788	$	105,506		37	$	3,574

Risk Ratings

United categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, current economic trends, among other factors. United analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. United uses the following definitions for its risk ratings:

Watch. Loans in this category are presently protected from apparent loss; however weaknesses exist that could cause future impairment, including the deterioration of financial ratios, past due status and questionable management capabilities. These loans require more than the ordinary amount of supervision. Collateral values generally afford adequate coverage, but may not be immediately marketable.

Substandard. These loans are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged. Specific and well-defined weaknesses exist that may include poor liquidity and deterioration of financial ratios. The loan may be past due and related deposit accounts experiencing overdrafts. There is the distinct possibility that the Company will sustain some loss if deficiencies are not corrected. Immediate corrective action is necessary.

Doubtful. Specific weaknesses characterized as Substandard that are severe enough to make collection in full highly questionable and improbable. There is no reliable secondary source of full repayment.

Loss. Loans categorized as Loss have the same characteristics as Doubtful however probability of loss is certain. Loans classified as Loss are charged-off.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are generally new loans that have not yet been assigned a grade.

As of December 31, 2011 and 2010, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	Pass		Watch		Substandard		Doubtful / Loss		Not Rated		Total
As of December 31, 2011
Commercial (secured by real estate)	$	1,561,204	$	89,830	$	170,380	$	—	$	—	$	1,821,414
Commercial & industrial		369,343		7,630		50,366		—		910		428,249
Commercial construction		114,817		14,173		35,165		—		—		164,155

Total commercial		2,045,364		111,633		255,911		—		910		2,413,818
Residential mortgage		993,779		42,323		98,800		—		—		1,134,902
Residential construction		312,527		38,386		97,478		—		—		448,391
Consumer installment		107,333		1,411		3,759		—		—		112,503

Total loans	$	3,459,003	$	193,753	$	455,948	$	—	$	910	$	4,109,614

As of December 31, 2010
Commercial (secured by real estate)	$	1,476,974	$	82,762	$	201,688	$	—	$	—	$	1,761,424
Commercial & industrial		402,969		15,153		22,379		—		1,017		441,518
Commercial construction		174,049		10,413		112,120		—		—		296,582

Total commercial		2,053,992		108,328		336,187		—		1,017		2,499,524
Residential mortgage		1,103,487		38,378		136,915		—		—		1,278,780
Residential construction		398,926		82,973		213,267		—		—		695,166
Consumer installment		125,134		650		4,872		—		—		130,656

Total loans	$	3,681,539	$	230,329	$	691,241	$	—	$	1,017	$	4,604,126

- Definition

The entire disclosure for claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 3, 4
-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 7
-Article 9

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 13
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.3,4)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5074-111524

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5066-111524

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5162-111524

+ Details

Foreclosed Property

12 Months Ended

Dec. 31, 2011

Foreclosed Property [Abstract]

Foreclosed Property

(7)

Foreclosed Property

Major classifications of foreclosed properties at December 31, 2011 and 2010 are summarized as follows (in thousands):

		September 30,			September 30,
	2011			2010

Commercial real estate	$	10,866		$	25,893
Commercial construction		3,336			17,808

Total commercial		14,202			43,701
Residential mortgage		7,840			23,687
Residential construction		29,799			91,385

Total foreclosed property		51,841			158,773
Less valuation allowance		18,982			16,565

Foreclosed property, net	$	32,859		$	142,208

Balance as a percentage of original loan unpaid principal		35.9	%		64.4	%

Activity in the valuation allowance for foreclosed property is presented in the following table (in thousands):

		September 30,			September 30,			September 30,
	2011			2010			2009

Balance at beginning of year	$	16,565		$	7,433		$	6,480
Additions charged to expense		57,368			25,755			9,004
Charge-offs upon disposition		(54,951	)		(16,623	)		(8,051	)

Balance at end of year	$	18,982		$	16,565		$	7,433

Expenses related to foreclosed assets include (in thousands):

		September 30,		September 30,		September 30,
	2011		2010		2009

Net loss on sales	$	11,038	$	23,571	$	8,877
Provision for unrealized losses		57,368		25,755		9,004
Operating expenses, net of rental income		10,499		16,381		14,484

Total foreclosed property expense	$	78,905	$	65,707	$	32,365

Premises and Equipment

12 Months Ended

Dec. 31, 2011

Premises and Equipment [Abstract]

Premises and Equipment

(8)

Premises and Equipment

Premises and equipment at December 31, 2011 and 2010 are summarized as follows, (in thousands):

		September 30,		September 30,
	2011		2010

Land and land improvements	$	81,395	$	80,294
Buildings and improvements		115,226		112,318
Furniture and equipment		64,581		67,296
Construction in progress		1,008		1,486


		262,210		261,394

Less accumulated depreciation		87,122		83,155


Premises and equipment, net	$	175,088	$	178,239

Depreciation expense was $9.83 million, $10.6 million and $11.3 million for 2011, 2010 and 2009, respectively.

United leases certain branch properties and equipment under operating leases. Rent expense was $2.25 million, $2.23 million and $3.25 million for 2011, 2010 and 2009, respectively. United does not have any capital leases. Rent commitments under operating leases, before considering renewal options that generally are present, were as follows (in thousands):

		September 30,
2012	$	2,930
2013		2,531
2014		714
2015		552
2016		297
Thereafter		2,100

Total	$	9,124

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

(9)

Goodwill and Other Intangible Assets

A summary of changes in goodwill for the years ended December 31, 2011, 2010 and 2009 is presented below, (in thousands):

		September 30,		September 30,			September 30,
	2011		2010			2009
Beginning balance	$	—	$	210,590		$	305,590
Impairment charges		—		(210,590	)		(95,000	)

Ending balance	$	—	$	—		$	210,590

The entire balance of United’s goodwill was determined to be impaired in the third quarter of 2010 and accordingly, it was fully charged off.

United has finite-lived intangible assets capitalized on its balance sheet in the form of core deposit intangibles. These intangible assets are amortized over their estimated useful lives of no more than 10 years. A summary of core deposit intangible assets as of December 31, 2011 and 2010 is presented below, (in thousands):

		September 30,		September 30,
	2011		2010
Gross carrying amount	$	32,652	$	32,652
Less accumulated amortization		24,224		21,206

Net carrying amount	$	8,428	$	11,446

Amortization expense on finite-lived intangible assets was $3.02 million in 2011, $3.16 million for 2010 and $3.10 million for 2009. Amortization expense for each of the years 2012 through 2016 is estimated below (in thousands):

			September 30,
2012			2,918
2013			2,030
2014			1,349
2015			956
2016			879

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Deposits

12 Months Ended

Dec. 31, 2011

Federal Home Loan Bank Advances and Repurchase Agreements, Regulatory Matters and Deposits [Abstract]

Deposits

(10)

Deposits

At December 31, 2011, the contractual maturities of time deposits are summarized as follows (in thousands):

		September 30,
Maturing In:

2012	$	1,817,913
2013		273,027
2014		75,574
2015		101,991
2016		71,019
thereafter		18,669

	$	2,358,193

At December 31, 2011, United held $179 million in certificates of deposit obtained through the efforts of third party brokers. At December 31, 2010, United had $677 million of brokered certificates of deposit. The daily average balance of these brokered deposits totaled $401 million and $610 million in 2011 and 2010, respectively. The weighted average rates paid during 2011 and 2010 were 1.53% and 2.21%, respectively, and the weighted average rate as of December 31, 2011 was 2.16%. These deposits generally have maturity dates ranging from 1 week to 3 years and are included in the table above.

At December 31, 2011 and 2010, $910,000 and $1.02 million in overdrawn deposit accounts were reclassified as loans. No specific allowance for loan losses was deemed necessary for these accounts at December 31, 2011 and 2010.

- Definition

The entire disclosure for deposit liabilities including data and tables. It may include a description of the entity's deposit liabilities, the aggregate amount of time deposits (including certificates of deposit) in denominations of $100,000 or more at the balance sheet date; the aggregate amount of any demand deposits that have been reclassified as loan balances, such as overdrafts, at the balance sheet date; deposits that are received on terms other than those in the normal course of business, the amount of accrued interest on deposit liabilities; securities, mortgage loans or other financial instruments that serve as collateral for deposits; for time deposits having a remaining term of more than one year, the aggregate amount of maturities for each of the five years following the balance sheet date; and the weighted average interest rate for all deposit liabilities held by the entity.

+ References + Details

Federal Home Loan Bank Advances and Repurchase Agreements

12 Months Ended

Dec. 31, 2011

Federal Home Loan Bank Advances and Repurchase Agreements, Regulatory Matters and Deposits [Abstract]

Federal Home Loan Bank Advances AND REPURCHASE AGREEMENTS

(11)

Federal Home Loan Bank Advances

At December 31, 2011, United had advances totaling $40.6 million from the FHLB all of which were fixed rate advances. At December 31, 2010, United had advances totaling $55.1 million from the FHLB all of which were fixed rate advances. Interest payments and principal payments are due at various maturity dates with interest rates up to 4.49% at December 31, 2011. At December 31, 2011, the weighted average interest rate on FHLB advances was 4.25%, compared to 4.28% as of December 31, 2010. The FHLB advances are collateralized by commercial (secured by real estate) and residential mortgage loans, investment securities and FHLB stock.

At December 31, 2011, the maturities and current rates of outstanding advances were as follows (in thousands):

		September 30,	September 30,
	Amount
Maturing In:	Maturing		Current Rate Range
2012	$	10,500	4.39% — 4.39%
2014		30,000	2.85% — 4.49%
2016		125

	$	40,625

Timing of principal payments may differ from the maturity schedule shown above as some advances include call options that allow the FHLB to require repayment prior to the maturity date.

- Definition

The entire disclosure for borrowing from the Federal Home Loan Bank, including: (i) general description; (ii) title and nature of obligation; (iii) interest rate; (iv) payment terms; (v) maturity dates by year; (vi) collateral requirements; (vii) restrictive covenants; (viii) priority; (ix) conversion or redemption features; (x) carrying value of assets pledged as collateral; (xi) combined aggregate maturities for next five years; (xii) unused or available balances.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Audit and Accounting Guide (AAG)
-Number AAG-DEP
-Chapter 15
-Paragraph 37
-IssueDate 2006-05-01
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 14
-Subparagraph h
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 47
-Paragraph 17
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher OTS
-Name Federal Regulation (FR)
-Number Title 12
-Chapter V
-Section 563c.102
-Paragraph 15, 18
-Subsection I
-LegacyDoc This is a non-GAAP reference that was included in the 2009 taxonomy. It will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6479118&loc=d3e64650-112822

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6479336&loc=d3e64711-112823

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6802200&loc=d3e1835-112601

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03.13(a))
-URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878

+ Details

Short Term Borrowings

12 Months Ended

Dec. 31, 2011

Short-term Borrowings and Long-term Debt [Abstract]

Short-term Borrowings

(12)

Short-term Borrowings

United uses a number of sources of short-term borrowings to meet its liquidity needs including federal funds purchased, repurchase agreements and Federal Reserve discount window borrowings. The table below shows the amounts of short-term borrowings outstanding by type at December 31, 2011 and 2010 (in thousands):

		September 30,		September 30,
	2011		2010
Repurchase agreements	$	102,577	$	101,067

Total short-term borrowings	$	102,577	$	101,067

At December 31, 2011, United had $60 million in offsetting repurchase agreements / reverse repurchase agreements with the same counterparty that were netted in the consolidated balance sheet. United enters into collateral swap transactions from time to time as a source of additional revenue.

Long Term Debt

12 Months Ended

Dec. 31, 2011

Short-term Borrowings and Long-term Debt [Abstract]

Long-term Debt

(13)

Long-term Debt

Long-term debt at December 31, 2011 and 2010 consisted of the following (in thousands):

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	2011		2010		Issue Date		Stated Maturity Date		Earliest Call Date		Interest Rate
2002 subordinated debentures	$	30,500	$	30,500		2002		2012		2012		6.750	%
2003 subordinated debentures		35,000		35,000		2003		2015		2010		7.500
2008 subordinated debentures		—		30,000		2008		2015		2008		LIBOR + 4.00

Total subordinated debentures		65,500		95,500

United Community Capital Trust		21,650		21,650		1998		2028		2008		8.125
United Community Statutory Trust I		5,155		5,155		2000		2030		2010		10.600
United Community Capital Trust II		10,309		10,309		2000		2030		2010		11.295
Southern Bancorp Capital Trust I		4,382		4,382		2004		2034		2009		Prime + 1.00
United Community Statutory Trust II		12,004		11,932		2008		2038		2013		9.000
United Community Statutory Trust III		1,225		1,218		2008		2038		2013		Prime + 3.00

Total trust preferred securities		54,725		54,646

Total long-term debt	$	120,225	$	150,146

Interest is paid semiannually for all subordinated debentures and trust preferred securities.

Subordinated Debentures

Subordinated debentures qualify as Tier 2 capital under risk based capital guidelines. The 2003 subordinated debentures were callable at par on September 30, 2010 and are callable at par on September 30 of each year thereafter. At September 30, 2010, the interest rate increased to 7.50% and will remain at that rate until maturity or until it is called. The 2008 subordinated debentures are callable at any time and were called in August of 2011. United acquired $1 million of the 2002 subordinated debentures through its acquisition of Southern Community Bank and retired it upon acquisition in 2009.

Trust Preferred Securities

Trust preferred securities qualify as Tier 1 capital under risk based capital guidelines subject to certain limitations. The trust preferred securities are mandatorily redeemable upon maturity, or upon earlier redemption at a premium as provided in the indentures.

The trust preferred securities issued under United Community Statutory Trust II and United Community Statutory Trust III are callable at par any time after October 31, 2013. These trust preferred securities have attached warrants that allow the holder to redeem the trust preferred securities in exchange for common stock at the exercise price of $100 per share. The warrants can be exercised at any time prior to October 31, 2013, the fifth anniversary of their issuance, at which time the warrants expire.

Earnings Per Share

12 Months Ended

Dec. 31, 2011

Earnings Per Share [Abstract]

Earnings Per Share

(14)

Earnings Per Share

United is required to report on the face of the statement of operations, earnings (loss) per common share with and without the dilutive effects of potential common stock issuances from instruments such as options, convertible securities and warrants. Basic earnings per common share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per common share.

During the years ended December 31, 2011 and 2010, United accrued dividends on preferred stock, including accretion of discounts, as shown in the following table (in thousands):

		September 30,		September 30,
	2011		2010
Series A—6% fixed	$	13	$	13
Series B—5% fixed until December 6, 2013, 9% thereafter		10,401		10,303
Series D—LIBOR plus 9.6875%, resets quarterly		1,425		—

Total preferred stock dividends	$	11,839	$	10,316

All preferred stock dividends are payable quarterly.

Series B preferred stock was issued at a discount. Dividend amounts shown include discount accretion for each period.

The preferred stock dividends were subtracted from net loss in order to arrive at net loss available to common shareholders. There is no dilution from dilutive securities for the years ended December 31, 2011, 2010 and 2009, due to the antidilutive effect of the net loss for those periods.

The following table sets forth the computation of basic and diluted loss per common share for the years ended December 31, 2011, 2010 and 2009 (in thousands, except per share data):

		September 30,			September 30,			September 30,
	2011			2010			2009
Net loss available to common stockholders	$	(238,584	)	$	(512,660	)	$	(238,569	)


Loss per common share:
Basic / diluted	$	(5.97	)	$	(27.09	)	$	(19.76	)


Weighted average common shares:
Basic		39,943			18,925			12,075
Effect of dilutive securities:
Stock options		—			—			—
Warrants		—			—			—

Diluted		39,943			18,925			12,075

At December 31, 2011, United had of the following potentially dilutive stock options and warrants outstanding: a warrant to purchase 219,909 common shares at $61.40 per share issued to the U.S. Treasury in conjunction with the issuance of United’s Series B preferred stock; 129,670 shares issuable upon exercise of warrants attached to trust preferred securities with an exercise price of $100 per share; 583,647 shares issuable upon exercise of stock options granted to employees with a weighted average exercise price of $94.48; 414,644 shares issuable upon completion of vesting of restricted stock awards; 1,411,765 shares issuable upon exercise of warrants exercisable at $21.25 per share granted to Fletcher International in connection with a 2010 asset purchase and sale agreement; 2,476,191 shares issuable upon conversion of preferred stock if Fletcher International exercises its option to purchase $65 million in convertible preferred stock, convertible at $26.25 per share; 1,162,791 shares issuable upon exercise of warrants exercisable at $30.10 per share to be granted to Fletcher International upon exercise of its option to acquire preferred stock; and 1,551,126 shares issuable upon exercise of warrants owned by Elm Ridge Off Shore Fund and Elm Ridge Value Fund, exercisable at $12.50 per share.

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

(15)

Income Taxes

Income tax expense (benefit) for the years ended December 31, 2011, 2010 and 2009 is as follows (in thousands):

		September 30,			September 30,			September 30,
	2011			2010			2009
Current	$	(3,983	)	$	1,963		$	(40,667	)
Deferred		(94,808	)		(88,124	)		(53,864	)
Increase in valuation allowance		94,808			157,378			3,872


Total income tax benefit	$	(3,983	)	$	71,217		$	(90,659	)

The differences between the provision for income taxes and the amount computed by applying the statutory federal income tax rate of 35% to loss before income taxes are as follows (in thousands):

		September 30,			September 30,			September 30,
	2011			2010			2009
Pretax loss at statutory rates	$	(80,755	)	$	(151,302	)	$	(111,825	)
Add (deduct):
State taxes, net of federal benefit		(9,210	)		(9,431	)		(9,405	)
Nondeductible goodwill impairment charges		—			71,561			32,282
Bank owned life insurance earnings		(556	)		(606	)		(3,308	)
Adjustment to reserve for uncertain tax positions		(4,593	)		2,903			(852	)
Tax-exempt interest revenue		(836	)		(993	)		(1,120	)
Nondeductible interest expense		34			62			96
Tax credits		(350	)		(501	)		(501	)
Incentive stock option expense		—			—			52
Increase in valuation allowance		94,808			157,378			3,872
Other		(2,525	)		2,146			50

Total income tax benefit	$	(3,983	)	$	71,217		$	(90,659	)

The following summarizes the sources and expected tax consequences of future taxable deductions (revenue) which comprise the net deferred tax asset at December 31, 2011 and 2010, which is included in other assets (in thousands):

		September 30,		September 30,
	2011		2010
Deferred tax assets:
Allowances for loan losses	$	44,528	$	68,070
Net operating loss carryforwards		226,716		123,716
Deferred compensation		7,032		6,309
Reserve for losses on foreclosed properties		8,804		6,444
Nonqualified share based compensation		4,260		3,911
Accrued expenses		779		746
Investment in low income housing tax credit partnerships		1,562		1,302
Unamortized pension actuarial losses and prior service cost		1,848		—
Acquired intangible assets		74		—
Other		2,431		—


Total deferred tax assets		298,034		210,498


Deferred tax liabilities:
Unrealized gains on cash flow hedges		1,796		7,676
Unrealized gains on securities available for sale		9,882		11,417
Premises and equipment		3,989		4,636
Acquired intangible assets		—		1,824
Loan origination costs		3,503		3,455
Gain from acquisition of Southern Community Bank		4,629		6,933
Prepaid expenses		1,279		1,509
Other		—		1,570


Total deferred tax liabilities		25,078		39,020


Less valuation allowance		272,956		171,478


Net deferred tax asset	$	—	$	—

At December 31, 2011 and 2010, United did not report any deferred tax assets as it had established a full valuation allowance based on the weighting of the evidence supporting the realization of the deferred tax asset. Accounting Standards Codification Topic 740, Income Taxes, requires that companies assess whether a valuation allowance should be established against their deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard.

At December 31, 2011, United had state net operating loss carryforwards of approximately $33 million that begin to expire in 2023, and approximately $656 million that begin to expire in 2028, if not previously utilized. United has state tax credit carryforwards of approximately $7.6 million that begin to expire in 2012, if not previously utilized. United has $546 million in Federal net operating loss carryforwards that begin to expire in 2029, if not previously utilized. United has $1.6 million of Federal general business tax credits that begin to expire in 2028, if not previously utilized as well as $2.4 million in federal alternative minimum tax credits which have no expiration date.

A reconciliation of the beginning and ending unrecognized tax benefit is as follows (in thousands):

		September 30,			September 30,			September 30,
	2011			2010			2009
Balance at beginning of year	$	11,133		$	8,252		$	9,336
Decreases based on tax positions related to prior years		(3,369	)		(119	)		(216	)
Additions based on tax positions related to the current year		585			3,982			1,965
Decreases resulting from a lapse in the applicable statute of limitations		(1,362	)		(982	)		—
Decreases based on settlements with taxing authorities		(1,002	)		—			(2,833	)


Balance at end of year	$	5,985		$	11,133		$	8,252

Approximately $4.69 million of this amount would increase income from continuing operations, and thus affect United’s effective tax rate, if ultimately recognized into income.

It is United’s policy to recognize interest and penalties accrued relative to unrecognized tax benefits in their respective federal or state income taxes accounts. The total amount of interest and penalties recorded in the consolidated statement of operations for the year ended December 31, 2010 was $235,000. In 2011, United reversed $1.27 million in previously recorded penalties and interest as a result of statute expiration on affected returns, settlement with a state taxing authority and a change in estimate relating to prior year tax positions. The amount accrued for interest and penalties at December 31, 2011 and 2010 was $330,000 and $1.6 million, respectively.

United is currently under examination by certain taxing authorities. Based on the outcome of these examinations, or as a result of the expiration of statute of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized tax benefits for tax positions taken regarding previously filed tax returns will materially change from those recorded as liabilities for uncertain tax positions in the financial statements. United anticipates that these audits may be finalized in the next 12 months. However, based on the status of the examinations and the protocol of finalizing audits by the taxing authorities, which could include formal legal proceedings, at this time it is not possible to estimate the effect of such changes, if any, to previously recorded uncertain tax positions.

United and its subsidiaries file a consolidated U.S. federal income tax return, as well as file various returns in the states where its banking offices are located. United’s Georgia filed income tax returns for the years before 2003, and for the year ended 2006, are no longer subject to examination by taxing authorities. United’s North Carolina filed income tax returns are no longer subject to examination by taxing authorities for years before 2009. The federal and remaining state filed income tax returns are no longer subject to examination by taxing authorities for years before 2007.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans [Abstract]

Employee Benefit Plans

(16)

Employee Benefit Plans

United offers a defined contribution 401(k) and Profit Sharing Plan (“Plan”) that covers substantially all employees meeting certain minimum service requirements. The Plan allows employees to make pre-tax contributions to the Plan and United matches these employee contributions dollar-for-dollar up to 5% of eligible compensation, subject to Plan and regulatory limits. United also makes discretionary profit sharing contributions of up to 3.5% of eligible compensation based on earnings performance. Employees begin to receive matching contributions after completing one year of service and benefits vest after three years of service. United’s Plan is administered in accordance with applicable laws and regulations. Compensation expense from continuing operations related to the Plan totaled $2.86 million, $2.97 million and $3.14 million in 2011, 2010 and 2009, respectively. The Plan allows employees to choose to invest among a number of investment options, including United’s common stock. During 2011, 2010 and 2009, the Plan purchased 372,363, 89,833 and 51,145 shares, respectively, directly from United at the average of the high and low stock price on the date of purchase.

United provides defined post-retirement benefits to certain executive officers and other key employees. Expenses incurred from continuing operations for these post-retirement benefits were approximately $(160,000), $1.50 million and $1.73 million for 2011, 2010 and 2009, respectively. The 2011 credit balance was due to a one-time $2.2 million credit adjustment for prior period expenses and a related reclassification of unamortized actuarial gains and losses and prior service costs to other comprehensive income for United’s Modified Retirement Plan. At December 31, 2011 and 2010, the accumulated benefit obligation under the Modified Retirement Plan was $12.1 million and $8.68 million, respectively.

United sponsors a non-qualified deferred compensation plan for its executive officers, certain other key employees and members of its, and its community banks’ Boards of Directors. The deferred compensation plan provides for the pre-tax deferral of compensation, fees and other specified benefits. The deferred compensation plan permits each participant to elect to defer a portion of his or her base salary or bonus and permits each director participant to elect to defer all or a portion of his or her director’s fees. Further, the deferred compensation plan allows for additional contributions by an employee, with matching contributions by United, for amounts that exceed the allowable amounts under the tax-qualified 401(k) plan. During 2011, 2010 and 2009, United recognized $24,000, $31,000 and $12,000, respectively, in matching contributions from continuing operations for this provision of the deferred compensation plan. The Board of Directors may elect to make a discretionary contribution to any or all participants.

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph h
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph q
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 8
-Subparagraph m
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 106
-Paragraph 518
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 87
-Paragraph 264
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 03-2
-Paragraph 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 30
-Paragraph 26
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS106-2
-Paragraph 20, 21, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 158
-Paragraph 7, 21, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Implementation Guide (Q and A)
-Number FAS88
-Paragraph 63
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI http://asc.fasb.org/topic&trid=2235017

+ Details

Derivatives and Hedging Activities

12 Months Ended

Dec. 31, 2011

Derivatives and Hedging Activities [Abstract]

Derivatives and Hedging Activities

(17)

Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

United is exposed to certain risks arising from both its business operations and economic conditions. United principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. United manages interest rate risk primarily by managing the amount, sources, and duration of its investment securities portfolio and debt funding and through the use of derivative financial instruments. Specifically, United enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. United’s derivative financial instruments are used to manage differences in the amount, timing, and duration of United’s known or expected cash receipts and its known or expected cash payments principally related to United’s loans and wholesale borrowings.

The table below presents the fair value of United’s derivative financial instruments as well as their classification on the consolidated balance sheet as of December 31, 2011 and 2010 (in thousands):

	September 30,		September 30,		September 30,
		Fair Value
Interest Rate Products	Balance Sheet Location	December 31, 2011		December 31, 2010
Liability derivatives	Other liabilities	$	422	$	—

All derivatives shown in the table above were designated as hedging instruments under ASC 815. United did not have any derivative financial instruments outstanding that were not designated as hedging instruments under ASC 815.

Cash Flow Hedges of Interest Rate Risk

United’s objectives in using interest rate derivatives are to add stability to net interest revenue and to manage its exposure to interest rate movements. To accomplish this objective, United primarily uses interest rate swaps as part of its interest rate risk management strategy. For United’s variable-rate loans, interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for United making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate floors designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if the designated rate index falls below the strike rate on the contract. United pays an up front premium for this interest rate protection. United had no active derivative contracts outstanding at December 31, 2011 or 2010 that were designated as cash flow hedges of interest rate risk.

The effective portion of changes in the fair value of derivatives designated, and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest revenue as interest payments are received on United’s prime-based, variable-rate loans. At December 31, 2011, the amount included in other comprehensive income represents deferred gains from terminated cash flow hedges where the forecasted hedging transaction is expected to remain effective over the remaining unexpired term of the original contract. Such gains are being deferred and recognized over the remaining life of the original derivative contract. For terminated swap contracts, the gains are recognized over the original life of the contract on a straight line basis. For terminated floors, the gains are recognized over the original term based on the original floorlet schedule. During the years ended December 31, 2011 and 2010, United accelerated the reclassification of $4.96 million and $1.37 million, respectively, in gains from terminated positions as a result of the forecasted transactions becoming probable not to occur. During the year ended December 31, 2009, United accelerated the reclassification of an unrealized loss in accumulated other comprehensive income of $3,000 to earnings, as a result of the hedged forecasted transactions becoming probable not to occur. During the next twelve months, United estimates that an additional $3.59 million of the deferred gains on terminated cash flow hedging positions will be reclassified as an increase to interest revenue.

Fair Value Hedges of Interest Rate Risk

United is exposed to changes in the fair value of certain of its fixed rate obligations due to changes in LIBOR, a benchmark interest rate. United uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the benchmark interest rate. Interest rate swaps designated as fair value hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for United making variable rate payments over the life of the agreements without the exchange of the underlying notional amount. At December 31, 2011, United had one interest rate swap with an aggregate notional amount of $14.8 million that was designated as a fair value hedge of interest rate risk. At December 31, 2010, United had no active derivative contracts outstanding that were designated as fair value hedges.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in earnings. United includes the gain or loss on the hedged items in the same line item as the offsetting loss or gain on the related derivatives. During the years ended December 31, 2011, 2010 and 2009, United recognized net gains/(losses) of $37,000, $215,000 and $(393,000), respectively, related to ineffectiveness of the fair value hedging relationships. United also recognized a net reduction of interest expense of $110,000, $3.97 million and $6.18 million for the years ended December 31, 2011, 2010 and 2009, respectively, related to United’s fair value hedges, which includes net settlements on the derivatives.

Tabular Disclosure of the Effect of Derivative Instruments on the Income Statement

The tables below present the effect of United’s derivative financial instruments on the consolidated statement of operations for the years ended December 31, 2011, 2010 and 2009.

Derivatives in Fair Value Hedging Relationships (in thousands):


	Amount of Gain (Loss) Recognized in								Amount of Gain (Loss) Recognized in
	Income on Derivative								Income on Hedged Item
Location of Gain (Loss) Recognized in Income on Derivative	2011		2010			2009			2011			2010		2009
Other fee revenue	$	328	$	(3,760	)	$	(259	)	$	(291	)	$	3,975	$	431
Other expense		—		—			(3,177	)		—			—		2,612

	$	328	$	(3,760	)	$	(3,436	)	$	(291	)	$	3,975	$	3,043

Derivatives in Cash Flow Hedging Relationships (in thousands):

		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion)							Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
	2011		2010		2009			Location	2011		2010		2009

Interest rate products	$	—	$	2,314	$	(1,453	)	Interest revenue	$	10,157	$	17,326	$	36,793
								Other expense		4,963		1,370		(3	)

Total	$	—	$	2,314	$	(1,453	)		$	15,120	$	18,696	$	36,790

Credit-risk-related Contingent Features

United manages its credit exposure on derivatives transactions by entering into a bi-lateral credit support agreement with each counterparty. The credit support agreements require collateralization of exposures beyond specified minimum threshold amounts. The details of these agreements, including the minimum thresholds, vary by counterparty.

United’s agreements with each of its derivative counterparties contain a provision where if either party defaults on any of its indebtedness, then it could also be declared in default on its derivative obligations. The agreements with derivatives counterparties also include provisions that if not met, could result in United being declared in default. United has agreements with certain of its derivative counterparties that contain a provision where if United fails to maintain its status as a well-capitalized institution or is subject to a prompt corrective action directive, the counterparty could terminate the derivative positions and United would be required to settle its obligations under the agreements.

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 45
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Publisher FASB
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-URI http://asc.fasb.org/extlink&oid=6887037&loc=d3e80784-113994

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+ Details

Regulatory Matters

12 Months Ended

Dec. 31, 2011

Federal Home Loan Bank Advances and Repurchase Agreements, Regulatory Matters and Deposits [Abstract]

Regulatory Matters

(18)

Regulatory Matters

Capital Requirements

United and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary action by regulators that, if undertaken, could have a direct material effect on the financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, United and the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures (as defined) established by regulation to ensure capital adequacy require United and the Bank to maintain minimum amounts and ratios of Total capital and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets.

As of December 31, 2011, the Bank was categorized as well-capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized, the Bank must exceed the well-capitalized guideline ratios, as set forth in the table and meet certain other requirements. Management believes that the Bank exceeded all well-capitalized requirements, and there have been no conditions or events since year-end that would change the status of well-capitalized. The regulatory designation of “well-capitalized” under prompt corrective action regulations is not applicable to United (a bank holding company). However, Regulation Y defines “well-capitalized” for a bank holding company for the purpose of determining eligibility for a streamlined review process for acquisition proposals. For such purposes, “well-capitalized” requires United to maintain a minimum Tier 1 risk-based capital ratio of 6% and a minimum Total risk-based capital ratio of 10%.

In November 2011, United entered into an informal memorandum of understanding with the Federal Reserve Bank of Atlanta and the Georgia Department of Banking and Finance (the “Holding Company MOU”) that superseded the board resolution previously requested by the Federal Reserve. The Holding Company MOU provides, similar to the superseded resolution, that United may not incur additional indebtedness, pay cash dividends, make payments on our trust preferred securities or subordinated indebtedness or repurchase outstanding stock without prior approval of the Federal Reserve. United was not given permission to pay interest on trust preferred securities and dividends on preferred stock during the first quarter of 2011. Effective April 15, 2011, United received approval to make payments for currently payable and previously deferred dividends and interest on its preferred stock and trust preferred securities. Since then, United has continued to receive quarterly approvals of all payments, including the fourth quarter of 2011 and the fist quarter of 2012. Additionally, the Holding Company MOU requires, among other things, that United ensures that the Bank functions in a safe and sound manner. United believes it if in compliance with all requirements of the Holding Company MOU.

The Bank is currently subject to an informal memorandum of understanding with the FDIC and Georgia Department of Banking and Finance (the “Bank MOU”). The Bank MOU requires, among other things, that the Bank maintain its Tier I leverage ratio at not less than 8% and its total risk-based capital ratio at not less than 10% during the life of the Bank MOU.

Minimum amounts required for capital adequacy purposes and to be well-capitalized under prompt corrective action provisions are presented below for United and the Bank (dollars in thousands):

		September 30,			September 30,			September 30,			September 30,			September 30,			September 30,
	Regulatory						United Community Banks, Inc.
	Guidelines						(consolidated)						United Community Bank
	Minimum			Well Capitalized			2011			2010			2011			2010
Risk-based ratios:
Tier 1 capital		4.0	%		6.0	%		13.69	%		9.81	%		13.60	%		10.85	%
Total capital		8.0			10.0			15.41			12.25			14.87			12.61
Leverage ratio		3.0						8.83			6.76			8.78			7.45
Tier 1 capital							$	618,695		$	489,279		$	614,532		$	540,183
Total capital								696,881			611,078			671,718			627,829

Cash, Dividend, Loan and Other Restrictions

At December 31, 2011 and 2010, the Bank did not have a required reserve balance at the Federal Reserve Bank. Federal and state banking regulations place certain restrictions on dividends paid by the Bank to United. At December 31, 2011, the Bank did not have any retained earnings available for distribution to United in the form of dividends without requesting regulatory approval.

On December 5, 2008, United entered into a Letter Agreement and Securities Purchase Agreement (the “Purchase Agreement”) with the U.S. Treasury Department (“Treasury”) under the Troubled Asset Relief Program (“TARP”) Capital Purchase Program discussed below, pursuant to which United sold (i) 180,000 shares of United’s Fixed Rate Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”) and (ii) a warrant (the “Warrant”) to purchase 426,540 shares (219,909 shares, as adjusted for subsequent stock dividends and a 50% reduction following United’s recent stock offering) of United’s common stock for an aggregate purchase price of $180 million in cash. Pursuant to the terms of the Purchase Agreement, the ability of United to declare or pay dividends or distributions on its common stock is subject to restrictions, including a restriction against increasing dividends from the last quarterly cash dividend per share of ($.45) declared on the common stock prior to December 5, 2008, as adjusted for subsequent stock dividends and other similar actions.

The Federal Reserve Act requires that extensions of credit by the Bank to certain affiliates, including United, be secured by specific collateral, that the extension of credit to any one affiliate be limited to 10% of capital and surplus (as defined), and that extensions of credit to all such affiliates be limited to 20% of capital and surplus.

- Definition

The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Audit and Accounting Guide (AAG)
-Number AAG-DEP
-Chapter 17
-Paragraph 15, 16, 17
-IssueDate 2006-05-01
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

(19)

Commitments and Contingencies

United and the Bank are parties to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of their customers. These financial instruments include commitments to extend credit and letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet. The contract amounts of these instruments reflect the extent of involvement the Bank has in particular classes of financial instruments.

The exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit written is represented by the contractual amount of these instruments. United uses the same credit policies in making commitments and conditional obligations as it uses for underwriting on-balance sheet instruments. In most cases, collateral or other security is required to support financial instruments with credit risk.

The following table summarizes, as of December 31, 2011 and 2010, the contract amount of off-balance sheet instruments (in thousands):

		September 30,		September 30,
	2011		2010
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	415,093	$	482,860
Letters of credit		15,888		18,813

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn on, the total commitment amounts do not necessarily represent future cash requirements. United evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, upon extension of credit is based on management’s credit evaluation. Collateral held varies, but may include unimproved and improved real estate, certificates of deposit, personal property or other acceptable collateral.

Letters of credit are conditional commitments issued by United and could result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party or upon the non-performance of the customer. Those guarantees are primarily issued to local businesses and government agencies. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. In most cases, the Bank holds real estate, certificates of deposit, and other acceptable collateral as security supporting those commitments for which collateral is deemed necessary. The extent of collateral held for those commitments varies.

United, in the normal course of business, is subject to various pending and threatened lawsuits in which claims for monetary damages are asserted. Although it is not possible to predict the outcome of these lawsuits, or the range of any possible loss, management, after consultation with legal counsel, does not anticipate that the ultimate aggregate liability, if any, arising from these lawsuits will have a material adverse effect on United’s financial position or results of operations.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Preferred Stock

12 Months Ended

Dec. 31, 2011

Preferred Stock and Shareholders' Equity [Abstract]

Preferred Stock

(20)

Preferred Stock

United may issue preferred stock in one or more series, up to a maximum of 10,000,000 shares. Each series shall include the number of shares issued, preferences, special rights and limitations as determined by the Board of Directors.

Series A

At December 31, 2011 and 2010, there were 21,700 Series A preferred shares, respectively, issued and outstanding, which were issued as non-cumulative preferred stock. The dividend rate of the Series A preferred stock is 6% per annum, provided a dividend has been declared for the common shares. The holders of the Series A preferred stock maintain a liquidation preference to the common stockholder. The Series A preferred stock has no voting rights and United may redeem the Series A preferred stock for an amount equal to the stated value plus the accrued dividend.

Series B

On December 5, 2008, United sold 180,000 shares of Series B Preferred Stock with the Warrant to purchase 426,540 shares (439,817 shares adjusted for stock dividends declared subsequent to issuance) of common stock, to Treasury under Treasury’s Capital Purchase Program. The proceeds from the sale of $180 million were allocated between the Series B Preferred Stock and the Warrant based on their relative fair values at the time of the sale. Of the $180 million in proceeds, $173 million was allocated to the Series B Preferred Stock and $6.90 million was allocated to the Warrant. The accretion of the discount recorded on the Series B Preferred Stock that resulted from allocating a portion of the proceeds to the Warrant is accreted directly to retained earnings over a five-year period applying a level yield, and is reported on the consolidated statement of operations in the determination of the amount of net loss available to common shareholders. The exercise price of the Warrant is $63.30 ($61.40 as adjusted for stock dividends declared subsequent to issuance) and it is exercisable at any time on or before December 5, 2018. According to the terms of the agreement with Treasury, the number of shares issuable under the Warrant was reduced by 50% due to the sale of $211 million in qualifying common equity in the third quarter of 2009. As a result, the number of shares issuable under the warrant was reduced to 219,909.

The Series B Preferred Stock qualifies as Tier 1 capital and will pay cumulative dividends at a rate of 5% per annum for the first five years and 9% per annum thereafter. The Series B Preferred Stock may be redeemed after December 5, 2011 at the stated amount of $1,000 per share plus any accrued and unpaid dividends. The Series B Preferred Stock is non-voting except for class voting rights on matters that would adversely affect the rights of the holders of the Series B Preferred Stock.

Series D

On February 22, 2011, United entered into a Share Exchange Agreement with the Elm Ridge Parties. Under the Share Exchange Agreement, the Elm Ridge Parties agreed to transfer the Company 1,551,126 shares of the Company’s common stock in exchange for 16,613 shares of the Company’s cumulative perpetual preferred stock, Series D, and warrants to purchase 1,551,126 common shares with an exercise price of $12.50 per share that expire on August 22 ,2013. This exchange transaction did not result in a net increase or decrease to total shareholder’s equity for the year ended December 31, 2011.

Shareholders' Equity

12 Months Ended

Dec. 31, 2011

Preferred Stock and Shareholders' Equity [Abstract]

Shareholders' Equity

(21)

Shareholders’ Equity

In 2007, the shareholders approved the Amended and Restated 2000 Key Employee Stock Option Plan (“2000 Plan”). Under the terms of the 2000 Plan, awards of 500,000 options, restricted stock awards, stock awards, performance share awards or stock appreciation rights could be granted for shares of United’s common stock. Options granted under the 2000 Plan can have an exercise price no less than the fair market value at the date of grant. The general terms of the 2000 Plan include a vesting period (usually four years) with an exercisable period not to exceed ten years. Certain option and restricted stock grants provide for accelerated vesting if there is a change in control of United or certain other conditions are met (as defined in the plan document).

Certain acquired companies had stock option plans for their key employees with provisions similar to United’s plan. Options under acquired plans were converted at the exchange ratio effective for common shares. No options are available for grant under any of the acquired plans.

Restricted stock and options outstanding and activity for the years ended December 31, 2011, 2010 and 2009 consisted of the following:

		September 30,			September 30,		September 30,			September 30,		September 30,		September 30,
	Restricted Stock					Options
				Weighted					Weighted		Weighted
				Average					Average		Average		Aggregate
				Grant Date					Exercise		Remaining		Intrinsic
	Shares			Fair Value		Shares			Price		Term (Yrs.)		Value (000’s)
December 31, 2008		17,898		$	120.85		670,138		$	99.95
Stock dividend		635			—		15,897			—
Granted		21,200			35.35		70,890			31.75
Exercised		(6,146	)		121.60		(87	)		29.80
Cancelled		(78	)		151.90		(24,150	)		90.65

December 31, 2009		33,509			64.30		732,688			91.50
Granted		86			25.10		2,500			24.55
Exercised		(10,381	)		74.26		—			—
Cancelled		—			—		(56,875	)		70.40

December 31, 2010		23,214			59.67		678,313			93.00
Granted		410,051			10.15		10,000			11.20
Exercised		(18,621	)		26.77		—			—
Cancelled		—			—		(104,666	)		76.87

December 31, 2011		414,644			12.19		583,647			94.48		4.10	$	—

Exercisable at December 31, 2011							518,062			100.71		3.69		—

During 2011, 10,140 shares having a grant date fair value of $86,000 were granted to certain executive officers over the course of the year as part of their base compensation with no restrictions or vesting requirement. Those shares are included in the table above as granted and exercised within the same year. The grant date fair value was included in compensation expense during 2011.

The following is a summary of stock options outstanding at December 31, 2011:


Options Outstanding								Options Exercisable
Shares		Range		Weighted Average Price		Average Remaining Life		Shares		Weighted Average Price
	12,023	$	10.00 -30.00	$	13.53		9.27		761	$	26.51
	58,551		30.01 - 50.00		31.94		7.06		30,931		32.28
	154,955		50.01 - 70.00		64.81		3.98		131,109		64.55
	75,775		70.01 - 90.00		79.34		1.44		75,126		79.36
	41,929		90.01 -110.00		107.01		3.30		41,929		107.01
	69,083		110.01 -130.00		114.19		2.67		69,083		114.19
	165,097		130.01 -150.00		143.74		4.76		162,889		143.68
	6,234		150.01 -170.00		152.52		5.17		6,234		152.52

	583,647		10.00 - 170.00		94.48		4.10		518,062		100.71

The weighted average fair value of options granted in 2011, 2010 and 2009 was $3.64, $13.19 and $14.27 respectively. The fair value of each option granted was estimated on the date of grant using the Black-Scholes model.

The key assumptions used to determine the fair value of options are presented in the table below:

		September 30,			September 30,			September 30,
	2011			2010			2009

Expected volatility		33	%		52	%		41	%
Expected dividend yield		0.0	%		0.0	%		0.0	%
Expected life (in years)		5.00			6.15			6.25
Risk free rate		2.1	%		3.1	%		3.3	%

United’s stock trading history began in March of 2002 when United listed on the Nasdaq Global Select Market. Expected volatility was determined using United’s historical monthly volatility over a period of 25 quarters. Compensation expense relating to options of $835,000, $1.97 million and $2.82 million, respectively, was included in earnings for 2011, 2010 and 2009. A deferred income tax benefit related to stock option expense of $325,000, $780,000 and $1.04 million was included in the determination of income tax expense in 2011, 2010 and 2009, respectively. The amount of compensation expense for all periods was determined based on the fair value of options at the time of grant, multiplied by the number of options granted that were expected to vest, which was then amortized over the vesting period. The forfeiture rate for options is estimated to be approximately 3% per year. The total intrinsic value of options exercised during 2009, was $1,000. There were no options exercised during 2011 and 2010.

Compensation expense for restricted stock is based on the fair value of restricted stock awards at the time of grant, which is equal to the value of United’s common stock on the date of grant. The value of restricted stock grants that are expected to vest is amortized into expense over the vesting period. Compensation expense recognized in the consolidated statement of operations for restricted stock in 2011, 2010 and 2009 was $1.25 million, $493,000, and $886,000, respectively. The total intrinsic value of restricted stock at December 31, 2011 was approximately $2.90 million.

As of December 31, 2011, there was $4.10 million of unrecognized compensation cost related to nonvested stock options and restricted stock granted under the 2000 Plan. The cost is expected to be recognized over a weighted-average period of 2.23 years. The aggregate grant date fair value of options and restricted stock that vested during 2011 was $2.10 million.

United sponsors a Dividend Reinvestment and Stock Purchase Plan (“DRIP”) that allows participants who already own United’s common stock to purchase additional shares directly from the Company. The DRIP also allows participants to automatically reinvest their quarterly dividends in additional shares of common stock without a commission. During 2011, 2010 and 2009, 538 shares, 7,062 shares and 9,781 shares, respectively, were issued in connection with the DRIP. The DRIP program has been suspended until United regains its S-3 filing status.

United’s 401(k) retirement plan regularly purchases shares of United’s common stock directly from United. During 2011, 2010 and 2009, United’s 401(k) retirement plan purchased 124,705 shares, 89,833 shares and 51,145 shares, respectively, directly from United at the average of the high and low stock prices on the transaction dates. In addition, United has an Employee Stock Purchase Program (“ESPP”) that allows eligible employees to purchase shares of common stock at a 5% discount, with no commission charges. During 2011, 2010 and 2009 United issued 31,573 shares, 24,882 shares and 19,294 shares, respectively through the ESPP.

United offers its common stock as an investment option in its deferred compensation plan. The common stock component is accounted for as an equity instrument and is reflected in the consolidated balance sheet as common stock issuable. The deferred compensation plan does not allow for diversification once an election is made to invest in United stock and settlement must be accomplished in shares at the time the deferral period is completed. At December 31, 2011 and 2010, United had 93,681 shares and 67,287 shares, respectively, of its common stock that was issuable under the deferred compensation plan.

The table below shows the components of accumulated other comprehensive income at December 31, 2011 and 2010 (in thousands):

		September 30,			September 30,
	2011			2010
Unrealized gains on securities available for sale, net of tax	$	10,874		$	15,168
Unrealized (losses) gains on derivative financial instruments qualifying as cash flow hedges, net of tax		(9,433	)		5,683
Unamortized actuarial gains and losses under defined benefit plans, net of amortization		(4,750	)		—

Accumulated other comprehensive income	$	(3,309	)	$	20,851

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
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-Paragraph d

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
-Paragraph 7, 11A
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 29, 30, 31
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Fair Value

12 Months Ended

Dec. 31, 2011

Fair Value [Abstract]

Fair Value

(22)

Fair Value

Fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Financial Accounting Standards Board’s Accounting Standards Codification Topic 820 (“ASC 820”) Fair Value Measurements and Disclosures establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Fair Value Hierarchy

Level 1 Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities that United has the ability to access.

Level 2 Valuation is based upon quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.

Level 3 Valuation is generated from model-based techniques that use at least one significant assumption based on unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. United’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The following is a description of the valuation methodologies used for assets and liabilities recorded at fair value.

Securities Available for Sale

Investment securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets.

Deferred Compensation Plan Assets and Liabilities

Included in other assets in the consolidated balance sheet are assets related to employee deferred compensation plans. The assets associated with these plans are invested in mutual funds and classified as Level 1. Deferred compensation liabilities, also classified as Level 1, are carried at the fair value of the obligation to the employee, which mirrors the fair value of the invested assets and is included in other liabilities in the consolidated balance sheet.

Mortgage Loans Held for Sale

Mortgage loans held for sale are carried at the lower of cost or market value. The fair value of mortgage loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. Generally, book value approximates fair value.

Loans

United does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate, except that as a practical expedient, a creditor may measure impairment based on a loan’s observable market price, or the fair value of the collateral if repayment of the loan is dependent upon the sale of the underlying collateral. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. In accordance with ASC 820, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, United records the impaired loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, United records the impaired loan as nonrecurring Level 3.

Foreclosed Assets

Foreclosed assets are adjusted to fair value, less cost to sell, upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, United records the foreclosed asset as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, United records the foreclosed asset as nonrecurring Level 3.

Goodwill and Other Intangible Assets

Goodwill and identified intangible assets are subject to impairment testing. United’s approach to testing goodwill for impairment is to compare the business unit’s carrying value to the implied fair value based on multiples of earnings and tangible book value for recently completed merger transactions. In the event the fair value is determined to be less than the carrying value, the asset is recorded at fair value as determined by the valuation model. As such, United classifies goodwill and other intangible assets subjected to nonrecurring fair value adjustments as Level 3.

Derivative Financial Instruments

United uses interest rate swaps and interest rate floors to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

The fair values of interest rate options are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates fell below the strike rate of the floors. The variable interest rates used in the calculation of projected receipts on the floor are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. To comply with the provisions of ASC 820, United incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, United has considered the effect of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although United has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2011, United had assessed the significance of the effect of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, United has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. United did not have any active derivative contracts at December 31, 2010.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The table below presents United’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2011 and 2010, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

		September 30,		September 30,		September 30,		September 30,
December 31, 2011	Level 1		Level 2		Level 3		Total
Assets:
Securities available for sale
U.S. Government agencies	$	—	$	43,750	$	—	$	43,750
State and political subdivisions		—		26,339		—		26,339
Mortgage-backed securities		—		1,609,909		—		1,609,909
Corporate bonds		—		107,328		350		107,678
Other		—		2,371		—		2,371
Deferred compensation plan assets		2,859		—		—		2,859

Total assets	$	2,859	$	1,789,697	$	350	$	1,792,906

Liabilities:
Deferred compensation plan liability	$	2,859	$	—	$	—	$	2,859
Brokered certificates of deposit		—		13,107		—		13,107
Derivative financial instruments		—		422		—		422

Total liabilities	$	2,859	$	13,529	$	—	$	16,388

		September 30,		September 30,		September 30,		September 30,
December 31, 2010	Level 1		Level 2		Level 3		Total
Assets:
Securities available for sale
U.S. Government agencies	$	—	$	98,480	$	—	$	98,480
State and political subdivisions		—		28,442		—		28,442
Mortgage-backed securities		—		986,074		4,934		991,008
Corporate bonds		—		103,685		350		104,035
Other		—		2,452		—		2,452
Deferred compensation plan assets		3,252		—		—		3,252

Total assets	$	3,252	$	1,219,133	$	5,284	$	1,227,669

Liabilities:
Deferred compensation plan liability	$	3,252	$	—	$	—	$	3,252

Total liabilities	$	3,252	$	—	$	—	$	3,252

The following table shows a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs that are classified as level 3 values (in thousands):

		September 30,
	Securities
	Available for Sale
Balance at December 31, 2010	$	5,284
Amounts included in earnings		(19	)
Paydowns		(1,119	)
Transfers between valuation levels, net		(3,796	)


Balance at December 31, 2011	$	350

In the fourth quarter of 2011, United transferred one mortgage backed security from Level 3 to Level 2. Previously, the security had not been priced and the book value was assigned as the fair value. During the fourth quarter the security was able to be priced based on objectively observable inputs based on similar assets.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

United may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. The table below presents United’s assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2011 and 2010, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

		September 30,		September 30,		September 30,		September 30,
December 31, 2011	Level 1		Level 2		Level 3		Total
Assets:
Loans	$	—	$	—	$	133,828	$	133,828
Foreclosed properties		—		—		29,102		29,102

Total assets	$	—	$	—	$	162,930	$	162,930

		September 30,		September 30,		September 30,		September 30,
December 31, 2010	Level 1		Level 2		Level 3		Total
Assets:
Loans	$	—	$	—	$	106,904	$	106,904
Foreclosed properties		—		—		85,072		85,072

Total assets	$	—	$	—	$	191,976	$	191,976

For assets and liabilities that are not presented on the balance sheet at fair value, United uses the following methods to determine fair value:

For financial instruments that have quoted market prices, those quotes are used to determine fair value. Financial instruments that have no defined maturity, have a remaining maturity of 180 days or less, or reprice frequently to a market rate, are assumed to have a fair value that approximates reported book value, after taking into consideration any applicable credit risk. If no market quotes are available, financial instruments are valued by discounting the expected cash flows using an estimated current market interest rate for the financial instrument. For off-balance sheet derivative instruments, fair value is estimated as the amount that United would receive or pay to terminate the contracts at the reporting date, taking into account the current unrealized gains or losses on open contracts.

The short maturity of United’s assets and liabilities results in having a significant number of financial instruments whose fair value equals or closely approximates carrying value. Such financial instruments are reported in the following balance sheet captions: cash and cash equivalents, mortgage loans held for sale, federal funds purchased, repurchase agreements and other short-term borrowings. The fair value of securities available for sale equals the balance sheet value. As of December 31, 2011, the fair value of interest rate contracts used for balance sheet management was a liability of approximately $422,000. United did not have any active derivative contracts outstanding at December 31, 2010.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect the premium or discount on any particular financial instrument that could result from the sale of United’s entire holdings. Because no ready market exists for a significant portion of United’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial instruments include the mortgage banking operation, brokerage network, deferred income taxes, premises and equipment and goodwill. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

Off-balance sheet instruments (commitments to extend credit and standby letters of credit) are generally short-term and at variable rates. Therefore, both the carrying amount and the estimated fair value associated with these instruments are immaterial.

The carrying amount and fair values for other financial instruments included in United’s balance sheet at December 31, 2011 and 2010 are as follows (in thousands):

		September 30,		September 30,		September 30,		September 30,
	2011				2010
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Assets:
Securities held to maturity	$	330,203	$	343,531	$	265,807	$	267,988
Loans, net		3,995,146		3,800,343		4,429,431		4,196,142
Liabilities:
Deposits		6,097,983		6,093,772		6,469,172		6,481,867
Federal Home Loan Bank advances		40,625		43,236		55,125		59,498
Long-term debt		120,225		115,327		150,146		93,536

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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+ Details

Transaction with Fletcher International

12 Months Ended

Dec. 31, 2011

Transaction with Fletcher International [Abstract]

Transaction with Fletcher International

(23)

Transaction with Fletcher International

On April 1, 2010, United entered into a securities purchase agreement with Fletcher International, Ltd. and the Bank entered into an asset purchase and sale agreement with Fletcher International, Inc. and certain affiliates thereof. Under the terms of the agreements, the Bank sold $103 million in nonperforming commercial and residential mortgage loans and foreclosed properties to Fletcher’s affiliates with a nominal aggregate sales price equal to the Bank’s carrying amount. The nonperforming assets sale transaction closed on April 30, 2010. The consideration for the sale consisted of $20.6 million in cash and a loan for $82.5 million. Fletcher formed six affiliated LLCs to purchase the nonperforming assets from United. A separate loan was made to each of the affiliated LLCs with the assets of each LLC cross pledged as collateral to each of the six loans. The loans each have a five year term with principal and interest payments required according to a 20-year amortization table. Interest accrues at a fixed rate of 3.5%. Additional principal payments are required prior to the release of properties serving as collateral for the loans as those properties are sold. The loans have paid according to their contractual terms since their inception.

As part of the agreement, Fletcher received a warrant to acquire 1,411,765 shares of United’s common stock at a price of $21.25 per share. The warrant has a nine year term and expires on May 26, 2019. To date, the warrant has not been exercised. In accordance with the terms of the securities purchase agreement, Fletcher has the right up to July 3, 2012, to purchase up to $65 million in United’s Series C Convertible Preferred Stock. The Series C Convertible Preferred Stock pays a dividend equal to the lesser of 8% or LIBOR plus 4%. The Series C Convertible Preferred Stock is convertible by Fletcher into common stock at $26.25 per share (2,476,191 shares). If Fletcher had not purchased all of the Series C Convertible Preferred Stock by May 31, 2011, it was required to pay United 5% of the commitment amount not purchased by such date, and it must pay United an additional 5% of the commitment amount not purchased by May 31, 2012. Fletcher paid United $3.25 million as it had not purchased the Series C Convertible Preferred Stock as of May 31, 2011. The payment was recorded directly in shareholders’ equity. Fletcher will receive an additional warrant to purchase $35 million in common stock at $30.10 per share (1,162,791 shares) when it purchases the last $35 million of Series C Convertible Preferred Stock. All of the warrants settle on a cashless exercise basis and the net shares to be delivered upon cashless exercise will be less than what would have been issuable if the warrant had been exercised for cash.

All of the components of the transaction, including all equity instruments issued under the securities purchase agreement and the notes receivable received as consideration from the sale of nonperforming assets were recorded at fair value. Because the value of the equity instruments and assets exchanged in the transaction exceeded the value of the cash and notes receivable received, United recorded a loss of $45.3 million on the transaction with Fletcher in the second quarter of 2010.

The table below presents a summary of the assets and equity instruments transferred and received at their respective fair values ($ in thousands, except per share amounts):

	September 30,	September 30,		September 30,
	Valuation Approach	Fair Value Heirarchy	Fair Value
Warrants Issued / Assets Transferred to Fletcher at Fair Value:
Warrant to purchase $30 million in common stock at $21.25 per share	Black-Scholes	Level 3	$	17,577
Option to purchase convertible preferred stock and warrant	Monte-Carlo Simulation	Level 3		22,236

Fair value of equity instruments recognized in capital surplus				39,813

Foreclosed properties transferred under Asset Purchase Agreement	Appraised Value	Level 2		33,434
Nonperforming loans transferred under Asset Purchase Agreement	Collateral Appraised Value	Level 2		69,655

Total nonperforming assets transferred				103,089

Total value of assets and equity instruments transferred				142,902

Cash and Notes Receivable Received in Exchange at Fair Value:
Cash down payment received from asset sale	NA	NA		20,618
Notes receivable (par value $82,471, net of $4,531 discount)	Discounted Cash Flows	Level 3		77,940

Total value of cash and notes receivable received				98,558

Fair value of assets and equity instruments transferred in excess of cash and notes received				44,344
Transaction fees				1,005

Loss recognized on Fletcher transaction			$	45,349

The $17.6 million value of the warrant to purchase $30 million in common stock was determined as of April 1, 2010, the date the terms were agreed to. The following modeling assumptions were used: dividend yield—0%; risk-free interest rate—3.89%; current stock price—$23.85; term—9 years; and volatility—33%. Although most of the modeling assumptions were based on observable data, because of the subjectivity involved in estimating expected volatility, the valuation is considered Level 3.

The $22.2 million value of the option to purchase convertible preferred stock and warrant was determined by an independent valuation firm using a Monte Carlo Simulation method appropriate for valuing complex securities with derivatives. The model uses 50,000 simulations of daily stock price paths using geometric Brownian motion and incorporates in a unified way all conversion, exercise and contingency conditions. Because of the significant assumptions involved in the valuation process, not all of which were based on observable data, the valuation is considered to be Level 3.

The $103 million of nonperforming assets sold were transferred at United’s recorded book value which had previously been written down to appraised value. Because the appraisals were based on sales of similar assets (observable data), the valuation is considered to be Level 2.

The $82.5 million of notes receivable were recorded at their estimated fair value of $77.9 million, net of a $4.5 million interest discount, which was determined based on discounted expected cash flows over the term at a rate commensurate with the credit risk inherent in the notes. The contractual rate on the notes is fixed at 3.5% for five years. The discount rate used for purposes of determining the fair value of the notes was 5.48% based on the terms, structure and risk profile of the notes. Note prepayments were estimated based on the expected marketing time for the underlying collateral since the notes require that principal be reduced as the underlying assets are sold. The valuation is considered Level 3 due to estimated prepayments which have a significant impact on the value and are not based on observable data.

Condensed Financial Statements of United Community Banks, Inc. (Parent Only)

12 Months Ended

Dec. 31, 2011

Condensed Financial Statements of United Community Banks, Inc. (Parent Only) [Abstract]

Condensed Financial Statements of United Community Banks, Inc. (Parent Only)

(24)

Condensed Financial Statements of United Community Banks, Inc. (Parent Only)

Statement of Operations

For the Years Ended December 31, 2011, 2010 and 2009

(in thousands)

		September 30,			September 30,			September 30,
	2011			2010			2009
Shared service fees from subsidiaries	$	7,646		$	6,266		$	6,552
Other		609			501			1,208

Total income		8,255			6,767			7,760

Interest expense		9,587			9,249			9,229
Other expense		9,367			7,683			9,109

Total expenses		18,954			16,932			18,338
Income tax (expense) benefit		(1,272	)		(9,961	)		3,950

Loss before equity in undistributed loss of subsidiaries		(11,971	)		(20,126	)		(6,628	)
Equity in undistributed loss of subsidiaries		(214,775	)		(482,218	)		(221,699	)

Net loss	$	(226,746	)	$	(502,344	)	$	(228,327	)

Balance Sheet

As of December 31, 2011 and 2010

(in thousands)

		September 30,		September 30,
	2011		2010
Assets
Cash	$	66,632	$	9,331
Investment in subsidiaries		631,770		578,706
Other assets		28,253		25,316

Total assets	$	726,655	$	613,353


Liabilities and Shareholders’ Equity

Subordinated debentures	$	120,225	$	120,146
Other liabilities		30,944		24,629

Total liabilities		151,169		144,775
Shareholders’ equity		575,486		468,578

Total liabilities and shareholders’ equity	$	726,655	$	613,353

Statement of Cash Flows

For the Years Ended December 31, 2011, 2010 and 2009

(in thousands)

		September 30,			September 30,			September 30,
	2011			2010			2009
Operating activities:
Net loss	$	(226,746	)	$	(502,344	)	$	(228,327	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in undistributed loss of the subsidiaries		214,775			482,218			221,699
Depreciation, amortization and accretion		122			241			333
Impairment loss on securities		—			—			555
Employee stock compensation		2,144			2,459			3,704
Change in assets and liabilities:
Other assets		(3,604	)		47,080			(5,395	)
Other liabilities		6,590			(36,782	)		2,170


Net cash used in operating activities		(6,719	)		(7,128	)		(5,261	)


Investing activities:
Investment in subsidiaries		(292,000	)		—			(210,900	)
Purchases of securities available for sale		—			(187	)		(438	)


Net cash used in investing activities		(292,000	)		(187	)		(211,338	)


Financing activities:
Repayment of subordinated notes		—			—			(1,000	)
Proceeds from exercise of stock options		—			—			2
Proceeds from issuance of common stock for dividend reinvestment and employee benefit plans		1,453			1,831			2,154
Proceeds from issuance of common and preferred stock, net of offering costs		361,560			—			211,089
Proceeds from penalty on incomplete private equity transaction		3,250			—			—
Retirement of Series A preferred stock		—			—			(41	)
Cash dividends on Series A preferred stock		(13	)		(13	)		(14	)
Cash dividends on Series B preferred stock		(9,020	)		(9,000	)		(8,500	)
Cash dividends on Series D preferred stock		(1,210	)		—			—


Net cash provided by (used in) financing activities		356,020			(7,182	)		203,690


Net change in cash		57,301			(14,497	)		(12,909	)

Cash at beginning of year		9,331			23,828			36,737


Cash at end of year	$	66,632		$	9,331		$	23,828

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References + Details