United Community Banks (UCB) 8-K United Community Banks, Inc. Reports Net Operating Loss for Second Quarter 2010

Exhibit 99.1

For Immediate Release

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

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

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

• Nonperforming assets decline 17 percent from last quarter

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

• Allowance-to-loans ratio increases to 3.57 percent

• Margin improves 11 basis points to 3.60 percent

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

																Second
	2010						2009									Quarter			For the Six						YTD
(in thousands, except per share	Second			First			Fourth			Third			Second			2010-2009			Months Ended						2010-2009
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change			2010			2009			Change
INCOME SUMMARY
Interest revenue	$	87,699		$	89,849		$	97,481		$	101,181		$	102,737					$	177,548		$	206,299
Interest expense		26,072			28,570			33,552			38,177			41,855						54,642			88,005
Net interest revenue		61,627			61,279			63,929			63,004			60,882			1	%		122,906			118,294			4	%
Provision for loan losses		61,500			75,000			90,000			95,000			60,000						136,500			125,000
Operating fee revenue (1)		11,579			11,666			14,447			13,389			11,305			2			23,245			23,128			1
Total operating revenue(1)		11,706			(2,055	)		(11,624	)		(18,607	)		12,187			(4	)		9,651			16,422			(41	)
Operating expenses (2)		58,308			54,820			60,126			51,426			53,710			9			113,128			105,498			7
Loss on sale of nonperforming assets		45,349			—			—			—			—						45,349			—
Operating loss from continuing operations before taxes		(91,951	)		(56,875	)		(71,750	)		(70,033	)		(41,523	)		(121	)		(148,826	)		(89,076	)		(67	)
Operating income tax benefit		(32,419	)		(22,417	)		(31,687	)		(26,252	)		(18,394	)					(54,836	)		(33,815	)
Net operating loss from continuing operations (1)(2)		(59,532	)		(34,458	)		(40,063	)		(43,781	)		(23,129	)		(157	)		(93,990	)		(55,261	)		(70	)
Gain from acquisition, net of tax expense		—			—			—			—			7,062						—			7,062
Noncash goodwill impairment charges		—			—			—			(25,000	)		—						—			(70,000	)
Severance costs, net of tax benefit		—			—			—			—			—						—			(1,797	)
(Loss) income from discontinued operations		—			(101	)		228			63			66						(101	)		222
Gain from sale of subsidiary, net of income taxes and selling costs		—			1,266			—			—			—						1,266			—
Net loss		(59,532	)		(33,293	)		(39,835	)		(68,718	)		(16,001	)		(272	)		(92,825	)		(119,774	)		22
Preferred dividends and discount accretion		2,577			2,572			2,567			2,562			2,559						5,149			5,113
Net loss available to common shareholders	$	(62,109	)	$	(35,865	)	$	(42,402	)	$	(71,280	)	$	(18,560	)				$	(97,974	)	$	(124,887	)
PERFORMANCE MEASURES
Per common share:
Diluted operating loss from continuing operations (1)(2)	$	(.66	)	$	(.39	)	$	(.45	)	$	(.93	)	$	(.53	)		(25	)	$	(1.05	)	$	(1.24	)		15
Diluted loss from continuing operations		(.66	)		(.39	)		(.45	)		(1.43	)		(.38	)		(74	)		(1.05	)		(2.58	)		59
Diluted loss		(.66	)		(.38	)		(.45	)		(1.43	)		(.38	)		(74	)		(1.04	)		(2.57	)		60
Stock dividends declared (6)		—			—			—		1 for 130			1 for 130							—		2 for 130
Book value		7.71			7.95			8.36			8.85			13.87			(44	)		7.71			13.87			(44	)
Tangible book value (4)		5.39			5.62			6.02			6.50			8.85			(39	)		5.39			8.85			(39	)
Key performance ratios:
Return on equity (3)(5)		(35.89	)%		(20.10	)%		(22.08	)%		(45.52	)%		(11.42	)%					(27.87	)%		(36.20	)%
Return on assets (5)		(3.10	)		(1.70	)		(1.91	)		(3.32	)		(.78	)					(2.39	)		(2.93	)
Net interest margin (5)		3.60			3.49			3.40			3.39			3.28						3.55			3.18
Operating efficiency ratio from continuing operations (1)(2)		141.60			75.22			78.74			68.35			73.68						108.48			74.38
Equity to assets		11.84			11.90			11.94			10.27			10.71						11.87			11.20
Tangible equity to assets (4)		9.26			9.39			9.53			7.55			7.96						9.32			8.10
Tangible common equity to assets (4)		6.91			7.13			7.37			5.36			5.77						7.02			5.93
Tangible common equity to risk-weighted assets (4)		9.97			10.03			10.39			10.67			7.49						9.97			7.49
ASSET QUALITY *
Non-performing loans	$	224,335		$	280,802		$	264,092		$	304,381		$	287,848					$	224,335		$	287,848
Foreclosed properties		123,910			136,275			120,770			110,610			104,754						123,910			104,754
Total non-performing assets (NPAs)		348,245			417,077			384,862			414,991			392,602						348,245			392,602
Allowance for loan losses		174,111			173,934			155,602			150,187			145,678						174,111			145,678
Net charge-offs		61,323			56,668			84,585			90,491			58,312						117,991			101,593
Allowance for loan losses to loans		3.57	%		3.48	%		3.02	%		2.80	%		2.64	%					3.57	%		2.64	%
Net charge-offs to average loans (5)		4.98			4.51			6.37			6.57			4.18						4.75			3.64
NPAs to loans and foreclosed properties		6.97			8.13			7.30			7.58			6.99						6.97			6.99
NPAs to total assets		4.55			5.32			4.81			4.91			4.63						4.55			4.63
AVERAGE BALANCES($ in millions)
Loans	$	5,011		$	5,173		$	5,357		$	5,565		$	5,597			(10	)	$	5,091		$	5,636			(10	)
Investment securities		1,532			1,518			1,529			1,615			1,771			(13	)		1,525			1,742			(12	)
Earning assets		6,854			7,085			7,487			7,401			7,442			(8	)		6,969			7,486			(7	)
Total assets		7,704			7,946			8,287			8,208			8,212			(6	)		7,825			8,291			(6	)
Deposits		6,375			6,570			6,835			6,690			6,545			(3	)		6,472			6,662			(3	)
Shareholders’ equity		912			945			989			843			879			4			929			923			1
Common shares — basic(thousands)		94,524			94,390			94,219			49,771			48,794			94			94,453			48,560			95
Common shares — diluted(thousands)		94,524			94,390			94,219			49,771			48,794			94			94,453			48,560			95
AT PERIOD END($ in millions)
Loans *	$	4,873		$	4,992		$	5,151		$	5,363		$	5,513			(12	)	$	4,873		$	5,513			(12	)
Investment securities		1,488			1,527			1,530			1,533			1,817			(18	)		1,488			1,817			(18	)
Total assets		7,652			7,837			8,000			8,444			8,477			(10	)		7,652			8,477			(10	)
Deposits		6,330			6,488			6,628			6,821			6,849			(8	)		6,330			6,849			(8	)
Shareholders’ equity		904			926			962			1,007			855			6			904			855			6
Common shares outstanding(thousands)		94,281			94,176			94,046			93,901			48,933			93			94,281			48,933			93

(1)	Excludes the gain from acquisition of $11.4 million, (income tax expense of $4.3 million) in the second quarter of 2009 and revenue generated by discontinued operations in all periods presented.
(2)	Excludes goodwill impairment charges of $25 million and $70 million in the third and first quarters of 2009, respectively, severance costs of $2.9 million, (income tax benefit of $1.1 million) in the first quarter of 2009 and expenses relating to discontinued operations for all periods presented.
(3)	Net loss available to common shareholders, which is net of preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).
(4)	Excludes effect of acquisition related intangibles and associated amortization.
(5)	Annualized.
(6)	Number of new shares issued for shares currently held.
*	Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.

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

	2010						2009										For the Six
(in thousands, except per share	Second			First			Fourth			Third				Second			Months Ended
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter				Quarter			2010			2009
Interest revenue reconciliation
Interest revenue — taxable equivalent	$	87,699		$	89,849		$	97,481		$	101,181			$	102,737		$	177,548		$	206,299
Taxable equivalent adjustment		(500	)		(493	)		(601	)		(580	)			(463	)		(993	)		(951	)
Interest revenue (GAAP)	$	87,199		$	89,356		$	96,880		$	100,601			$	102,274		$	176,555		$	205,348
Net interest revenue reconciliation
Net interest revenue — taxable equivalent	$	61,627		$	61,279		$	63,929		$	63,004			$	60,882		$	122,906		$	118,294
Taxable equivalent adjustment		(500	)		(493	)		(601	)		(580	)			(463	)		(993	)		(951	)
Net interest revenue (GAAP)	$	61,127		$	60,786		$	63,328		$	62,424			$	60,419		$	121,913		$	117,343
Fee revenue reconciliation
Operating fee revenue	$	11,579		$	11,666		$	14,447		$	13,389			$	11,305		$	23,245		$	23,128
Gain from acquisition		—			—			—			—				11,390			—			11,390
Fee revenue (GAAP)	$	11,579		$	11,666		$	14,447		$	13,389			$	22,695		$	23,245		$	34,518
Total revenue reconciliation
Total operating revenue	$	11,706		$	(2,055	)	$	(11,624	)	$	(18,607	)		$	12,187		$	9,651		$	16,422
Taxable equivalent adjustment		(500	)		(493	)		(601	)		(580	)			(463	)		(993	)		(951	)
Gain from acquisition		—			—			—			—		��		11,390			—			11,390
Total revenue (GAAP)	$	11,206		$	(2,548	)	$	(12,225	)	$	(19,187	)		$	23,114		$	8,658		$	26,861
Expense reconciliation
Operating expense	$	103,657		$	54,820		$	60,126		$	51,426			$	53,710		$	158,477		$	105,498
Noncash goodwill impairment charge		—			—			—			25,000				—			—			70,000
Severance costs		—			—			—			—				—			—			2,898
Operating expense (GAAP)	$	103,657		$	54,820		$	60,126		$	76,426			$	53,710		$	158,477		$	178,396
Loss from continuing operations before taxes reconciliation
Operating loss from continuing operations before taxes	$	(91,951	)	$	(56,875	)	$	(71,750	)	$	(70,033	)		$	(41,523	)	$	(148,826	)	$	(89,076	)
Taxable equivalent adjustment		(500	)		(493	)		(601	)		(580	)			(463	)		(993	)		(951	)
Gain from acquisition		—			—			—			—				11,390			—			11,390
Noncash goodwill impairment charge		—			—			—			(25,000	)			—			—			(70,000	)
Severance costs		—			—			—			—				—			—			(2,898	)
Loss from continuing operations before taxes (GAAP)	$	(92,451	)	$	(57,368	)	$	(72,351	)	$	(95,613	)		$	(30,596	)	$	(149,819	)	$	(151,535	)
Income tax benefit reconciliation
Operating income tax benefit	$	(32,419	)	$	(22,417	)	$	(31,687	)	$	(26,252	)		$	(18,394	)	$	(54,836	)	$	(33,815	)
Taxable equivalent adjustment		(500	)		(493	)		(601	)		(580	)			(463	)		(993	)		(951	)
Gain from acquisition, tax expense		—			—			—			—				4,328			—			4,328
Severance costs, tax benefit		—			—			—			—				—			—			(1,101	)
Income tax benefit (GAAP)	$	(32,919	)	$	(22,910	)	$	(32,288	)	$	(26,832	)		$	(14,529	)	$	(55,829	)	$	(31,539	)
Diluted loss from continuing operations per common share reconciliation
Diluted operating loss from continuing operations per common share	$	(.66	)	$	(.39	)	$	(.45	)	$	(.93	)		$	(.53	)	$	(1.05	)	$	(1.24	)
Gain from acquisition		—			—			—			—				.15			—			.15
Noncash goodwill impairment charge		—			—			—			(.50	)			—			—			(1.45	)
Severance costs		—			—			—			—				—			—			(.04	)
Diluted loss from continuing operations per common share (GAAP)	$	(.66	)	$	(.39	)	$	(.45	)	$	(1.43	)		$	(.38	)	$	(1.05	)	$	(2.58	)
Book value per common share reconciliation
Tangible book value per common share	$	5.39		$	5.62		$	6.02		$	6.50			$	8.85		$	5.39		$	8.85
Effect of goodwill and other intangibles		2.32			2.33			2.34			2.35				5.02			2.32			5.02
Book value per common share (GAAP)	$	7.71		$	7.95		$	8.36		$	8.85			$	13.87		$	7.71		$	13.87
Efficiency ratio from continuing operations reconciliation
Operating efficiency ratio from continuing operations		141.60	%		75.22	%		78.74	%		68.35	%			73.68	%		108.48	%		74.38	%
Gain from acquisition		—			—			—			—				(9.96	)		—			(5.53	)
Noncash goodwill impairment charge		—			—			—			33.22				—			—			45.69
Severance costs		—			—			—			—				—			—			1.89
Efficiency ratio from continuing operations (GAAP)		141.60	%		75.22	%		78.74	%		101.57	%			63.72	%		108.48	%		116.43	%
Average equity to assets reconciliation
Tangible common equity to assets		6.91	%		7.13	%		7.37	%		5.36	%			5.77	%		7.02	%		5.93	%
Effect of preferred equity		2.35			2.26			2.16			2.19				2.19			2.30			2.17
Tangible equity to assets		9.26			9.39			9.53			7.55				7.96			9.32			8.10
Effect of goodwill and other intangibles		2.58			2.51			2.41			2.72				2.75			2.55			3.10
Equity to assets (GAAP)		11.84	%		11.90	%		11.94	%		10.27	%			10.71	%		11.87	%		11.20	%
Actual tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets		9.97	%		10.03	%		10.39	%		10.67	%			7.49	%		9.97	%		7.49	%
Effect of other comprehensive income		(.87	)		(.85	)		(.87	)		(.90	)			(.72	)		(.87	)		(.72	)
Effect of deferred tax limitation		(2.47	)		(1.75	)		(1.27	)		(.58	)			(.22	)		(2.47	)		(.22	)
Effect of trust preferred		1.03			1.00			.97			.92				.90			1.03			.90
Effect of preferred equity		3.41			3.29			3.19			3.04				2.99			3.41			2.99
Tier I capital ratio (Regulatory)		11.07	%		11.72	%		12.41	%		13.15	%			10.44	%		11.07	%		10.44	%

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

	2010				2009						Linked			Year over
	Second		First		Fourth		Third		Second		Quarter			Year
(in millions)	Quarter(1)		Quarter(1)		Quarter(1)		Quarter(1)		Quarter(1)		Change			Change
LOANS BY CATEGORY
Commercial (sec. by RE)	$	1,780	$	1,765	$	1,779	$	1,787	$	1,797	$	15		$	(17	)
Commercial construction		342		357		363		380		379		(15	)		(37	)
Commercial & industrial		441		381		390		403		399		60			42
Total commercial		2,563		2,503		2,532		2,570		2,575		60			(12	)
Residential construction		820		960		1,050		1,185		1,315		(140	)		(495	)
Residential mortgage		1,356		1,390		1,427		1,461		1,470		(34	)		(114	)
Consumer / installment		134		139		142		147		153		(5	)		(19	)
Total loans	$	4,873	$	4,992	$	5,151	$	5,363	$	5,513		(119	)		(640	)
LOANS BY MARKET
Atlanta MSA	$	1,373	$	1,404	$	1,435	$	1,526	$	1,605		(31	)		(232	)
Gainesville MSA		343		372		390		402		413		(29	)		(70	)
North Georgia		1,808		1,814		1,884		1,942		1,978		(6	)		(170	)
Western North Carolina		738		756		772		786		794		(18	)		(56	)
Coastal Georgia		356		388		405		440		455		(32	)		(99	)
East Tennessee		255		258		265		267		268		(3	)		(13	)
Total loans	$	4,873	$	4,992	$	5,151	$	5,363	$	5,513		(119	)		(640	)
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development	$	214	$	290	$	332	$	380	$	413		(76	)		(199	)
Land loans		110		124		127		159		159		(14	)		(49	)
Lot loans		311		321		336		336		369		(10	)		(58	)
Total		635		735		795		875		941		(100	)		(306	)
House loans
Spec		125		153		178		218		268		(28	)		(143	)
Sold		60		72		77		92		106		(12	)		(46	)
Total		185		225		255		310		374		(40	)		(189	)
Total residential construction	$	820	$	960	$	1,050	$	1,185	$	1,315		(140	)		(495	)
RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
Acquisition & development	$	52	$	66	$	76	$	100	$	124		(14	)		(72	)
Land loans		32		43		43		61		63		(11	)		(31	)
Lot loans		39		47		52		54		81		(8	)		(42	)
Total		123		156		171		215		268		(33	)		(145	)
House loans
Spec		50		58		68		91		127		(8	)		(77	)
Sold		10		14		16		22		29		(4	)		(19	)
Total		60		72		84		113		156		(12	)		(96	)
Total residential construction	$	183	$	228	$	255	$	328	$	424		(45	)		(241	)

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

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

	Second Quarter 2010									First Quarter 2010									Fourth Quarter 2009
	Non-performing			Foreclosed			Total			Non-performing			Foreclosed			Total			Non-performing			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs			Loans			Properties			NPAs			Loans			Properties			NPAs
NPAs BY CATEGORY
Commercial (sec. by RE)	$	56,013		$	13,297		$	69,310		$	45,918		$	21,597		$	67,515		$	37,040		$	15,842		$	52,882
Commercial construction		17,872			11,339			29,211			23,556			14,285			37,841			19,976			9,761			29,737
Commercial & industrial		7,245			—			7,245			3,610			—			3,610			3,946			—			3,946
Total commercial		81,130			24,636			105,766			73,084			35,882			108,966			60,962			25,603			86,565
Residential construction		88,375			74,444			162,819			147,326			74,220			221,546			142,332			76,519			218,851
Residential mortgage		53,175			24,830			78,005			57,920			26,173			84,093			58,767			18,648			77,415
Consumer / installment		1,655			—			1,655			2,472			—			2,472			2,031			—			2,031
Total NPAs	$	224,335		$	123,910		$	348,245		$	280,802		$	136,275		$	417,077		$	264,092		$	120,770		$	384,862
NPAs BY MARKET
Atlanta MSA	$	74,031		$	30,605		$	104,636		$	81,914		$	36,951		$	118,865		$	106,536		$	41,125		$	147,661
Gainesville MSA		10,730			2,750			13,480			17,058			3,192			20,250			5,074			2,614			7,688
North Georgia		102,198			60,597			162,795			109,280			63,128			172,408			87,598			53,072			140,670
Western North Carolina		22,776			11,473			34,249			31,353			8,588			39,941			29,610			5,096			34,706
Coastal Georgia		8,341			16,548			24,889			33,438			21,871			55,309			26,871			17,150			44,021
East Tennessee		6,259			1,937			8,196			7,759			2,545			10,304			8,403			1,713			10,116
Total NPAs	$	224,335		$	123,910		$	348,245		$	280,802		$	136,275		$	417,077		$	264,092		$	120,770		$	384,862
NPA ACTIVITY
Beginning Balance	$	280,802		$	136,275		$	417,077		$	264,092		$	120,770		$	384,862		$	304,381		$	110,610		$	414,991
Loans placed on non-accrual		155,007			—			155,007			139,030			—			139,030			174,898			—			174,898
Payments received		(12,189	)		—			(12,189	)		(5,733	)		—			(5,733	)		(26,935	)		—			(26,935	)
Loan charge-offs		(62,693	)		—			(62,693	)		(58,897	)		—			(58,897	)		(88,427	)		—			(88,427	)
Foreclosures		(66,994	)		66,994			—			(49,233	)		49,233			—			(79,983	)		79,983			—
Capitalized costs		—			305			305			—			320			320			—			981			981
Note / property sales		(69,598	)		(68,472	)		(138,070	)		(8,457	)		(25,951	)		(34,408	)		(19,842	)		(61,228	)		(81,070	)
Write downs		—			(6,094	)		(6,094	)		—			(4,579	)		(4,579	)		—			(2,209	)		(2,209	)
Net losses on sales		—			(5,098	)		(5,098	)		—			(3,518	)		(3,518	)		—			(7,367	)		(7,367	)
Ending Balance	$	224,335		$	123,910		$	348,245		$	280,802		$	136,275		$	417,077		$	264,092		$	120,770		$	384,862

	Second Quarter 2010					First Quarter 2010					Fourth Quarter 2009
			Net Charge-					Net Charge-					Net Charge-
			Offs to					Offs to					Offs to
	Net		Average			Net		Average			Net		Average
(in thousands)	Charge-Offs		Loans (2)			Charge-Offs		Loans (2)			Charge-Offs		Loans (2)
NET CHARGE-OFFS BY CATEGORY
Commercial (sec. by RE)	$	9,757		2.21	%	$	1,964		.45	%	$	3,896		.86	%
Commercial construction		1,460		1.67			2,206		2.48			4,717		5.03
Commercial & industrial		867		.85			4,110		4.31			153		.15
Total commercial		12,084		1.91			8,280		1.33			8,766		1.36
Residential construction		41,515		18.71			43,100		17.32			67,393		23.87
Residential mortgage		6,517		1.90			4,551		1.31			7,026		1.93
Consumer / installment		1,207		3.53			737		2.12			1,400		3.83
Total	$	61,323		4.98		$	56,668		4.51		$	84,585		6.37
NET CHARGE-OFFS BY MARKET
Atlanta MSA	$	16,926		4.85	%	$	15,545		4.32	%	$	43,595		12.07	%
Gainesville MSA		2,547		3.01			1,675		1.92			2,273		2.49
North Georgia		28,100		6.19			29,747		6.51			18,057		3.57
Western North Carolina		7,194		3.86			3,695		1.96			10,091		5.11
Coastal Georgia		5,581		6.07			5,649		5.74			8,109		7.72
East Tennessee		975		1.53			357		.55			2,460		3.67
Total	$	61,323		4.98		$	56,668		4.51		$	84,585		6.37

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

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Income(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands, except per share data)	2010			2009			2010			2009
Interest revenue:
Loans, including fees	$	70,611		$	81,691		$	142,826		$	163,571
Investment securities, including tax exempt of $295, $309, $606 and $628		15,829			20,485			32,032			41,237
Federal funds sold, commercial paper and deposits in banks		759			98			1,697			540
Total interest revenue		87,199			102,274			176,555			205,348
Interest expense:
Deposits:
NOW		1,745			2,843			3,599			6,180
Money market		1,829			2,269			3,586			4,506
Savings		83			121			167			248
Time		17,718			32,064			37,916			68,117
Total deposit interest expense		21,375			37,297			45,268			79,051
Federal funds purchased, repurchase agreements and other short-term borrowings		1,056			595			2,094			1,148
Federal Home Loan Bank advances		974			1,203			1,951			2,277
Long-term debt		2,667			2,760			5,329			5,529
Total interest expense		26,072			41,855			54,642			88,005
Net interest revenue		61,127			60,419			121,913			117,343
Provision for loan losses		61,500			60,000			136,500			125,000
Net interest revenue after provision for loan losses		(373	)		419			(14,587	)		(7,657	)
Fee revenue:
Service charges and fees		7,993			7,557			15,440			14,591
Mortgage loan and other related fees		1,601			2,825			3,080			5,476
Brokerage fees		586			497			1,153			1,186
Securities losses, net		—			(711	)		61			(408	)
Gain from acquisition		—			11,390			—			11,390
Other		1,399			1,137			3,511			2,283
Total fee revenue		11,579			22,695			23,245			34,518
Total revenue		11,206			23,114			8,658			26,861
Operating expenses:
Salaries and employee benefits		23,590			26,305			47,950			53,618
Communications and equipment		3,511			3,571			6,784			7,217
Occupancy		3,836			3,818			7,650			7,587
Advertising and public relations		1,352			1,125			2,395			2,169
Postage, printing and supplies		765			1,288			1,990			2,463
Professional fees		2,178			3,195			4,121			6,476
Foreclosed preoperty		14,540			5,737			25,353			10,056
FDIC assessments and other regulatory charges		3,566			6,810			7,192			9,492
Amortization of intangibles		794			739			1,596			1,478
Other		4,176			1,122			8,097			4,942
Loss on sale of nonperforming assets		45,349			—			45,349			—
Goodwill impairment		—			—			—			70,000
Severance costs		—			—			—			2,898
Total operating expenses		103,657			53,710			158,477			178,396
Loss from continuing operations before income taxes		(92,451	)		(30,596	)		(149,819	)		(151,535	)
Income tax benefit		(32,919	)		(14,529	)		(55,829	)		(31,539	)
Net loss from continuing operations		(59,532	)		(16,067	)		(93,990	)		(119,996	)
(Loss) income from discontinued operations, net of income taxes		—			66			(101	)		222
Gain from sale of subsidiary, net of income taxes and selling costs		—			—			1,266			—
Net loss		(59,532	)		(16,001	)		(92,825	)		(119,774	)
Preferred stock dividends and discount accretion		2,577			2,559			5,149			5,113
Net loss available to common shareholders	$	(62,109	)	$	(18,560	)	$	(97,974	)	$	(124,887	)
Loss from continuing operations per common share — Basic / Diluted	$	(.66	)	$	(.38	)	$	(1.05	)	$	(2.58	)
Loss per common share — Basic / Diluted		(.66	)		(.38	)		(1.04	)		(2.57	)
Weighted average common shares outstanding — Basic / Diluted		94,524			48,794			94,453			48,560

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet

	June 30,			December 31,		June 30,
(in thousands, except share and per share data)	2010			2009		2009
	(unaudited)			(audited)		(unaudited)
ASSETS
Cash and due from banks	$	115,088		$	126,265	$	110,943
Interest-bearing deposits in banks		105,183			120,382		70,474
Federal funds sold, commercial paper and short-term investments		148,227			129,720		—
Cash and cash equivalents		368,498			376,367		181,417
Securities available for sale		1,165,776			1,530,047		1,816,787
Securities held to maturity (fair value $327,497)		322,148			—		—
Mortgage loans held for sale		22,705			30,226		42,185
Loans, net of unearned income		4,873,030			5,151,476		5,513,087
Less allowance for loan losses		174,111			155,602		145,678
Loans, net		4,698,919			4,995,874		5,367,409
Assets covered by loss sharing agreements with the FDIC		156,611			185,938		230,125
Premises and equipment, net		180,125			182,038		178,983
Accrued interest receivable		29,650			33,867		41,405
Goodwill and other intangible assets		223,600			225,196		251,821
Foreclosed property		123,910			120,770		104,754
Other assets		360,542			319,591		262,469
Total assets	$	7,652,484		$	7,999,914	$	8,477,355
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	779,934		$	707,826	$	714,630
NOW		1,326,861			1,335,790		1,273,368
Money market		756,370			713,901		573,463
Savings		185,176			177,427		180,368
Time:
Less than $100,000		1,575,211			1,746,511		1,992,056
Greater than $100,000		1,093,975			1,187,499		1,351,527
Brokered		611,985			758,880		763,348
Total deposits		6,329,512			6,627,834		6,848,760
Federal funds purchased, repurchase agreements, and other short-term borrowings		104,127			101,389		252,493
Federal Home Loan Bank advances		104,138			114,501		283,292
Long-term debt		150,106			150,066		150,026
Accrued expenses and other liabilities		60,184			43,803		87,512
Total liabilities		6,748,067			7,037,593		7,622,083
Shareholders’ equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series A; $10 stated value; 21,700 shares issued and outstanding		217			217		217
Series B; $1,000 stated value; 180,000 shares issued and outstanding		175,050			174,408		173,785
Common stock, $1 par value; 200,000,000 shares authorized;
94,280,925, 94,045,603 and 48,933,383 shares issued and outstanding		94,281			94,046		48,933
Common stock issuable; 284,771, 221,906 and 182,041 shares		3,898			3,597		3,383
Capital surplus		663,836			622,034		450,514
(Accumulated deficit) retained earnings		(77,590	)		20,384		136,624
Accumulated other comprehensive income		44,725			47,635		41,816
Total shareholders’ equity		904,417			962,321		855,272
Total liabilities and shareholders’ equity	$	7,652,484		$	7,999,914	$	8,477,355

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

	2010								2009
	Average					Avg.			Average					Avg.
(dollars in thousands, taxable equivalent)	Balance			Interest		Rate			Balance			Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income(1)(2)	$	5,010,937		$	70,640		5.65	%	$	5,597,259		$	81,567		5.85	%
Taxable securities(3)		1,503,162			15,534		4.13			1,742,620			20,176		4.63
Tax-exempt securities(1)(3)		28,920			482		6.67			28,862			506		7.01
Federal funds sold and other interest-earning assets		311,475			1,043		1.34			73,437			488		2.66
Total interest-earning assets		6,854,494			87,699		5.13			7,442,178			102,737		5.53
Non-interest-earning assets:
Allowance for loan losses		(193,998	)							(147,691	)
Cash and due from banks		100,931								101,830
Premises and equipment		181,064								179,446
Other assets(3)		761,803								636,377
Total assets	$	7,704,294							$	8,212,140
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,325,099		$	1,745		.53		$	1,258,134		$	2,843		.91
Money market		746,039			1,829		.98			521,989			2,269		1.74
Savings		186,628			83		.18			178,435			121		.27
Time less than $100,000		1,605,308			7,887		1.97			1,894,071			15,342		3.25
Time greater than $100,000		1,110,010			6,102		2.20			1,325,757			11,513		3.48
Brokered		642,954			3,729		2.33			686,070			5,209		3.05
Total interest-bearing deposits		5,616,038			21,375		1.53			5,864,456			37,297		2.55
Federal funds purchased and other borrowings		104,637			1,056		4.05			220,376			595		1.08
Federal Home Loan Bank advances		107,948			974		3.62			309,962			1,203		1.56
Long-term debt		150,097			2,667		7.13			151,019			2,760		7.33
Total borrowed funds		362,682			4,697		5.19			681,357			4,558		2.68
Total interest-bearing liabilities		5,978,720			26,072		1.75			6,545,813			41,855		2.56
Non-interest-bearing liabilities:
Non-interest-bearing deposits		758,558								680,081
Other liabilities		54,931								107,036
Total liabilities		6,792,209								7,332,930
Shareholders’ equity		912,085								879,210
Total liabilities and shareholders’ equity	$	7,704,294							$	8,212,140
Net interest revenue				$	61,627							$	60,882
Net interest-rate spread							3.38	%							2.97	%
Net interest margin(4)							3.60	%							3.28	%

(1)	Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)	Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued.
(3)	Securities available for sale are shown at amortized cost. Pretax unrealized gains of $43.6 million in 2010 and $14.7 million in 2009 are included in other assets for purposes of this presentation.
(4)	Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

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

	2010								2009
	Average					Avg.			Average					Avg.
(dollars in thousands, taxable equivalent)	Balance			Interest		Rate			Balance			Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income(1)(2)	$	5,091,445		$	142,859		5.66	%	$	5,635,942		$	163,316		5.84	%
Taxable securities(3)		1,495,447			31,426		4.20			1,712,778			40,609		4.74
Tax-exempt securities(1)(3)		29,482			991		6.72			29,453			1,028		6.98
Federal funds sold and other interest-earning assets		352,683			2,272		1.29			107,788			1,346		2.50
Total interest-earning assets		6,969,057			177,548		5.13			7,485,961			206,299		5.55
Non-interest-earning assets:
Allowance for loan losses		(190,662	)							(138,297	)
Cash and due from banks		102,728								103,113
Premises and equipment		181,493								179,470
Other assets(3)		762,014								661,520
Total assets	$	7,824,630							$	8,291,767
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,343,297		$	3,599		.54		$	1,307,865		$	6,180		.95
Money market		734,817			3,586		.98			499,780			4,506		1.82
Savings		183,555			167		.18			175,587			248		.28
Time less than $100,000		1,648,739			16,778		2.05			1,918,349			32,559		3.42
Time greater than $100,000		1,132,767			12,872		2.29			1,359,286			24,338		3.61
Brokered		689,717			8,266		2.42			735,844			11,220		3.07
Total interest-bearing deposits		5,732,892			45,268		1.59			5,996,711			79,051		2.66
Federal funds purchased and other borrowings		103,355			2,094		4.09			185,639			1,148		1.25
Federal Home Loan Bank advances		111,150			1,951		3.54			257,742			2,277		1.78
Long-term debt		150,088			5,329		7.16			151,009			5,529		7.38
Total borrowed funds		364,593			9,374		5.18			594,390			8,954		3.04
Total interest-bearing liabilities		6,097,485			54,642		1.81			6,591,101			88,005		2.69
Non-interest-bearing liabilities:
Non-interest-bearing deposits		738,876								665,170
Other liabilities		59,605								112,382
Total liabilities		6,895,966								7,368,653
Shareholders’ equity		928,664								923,114
Total liabilities and shareholders’ equity	$	7,824,630							$	8,291,767
Net interest revenue				$	122,906							$	118,294
Net interest-rate spread							3.32	%							2.86	%
Net interest margin(4)							3.55	%							3.18	%

(1)	Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)	Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued.
(3)	Securities available for sale are shown at amortized cost. Pretax unrealized gains of $43.4 million in 2010 and $12.7 million in 2009 are included in other assets for purposes of this presentation.
(4)	Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.