United Community Banks (UCB) 8-K Diluted Operating Earnings per Share of 46 Cents — Up 12 Percent

For Immediate Release

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

UNITED COMMUNITY BANKS, INC. REPORTS
12 PERCENT GAIN IN DILUTED OPERATING EARNINGS
PER SHARE FOR SECOND QUARTER 2007

HIGHLIGHTS:

• Record Second Quarter Operating Earnings

Diluted Operating Earnings per Share of 46 Cents — Up 12 Percent

Operating Net Income of $21.1 Million — Up 24 Percent

Loan and Fee Revenue Growth Drive Performance

• Net Income of $11.9 million, Includes Special $15 Million Provision for Loan Losses

• Completed Acquisition of Gwinnett Commercial Group

• Opened Two De Novo Offices

BLAIRSVILLE, GA, July 24, 2007 — United Community Banks, Inc. (NASDAQ: UCBI) today announced record operating earnings for the second quarter of 2007. Compared with the second quarter of 2006, the company achieved a 21 percent increase in total operating revenue, a 24 percent rise in net operating income and a 12 percent gain in diluted operating earnings per share.

Reported earnings of $11.9 million included a special $15 million provision for fraud-related loan losses. The after-tax impact of this provision was $9.2 million, or 20 cents per diluted share.

“In a press release and conference call earlier this month, we discussed the $15 million provision for fraud-related loan losses in two developments near Spruce Pine, North Carolina,” said Jimmy

Tallent, United’s President and Chief Executive Officer. “We also stated that we classified the entire $23.6 million of loans as non-accrual and reversed the accrued interest. Because this fraud-related matter was isolated and a non-recurring event, we have shown the special provision separate from the regular provision for loan losses. We will highlight operating earnings measures, which exclude this provision, for the balance of 2007 to provide a better understanding of our underlying core earnings and credit trends. With that, we continued to deliver solid operating performance for the second quarter and our dedicated employees, community bank business model, unique footprint and service-oriented culture position us well to meet our challenges. In fact, our customer satisfaction scores in June of 93.3 percent reached the highest level since we began measuring them in March of 2003. This is strong evidence that our employees are focused on service and our community banking business model is working.”

Total operating revenue on a taxable equivalent basis was $80.8 million for the quarter compared with $66.8 million for the second quarter of 2006, a 21 percent increase. Total revenue was $156.6 million year-to-date versus $131.0 million for 2006. Net operating income for the second quarter of 2007 was $21.1 million, compared with $16.9 million for the same period of 2006, a 24 percent increase. Net operating income for the first six months was $40.4 million for 2007 compared with $33.0 million for 2006. Diluted operating earnings per share for the second quarter increased 12 percent to 46 cents from 41 cents a year ago. For the first six months, diluted operating earnings per share increased 13 percent from 80 cents to 90 cents. Operating return on tangible equity was 17.54 percent and operating return on assets was 1.12 percent for the second quarter, compared with 17.68 percent and 1.10 percent a year ago, respectively.

Loans increased by $1.2 billion, or 25 percent, from a year ago. This increase included $267 million from the Southern National Bank acquisition, which closed in December 2006, and $534 million from the First Bank of the South acquisition, which closed in June 2007. Excluding acquired loans, core loan growth was 8 percent for the past twelve months and 5 percent annualized, or $63 million, on a linked quarter basis. “While we’ve experienced slower growth in 2007, the pace increased from the first quarter and we are targeting loan growth in the 4 to 8 percent range for the remainder of the year,” said Tallent.

“The company was able to fund year-over-year loan growth by adding $450 million in customer deposits, which excludes deposits from acquisitions,” noted Tallent. “During 2007, we have shifted to lower-cost wholesale funding with customer deposits decreasing slightly during the second quarter. However, for the first six months we continued to fund our loan growth with core customer deposits, adding $143 million of transaction, savings and money market accounts while letting more expensive time deposits run off.”

United continued de novo expansion during the quarter by opening two offices in Georgia, one in Hall County outside of Gainesville and another in Cherokee County near Interstate 575 approaching Atlanta. “While we will continue to look for expansion opportunities that make sense, we will also be prudent as we monitor loan growth trends,” said Tallent.

United also completed the acquisition of metro Atlanta-based First Bank of the South during the second quarter. The transaction added three offices in Gwinnett County and one each in DeKalb and north Fulton counties. The population of Gwinnett, the second-largest county in the Atlanta MSA, is projected to grow at four times the national average, or 26 percent, over the next five years. United now has 11 community banks with 47 offices and approximately $3.5 billion in assets in the Atlanta Region, which includes the Atlanta and Gainesville MSAs.

For the second quarter of 2007, taxable equivalent net interest revenue of $68.0 million reflected an increase of $9.5 million, or 16 percent, from the second quarter of 2006. The year-to-date increase was $18.6 million, or 16 percent, compared to the first half of 2006. Taxable equivalent net interest margin was 3.94 percent for the second quarter, compared with 3.99 percent for the first quarter of 2007 and 4.07 percent for the second quarter of 2006. “Consistent with the industry, our net interest margin has been under pressure due to the flat yield curve,” stated Tallent. “The slight decrease from last quarter was due to the increase in non-accrual loans and a slight change in the mix of earning assets. With the addition of First Bank of the South, we expect our margin to move up a few basis points during the second half of 2007. Our focus remains on generating high-quality loans and attracting low-cost customer deposits while keeping discretionary spending at a minimum.”

The second quarter provision for loan losses was $3.7 million, excluding the special $15 million fraud loss provision. Annualized net charge-offs to average loans was 15 basis points for the second quarter compared to 11 basis points for the first quarter and 9 basis points for the second quarter of 2006. At quarter-end, non-performing assets totaled $43.6 million, including $23.6 million of fraud-related loans associated with the Spruce Pine developments. Excluding Spruce Pine loans, non-performing assets were $20.0 million, compared with $8.8 million a year ago and $14.3 million at the end of the first quarter of 2007. Excluding Spruce Pine, non-performing assets, as a percentage of total assets was 25 basis points at quarter-end, compared with 20 basis points at March 31, 2007 and 14 basis points at June 30, 2006. The Spruce Pine non-performing assets as a percentage of total assets was 29 basis points, bringing the combined total to 54 basis points at June 30, 2007.

“Throughout most of 2006 and into 2007 we were at unsustainably low levels of non-performing assets,” Tallent said. “Non-performing assets, excluding Spruce Pine, were at the lower end of our long-term historic range of 20 to 35 basis points. While these non-performing Spruce Pine loans and the fraud-related loan loss provision this quarter are real, and at the end of the day affect our bottom line, they are not a typical occurrence for this company. This was an isolated event, and our long-standing principle of strong credit quality with loans secured by hard assets continues.”

Fee revenue of $16.6 million for the second quarter grew by $4.6 million, or 38 percent, from the $12.0 million for the second quarter of 2006. The linked quarter increase was $2.2 million. Service charges and fees on deposit accounts of $8.0 million increased $1.1 million, or 17 percent, from the second quarter of 2006, primarily due to growth in transactions and new accounts resulting from core deposit programs and higher ATM and debit card usage. Mortgage fees rose $768,000 to $2.5 million due to higher volumes and pricing of mortgages sold. Mortgage loans closed during the second quarter were $122 million compared with $92 million for the second quarter of 2006. Consulting fees of $2.2 million were up $669,000 from a year ago, or 43 percent, reflecting strong growth in our advisory services practice. During the quarter there were securities gains of $1.4 million, partially offset by a $1.2 million charge on the

prepayment of higher-cost borrowings. Both transactions were part of United’s ongoing balance sheet management activities.

Operating expenses of $47.7 million increased $8.1 million, or 20 percent, from the second quarter of 2006. The acquisitions of Southern National Bank and First Bank of the South accounted for approximately $2.3 million of the total increase. Salaries and employee benefit costs totaled $30.0 million, which was $5.6 million, or 23 percent, higher than the second quarter of 2006. Acquisitions accounted for about $1.5 million of the increase, with the rest primarily due to staffing de novo locations and business growth. Professional fees increased $941,000 to $2.0 million reflecting higher fees associated with corporate initiatives and loan foreclosures.. Occupancy expense increased $400,000 to $3.3 million reflecting higher costs to operate additional banking offices. Postage, printing and supplies expense rose $391,000 to $1.7 million due to business growth and marketing campaigns.

“Our operating efficiency ratio for the quarter of 56.6 percent was within our long-term efficiency goal of 56 to 58 percent,” Tallent said. “The efficiency ratio shows that despite the difficult environment that we are operating in, strong revenue growth coupled with disciplined expense controls are offsetting the significant expansion cost of reinvesting for the future.”

“The Board of Directors approved a one million share increase in our stock purchase program that expires in December 2007, raising the total authorized level to two million shares,” stated Tallent. “With the recent drop in our stock price, management and the Board felt it was appropriate for the company to demonstrate its support and commitment to enhancing shareholder value. We plan to start the purchase program immediately.”

“With the slower pace of loan growth, our outlook for 2007 is for operating earnings per share growth of 10 to 12 percent,” said Tallent. “We remain committed to building shareholder value through our ability to deliver consistent double-digit growth in operating earnings per share, expand the franchise and provide superior customer service. It’s no secret that we encountered some challenges in the first half of 2007, but we are optimistic that we will deliver another year of superior operating performance.”

Conference Call

United Community Banks will hold a conference call on Tuesday, July 24, 2007, at 11 a.m. ET to discuss the contents of this news release, as well as business highlights for the quarter and the financial outlook for 2007. The telephone number for the conference call is (866) 383-7989 and the pass code is “UCBI.” The conference call will also be available by web cast within the Investor Relations section of the company’s web site 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 $8.1 billion and operates 27 community banks with 110 banking offices located throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The company specializes in providing personalized community banking services to individuals and small to mid-size businesses. United Community Banks also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United Community Banks common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at the company’s web site at www.ucbi.com.

Safe Harbor

This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled “Forward Looking Statements” on page 4 of United Community Banks, Inc.’s annual report filed on Form 10-K with the Securities and Exchange Commission.

(Tables Follow)

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

																Second
	2007						2006									Quarter			For the Six						YTD
(in thousands, except per share	Second			First			Fourth			Third			Second			2007-2006			Months Ended						2007-2006
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change			2007			2006			Change
INCOME SUMMARY
Interest revenue	$	136,237		$	129,028		$	123,463		$	116,304		$	107,890					$	265,265		$	206,928
Interest expense		68,270			63,923			60,912			55,431			49,407						132,193			92,472
Net interest revenue		67,967			65,105			62,551			60,873			58,483			16	%		133,072			114,456			16	%
Provision for loan losses (1)		3,700			3,700			3,700			3,700			3,700						7,400			7,200
Fee revenue		16,554			14,382			13,215			12,146			11,976			38			30,936			23,734			30
Total operating revenue		80,821			75,787			72,066			69,319			66,759			21			156,608			130,990			20
Operating expenses		47,702			44,841			42,521			41,441			39,645			20			92,543			78,108			18
Income before taxes		33,119			30,946			29,545			27,878			27,114			22			64,065			52,882			21
Income taxes		12,043			11,601			11,111			10,465			10,185						23,644			19,914
Net operating income		21,076			19,345			18,434			17,413			16,929			24			40,421			32,968			23
Fraud loss provision, net of tax (1)		9,165			—			—			—			—						9,165			—
Net income	$	11,911		$	19,345		$	18,434		$	17,413		$	16,929			(30	)	$	31,256		$	32,968			(5	)
OPERATING PERFORMANCE(1)																							��
Earnings per common share:
Basic	$	.47		$	.45		$	.45		$	.43		$	.42			12		$	.92		$	.82			12
Diluted		.46			.44			.44			.42			.41			12			.90			.80			13
Return on tangible equity(2)(3)(4)		17.54	%		17.18	%		17.49	%		17.29	%		17.68	%					17.36	%		17.67	%
Return on assets(4)		1.12			1.11			1.10			1.09			1.10						1.12			1.10
Dividend payout ratio		19.15			20.00			17.78			18.60			19.05						19.57			19.51
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings	$	.26		$	.45		$	.45		$	.43		$	.42			(38	)	$	.71		$	.82			(13	)
Diluted earnings		.26			.44			.44			.42			.41			(37	)		.70			.80			(13	)
Cash dividends declared		.09			.09			.08			.08			.08			13			.18			.16			13
Book value		16.98			14.83			14.37			13.07			12.34			38			16.98			12.34			38
Tangible book value(3)		10.44			11.06			10.57			10.16			9.50			10			10.44			9.50			10
Key performance ratios:
Return on equity(2)(4)		7.05			12.48			13.26			13.22			13.41						9.64			13.33
Return on assets(4)		.64			1.11			1.10			1.09			1.10						.86			1.10
Net interest margin(4)		3.94			3.99			3.99			4.07			4.07						3.96			4.07
Efficiency ratio		56.59			56.56			55.93			56.46			56.04						56.57			56.40
Dividend payout ratio		34.62			20.00			17.78			18.60			19.05						25.35			19.51
Equity to assets		8.94			8.80			8.21			8.04			7.95						8.87			7.99
Tangible equity to assets(3)		6.65			6.66			6.46			6.35			6.22						6.65			6.23
ASSET QUALITY (5)
Allowance for loan losses	$	92,471		$	68,804		$	66,566		$	60,901		$	58,508					$	92,471		$	58,508
Non-performing assets		43,601			14,290			13,654			9,347			8,805						43,601			8,805
Net charge-offs		2,124			1,462			1,930			1,307			1,042						3,586			2,287
Allowance for loan losses to loans		1.54	%		1.27	%		1.24	%		1.23	%		1.22	%					1.54	%		1.22	%
Non-performing assets to total assets		.54			.20			.19			.14			.14						.54			.14
Net charge-offs to average loans(4)		.15			.11			.15			.11			.09						.13			.10
AVERAGE BALANCES
Loans	$	5,619,950		$	5,402,860		$	5,134,721		$	4,865,886		$	4,690,196			20		$	5,512,005		$	4,598,355			20
Investment securities		1,242,448			1,153,208			1,059,125			1,029,981			1,039,707			19			1,198,075			1,039,198			15
Earning assets		6,915,134			6,599,035			6,225,943			5,942,710			5,758,697			20			6,757,959			5,667,213			19
Total assets		7,519,392			7,092,710			6,669,950			6,350,205			6,159,152			22			7,307,231			6,060,526			21
Deposits		5,945,633			5,764,426			5,517,696			5,085,168			4,842,389			23			5,855,530			4,728,730			24
Shareholders’ equity		672,348			624,100			547,419			510,791			489,821			37			648,358			484,420			34
Common shares — basic		44,949			43,000			41,096			40,223			40,156						43,980			40,122
Common shares — diluted		45,761			43,912			42,311			41,460			41,328						44,842			41,259
AT PERIOD END
Loans	$	5,999,093		$	5,402,198		$	5,376,538		$	4,965,365		$	4,810,277			25		$	5,999,093		$	4,810,277			25
Investment securities		1,213,659			1,150,424			1,107,153			980,273			974,524			25			1,213,659			974,524			25
Total assets		8,087,667			7,186,602			7,101,249			6,455,290			6,331,136			28			8,087,667			6,331,136			28
Deposits		6,361,269			5,841,687			5,772,886			5,309,219			4,976,650			28			6,361,269			4,976,650			28
Shareholders’ equity		828,731			638,456			616,767			526,734			496,297			67			828,731			496,297			67
Common shares outstanding		48,781			43,038			42,891			40,269			40,179						48,781			40,179

(1)	Excludes effect of special $15 million fraud related provision for loan losses recorded in the second quarter of 2007.
(2)	Net income available to common shareholders, which excludes preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).
(3)	Excludes effect of acquisition related intangibles and associated amortization.
(4)	Annualized.
(5)	Asset Quality measures for the second quarter and first six months of 2007 include $23.6 million in nonperforming loans and a special $15 million fraud loss provision that relate to two real estate developments. This fraud-related matter was isolated and considered to be non-recurring. Excluding the non-recurring amounts, the allowance for loan losses would be $77,471, the allowance for loan losses to loans ratio would be 1.29%, non-performing assets would be $19,968 and the ratio of non-performing assets to total assets would be .25% at June 30, 2007.

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

											Linked Quarter
	2007				2006						Change(3)						Year over Year Change
	Second		First		Fourth		Third		Second					Excluding						Excluding
(in millions)	Quarter(1)		Quarter		Quarter(2)		Quarter		Quarter		Actual			Acquired			Actual			Acquired
LOANS BY CATEGORY
Commercial (sec. by RE)	$	1,461	$	1,227	$	1,230	$	1,157	$	1,130		76	%		5	%		29	%		7	%
Commercial & industrial		421		315		296		272		255		135			18			65			27
Total commercial		1,882		1,542		1,526		1,429		1,385		88			8			36			10
Construction & land dev		2,522		2,336		2,333		2,065		1,995		32			(1	)		26			7
Residential mortgage		1,413		1,354		1,338		1,299		1,261		17			10			12			8
Consumer / installment		182		170		180		172		169		28			20			8			1
Total loans	$	5,999	$	5,402	$	5,377	$	4,965	$	4,810		44			5			25			8
LOANS BY MARKET
Atlanta Region	$	2,517	$	2,015	$	2,005	$	1,696	$	1,625		100	%		(7	)%		55	%		6	%
North Georgia		2,032		2,010		2,034		1,984		1,952		4			4			4			4
Coastal Georgia		396		372		358		343		336		26			26			18			18
Western North Carolina		816		782		773		752		717		17			17			14			14
Eastern Tennessee		238		223		207		190		180		27			27			32			32
Total loans	$	5,999	$	5,402	$	5,377	$	4,965	$	4,810		44			5			25			8

(1)	Acquired Gwinnett Commercial Group on June 1, 2007 with total loans of $534 million in the Atlanta Region: Commercial (secured by RE) of $219 million; Commercial & industrial of $91million; Construction & land development of $193 million; Residential mortgage of $27 million and Consumer / installment of $4 million.
(2)	Acquired Southern Bancorp on December 1, 2006 with total loans of $267 million in the Atlanta Region: Commercial (secured by RE) of $38 million; Commercial & industrial of $6 million; Construction & land development of $192 million; Residential mortgage of $25 million and Consumer / installment of $7 million.
(3)	Annualized.

UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
(in thousands, except per share data)

	Second			Six Months Ended
	Quarter			June 30,
	2007			2007
Special provision for fraud related loan losses	$	15,000		$	15,000
Income tax effect of special provision		5,835			5,835
After-tax effect of special provision	$	9,165		$	9,165
Net Income Reconciliation
Operating net income	$	21,076		$	40,421
After-tax effect of special provision		(9,165	)		(9,165	)
Net income (GAAP)	$	11,911		$	31,256
			��
Basic Earnings Per Share Reconciliation
Basic operating earnings per share	$	.47		$	.92
Per share effect of special provision		(.21	)		(.21	)
Basic earnings per share (GAAP)	$	.26		$	.71
Diluted Earnings Per Share Reconciliation
Diluted operating earnings per share	$	.46		$	.90
Per share effect of special provision		(.20	)		(.20	)
Diluted earnings per share (GAAP)	$	.26		$	.70

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)	2007			2006			2007			2006
Interest revenue:
Loans, including fees	$	119,799		$	95,242		$	233,872		$	181,848
Investment securities:
Taxable		15,476			11,521			29,444			22,839
Tax exempt		438			509			885			1,023
Federal funds sold and deposits in banks		80			162			138			320
Total interest revenue		135,793			107,434			264,339			206,030
Interest expense:
Deposits:
NOW		11,470			7,342			22,097			13,329
Money market		3,540			1,614			6,080			2,814
Savings		374			226			683			454
Time		41,979			29,599			83,604			54,985
Total deposit interest expense		57,363			38,781			112,464			71,582
Federal funds purchased, repurchase agreements, & other short-term borrowings		3,671			2,078			5,488			3,560
Federal Home Loan Bank advances		5,035			6,380			9,836			13,009
Long-term debt		2,201			2,168			4,405			4,321
Total interest expense		68,270			49,407			132,193			92,472
Net interest revenue		67,523			58,027			132,146			113,558
Provision for loan losses		18,700			3,700			22,400			7,200
Net interest revenue after provision for loan losses		48,823			54,327			109,746			106,358
Fee revenue:
Service charges and fees		7,975			6,828			15,228			13,181
Mortgage loan and other related fees		2,476			1,708			4,699			3,221
Consulting fees		2,241			1,572			3,988			3,156
Brokerage fees		1,192			796			2,136			1,646
Securities gains (losses), net		1,386			—			1,593			(3	)
Losses on prepayment of borrowings		(1,164	)		(290	)		(1,164	)		(290	)
Other		2,448			1,362			4,456			2,823
Total fee revenue		16,554			11,976			30,936			23,734
Total revenue		65,377			66,303			140,682			130,092
Operating expenses:
Salaries and employee benefits		30,022			24,469			58,339			48,353
Communications and equipment		3,845			3,731			7,657			7,107
Occupancy		3,316			2,916			6,507			5,848
Advertising and public relations		2,098			1,948			4,114			3,836
Postage, printing and supplies		1,680			1,289			3,340			2,805
Professional fees		2,010			1,069			3,489			2,230
Amortization of intangibles		633			503			1,197			1,006
Other		4,098			3,720			7,900			6,923
Total operating expenses		47,702			39,645			92,543			78,108
Income before income taxes		17,675			26,658			48,139			51,984
Income taxes		5,764			9,729			16,883			19,016
Net income	$	11,911		$	16,929		$	31,256		$	32,968
Net income available to common shareholders	$	11,906		$	16,924		$	31,246		$	32,958
Earnings per common share:
Basic	$	.26		$	.42		$	.71		$	.82
Diluted		.26			.41			.70			.80
Dividends per common share		.09			.08			.18			.16
Weighted average common shares outstanding:
Basic		44,949			40,156			43,980			40,122
Diluted		45,761			41,328			44,842			41,259

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet

	June 30,			December 31,			June 30,
(in thousands, except share and per share data)	2007			2006			2006
	(unaudited)			(audited)			(unaudited)
ASSETS
Cash and due from banks	$	171,095		$	158,348		$	159,954
Interest-bearing deposits in banks		23,146			12,936			21,948
Cash and cash equivalents		194,241			171,284			181,902
Securities available for sale		1,213,659			1,107,153			974,524
Mortgage loans held for sale		30,615			35,325			24,000
Loans, net of unearned income		5,999,093			5,376,538			4,810,277
Less allowance for loan losses		92,471			66,566			58,508
Loans, net		5,906,622			5,309,972			4,751,769
Premises and equipment, net		171,327			139,716			124,018
Accrued interest receivable		64,538			58,291			44,187
Goodwill and other intangible assets		326,467			167,058			117,646
Other assets		180,198			112,450			113,090
Total assets	$	8,087,667		$	7,101,249		$	6,331,136
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	773,435		$	659,892		$	662,463
NOW		1,447,789			1,307,654			1,106,988
Money market		504,730			255,862			198,491
Savings		207,468			175,631			173,985
Time:
Less than $100,000		1,651,486			1,650,906			1,388,009
Greater than $100,000		1,428,841			1,397,245			1,106,359
Brokered		347,520			325,696			340,355
Total deposits		6,361,269			5,772,886			4,976,650
Federal funds purchased, repurchase agreements, and other short-term borrowings		238,429			65,884			249,552
Federal Home Loan Bank advances		499,060			489,084			458,587
Long-term debt		113,151			113,151			111,869
Accrued expenses and other liabilities		47,027			43,477			38,181
Total liabilities		7,258,936			6,484,482			5,834,839
Shareholders’ equity:
Preferred stock, $1 par value; $10 stated value; 10,000,000 shares authorized; 32,200, 32,200 and 32,200 shares issued and outstanding		322			322			322
Common stock, $1 par value; 100,000,000 shares authorized; 48,781,351, 42,890,863 and 40,178,533 shares issued and outstanding		48,781			42,891			40,179
Common stock issuable; 60,761, 29,821 and 19,712 shares		1,816			862			544
Capital surplus		461,226			270,383			197,235
Retained earnings		329,229			306,261			277,086
Accumulated other comprehensive loss		(12,643	)		(3,952	)		(19,069	)
Total shareholders’ equity		828,731			616,767			496,297
Total liabilities and shareholders’ equity	$	8,087,667		$	7,101,249		$	6,331,136

UNITED COMMUNITY BANKS, INC.

Average Consolidated Balance Sheets and Net Interest Analysis

For the Three Months Ended June 30,

	2007								2006
	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)	$	5,619,950		$	119,569		8.53	%	$	4,690,196		$	95,127		8.14	%
Taxable securities(3)		1,200,268			15,476		5.16			991,701			11,521		4.65
Tax-exempt securities(1) (3)		42,180			721		6.83			48,006			837		6.97
Federal funds sold and other interest-earning assets		52,736			471		3.57			28,794			405		5.63
Total interest-earning assets		6,915,134			136,237		7.90			5,758,697			107,890		7.51
Non-interest-earning assets:
Allowance for loan losses		(73,323	)							(57,654	)
Cash and due from banks		130,046								129,389
Premises and equipment		158,290								120,870
Other assets(3)		389,245								207,850
Total assets	$	7,519,392							$	6,159,152
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,379,423		$	11,470		3.34		$	1,102,041		$	7,342		2.67
Money market		354,815			3,540		4.00			180,757			1,614		3.58
Savings		186,490			374		.80			174,533			226		.52
Time less than $100,000		1,627,708			19,978		4.92			1,344,861			14,066		4.20
Time greater than $100,000		1,372,410			17,892		5.23			1,061,249			12,147		4.59
Brokered		332,857			4,109		4.95			327,962			3,386		4.14
Total interest-bearing deposits		5,253,703			57,363		4.38			4,191,403			38,781		3.71
Federal funds purchased and other borrowings		275,319			3,671		5.35			165,563			2,078		5.03
Federal Home Loan Bank advances		419,287			5,035		4.82			506,531			6,380		5.05
Long-term debt		113,270			2,201		7.79			111,869			2,168		7.77
Total borrowed funds		807,876			10,907		5.42			783,963			10,626		5.44
Total interest-bearing liabilities		6,061,579			68,270		4.52			4,975,366			49,407		3.98
Non-interest-bearing liabilities:
Non-interest-bearing deposits		691,930								650,986
Other liabilities		93,535								42,979
Total liabilities		6,847,044								5,669,331
Shareholders’ equity		672,348								489,821
Total liabilities and shareholders’ equity		7,519,392								6,159,152
Net interest revenue				$	67,967							$	58,483
Net interest-rate spread							3.38	%							3.53	%
Net interest margin(4)							3.94	%							4.07	%

(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 losses of $7.8 million in 2007 and $21.6 million in 2006 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,

	2007								2006
	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)	$	5,512,005		$	233,437		8.54	%	$	4,598,355		$	181,622		7.96	%
Taxable securities(3)		1,155,308			29,444		5.10			990,698			22,839		4.61
Tax-exempt securities(1) (3)		42,767			1,456		6.81			48,500			1,683		6.94
Federal funds sold and other interest-earning assets		47,879			928		3.88			29,660			784		5.29
Total interest-earning assets		6,757,959			265,265		7.91			5,667,213			206,928		7.36
Non-interest-earning assets:
Allowance for loan losses		(70,769	)							(56,247	)
Cash and due from banks		125,367								125,957
Premises and equipment		152,593								118,245
Other assets(3)		342,081								205,358
Total assets	$	7,307,231							$	6,060,526
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,351,277		$	22,097		3.30		$	1,092,245		$	13,329		2.46
Money Market		308,541			6,080		3.97			172,128			2,814		3.30
Savings		180,913			683		.76			175,161			454		.52
Time less than $100,000		1,634,569			39,774		4.91			1,307,676			26,101		4.03
Time greater than $100,000		1,378,870			35,808		5.24			1,020,682			22,556		4.46
Brokered		333,800			8,022		4.85			321,562			6,328		3.97
Total interest-bearing deposits		5,187,970			112,464		4.37			4,089,454			71,582		3.53
Federal funds purchased & other borrowings		207,663			5,488		5.33			147,185			3,560		4.88
Federal Home Loan Bank advances		407,583			9,836		4.87			546,405			13,009		4.80
Long-term debt		113,251			4,405		7.84			111,868			4,321		7.79
Total borrowed funds		728,497			19,729		5.46			805,458			20,890		5.23
Total interest-bearing liabilities		5,916,467			132,193		4.51			4,894,912			92,472		3.81
Non-interest-bearing liabilities:
Non-interest-bearing deposits		667,560								639,276
Other liabilities		74,846								41,918
Total liabilities		6,658,873								5,576,106
Shareholders’ equity		648,358								484,420
Total liabilities and shareholders’ equity	$	7,307,231							$	6,060,526
Net interest revenue				$	133,072							$	114,456
Net interest-rate spread							3.40	%							3.55	%
Net interest margin(4)							3.96	%							4.07	%

(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 incom 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 losses of $8.9 million in 2007 and $17.9 million in 2006 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.