SEC Filing | United Community Banks, Inc.

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t76299_8k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

April 25, 2013

United Community Banks, Inc.

(Exact name of registrant as specified in its charter)

Georgia	No. 001-35095	No. 58-180-7304
(State or other jurisdiction of	(Commission File Number)	(IRS Employer
incorporation)		Identification No.)

125 Highway 515 East

Blairsville, Georgia 30512

(Address of principal executive offices)

Registrant's telephone number, including area code:

(706) 781-2265

Not applicable

(Former name or former address, if changed since last report)

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

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

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

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

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

Item 2.02	Results of Operations and Financial Condition.

	On April 25, 2013, United Community Banks, Inc. (the “Registrant”) issued a news release announcing its financial results for the quarter ended March 31, 2013 (the “News Release”). The News Release, including financial schedules, is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. In connection with issuing the News Release, on April 25, 2013 at 11:00 a.m. EDT, the Registrant intends to hold a conference call/webcast to discuss the News Release. In addition to the News Release, during the conference call the Registrant intends to discuss certain financial information contained in the March 31, 2013 Investor Presentation (the “Investor Presentation”), which will be posted to the Registrant’s website at www.ucbi.com. The Investor Presentation is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. The presentation of the Registrant’s financial results includes core earnings measures, which are measures of performance determined by methods other than in accordance with generally accepted accounting principles, or GAAP. Management included non-GAAP core earnings measures because it believes they are useful for evaluating the Registrant’s operations and performance over periods of time, and uses core earnings measures in managing and evaluating the Registrant’s business and intends to refer to them in discussions about the Registrant’s operations and performance. Core earnings measures exclude credit related costs such as the provision for loan losses and foreclosed property expense, securities gains and losses, income taxes and other items of a non-recurring nature. Core earnings measures are useful in evaluating the underlying earnings performance trends of the Registrant. Management believes these non-GAAP performance measures may provide users of the Registrant’s financial information with a meaningful measure for assessing the Registrant’s financial results and comparing those financial results to prior periods. Core earnings measures should be viewed in addition to, and not as an alternative to or substitute for, the Registrant’s performance measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Item 9.01		Financial Statements and Exhibits.
(d)		Exhibits

Exhibit No.		Description

99.1		Press Release, dated April 25, 2013

99.2		Investor Presentation, First Quarter 2013

SIGNATURES

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

	UNITED COMMUNITY BANKS, INC.


	By:	/s/ Rex S. Schuette
		Rex S. Schuette
		Executive Vice President and
		Chief Financial Officer

Date: April 25, 2013

ex99-1.htm

Exhibit 99.1

For Immediate Release

For more information:

Rex S. Schuette

Chief Financial Officer

(706) 781-2266

Rex_Schuette@ucbi.com

UNITED COMMUNITY BANKS, INC. REPORTS

EARNINGS OF $11.8 MILLION FOR FIRST QUARTER 2013

·	Net income of $11.8 million, or 15 cents per share

·	Loans up $18.6 million from fourth quarter, or 2 percent annualized

·	Core transaction deposits up $81.2 million in first quarter, or 10 percent annualized

·	Solid improvement in key credit quality measures

BLAIRSVILLE, GA – April 25, 2013 – United Community Banks, Inc. (NASDAQ: UCBI) today reported net income of $11.8 million, or 15 cents per share, for the first quarter of 2013. The first quarter results reflect modest loan growth, improved credit quality, strong core transaction deposit growth, and lower operating expenses compared with the same period a year ago.

“We are off to a good start to what we expect to be another productive year,” said Jimmy Tallent, president and chief executive officer. “The first quarter continued our trend of meaningful improvement in every key measure of credit quality. We made particularly strong progress slowing nonperforming loan inflows which, at $9.67 million, were less than half the fourth quarter level. Nonperforming assets were $113 million and 1.65 percent of total assets at the end of the first quarter. That is down $15 million, or 12 percent, from the end of the fourth quarter, and down $49 million, or 30 percent, from a year ago. Additionally, core transaction deposits increased by $81 million, or 10 percent annualized.”

Tallent continued, “We grew our loan portfolio by $19 million from the fourth quarter, for an annualized rate of 2 percent. Achieving quality loan growth remains a challenge in what continues to be a sluggish economy. We achieved this growth by bringing on new commercial lenders and by offering new retail loan products that are tailored to meet our customers’ financing needs at competitive rates.”

The first quarter provision for loan losses was $11 million, down $4 million from a year ago and $3 million from the fourth quarter. First quarter net charge-offs were $12.4 million compared to $14.5 million in the fourth quarter and $15.9 million a year ago.

“The inflow of nonperforming loans was the lowest quarterly total since the beginning of the economic cycle,” Tallent said. “The benefit of this trend, which we expect to continue, was clearly evident in our lower net charge-offs and provisioning.”

Taxable equivalent net interest revenue totaled $54.7 million, down $1.37 million from the fourth quarter and down $4.21 million from the first quarter a year ago. “The decrease primarily reflects lower yields on our loan and investment securities portfolios,” said Tallent. “The lower loan portfolio yield reflects ongoing pricing pressure on new and renewed loans, and new retail product offerings with low introductory rates. The lower investment securities yield is due to reinvestment of cash flows at record low rates. We continue to look for reinvestment opportunities, with a focus on floating-rate securities, to alleviate market and duration risk. Floating-rate securities account for 34 percent of the investment securities portfolio, and improve our interest sensitivity position by reducing exposure to rising interest rates. We would like a higher yield but will not go out on the curve to chase one.”

The taxable equivalent net interest margin was down six basis points from the fourth quarter, and 15 basis points from a year ago, to 3.38 percent. “Our net interest margin will remain under pressure as long as interest rates remain at this unprecedented low level,” stated Tallent. “To offset the impact on net interest revenue, we remain sharply focused on growing our loan portfolio in the mid-single digit range by focusing on retail loans and by continuing to add commercial lenders in key markets.”

First quarter fee revenue was $12.8 million, compared to $14.8 million in the fourth quarter and $15.4 million a year ago. The decrease from the preceding quarter was primarily due to a slow-down in mortgage refinancing activity, a lower overdraft fee total related to transaction and activity levels, and an incentive in the fourth quarter from our debit card network services provider. Closed mortgage loans totaled $69.8 million in the first quarter compared with $100 million in the fourth quarter and $81.7 million in the first quarter of 2012. The decrease in other fee revenue compared to a year earlier was primarily due to two non-core items in the first quarter of 2012: a federal tax refund of $1.1 million and $728,000 in gains from the sale of low income housing tax credits.

Operating expenses, excluding foreclosed property costs and a $4 million fourth quarter charge for settlement of litigation, were $41.4 million in the first quarter of 2013 compared to $42.1 million for the fourth quarter of 2012 and $43.1 million a year ago. The decrease from both periods was due to management’s efforts to reduce costs and operate more efficiently, primarily through reduction in staff levels and related costs.

Foreclosed property costs were $2.33 million in the first quarter of 2013, compared to $4.61 million in the fourth quarter of 2012 and $3.83 million a year ago. First quarter 2013 costs included $1.19 million for maintenance and $1.15 million in net losses and write-downs. For the fourth quarter of 2012, foreclosed property costs included $1.42 million in maintenance and $3.19 million in net losses and write-downs. First quarter 2012 foreclosed property costs included $1.62 million in maintenance and $2.20 million in net losses and write-downs.

As of March 31, 2013, capital ratios were as follows: Tier 1 Risk-Based of 14.3 percent; Tier 1 Leverage of 9.7 percent; Total Risk-Based of 15.9 percent; Tier 1 Common Risk-Based of 8.9 percent; and, Tangible Equity-to-Assets of 8.5 percent.

“We know that challenges remain as the economy continues to struggle and interest rates are at record lows,” Tallent continued. “Our focus is on growing net interest revenue by growing loans in a prudent and balanced manner, and pursuing opportunities to grow mortgage and advisory services market share. The environment forces us to be more efficient and work smarter to achieve our goals, and this team is fully committed and up to the challenge. We do expect continued improvement in credit measures that will translate into lower charge-off and provisioning levels.”

Tallent concluded, “We constantly look for ways to improve our financial performance by growing our business and improving operating efficiency, all while maintaining the best customer satisfaction scores in the industry. We remain firmly committed to improving our financial results while delivering the best banking experience and growing shareholder value.”

Conference Call

United will hold a conference call today, Thursday, April 25, 2013, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 31826472. The conference call also will be webcast and can be accessed by selecting ‘Calendar of Events’ within the Investor Relations section of United’s website at www.ucbi.com.

About United Community Banks, Inc.

Headquartered in Blairsville, United Community Banks, Inc. is the third-largest bank holding company in Georgia. United has assets of $6.8 billion and operates 103 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina, east Tennessee and northwest South Carolina. United specializes in providing personalized community banking services to individuals and small to mid-size businesses and also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United’s common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at United’s website at www.ucbi.com.

Safe Harbor

This news release contains forward-looking statements, as defined by federal securities laws, including statements about United’s financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United’s filings with the Securities and Exchange Commission including its 2012 Annual Report on Form 10-K under the sections entitled “Forward-Looking Statements” and “Risk Factors.” Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.

# # #

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

																First
	2013			2012												Quarter
(in thousands, except per share	First			Fourth			Third			Second			First			2013-2012
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change
INCOME SUMMARY
Interest revenue	$	62,134		$	64,450		$	65,978		$	66,780		$	70,221
Interest expense		7,475			8,422			8,607			9,944			11,357
Net interest revenue		54,659			56,028			57,371			56,836			58,864			(7	) %
Provision for loan losses		11,000			14,000			15,500			18,000			15,000
Fee revenue		12,826			14,761			13,764			12,867			15,379			(17	)
Total revenue		56,485			56,789			55,635			51,703			59,243
Operating expenses		43,770			50,726			44,783			44,310			46,955			(7	)
Income before income taxes		12,715			6,063			10,852			7,393			12,288			3
Income tax expense		950			802			284			894			760
Net income		11,765			5,261			10,568			6,499			11,528			2
Preferred dividends and discount accretion		3,052			3,045			3,041			3,032			3,030
Net income available to common shareholders	$	8,713		$	2,216		$	7,527		$	3,467		$	8,498			3

PERFORMANCE MEASURES
Per common share:
Diluted income	$	.15		$	.04		$	.13		$	.06		$	.15			-
Book value		6.85			6.67			6.75			6.61			6.68			3
Tangible book value (2)		6.76			6.57			6.64			6.48			6.54			3

Key performance ratios:
Return on equity (1)(3)		8.51	%		2.15	%		7.43	%		3.51	%		8.78	%
Return on assets (3)		.70			.31			.63			.37			.66
Net interest margin (3)		3.38			3.44			3.60			3.43			3.53
Efficiency ratio		64.97			71.69			62.95			63.84			63.31
Equity to assets		8.60			8.63			8.75			8.33			8.19
Tangible equity to assets (2)		8.53			8.55			8.66			8.24			8.08
Tangible common equity to assets (2)		5.66			5.67			5.73			5.45			5.33
Tangible common equity to risk-
weighted assets (2)		8.45			8.26			8.44			8.37			8.21

ASSET QUALITY *
Non-performing loans	$	96,006		$	109,894		$	115,001		$	115,340		$	129,704
Foreclosed properties		16,734			18,264			26,958			30,421			31,887
Total non-performing assets (NPAs)		112,740			128,158			141,959			145,761			161,591
Allowance for loan losses		105,753			107,137			107,642			112,705			113,601
Net charge-offs		12,384			14,505			20,563			18,896			15,867
Allowance for loan losses to loans		2.52	%		2.57	%		2.60	%		2.74	%		2.75	%
Net charge-offs to average loans (3)		1.21			1.39			1.99			1.85			1.55
NPAs to loans and foreclosed
properties		2.68			3.06			3.41			3.51			3.88
NPAs to total assets		1.65			1.88			2.12			2.16			2.25

AVERAGE BALANCES ($ in millions)
Loans	$	4,197		$	4,191		$	4,147		$	4,156		$	4,168			1
Investment securities		2,141			2,088			1,971			2,145			2,153			(1	)
Earning assets		6,547			6,482			6,346			6,665			6,700			(2	)
Total assets		6,834			6,778			6,648			6,993			7,045			(3	)
Deposits		5,946			5,873			5,789			5,853			6,028			(1	)
Shareholders’ equity		588			585			582			583			577			2
Common shares - basic (thousands)		58,081			57,971			57,880			57,840			57,764
Common shares - diluted (thousands)		58,081			57,971			57,880			57,840			57,764

AT PERIOD END ($ in millions)
Loans *	$	4,194		$	4,175		$	4,138		$	4,119		$	4,128			2
Investment securities		2,141			2,079			2,025			1,984			2,202			(3	)
Total assets		6,849			6,802			6,699			6,737			7,174			(5	)
Deposits		6,026			5,952			5,823			5,822			6,001			-
Shareholders’ equity		592			581			585			576			580			2
Common shares outstanding (thousands)		57,767			57,741			57,710			57,641			57,603

(1) Net income available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss). (2) Excludes effect of acquisition related intangibles and associated amortization. (3) Annualized.

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

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information

	2013			2012
(in thousands, except per share	First			Fourth			Third			Second			First
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter

Interest revenue reconciliation
Interest revenue - taxable equivalent	$	62,134		$	64,450		$	65,978		$	66,780		$	70,221
Taxable equivalent adjustment		(365	)		(381	)		(419	)		(444	)		(446	)
Interest revenue (GAAP)	$	61,769		$	64,069		$	65,559		$	66,336		$	69,775

Net interest revenue reconciliation
Net interest revenue - taxable equivalent	$	54,659		$	56,028		$	57,371		$	56,836		$	58,864
Taxable equivalent adjustment		(365	)		(381	)		(419	)		(444	)		(446	)
Net interest revenue (GAAP)	$	54,294		$	55,647		$	56,952		$	56,392		$	58,418

Total revenue reconciliation
Total operating revenue	$	56,485		$	56,789		$	55,635		$	51,703		$	59,243
Taxable equivalent adjustment		(365	)		(381	)		(419	)		(444	)		(446	)
Total revenue (GAAP)	$	56,120		$	56,408		$	55,216		$	51,259		$	58,797

Income before taxes reconciliation
Income before taxes	$	12,715		$	6,063		$	10,852		$	7,393		$	12,288
Taxable equivalent adjustment		(365	)		(381	)		(419	)		(444	)		(446	)
Income before taxes (GAAP)	$	12,350		$	5,682		$	10,433		$	6,949		$	11,842

Income tax expense reconciliation
Income tax expense	$	950		$	802		$	284		$	894		$	760
Taxable equivalent adjustment		(365	)		(381	)		(419	)		(444	)		(446	)
Income tax expense (GAAP)	$	585		$	421		$	(135	)	$	450		$	314

Book value per common share reconciliation
Tangible book value per common share	$	6.76		$	6.57		$	6.64		$	6.48		$	6.54
Effect of goodwill and other intangibles		.09			.10			.11			.13			.14
Book value per common share (GAAP)	$	6.85		$	6.67		$	6.75		$	6.61		$	6.68

Average equity to assets reconciliation
Tangible common equity to assets		5.66	%		5.67	%		5.73	%		5.45	%		5.33	%
Effect of preferred equity		2.87			2.88			2.93			2.79			2.75
Tangible equity to assets		8.53			8.55			8.66			8.24			8.08
Effect of goodwill and other intangibles		.07			.08			.09			.09			.11
Equity to assets (GAAP)		8.60	%		8.63	%		8.75	%		8.33	%		8.19	%

Tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets		8.45	%		8.26	%		8.44	%		8.37	%		8.21	%
Effect of other comprehensive income		.49			.51			.36			.28			.10
Effect of trust preferred		1.15			1.15			1.17			1.19			1.15
Effect of preferred equity		4.22			4.24			4.29			4.35			4.23
Tier I capital ratio (Regulatory)		14.31	%		14.16	%		14.26	%		14.19	%		13.69	%

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

	2013		2012								Linked			Year over
	First		Fourth		Third		Second		First		Quarter			Year
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter		Change			Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,130	$	1,131	$	1,126	$	1,140	$	1,137	$	(1	)	$	(7	)
Income producing commercial RE		674		682		693		697		706		(8	)		(32	)
Commercial & industrial		454		458		460		450		440		(4	)		14
Commercial construction		152		155		161		169		167		(3	)		(15	)
Total commercial		2,410		2,426		2,440		2,456		2,450		(16	)		(40	)
Residential mortgage		850		829		833		834		836		21			14
Home equity lines of credit		396		385		341		294		295		11			101
Residential construction		372		382		389		409		436		(10	)		(64	)
Consumer installment		166		153		135		126		111		13			55
Total loans	$	4,194	$	4,175	$	4,138	$	4,119	$	4,128		19			66

LOANS BY MARKET
North Georgia	$	1,363	$	1,364	$	1,383	$	1,387	$	1,408		(1	)		(45	)
Atlanta MSA		1,317		1,288		1,257		1,252		1,239		29			78
North Carolina		575		579		579		576		588		(4	)		(13	)
Coastal Georgia		398		400		380		369		366		(2	)		32
Gainesville MSA		259		261		256		259		262		(2	)		(3	)
East Tennessee		282		283		283		276		265		(1	)		17
Total loans	$	4,194	$	4,175	$	4,138	$	4,119	$	4,128		19			66

RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development	$	57	$	62	$	71	$	78	$	86		(5	)		(29	)
Land loans		42		46		41		45		57		(4	)		(15	)
Lot loans		188		193		196		203		204		(5	)		(16	)
Total		287		301		308		326		347		(14	)		(60	)

House loans
Spec		40		41		44		49		57		(1	)		(17	)
Sold		45		40		37		34		32		5			13
Total		85		81		81		83		89		4			(4	)
Total residential construction	$	372	$	382	$	389	$	409	$	436		(10	)		(64	)

(1) Excludes total loans of $28.3 million, $33.4 million, $37.0 million, $41.5 million and $47.2 million as of March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Credit Quality (1)

	First Quarter 2013									Fourth Quarter 2012									Third Quarter 2012
	Non-performing			Foreclosed			Total			Non-performing			Foreclosed			Total			Non-performing			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs			Loans			Properties			NPAs			Loans			Properties			NPAs
NPAs BY CATEGORY
Owner occupied CRE	$	8,142		$	4,750		$	12,892		$	12,599		$	4,989		$	17,588		$	14,140		$	7,170		$	21,310
Income producing CRE		9,162			834			9,996			9,549			490			10,039			11,756			1,597			13,353
Commercial & industrial		29,545			-			29,545			31,817			-			31,817			32,678			-			32,678
Commercial construction		22,359			3,027			25,386			23,843			2,204			26,047			18,590			3,121			21,711
Total commercial		69,208			8,611			77,819			77,808			7,683			85,491			77,164			11,888			89,052
Residential mortgage		10,901			3,463			14,364			11,151			4,753			15,904			12,629			6,031			18,660
Home equity lines of credit		916			-			916			1,438			-			1,438			1,367			-			1,367
Residential construction		14,592			4,660			19,252			18,702			5,828			24,530			22,935			9,039			31,974
Consumer installment		389			-			389			795			-			795			906			-			906
Total NPAs	$	96,006		$	16,734		$	112,740		$	109,894		$	18,264		$	128,158		$	115,001		$	26,958		$	141,959
Balance as a % of
Unpaid Principal		66.3	%		45.0	%		62.0	%		69.5	%		39.7	%		62.8	%		68.8	%		36.4	%		58.8	%

NPAs BY MARKET
North Georgia	$	63,210		$	6,616		$	69,826		$	69,950		$	8,219		$	78,169		$	72,211		$	14,582		$	86,793
Atlanta MSA		17,380			3,524			20,904			18,556			3,442			21,998			21,349			5,926			27,275
North Carolina		8,519			2,533			11,052			11,014			2,579			13,593			9,622			2,771			12,393
Coastal Georgia		3,523			1,449			4,972			3,810			1,609			5,419			6,822			864			7,686
Gainesville MSA		911			370			1,281			903			556			1,459			840			1,328			2,168
East Tennessee		2,463			2,242			4,705			5,661			1,859			7,520			4,157			1,487			5,644
Total NPAs	$	96,006		$	16,734		$	112,740		$	109,894		$	18,264		$	128,158		$	115,001		$	26,958		$	141,959


NPA ACTIVITY
Beginning Balance	$	109,894		$	18,264		$	128,158		$	115,001		$	26,958		$	141,959		$	115,340		$	30,421		$	145,761
Loans placed on non-accrual		9,665			-			9,665			20,211			-			20,211			30,535			-			30,535
Payments received		(6,809	)		-			(6,809	)		(6,458	)		-			(6,458	)		(3,646	)		-			(3,646	)
Loan charge-offs		(10,456	)		-			(10,456	)		(11,722	)		-			(11,722	)		(19,227	)		-			(19,227	)
Foreclosures		(6,288	)		6,288			-			(7,138	)		7,138			-			(8,001	)		8,001			-
Capitalized costs		-			54			54			-			201			201			-			102			102
Note / property sales		-			(6,726	)		(6,726	)		-			(12,845	)		(12,845	)		-			(8,822	)		(8,822	)
Write downs		-			(1,041	)		(1,041	)		-			(1,438	)		(1,438	)		-			(2,394	)		(2,394	)
Net losses on sales		-			(105	)		(105	)		-			(1,750	)		(1,750	)		-			(350	)		(350	)
Ending Balance	$	96,006		$	16,734		$	112,740		$	109,894		$	18,264		$	128,158		$	115,001		$	26,958		$	141,959

	First Quarter 2013						Fourth Quarter 2012					Third Quarter 2012
				Net Charge-					Net Charge-						Net Charge-
				Offs to					Offs to						Offs to
	Net			Average			Net		Average			Net			Average
(in thousands)	Charge-Offs			Loans (2)			Charge-Offs		Loans (2)			Charge-Offs			Loans (2)
NET CHARGE-OFFS BY CATEGORY
Owner occupied CRE	$	1,922			.69	%	$	4,997		1.76	%	$	6,192			3.56	%
Income producing CRE		3,321			1.99			1,153		.67			1,982			.70
Commercial & industrial		1,501			1.34			135		.12			(259	)		(.23	)
Commercial construction		(4	)		(.01	)		1,688		4.25			3,190			7.74
Total commercial		6,740			1.14			7,973		1.30			11,105			1.81
Residential mortgage		1,635			.79			3,254		1.55			2,846			1.40
Home equity lines of credit		512			.53			445		.49			681			.80
Residential construction		2,973			3.22			2,435		2.52			5,676			5.69
Consumer installment		524			1.35			398		1.10			255			.78
Total	$	12,384			1.21		$	14,505		1.39		$	20,563			1.99


NET CHARGE-OFFS BY MARKET
North Georgia	$	4,910			1.42	%	$	4,474		1.26	%	$	6,451			1.84	%
Atlanta MSA		3,295			1.07			3,977		1.27			9,344			3.02
North Carolina		2,249			1.59			2,032		1.39			1,674			1.15
Coastal Georgia		821			.85			574		.60			2,486			2.67
Gainesville MSA		430			.67			1,331		2.04			294			.45
East Tennessee		679			.98			2,117		2.98			314			.45
Total	$	12,384			1.21		$	14,505		1.39		$	20,563			1.99

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

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Operations (Unaudited)

	Three Months Ended
	March 31,
(in thousands, except per share data)	2013		2012

Interest revenue:
Loans, including fees	$	50,934	$	55,759
Investment securities, including tax exempt of $212 and $250		9,965		13,004
Deposits in banks and short-term investments		870		1,012
Total interest revenue		61,769		69,775

Interest expense:
Deposits:
NOW		454		637
Money market		562		641
Savings		36		37
Time		3,226		6,159
Total deposit interest expense		4,278		7,474
Short-term borrowings		516		1,045
Federal Home Loan Bank advances		19		466
Long-term debt		2,662		2,372
Total interest expense		7,475		11,357
Net interest revenue		54,294		58,418
Provision for loan losses		11,000		15,000
Net interest revenue after provision for loan losses		43,294		43,418

Fee revenue:
Service charges and fees		7,403		7,783
Mortgage loan and other related fees		2,655		2,099
Brokerage fees		767		813
Securities gains, net		116		557
Loss from prepayment of debt		-		(482	)
Other		1,885		4,609
Total fee revenue		12,826		15,379
Total revenue		56,120		58,797

Operating expenses:
Salaries and employee benefits		23,592		25,225
Communications and equipment		3,046		3,155
Occupancy		3,367		3,771
Advertising and public relations		938		846
Postage, printing and supplies		863		979
Professional fees		2,366		1,975
Foreclosed property		2,333		3,825
FDIC assessments and other regulatory charges		2,505		2,510
Amortization of intangibles		705		732
Other		4,055		3,937
Total operating expenses		43,770		46,955
Net income before income taxes		12,350		11,842
Income tax expense		585		314
Net income		11,765		11,528
Preferred stock dividends and discount accretion		3,052		3,030
Net income available to common shareholders	$	8,713	$	8,498
Earnings per common share - basic / diluted	$	.15	$	.15
Weighted average common shares outstanding - basic / diluted		58,081		57,764

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet

	March 31,			December 31,			March 31,
(in thousands, except share and per share data)	2013			2012			2012
	(unaudited)			(audited)			(audited)
ASSETS
Cash and due from banks	$	57,638		$	66,536		$	53,147
Interest-bearing deposits in banks		107,390			124,613			139,439
Short-term investments		82,000			60,000			235,000
Cash and cash equivalents		247,028			251,149			427,586
Securities available for sale		1,909,426			1,834,593			1,898,815
Securities held to maturity (fair value $247,087, $261,131 and $318,490)		231,087			244,184			303,636
Mortgage loans held for sale		18,290			28,821			24,809
Loans, net of unearned income		4,193,560			4,175,008			4,127,566
Less allowance for loan losses		(105,753	)		(107,137	)		(113,601	)
Loans, net		4,087,807			4,067,871			4,013,965
Assets covered by loss sharing agreements with the FDIC		42,096			47,467			72,854
Premises and equipment, net		168,036			168,920			174,419
Bank owned life insurance		82,114			81,867			80,956
Accrued interest receivable		18,302			18,659			20,292
Goodwill and other intangible assets		4,805			5,510			7,695
Foreclosed property		16,734			18,264			31,887
Unsettled securities sales		-			5,763			43,527
Other assets		23,643			29,191			73,252
Total assets	$	6,849,368		$	6,802,259		$	7,173,693
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand	$	1,298,425		$	1,252,605		$	1,101,757
NOW		1,281,454			1,316,453			1,389,016
Money market		1,165,836			1,149,912			1,123,734
Savings		243,347			227,308			214,150
Time:
Less than $100,000		1,019,396			1,055,271			1,207,479
Greater than $100,000		685,174			705,558			796,882
Brokered		332,220			245,033			167,521
Total deposits		6,025,852			5,952,140			6,000,539
Short-term borrowings		51,999			52,574			101,925
Federal Home Loan Bank advances		125			40,125			215,125
Long-term debt		124,825			124,805			120,245
Unsettled securities purchases		-			-			119,565
Accrued expenses and other liabilities		54,349			51,210			36,755
Total liabilities		6,257,150			6,220,854			6,594,154
Shareholders' equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series A; $10 stated value; 21,700 shares issued and outstanding		217			217			217
Series B; $1,000 stated value; 180,000 shares issued and outstanding		178,937			178,557			177,451
Series D; $1,000 stated value; 16,613 shares issued and outstanding		16,613			16,613			16,613
Common stock, $1 par value; 100,000,000 shares authorized;
43,063,761, 42,423,870 and 41,688,647 shares issued and outstanding		43,064			42,424			41,689
Common stock, non-voting, $1 par value; 30,000,000 shares authorized;
14,703,636, 15,316,794 and 15,914,209 shares issued and outstanding		14,704			15,317			15,914
Common stock issuable; 133,469, 133,238 and 90,126 shares		2,726			3,119			2,948
Capital surplus		1,059,222			1,057,951			1,056,135
Accumulated deficit		(700,440	)		(709,153	)		(722,363	)
Accumulated other comprehensive loss		(22,825	)		(23,640	)		(9,065	)
Total shareholders' equity		592,218			581,405			579,539
Total liabilities and shareholders' equity	$	6,849,368		$	6,802,259		$	7,173,693

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,

	2013								2012
	Average					Avg.			Average					Avg.
(dollars in thousands, taxable equivalent)	Balance			Interest		Rate			Balance			Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2)	$	4,196,757		$	50,999		4.93	%	$	4,168,440		$	55,842		5.39	%
Taxable securities (3)		2,119,085			9,753		1.84			2,127,794			12,754		2.40
Tax-exempt securities (1)(3)		21,733			347		6.39			25,438			410		6.45
Federal funds sold and other interest-earning assets		209,674			1,035		1.97			377,988			1,215		1.29

Total interest-earning assets		6,547,249			62,134		3.84			6,699,660			70,221		4.21
Non-interest-earning assets:
Allowance for loan losses		(110,941	)							(117,803	)
Cash and due from banks		64,294								54,664
Premises and equipment		169,280								174,849
Other assets (3)		164,250								233,676
Total assets	$	6,834,132							$	7,045,046

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,303,308			454		.14		$	1,458,112			637		.18
Money market		1,257,409			562		.18			1,069,658			641		.24
Savings		234,110			36		.06			205,402			37		.07
Time less than $100,000		1,039,707			1,749		.68			1,271,351			3,026		.96
Time greater than $100,000		694,553			1,477		.86			821,164			2,415		1.18
Brokered time deposits		175,128			-		.00			161,335			718		1.79
Total interest-bearing deposits		4,704,215			4,278		.37			4,987,022			7,474		.60

Federal funds purchased and other borrowings		72,157			516		2.90			102,258			1,045		4.11
Federal Home Loan Bank advances		33,069			19		.23			138,372			466		1.35
Long-term debt		124,816			2,662		8.65			120,237			2,372		7.93
Total borrowed funds		230,042			3,197		5.64			360,867			3,883		4.33

Total interest-bearing liabilities		4,934,257			7,475		.61			5,347,889			11,357		.85
Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,241,527								1,040,587
Other liabilities		70,839								79,612
Total liabilities		6,246,623								6,468,088
Shareholders' equity		587,509								576,958
Total liabilities and shareholders' equity	$	6,834,132							$	7,045,046

Net interest revenue				$	54,659							$	58,864
Net interest-rate spread							3.23	%							3.36	%

Net interest margin (4)							3.38	%							3.53	%

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

(2) Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.

Securities available for sale are shown at amortized cost. Pretax unrealized gains of $17.1 million in 2013 and $23.6 million in 2012 are included in other assets for purposes of this presentation.

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

ex99-2.htm

Exhibit 99.2

First Quarter 2013 Investor Presentation

Jimmy C. Tallent

President &

Chief Executive Officer

H. Lynn Harton

Chief Operating Officer

Rex S. Schuette

Executive Vice President & Chief Financial Officer rex_schuette@ucbi.com (706) 781-2266

David P. Shearrow

Executive Vice President & Chief Risk Officer

United Community Banks, Inc.

Cautionary Statement

This investor presentation may contain forward-looking statements, as defined by federal securities laws, including statements about United’s financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United Community Banks, Inc.’s filings with the Securities and Exchange Commission including its 2012 Annual Report on Form 10-K under the sections entitled “Forward-Looking Statements”.

Forward-looking statements speak only as of the date they are made, and we undertake no

Non-GAAP Measures

This presentation also contains financial measures determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). Such non-GAAP financial measures include the following: core fee revenue, core operating expense, core earnings, tangible common equity to tangible assets, tangible equity to tangible assets and tangible common equity to risk-weighted assets. The most comparable GAAP measures to these measures are: fee revenue, operating expense, net income (loss), and equity to assets.

Management uses these non-GAAP financial measures because we believe it is useful for evaluating our operations and performance over periods of time, as well as in managing and evaluating our business and in discussions about our operations and performance. Management believes these non-GAAP financial measures provide users of our financial information with a meaningful measure for assessing our financial results and credit trends, as well as for comparison to financial results for prior periods. These non-GAAP financial measures should not be considered as a substitute for financial measures determined in accordance with GAAP and may not be comparable to other similarly titled financial measures used by other companies. For a reconciliation of the differences between our non-GAAP financial measures and the most comparable GAAP measures, please refer to the ‘Non-GAAP Reconcilement Tables’ at the end of the Appendix to this presentation.

United at a Glance

Founded in 1950

Third-largest bank holding company in Georgia

Headquartered in Blairsville, Georgia with 103 locations throughout north Georgia, metro Atlanta, coastal Georgia, western North Carolina, western South Carolina, and east Tennessee

Deposit Market Share(1) Key Statistics as of 3/31/13

Market Offices Deposit Share Rank (billions)

North Georgia 22 32% Total assets $6.85 Atlanta MSA 37 4 7 Total deposits $6.03 Gainesville MSA 5 12 5 Loans $4.19 Coastal Georgia 8 4 8 Western North Carolina 20 12 3 East Tennessee 1 2 9

1FDIC deposit market share and rank as of June 30, 2012 for markets where United takes deposits. Source: SNL and FDIC. Excludes 2 Loan Production Offices

Business and Operating Model

Service is Point of Differentiation

• #1 in Customer Satisfaction according to Customer Service Profiles

• J.D. Power 2013 Retail Banking Satisfaction Study rates United among the top 2 banks in the southeast

• Golden rule of banking – treating people the way we want to be treated

• “The Bank that SERVICE Built”

• Customer surveys continue with 95% satisfaction rate

“Community bank service, large bank resources”

Strategic footprint with Twenty-seven substantial banking Disciplined growth “community banks” opportunities strategy

Local CEOs with deep roots in their communities Operates in a number of the Organic supported by de novos more demographically attractive and selective acquisitions Resources of a $6.8 billion bank U.S. markets

United Community Banks, Inc.

PERFORMANCE - TRENDS

Highlights First Quarter

Improving Quarterly Results

•Net income of $11.8 million, or 15 cents per share •Seventh quarterly profit in past eight quarters •Core earnings (pre-tax, pre-credit) of $26.4 million

Modest Loan Growth, Both Linked Quarter and Year Ago

• Increased commercial and retail lending opportunities

• New retail mortgage and home equity products

• Expansion into Greenville, SC market

Solid Improvement in All Credit Quality Metrics

• NPAs decline 12% to $112.7 million and 1.65% of total assets

• NPL inflow declines 52% to $9.7 million

• Net charge-offs decline $2.1 million to $12.4 million; lowest level in 5 years

Strong Core Transaction Deposit Growth

• Up 10%, annualized, from last quarter

• Building customer deposit base

• Represents 58% of total customer deposits compared to 34% at the end of 2008

Regulatory Highlights

• SEC investigation surrounding deferred tax assets closed with no enforcement action issued

• U.S. Department of the Treasury owned securities (TARP) remarketed and closed generating among the highest pricing in the nation of similar transactions

Net Income $ in

millions

$15

$ 11.5 $11.8

$10.6 $10

$ 6.5

$5.3 $5

1Q12 2Q12 3Q12 4Q12 1Q13

Key Drivers of Net Interest Revenue / Margin

$ in

Net Interest Revenue & Margin millions

$61

$ 58.9 Net Interest Revenue

$ 57.4 4.0% • Offset margin compression by growing

$57 $56.8 $56.0 loans

$ 54.7 • 1Q13 growth impacted by:

• Two fewer days in quarter

$53 3.53% 3.60%

• New / renewed loan repricing,

3.43% 3.44% 3.5%

3.38% including new mortgage and HELOC $49 program Net Interest Margin • Securities pricing under pressure

$45 3.0%

1Q12 2Q12 3Q12 4Q12 1Q13

Key Drivers of NIR – Loan Growth Key Drivers of NIR – Deposit Pricing (excl. brokered)

6% .40

5 Loan Yields

5.07% 4.93%

.30 .30 .30 .30

.20 .21 .21

Securities Yields NOW

2% 2

.14 .14 .13

• CD pricing reflects the quarter-average new and

.10

Avg Rate on Int Bearing Dep’s renewed yield.

. .37% • MMDA / NOW pricing reflects the deposit yield for

0% 0 each quarter.

1Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13

Non-Performing Loans (NPLs) Inflow Trends

$ in Quarterly NPL Inflows

millions

$ 32.4

$ 30 $29.4 $30.5

$ 20 $20.2

$ 10 $9.7

$ 0

Q112 Q212 Q312 Q412 Q113

Resi Constr Comm Constr Resi Mtg Comm RE Comm Consumer

$ in Total NPLs

millions

$ 129.7

$ 120 $115.4 $115.0

$ 109.9

$ 99.0

$ 90

$ 60

$ 30

$ 0

Q112 Q212 Q312 Q412 Q113

Single Customer

United Community Banks, Inc.

OUTLOOK

Outlook

Our Goal: Leverage Our Strengths

•Strong local leadership

•Funding advantage in our legacy markets •Consistent and attractive culture

• Class leading customer satisfaction

• Low employee turnover

To Grow Our Business The Right Way

•Become better retail and small business bank

• Grow sales: Better product design, merchandising, campaign execution

• Streamline delivery process that focuses on how we serve our customer in the end

• HELOC program success: $125 million in new balances

• Invest in people

• Continue to invest in, and improve commercial and retail capabilities

• Diversify portfolio – focus on C&I, owner occupied, and consumer lending

• Momentum building across footprint

• Invest in people: 31 lenders past 2 years in growth opportunity markets

• Enter new markets: Opened LPO in Greenville, SC (4Q12); expand territory and commercial loan potential

• Positive net loan growth going forward

• Customer derivative swap program – meeting customer needs while adding fee revenue

• Deferred Tax Asset Recovery

Outlook $ in

millions

Grow Existing Fee Businesses at Faster Pace

•Mortgage first priority

• Performing well, but at 50% of peers

• Focus on home purchase product as well as refinancings

• Focus on lower performing markets

• Invest in management, people and new markets

• Advisory Services

• Customer satisfaction high

• Invest in management, people, and new markets

Mortgage Fee Revenue

$ 3.26

$3.00 $2.80

$ 2.66

$ 2.32

$2.25 $2.10 $1.50

$0.75

1Q12 2Q12 3Q12 4Q12 1Q13*

NGA and NC Other Markets

*57% of Volume New Mortgages

Outlook

Summary

•Focus on core earnings growth – fee revenue, expenses, efficiencies

• Offsetting margin headwinds through loan growth and improving deposit mix

• Goal loan growth in 2013 – mid-single digit range

• Expecting quarterly margin compression in 2013 – 2 to 4 basis points

• Steady progress on credit; improving through 2013

• Solid strengths – size, culture, capital

• Well-positioned in all areas for opportunities

United Community Banks, Inc.

FINANCIAL REVIEW

Core Earnings & Core Fee Revenue

Core Earnings -$26.4 $ in

Million

$ 60 millions

$ 58.9 $56.9 $57.4 $56.0 •Down $2.7 million from

$ 54.7 4Q12 and $2.9 million from

$ 50 a year ago

•NIR impacted by fewer days

$ 42.7 and margin

$ 40 $41.3 $40.5 $41.6 $40.9 •Fee revenue decline due to

seasonal impact and lower mortgage volume

$ 30 $29.3 $29.9 $29.1

$ 28.3 $26.4 Net Interest Revenue

$ 20

Core Operating Expenses $13.1 $14.6

$ 10 $12.8 $13.0 $12.6

Core Earnings

1Q12 2Q12 3Q12 4Q12 1Q13

Core Fee Revenue $ in thousands

CORE EARNINGS CORE FEE REVENUE

Variance - Increase / (Decrease) Variance - Increase / (Decrease) 1Q13 4Q12 1Q12 1Q13 4Q12 1Q12 Net Interest Revenue $ 54,659 $ (1,369) $ (4,205)

Overdraft Fees $ 2,991 $ (473) $ (254) Fee Revenue 12,618 (1,933) (473) Debit Card Fees 3,227 (474) 125

Gross Revenue 67,277 (3,302) (4,678)

Operating Expense (Excl OREO) 40,900 (589) (1,770) Other Service Charges 1,185 (25) (251) Pre-Tax, Pre-Credit (Core) $ 26,377 $ (2,713) $ (2,908) Total Service Charges and Fees 7,403 (972) (380) Mortgage Loan & Related Fees 2,655 (607) 556 Net Interest Margin 3.38 % (.06) % (.15) % Brokerage Fees 767 16 (46) Other 1,793 (370) (603)

Total Fee Revenue - Core 12,618 (1,933) (473)

Non-Core(1) 208 (2) (2,080)

(1) Includes securities gains (losses), gains from hedge ineffectiveness, gains

Reported - GAAP $ 12,826 $ (1,935) $ (2,553)

from the sale of low income housing credits, deferred compensation gains, and interest on federal income tax refund.

Core Operating Expenses $ in

thousands

Variance - Increase / (Decrease) 1Q13 4Q12 1Q12

Salaries & Employee Benefits $ 23,055 $ 95 $ (1,710) Communications & Equipment 3,046 (274) (109) Occupancy 3,367 (88) (404)

FDIC Assessment 2,505 - (5) (1) Includes foreclosed

property costs,

Advertising & Public Relations 938 (49) 92 severance, deferred

compensation gains, and

Postage, Printing & Supplies 863 (187) (116) provision for litigation

settlement.

Professional Fees 2,366 (319) 391 Other Expense 4,760 233 91

Core Operating Expenses 40,900 (589) (1,770)

Non-Core(1) 2,870 (6,367) (1,415)

Reported GAAP $ 43,770 $ (6,956) $ (3,185)

Net Income $ in

thousands

NET OPERATING INCOME

Variance - Increase / (Decrease) 1Q13 4Q12 1Q12 Core Earnings (Pre-Tax, Pre-Credit) $ 26,377 $ (2,713) $ (2,908)

Provision for Loan Loss (11,000) (3,000) (4,000)

NON-CORE FEE REVENUE:

Hedge Ineffectiveness Gains (Losses) (85) (201) (200) Securites Gains (Losses) 116 85 (441) Losses from Prepayment of Borrowings - - 482 Interest on Federal Income Tax Refund - - (1,100) Gains from Sale of Low Income Housing Tax Credits - - (728) Gains (Losses) on Deferred Compensation Plan Assets 177 114 (93)

Total Non-Core Fee Revenue 208 (2) (2,080)

NON-CORE OPERATING EXPENSES:

Foreclosed Property Write Downs 1,041 (397) (1,070)

Foreclosed Property (Gains) Losses on Sales 105 (1,645) 12 58 Million Forclosed Property Maintenance Expenses 1,187 (236) (434)

Severance Costs 360 (203) 170

Provision for Litigation Settlement - (4,000) - Outstanding Gains (Losses) on Deferred Comp Plan Liability 177 114 (93)

Total Non-Core Operating Expenses 2,870 (6,367) (1,415)

Income Tax Expense (950) 148 190

Net Income $ 11,765 $ 6,504 $ 237 NET INCOME

Variance - Increase / (Decrease) 1Q13 4Q12 1Q12 Net Income $ 11,765 $ 6,504 $ 237

Preferred Stock Dividends (3,052) 7 22

Net Income Avail to Common Shareholders $ 8,713 $ 6,497 $ 215

Net Income Per Share $ .15 $ .11 $ -

Tangible Book Value $ 6.76 $ .19 $ .22

(DTA Allowance $271 Million)

Customer Deposit Mix & Core Growth $ in

millions

Deposits by % / Customer Mix Total Deposit Mix

1Q13 4Q12 1Q12 4Q08

Demand / NOW $ 1,894 $ 1,841 $ 1,722 $ 1,457

1Q13

MMDA / Savings 1,401 1,372 1,331 630 $5.7B Core Transaction 3,295 3,213 3,053 2,087

58% Significant

Demand & NOW Time < $100,000 1,014 1,050 1,201 1,945

33% growth in

Public Public Deposits 700 739 782 755 core Total Core 5,009 5,002 5,036 4,787

Funds

13% transaction

deposits Time >$100,000 653 674 759 1,336 Time MMDA & Public Deposits 32 31 38 87

Sav since 4Q08

>$100M Total Customer 5,694 5,707 5,833 6,210

11% 25% Time

<$100M Brokered Deposits 332 245 168 793

18% Total Deposits $ 6,026 $ 5,952 $ 6,001 $ 7,003

4Q08 Core Deposit Growth – Category & Market

Public $6.2B

Growth Growth

Funds 34%

CATEGORY 1Q13 MARKET 1Q13

14%

Demand $ 52 Atlanta $ 39

Time Demand & NOW

MM Accounts 13 N. Georgia 24

>$100M 23%

Savings 16 North Carolina 11

22%

NOW - Coastal Georgia 3 MMDA & Total Categories $ 81 Tennessee 2 Time Sav Gainesville 2 <$100M 10% Percent Growth (Annualized) 10 % $ 81

31%

Capital Ratios

15%

14.30% 14.30% 14.20% 14.30% 13.70%

10%

8.80% 8.80% 8.80% 8.90% 8.30%

5.50% 5.70% 5.70% 5.70%

5% 5.30%

1Q12 2Q12 3Q12 4Q12 1Q13

Total RBC Tier 1 RBC Leverage Tier 1 Common RBC Tangible Common to Assets*

*DTA Allowance of $271 million, when reversed, adds 3.6% to 1Q13 Tangible Common to Assets

Well-

Capitalized MAR ‘13 DEC ‘12 MAR ‘12 Bank Tier 1 RBC 6 % 14.7 % 14.5 % 13.7 % Total RBC 10 16.0 15.7 15.0 Leverage 5 10.0 9.9 9.0

Holding Company

Tangible Equity to Assets 8.5 8.6 8.1

United Community Banks, Inc.

LOAN PORTFOLIO & CREDIT QUALITY

Loan Portfolio (total $4.19 billion) $ in

billions

By Loan Type Diversifying Portfolio

Reduced

1Q11 concentrations 1Q13

Commercial $4.194 of A&D and $4.194

57% Investor RE $2.41 loans

Retail Retail C&I 34%

Install 4% $.16

31% 34% $1.411 $1.308 $1.424

C&I 38%

Residential $1.584

Mortgage 30% $1.25 Inv RE

17% Inv RE $.699 16% $.674

Geographic Diversity

$ 1.317 $ 1.363 Total Loans

36% Atlanta MSA North Georgia Loan Diversification & Type

Period $ in Billions

• Reducing land exposure $ .575 1Q13 $4.194

24%

$ .398 Western North Carolina 4Q12 $4.175 • Focus on small business

$ .259 $ .282 3Q12 $4.138

12% Coastal Georgia and C&I

Gainesville MSA East Tennessee 2Q12 $4.119

33% 1Q12 $4.128 • Enhanced retail products

6% 7% 9% 14% 31%

New Loans Funded and Advances(1) $ in

millions

CATEGORY MARKET

(1)Represents

1Q13 1Q12 new loans 1Q13 1Q12

Commercial C & I $ 39.9 $ 49.5 funded and net Atlanta $ 86.5 $ 90.6 loan advances

Owner Occupied CRE 58.0 72.6 (net of Coastal Georgia(2) 37.7 32.0 Income Producing CRE 14.5 19.6 payments on N. Georgia 70.2 57.8

1.6 3.0 lines of credit)

Commercial Constr. North Carolina 32.2 19.9

(2)Includes $19.6

Total Commercial 114.0 144.9 Tennessee 21.7 22.6 and $-0-,

Residential Mortgage 56.2 35.1 respectively, of Gainesville 26.1 9.5 Residential HELOC 40.4 15.1 purchased Total Markets $ 274.4 $ 232.4

30.1 22.4 Indirect Auto

Residential Construction

Loans

Consumer(2) 33.7 15.0

Total Categories 274.4 232.4

New Loans Funded and Advances

$309.0 $300

$ 281.6

$ 274.4

$250

$ 232.4

$215.2 $200

1Q12 2Q12 3Q12 4Q12 1Q13

Commercial Loans (total $2.41 billion) $ in

billions

By Loan Type Geographic Diversity

Office Bldg $ .968

26% Atlanta MSA

36% North Georgia $ .655

Other

41% 24% $ .181 $ .282 $ .146 $ .178 Coastal Georgia 12% East Tennessee Gainesville MSA Western North Carolina

6% 7% 8% 12% 27% 40%

Owner 0% Occupied

Income 47% Average Loan Size

Producing $1.13B

Type ,000

28%

$.67B Owner Occup’d $423 Income Prod 603

C & I

C & I 92

19%

$.46B Comm Constr 417

Retail (total $1.41 billion) $ in

millions

By Loan Type Geographic Diversity(1)

$ .532 Home Equity 36% $ .312 North Georgia LOC 28% $.40B Western North Carolina 24% $ .229

Avg loan size $48,000 $ .124 Atlanta MSA

$ .067 $ .094 Consumer 12% Coastal Georgia East Tennessee

8% Gainesville MSA

$.11B 5% 7% 9% 17% 23% 39%

(1) Excludes indirect auto of $.05B

Mortgage

Success with new portfolio

60% products and HELOCs $.85B

Conservative underwriting

Avg loan size $98,000

62% of HE Primary Lien

Residential Construction (total $372 million) $ in

millions

Geographic Diversity

North Georgia $ 175 $ 81 Atlanta MSA $ 67 Western North Carolina $ 23 East Tennessee $ 11 Gainesville MSA $ 15 Coastal Georgia

0% 3% 4% 6% 18% 22% 47%

1Q13 vs. 1Q13 4Q12 3Q12 2Q12 1Q12 1Q12 TOTAL COMPANY

Land Loans

Developing $ 57 $ 62 $ 71 $ 78 $ 86 $ (29) Raw 42 46 41 45 57 (15) Lot 188 193 196 203 204 (16) Total 287 301 308 326 347 (60) Construction Loans Spec 40 41 44 49 57 (17) Sold 45 40 37 34 32 13 Total 85 81 81 83 89 (4) Total $ 372 $ 382 $ 389 $ 409 $ 436 $ (64)

Credit Quality $ in

millions

1Q13 4Q12 3Q12 2Q12 1Q12 Net Charge-offs $ 12.4 $ 14.5 $ 20.6 $ 18.9 $ 15.9 as % of Average Loans 1.21 % 1.39 % 1.99 % 1.85 % 1.55 %

Allowance for Loan Losses $ 105.8 $ 107.1 $ 107.6 $ 112.7 $ 113.6 as % of Total Loans 2.52 % 2.57 % 2.60 % 2.74 % 2.75 % as % of NPLs 110 97 94 98 88

Past Due Loans (30 - 89 Days) .67 % .65 % .68 % .65 % .86 %

Non-Performing Loans $ 96.0 $ 109.9 $ 115.0 $ 115.4 $ 129.7 OREO 16.7 18.3 27.0 30.4 31.9 Total NPAs 112.7 128.2 142.0 145.8 161.6

Performing Classified Loans 271.7 261.9 284.0 324.0 317.0 Total Classified Assets $ 384.4 $ 390.1 $ 426.0 $ 469.8 $ 478.6 as % of Tier 1 / Allow ance 49 % 50 % 55 % 62 % 64 %

Accruing TDRs (see page 28) $ 126.0 $ 122.8 $ 138.3 $ 141.6 $ 125.8

As % of Original Principal Balance

Non-Performing Loans 66.3 % 69.5 % 68.8 % 68.8 % 70.6 % OREO 45.0 39.7 36.4 39.3 36.1

Total NPAs as % of Total Assets 1.65 1.88 2.12 2.16 2.25 as % of Loans & OREO 2.69 3.06 3.41 3.51 3.88

Performing Classified Loans $ in

millions

$350

$320 $323.6

$ 316.9

$290

$271.7 $260 $261.9

1Q12 2Q12 3Q12 4Q12 1Q13

BY CATEGORY 1Q12 2Q12 3Q12 4Q12 1Q13

Commercial:

Commercial & Industrial $ 17 $ 16 $ 19 $ 18 $ 20 Owner Occupied 78 54 77 65 71 Total C & I 95 70 96 83 91 Income Producing CRE 56 94 49 53 57 Commercial Constr 23 38 27 19 18

Total Commercial 174 202 172 155 166

Residential Mortgage 76 73 73 65 64 Residential Construction 64 46 35 38 38 Consumer / Installment 3 3 3 4 3

Total Performing Classified $ 317 $ 324 $ 283 $ 262 $ 271

TDRs $ in

millions

LOAN TYPE Accruing(1) Non-Accruing Total TDRs 1Q13 vs. 1Q12 1Q13 vs. 1Q12 1Q13 vs. 1Q12

Commercial (Sec by RE) $ 65.7 $ 70.3 $ 9.0 $ 9.5 $ 74.7 $ 79.8 Commercial & Industrial 8.6 3.3 .2 .2 8.8 3.5 Commercial Construction 15.8 17.9 16.8 16.2 32.6 34.1 Total Commercial 90.1 91.5 26.0 25.9 116.1 117.4 Residential Mortgage 16.8 12.5 2.2 2.3 19.0 14.8 Residential Construction 18.9 21.6 4.5 4.4 23.4 26.0 Consumer Installment .2 .2 .1 .1 .3 .3

Total $ 126.0 $ 125.8 $ 32.8 $ 32.7 $ 158.8 $ 158.5

Accruing TDRs (1) 78 percent of accruing TDR loans

$ 200 have an interest rate of 4 percent or greater

$ 150

$ 141.6 $138.3

$ 125.8 $122.8 $126.0

$ 100 Accruing TDR past due 30 – 89 days

– 2.03%

$ 50

79% of accruing TDRs are classified

$ - loans

1Q12 2Q12 3Q12 4Q12 1Q13

Net Charge-offs by Category & Market $ in

thousands

NET CHARGE-OFFS BY CATEGORY

1Q13 % of Average Loans (Annualized)

% of Avg

Total Loans 4Q12 3Q12 2Q12 1Q12 Commercial (Sec. by RE): Ow ner Occupied $ 1,922 .69 % 1.76 % 3.56 % .46 % .87 % Income Producing 3,321 1.99 .67 .70 1.75 .70 Total Comm (Sec. by RE) 5,243 1.18 1.35 1.79 .95 .81 Commercial & Industrial 1,501 1.34 .12 (.23) .70 .62 Commercial Construction (4) (.01) 4.25 7.74 .21 .81 Total Commercial 6,740 1.14 1.30 1.81 .86 .78 Residential Mortgage 1,635 .79 1.55 1.40 .70 1.98 Home Equity LOC 512 .53 .49 .80 2.60 1.70 Residential Construction 2,973 3.22 2.52 5.69 9.14 4.84 Consumer/ Installment 524 1.35 1.10 .78 .88 1.72 Total Net Charge-offs $ 12,384 1.21 1.39 1.99 1.85 1.55 NET CHARGE-OFFS BY MARKET

North Georgia $ 4,910 1.42 % 1.26 % 1.84 % 3.58 % 2.56 % Atlanta MSA 3,295 1.07 1.27 3.02 .75 .89 North Carolina 2,249 1.59 1.39 1.15 2.52 1.14 Coastal Georgia 821 .85 .60 2.67 .23 1.53 Gainesville MSA 430 .67 2.04 .45 (.29) 1.35 East Tennessee 679 .98 2.98 .45 .68 .34

NPAs by Loan Category & Market $ in

thousands

1Q13 1Q12

NPLs OREO Total NPAs NPLs OREO Total NPAs LOAN CATEGORY LOAN CATEGORY

Commercial (sec. by RE): Commercial (sec. by RE):

Owner Occupied $ 8,142 $ 4,750 $ 12,892 Owner Occupied $ 12,830 $ 7,892 $ 20,722 Income Producing 9,162 834 9,996 Income Producing 13,251 2,916 16,167 Commercial & Industrial 29,545 - 29,545 Commercial & Industrial 36,314 - 36,314 Commercial Construction 22,359 3,027 25,386 Commercial Construction 23,319 3,266 26,585

Total Commercial 69,208 8,611 77,819 Total Commercial 85,714 14,074 99,788

Residential Mortgage 10,901 3,463 14,364 Residential Mortgage 18,741 5,882 24,623 HELOC 916 - 916 Residential Construction 14,592 4,660 19,252 Residential Construction 24,341 11,931 36,272 Consumer/ Installment 389 - 389 Consumer/ Installment 908 - 908

Total $ 96,006 $ 16,734 $ 112,740 Total $ 129,704 $ 31,887 $ 161,591 MARKET MARKET

Gainesville $ 911 $ 370 $ 1,281 Gainesville $ 2,210 $ 3,387 $ 5,597 Coastal Georgia 3,523 1,449 4,972 Coastal Georgia 5,622 1,268 6,890 East Tennessee 2,463 2,242 4,705 East Tennessee 2,669 376 3,045 North Carolina 8,519 2,533 11,052 North Carolina 15,765 4,650 20,415 Atlanta MSA 17,380 3,524 20,904 Atlanta MSA 22,321 7,647 29,968 North Georgia 63,210 6,616 69,826 North Georgia 81,117 14,559 95,676

Non Performing Assets $ in

$ 200 millions

$ 161.6

$ 145.8 $142.0

$ 128.2

$ 100 $112.7

*NPAs to total assets Ð 1.65% / Allowance to loans at 2.52%

$ 0

1Q12 2Q12 3Q12 4Q12* 1Q13

Non-Performing Loans

United Community Banks, Inc.

APPENDIX

Experienced Proven Leadership

• Over 39 years in banking

• Over 30 years in banking • Over 35 years in banking

• Led company from $42

• Responsible for overall • Responsible for million in assets in 1989 to operations accounting, finance and $6.8 billion today

• Former Consultant and reporting activities, M&A,

• Trustee of Young Harris

Special Assistant to the and investor relations College CEO and EVP of • Former CAO and Controller

• Georgia Power Company

Commercial Banking for TD for State Street Board Member Bank Financial Group; and Corporation

• GA Economic Developers

President & CEO of The • Former ABA Accounting Association Spirit of South Financial Group Committee Chairman Georgia Award recipient

H. Lynn Harton

Jimmy C. Tallent Rex S. Schuette

Chief Operating

President & CEO EVP & CFO

Officer

Joined 1984 Joined 2001 Joined 2012

• Over 30 years in banking • Over 35 years in banking • Over 20 years in financial

• Responsible for Risk • Responsible for 27 services and banking Management and Credit community banks with 103 • Responsible for strategic Risk Administration; Co- branch offices planning and Chairman of Risk • Formerly of Riegel Textile implementation Management Committee; Credit Union; President of • Former President of also responsible for credit Farmers and Merchants American Savings Bank; underwriting, review, Bank and CFO & CRO of The policy and special assets • Former Georgia Board of South Financial Group

• Former EVP & SCO for Natural Resources Board SunTrust Banks Chairman

David P. Shearrow Bill M. Gilbert Timothy K. Schools

EVP & CRO Director of Banking Chief Strategy Officer

Joined 2007 Joined 2000 Joined 2011

Market Share Opportunities & Demographics

EXCELLENT GROWTH OPPORTUNITIES FAST GROWING MARKETS

Market Deposits Population Growth (%) Deposits (in Deposit Population Actual Projected

Markets (in billions)(1) billions)(2,3) Banks(3) Offices Share(1) Rank(1)

Markets1 (in thousands) 2010 - 2012 2012 - 2017

North Georgia $ 6.4 $ 2.0 11 22 32 % 1 Atlanta, GA MSA

5,365 2 % 5 %

Western North Carolina 6.4 .9 1 20 12 3 East Tennessee 868 2 4 Gainesville MSA 2.6 .3 1 5 12 5 Greenville-Mauldin-Easley, SC MSA 651 2 6 Atlanta MSA 50.2 2.1 10 37 4 7 Western North Carolina 446 2 4 Coastal Georgia 7.3 .3 2 8 4 8 Coastal Georgia 390 2 7 East Tennessee 16.0 .3 2 11 2 9 North Georgia 387 1 2 Gainesville, GA MSA 182 1 6

Total Markets $ 88.9 $ 5.9 27 103

Total Markets

¹ FDIC deposit market share and rank as of 6/12 for markets where United takes deposits. Data Source: SNL and FDIC.

2 Based on current quarter. Georgia 9,858 2 5

3 Excludes two loan production offices North Carolina 9,759 2 6 Tennessee 6,452 2 4 South Carolina 4,740 2 6 United States 313,129 1 3

¹ Population data is for 2012 and includes those markets where United takes deposits. No deposits in SC.

Data Source: SNL

“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.”

-Benjamin Franklin

Liquidity $ in

millions

Unused Variance Capacity 1Q13 4Q12 1Q12 vs 4Q12 vs 1Q12

Wholesale Borrowings

(1)

Brokered Deposits $ 1,394 $ 332 $ 245 $ 168 $ 87 $ 164 FHLB 1,351 - 40 215 (40) (215) Fed Funds 130 - - - - -Other Wholesale - 52 53 102 (1) (50)

Total $ 2,875 $ 384 $ 338 $ 485 $ 46 $ (101) WHOLESALE

BORROWINGS

Long-Term Debt

Senior Debt $ 35 $ 35 $ - $ - $ 35 Sub-Debt 35 35 65 - (30) Trust Preferred Securities 55 55 55 - -

Total Long-Term Debt $ 125 $ 125 $ 120 $ - $ 5

(1) Estimated Brokered Deposit Total Capacity at 25% of Assets

Variance 1Q13 4Q12 1Q12 vs 4Q12 vs 1Q12

Loans $ 4,194 $ 4,175 $ 4,128 $ 19 $ 66

Core (DDA, MMDA, Savings) $ 3,295 $ 3,213 $ 3,053 $ 82 $ 242 Public Funds 732 770 819 (38) (87) CD’s 1,667 1,724 1,960 (57) (293) Total Deposits (excl Brokered) $ 5,694 $ 5,707 $ 5,832 $ (13) $ (138)

LOANS / DEPOSITS Loan to Deposit Ratio 74% 73% 71%

Investment Securities:

Available for Sale -Fixed $ 1,193 $ 1,126 $ 1,359 $ 67 $ (166) -Floating 716 712 540 4 176 Held to Maturity -Fixed 211 222 277 (11) (66) -Floating 21 22 27 (1) (6) Total Investment Securities 2,141 2,082 2,203 59 (62)

Percent of Assets (Excludes Floating) 20% 20% 23%

Business Mix – Deposits at quarter-end $ in

millions

1Q13 vs. DEPOSITS BY CATEGORY 1Q13 4Q12 3Q12 2Q12 1Q12 1Q12

Demand & Now $ 1,894 $ 1,841 $ 1,796 $ 1,735 $ 1,722 $ 172 MMDA & Savings 1,401 1,372 1,342 1,330 1,331 70

Core Transaction Deposits 3,295 3,213 3,138 3,065 3,053 242

Time < $100,000 1,014 1,050 1,118 1,159 1,201 (187) Time $100,000 < $250,000 528 547 598 625 654 (126) Public Deposits 700 739 612 623 782 (82) Total Core Deposits 5,537 5,549 5,466 5,472 5,690 (153)

Time $250,000 125 127 101 103 105 20 Public Deposits 32 31 32 36 38 (6)

Total Customer Deposits 5,694 5,707 5,599 5,611 5,833 (139)

Brokered Deposits 332 245 224 211 168 164

Total Deposits $ 6,026 $ 5,952 $ 5,823 $ 5,822 $ 6,001 $ 25

Core Transaction Deposits $ in

millions

$174

East Tennessee Core Transactions / Total

$176

4Q12 1Q13 4Q12

$209

Coastal Georgia 1Q13 Coastal GA 68.0 % 67.8 %

$212

Gainesville MSA 65.0 63.7 $202 North Carolina 60.1 58.9

Gainesville MSA $205 Atlanta MSA 61.9 59.9 East TN 60.2 57.9

$535

North Carolina North Georgia 69.7 54.8

$546

Total 57.9 % 56.3 %

$850

North Georgia

$874

$1,243

Atlanta MSA

$1,282

$0 $200 $400 $600 $800 $1,000 $1,200

Lending & Credit Environment

Regional Credit Review – Standard Underwriting

•Legal Lending Limit $166 •House Lending Limit 20 •Project Lending Limit 12 •Top 25 Relationships 372

PROACTIVELY ADDRESSING CREDIT ENVIRONMENT

• Centralized underwriting and approval process

• Segregated work-out teams

• Highly skilled ORE disposition group STRUCTURE • Seasoned regional credit professionals

• Continuous external loan review Weekly past due meetings

• Internal loan review of new credit relationships Weekly NPA/ORE meetings

• Intensive executive management involvement….. Quarterly criticized watch loan review meetings

PROCESS Quarterly pass commercial and CRE portfolio review meetings

• Ongoing enhancements to credit policy

• Periodic updates to portfolio limits

POLICY

Commercial Construction & Real Estate $ in

millions

COMMERCIAL CONSTRUCTION COMMERCIAL REAL ESTATE

31-Mar-13 31-Mar-13 Amount Percent Land Develop - Vacant (Improved) $ 64.2 42 % Raw Land - Vacant (Unimproved) 42.6 28 Owner Income Commercial Land Development 20.7 14 Occupied Producing Total Percent Office Buildings 9.2 6 Office Buildings $ 295.9 $ 199.0 $ 494.9 27 % Churches 7.2 5 Retail 111.7 136.1 247.8 14 Warehouse 2.6 2 Small Warehouses / Storage 119.9 63.8 183.7 10 Hotels / Motels .6 - Multi-Residential / Other Properties 69.1 93.1 162.2 9 Miscellaneous Construction 5.3 3 Churches 141.0 - 141.0 8 Total Commercial Construction $ 152.4 Convenience Stores 87.7 16.2 103.9 6 Hotels / Motels - 84.1 84.1 5 Franchise / Restaurants 37.9 33.4 71.3 4 Farmland 60.2 - 60.2 3 Average Loan Size (,000) Manufacturing Facility 48.4 6.7 55.1 3 •Commercial Construction $417 Auto Dealership / Service 41.4 9.4 50.8 3 •Commercial RE: Leasehold Property 16.2 17.0 33.2 2

•Composite CRE 465

•Owner Occupied 423 Golf Course / Recreation 32.5 - 32.5 2 •Income Producing 603 Daycare Facility 12.9 7.2 20.1 1 Funeral Home 16.4 0.6 17.0 1 Carwash 15.9 0.3 16.2 1 Commercial RE Characteristics Movie Theater / Bowling Recreation 14.1 - 14.1 1

•62.7% owner occupied

Marina 9.2 - 9.2 -

•Small business, doctors, dentists, attorneys,

CPAs Mobile Home Parks - 6.7 6.7 -

•$12 million project limit Total Commercial Real Estate $ 1,130.4 $ 673.6 $ 1,804.0

Loans by Business Mix and Region $ in

millions

1Q13 vs.

1Q13 4Q12 3Q12 2Q12 1Q12 1Q12 2012 2011 2010 2009 2008 QUARTERLY LOANS - BUSINESS MIX BY CATEGORY ANNUAL LOANS - BUSINESS MIX BY CATEGORY

Commercial: Commercial:

Comm & Indus $ 454 $ 458 $ 460 $ 450 $ 440 $ 14 Comm & Indus $ 458 $ 428 $ 441 $ 390 $ 410 Owner Occ’d 1,130 1,131 1,126 1,140 1,137 (7) Owner Occ’d 1,131 1,112 980 963 956 Total C & I 1,584 1,589 1,586 1,590 1,577 7 Total C & I 1,589 1,540 1,421 1,353 1,366 Income Prod CRE 674 682 693 697 706 (32) Income Prod CRE 682 710 781 816 671 Comm Constr 152 155 161 169 167 (15) Comm Constr 155 164 297 363 500 Total Comm 2,410 2,426 2,440 2,456 2,450 (40) Total Comm 2,426 2,414 2,499 2,532 2,537 Resi Mortgage 1,246 1,214 1,174 1,128 1,131 115 Resi Mortgage 1,214 1,135 1,279 1,427 1,526 Resi Constr 372 382 389 409 436 (64) Resi Constr 382 448 695 1,050 1,479 Consum / Install 166 153 135 126 111 55 Consum / Install 153 113 131 142 163 Total Loans $ 4,194 $ 4,175 $ 4,138 $ 4,119 $ 4,128 $ 66 Total Loans $ 4,175 $ 4,110 $ 4,604 $ 5,151 $ 5,705

1Q13 vs.

1Q13 4Q12 3Q12 2Q12 1Q12 1Q12 2012 2011 2010 2009 2008 QUARTERLY LOANS - BY REGION ANNUAL LOANS - BY REGION

North Georgia $ 1,363 $ 1,364 $ 1,383 $ 1,387 $ 1,408 $ (45) North Georgia $ 1,364 $ 1,426 $ 1,689 $ 1,884 $ 2,040 Atlanta MSA 1,317 1,288 1,257 1,252 1,239 78 Atlanta MSA 1,288 1,220 1,310 1,435 1,706 North Carolina 575 579 579 576 588 (13) North Carolina 579 597 702 772 810 Coastal Georgia 398 400 380 369 366 32 Coastal Georgia 400 346 335 405 464 Gainesville MSA 259 261 256 259 262 (3) Gainesville MSA 261 265 312 390 420 East Tennessee 282 283 283 276 265 17 East Tennessee 283 256 256 265 265 Total Loans $ 4,194 $ 4,175 $ 4,138 $ 4,119 $ 4,128 $ 66 Total Loans $ 4,175 $ 4,110 $ 4,604 $ 5,151 $ 5,705

Non GAAP Reconciliation Tables $ in

thousands

Operating Earnings to GAAP Earnings Reconciliation

1Q13 4Q12 3Q12 2Q12 1Q12 CORE FEE REVENUE

Core fee revenue $ 12,618 $ 14,551 $ 13,003 $ 12,764 $ 13,091 Securities gains, net 116 31 - 6,490 557 Loss on prepayment of borrowings - - - (6,199) (482) Gains from sales of low income housing tax credits - - - - 728 Hedge ineffectiveness gains (losses) (85) 116 608 (180) 115 Interest on Federal tax refund - - - - 1,100 Mark to market on deferred compensation plan assets 177 63 153 (8) 270 Fee revenue (GAAP) $ 12,826 $ 14,761 $ 13,764 $ 12,867 $ 15,379

CORE OPERATING EXPENSE

Core operating expense $ 40,900 $ 41,489 $ 40,523 $ 41,312 $ 42,670 Foreclosed property expense 2,333 4,611 3,706 1,851 3,825 Severance 360 563 401 1,155 190 Provision for litigation settlement - 4,000 - - -Mark to market on deferred compensation plan liability 177 63 153 (8) 270 Operating expense (GAAP) $ 43,770 $ 50,726 $ 44,783 $ 44,310 $ 46,955

TANGIBLE COMMON EQUITY AND TANGIBLE EQUITY TO TANGIBLE ASSETS

Tangible common equity to tangible assets 5.66 % 5.67 % 5.73 % 5.45 % 5.33 % Effect of preferred equity 2.87 2.88 2.93 2.79 2.75 Tangible equity to tangible assets 8.53 8.55 8.66 8.24 8.08 Effect of goodwill and other intangibles .07 .08 .09 .09 .11 Equity to assets (GAAP) 8.60 % 8.63 % 8.75 % 8.33 % 8.19 %

TANGIBLE COMMON EQUITY TO RISK-WEIGHTED ASSETS

Tangible common equity to risk-weighted assets 8.39 % 8.26 % 8.44 % 8.37 % 8.21 % Effect of preferred equity 4.19 4.24 4.29 4.35 4.23

Tangible equity to risk weighted assets 12.58 12.50 12.73 12.72 12.44

Effect of other comprehensive income .49 .51 .36 .28 .10 Effect of trust preferred 1.14 1.15 1.17 1.19 1.15

Tier I capital ratio (Regulatory) 14.21 % 14.16 % 14.26 % 14.19 % 13.69 %