United Community Banks (UCB) 8-K Results of Operations and Financial Condition

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
10 PERCENT GAIN IN DILUTED EARNINGS PER SHARE
FOR THIRD QUARTER 2007

HIGHLIGHTS:

• Third Quarter Earnings

Diluted Earnings per Share of 46 Cents — Up 10 Percent

Net Income of $22.5 Million — Up 29 Percent

• Loan and Fee Revenue Growth Drive Performance

• Opened De Novo Office in Savannah

BLAIRSVILLE, GA, October 23, 2007 — United Community Banks, Inc. (NASDAQ: UCBI) today announced diluted earnings per share of 46 cents for the third quarter of 2007, a 10 percent increase from 42 cents a year ago. Total revenue on a taxable equivalent basis was $83.6 million for the quarter compared with $69.3 million for the third quarter of 2006, a 21 percent increase. Net income for the third quarter of 2007 was $22.5 million, compared with $17.4 million for the same period of 2006, up 29 percent. Return on tangible equity was 17.54 percent and return on assets was 1.11 percent for the third quarter, compared with 17.29 percent and 1.09 percent a year ago, respectively.

“We are pleased to report solid year-over-year performance, especially as the slow down in the residential real estate market makes this a challenging time for community banks,” said Jimmy Tallent, president and chief executive officer. “We will continue to face challenges in the

quarters to come; however, we are well-prepared to overcome obstacles that may come our way.”

For the first nine months, diluted operating earnings per share increased 11 percent to $1.36 compared with $1.22 for the first nine months of 2006. Year-to-date taxable equivalent operating revenue increased 20 percent to $240.2 million versus $200.3 million for 2006. Net operating income for the first nine months of 2007 was $63.0 million, up 25 percent, compared with $50.4 million for 2006. Earnings measures for the first nine months of 2007 are presented on an operating basis that excludes a second quarter $15 million special provision for loan losses relating to two failed residential real estate developments near Spruce Pine, North Carolina. Because this provision was the result of a fraud-related matter that is considered an isolated and non-recurring event, management believes the presentation of operating earnings is useful for understanding underlying core earnings trends.

Loans increased by $987 million, or 20 percent, from a year ago. This increase included $267 million from the Southern National Bank acquisition in December 2006 and $534 million from the First Bank of the South acquisition in June 2007. Excluding acquired loans, core loan growth was 4 percent for the past 12 months and down slightly from the second quarter. “We have seen a softening in residential construction loans and the housing markets, particularly in the Atlanta region,” Tallent said. “Last quarter, we targeted loan growth for the remainder of 2007 to be in the range of 4 to 8 percent annualized. Given the uncertainties and slow down in the housing market, we expect that loan growth during the fourth quarter will be below our targeted range.”

Deposits increased $845 million, or 16 percent, from a year ago due to acquisitions. “Total deposits, excluding acquired deposits, decreased by less than $50 million from the prior year due to our banks intentionally letting non-relationship time deposits run off as loan demand declined,” commented Tallent. “Excluding these time deposits, our customer deposits were up about $192 million from the prior year and down $41 million from the second quarter. We believe this is temporary. The number of customer relationships continue to increase and our customer satisfaction scores remain above 90 percent and at historical highs.”

United added its 111^th banking office during the third quarter with the opening of a third location in Savannah, Georgia. “We have slowed our expansion efforts from previous levels as we monitor loan growth trends in our markets,” commented Tallent.

For the third quarter of 2007, taxable equivalent net interest revenue of $71.7 million reflected an increase of $10.8 million, or 18 percent, from the third quarter of 2006. The year-to-date increase was $29.4 million, or 17 percent, compared to the first nine months of 2006. Taxable equivalent net interest margin was 3.89 percent for the third quarter, compared with 3.94 percent for the second quarter of 2007 and 4.07 percent for the third quarter of 2006. “Consistent with the industry, our net interest margin continues to be under pressure due to the inverted interest rate curve and competitive pricing,” stated Tallent. “The decrease over the past two quarters was primarily due to the higher level of non-accrual loans and a slight change in the mix of earning assets.”

The third quarter provision for loan losses was $3.7 million. Net charge-offs were $5.2 million compared with $2.1 million for the second quarter and $1.3 million a year ago. Annualized net charge-offs to average loans was 35 basis points for the third quarter compared to 15 basis points for the second quarter and 11 basis points for the third quarter of 2006. “Two thirds of the charge-offs this quarter related to two credits that we actively worked to move out of the bank,” Tallent said. “One of the credits was sold prior to quarter-end and the other is under contract for sale in the fourth quarter. We are adequately reserved to handle this level of charge-offs and will continue to aggressively move non-performing credits off of our balance sheet.”

At quarter-end, non-performing assets totaled $63.3 million, including $23.6 million of fraud-related loans associated with the Spruce Pine developments. Excluding Spruce Pine loans, non-performing assets were $39.8 million, compared with $20.0 million at June 30, 2007 and $9.3 million a year ago. Excluding the Spruce Pine loans, non-performing assets as a percentage of total assets was 49 basis points at quarter-end compared with 25 basis points at June 30, 2007 and 14 basis points at September 30, 2006. The Spruce Pine non-performing assets as a percentage of total assets was 29 basis points. “We continued negotiations with borrowers during the third quarter and have been in contact with all of the borrowers or their counsel,”

commented Tallent. “We have not taken any charge-offs on these loans; however, we expect to begin the foreclosure process in the fourth quarter, as necessary, if ongoing negotiations fail to produce an acceptable outcome. We continue to believe that the $15 million special provision last quarter will be adequate.”

“Non-performing assets, until recently, were at unsustainably low levels and at the lower end of our historic 20 to 35 basis point range,” Tallent said. “During this quarter, excluding the Spruce Pine loans, non-performing assets increased above this range to 49 basis points. Most of the rise was construction-related due to softening in the market. Overall, our credit quality this quarter is a reflection of the current environment. Our markets are affected by the slow down in housing and construction and we continue to see a buildup of lot inventory in the Atlanta region and a standstill in new construction lending. Although we don’t know the length of this current cycle, it may be several quarters before we return to our historical range of non-performing assets. Even with the rise in non-performers, our credit quality ratios compare favorably to our peers and we have an experienced team to handle these issues.”

Fee revenue of $15.6 million for the third quarter reflected an increase of $3.5 million, or 29 percent, from $12.1 million for the third quarter of 2006. Service charges and fees on deposit accounts of $7.9 million increased $941,000, or 14 percent, from the third quarter of 2006 due to growth in transactions and new accounts and higher ATM and debit card usage. Consulting fees increased $341,000 to $2.4 million, 17 percent from a year ago and a record quarter, reflecting strong growth in the advisory services practice. Other fee revenue of $2.1 million included $720,000 of earnings from bank-owned life insurance that was added in the second quarter of 2007.

Operating expenses of $48.2 million reflected an increase of $6.7 million, or 16 percent, from the third quarter of 2006. Salaries and employee benefit costs totaled $29.7 million, which was $3.6 million, or 14 percent, higher than the third quarter of 2006. Acquisitions accounted for approximately $2 million of the increase, with the rest primarily due to staffing new banking office locations. Professional fees increased $982,000 to $1.9 million, reflecting higher fees associated with corporate initiatives, loan work-outs and foreclosures. Occupancy expense

increased $672,000 to $3.6 million attributable to the higher costs of operating additional banking offices. Other expenses of $5.2 million were $1.4 million higher than a year ago; half of this increase was due to higher FDIC insurance premiums beginning in the third quarter of 2007 and the balance was primarily from acquisitions and new banking offices.

“Our operating efficiency ratio of 55.3 percent for the quarter was better than our long-term efficiency target range of 56 to 58 percent,” Tallent said. “This ratio shows that despite the environmental difficulties, we have been able to maintain disciplined expense controls.”

“Last quarter, the Board of Directors increased the level of our stock purchase program to 2 million shares,” noted Tallent. “During the third quarter, we purchased 1.3 million shares at an average cost of $24.43. With our stock price at its current level and slower balance sheet growth, we believe that purchasing our stock is an attractive use of capital. Therefore, the Board has authorized an increase in the stock purchase program to 3 million shares through December 2008. We will continue to monitor our stock price and purchase shares to demonstrate our commitment to enhancing shareholder value.”

“We remain committed to building long-term shareholder value through our ability to deliver strong growth in earnings per share, to expand the franchise and to provide superior customer service,” said Tallent. “With the continued slower pace of loan growth, the outlook for the full year of 2007 is for operating earnings per share growth of 9 to 11 percent.”

“Although these are very challenging times for financial institutions, every economic cycle is temporary,” stated Tallent. “At the same time, we recognize that our outlook for 2008 will be tempered by the slower pace of loan growth. We will provide an update to this outlook with our year-end results during the January conference call. The current conditions in the banking industry and our overall performance confirm that our operating model works and will enable us to manage through this cycle. The structure, principles and philosophies that brought us to where we are today remain in place. We are always committed to the unparalleled service that our customers have come to expect from us.”

Conference Call

United Community Banks will hold a conference call on Tuesday, October 23, 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) 202-3109 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 $8.2 billion and operates 27 community banks with 111 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

																Third
	2007									2006						Quarter			For the Nine						YTD
(in thousands, except per share	Third			Second			First			Fourth			Third			2007-2006			Months Ended						2007-2006
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change			2007			2006			Change
INCOME SUMMARY
Interest revenue	$	144,884		$	136,237		$	129,028		$	123,463		$	116,304					$	410,150		$	323,232
Interest expense		73,203			68,270			63,923			60,912			55,431						205,396			147,903
Net interest revenue		71,681			67,967			65,105			62,551			60,873			18	%		204,754			175,329			17	%
Provision for loan losses (1)		3,700			3,700			3,700			3,700			3,700						11,100			10,900
Fee revenue		15,615			16,554			14,382			13,215			12,146			29			46,551			35,880			30
Total operating revenue		83,596			80,821			75,787			72,066			69,319			21			240,205			200,309			20
Operating expenses		48,182			47,702			44,841			42,521			41,441			16			140,725			119,549			18
Income before taxes		35,414			33,119			30,946			29,545			27,878			27			99,480			80,760			23
Income taxes		12,878			12,043			11,601			11,111			10,465						36,523			30,379
Net operating income		22,536			21,076			19,345			18,434			17,413			29			62,957			50,381			25
Fraud loss provision, net of tax (1)		—			9,165			—			—			—						9,165			—
Net income	$	22,536		$	11,911		$	19,345		$	18,434		$	17,413			29		$	53,792		$	50,381			7
OPERATING PERFORMANCE (1)																							��
Earnings per common share:
Basic	$	.47		$	.47		$	.45		$	.45		$	.43			9		$	1.38		$	1.25			10
Diluted		.46			.46			.44			.44			.42			10			1.36			1.22			11
Return on tangible equity(2)(3)(4)		17.54	%		17.52	%		17.18	%		17.49	%		17.29	%					17.42	%		17.54	%
Return on assets(4)		1.11			1.12			1.11			1.10			1.09						1.11			1.09
Dividend payout ratio		19.15			19.15			20.00			17.78			18.60						19.57			19.20
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings	$	.47		$	.26		$	.45		$	.45		$	.43			9		$	1.18		$	1.25			(6	)
Diluted earnings		.46			.26			.44			.44			.42			10			1.16			1.22			(5	)
Cash dividends declared		.09			.09			.09			.08			.08			13			.27			.24			13
Book value		17.53			16.98			14.83			14.37			13.07			34			17.53			13.07			34
Tangible book value(3)		10.82			10.44			11.06			10.57			10.16			6			10.77			10.16			6
Key performance ratios:
Return on equity(2)(4)		10.66			7.05			12.47			13.26			13.22						10.04			13.29
Return on assets(4)		1.11			.64			1.11			1.10			1.09						.95			1.09
Net interest margin(4)		3.89			3.94			3.99			3.99			4.07						3.94			4.07
Efficiency ratio		55.34			56.59			56.56			55.93			56.19						56.14			56.33
Dividend payout ratio		19.15			34.62			20.00			17.78			18.60						22.88			19.20
Equity to assets		10.32			8.94			8.80			8.21			8.04						9.39			8.01
Tangible equity to assets(3)		6.65			6.65			6.66			6.46			6.35						6.65			6.27
ASSET QUALITY (5)
Allowance for loan losses	$	90,935		$	92,471		$	68,804		$	66,566		$	60,901					$	90,936		$	60,901
Non-performing assets		63,337			43,601			14,290			13,654			9,347						63,337			9,347
Net charge-offs		5,235			2,124			1,462			1,930			1,307						8,821			3,594
Allowance for loan losses to loans		1.53	%		1.54	%		1.27	%		1.24	%		1.23	%					1.53	%		1.23	%
Non-performing assets to total assets		.77			.54			.20			.19			.14						.77			.14
Net charge-offs to average loans(4)		.35			.15			.11			.15			.11						.21			.10
AVERAGE BALANCES
Loans	$	5,966,933		$	5,619,950		$	5,402,860		$	5,134,721		$	4,865,886			23		$	5,665,314		$	4,688,512			21
Investment securities		1,308,192			1,242,448			1,153,208			1,059,125			1,029,981			27			1,235,183			1,036,092			19
Earning assets		7,332,492			6,915,134			6,599,035			6,225,943			5,942,710			23			6,951,573			5,760,055			21
Total assets		8,083,739			7,519,392			7,092,710			6,669,950			6,350,205			27			7,568,910			6,158,147			23
Deposits		6,246,319			5,945,633			5,764,426			5,517,696			5,085,168			23			5,987,225			4,848,848			23
Shareholders’ equity		834,094			672,348			624,100			547,419			510,791			63			710,950			493,307			44
Common shares — basic		48,348			44,949			43,000			41,096			40,223						45,452			40,156
Common shares — diluted		48,977			45,761			43,912			42,311			41,460						46,235			41,327
AT PERIOD END
Loans	$	5,952,749		$	5,999,093		$	5,402,198		$	5,376,538		$	4,965,365			20		$	5,952,749		$	4,965,365			20
Investment securities		1,296,826			1,213,659			1,150,424			1,107,153			980,273			32			1,296,826			980,273			32
Total assets		8,180,600			8,087,667			7,186,602			7,101,249			6,455,290			27			8,180,600			6,455,290			27
Deposits		6,154,308			6,361,269			5,841,687			5,772,886			5,309,219			16			6,154,308			5,309,219			16
Shareholders’ equity		833,761			828,731			638,456			616,767			526,734			58			833,761			526,734			58
Common shares outstanding		47,542			48,781			43,038			42,891			40,269						47,542			40,269

(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 third quarter, second quarter and first nine months of 2007 include $23.6 million in nonperforming loans that relate to two real estate developments. Additionally, in the second quarter of 2007, United recorded a $15 million special provision for loan losses related to this matter. This fraud-related matter was isolated and considered to be non-recurring. Excluding the non-recurring amounts, the allowance for loan losses would be $75,935 and $77,471, the allowance for loan losses to loans ratio would be 1.28% and 1.29%, non-performing assets would be $39,749 and $19,968, and the ratio of non-performing assets to total assets would be .49% and .25% at September 30, 2007 and June 30, 2007, respectively.

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

	2007						2006				Linked Quarter Change(3)			Year over Year Change
	Third		Second		First		Fourth		Third								Excluding
(in millions)	Quarter		Quarter(1)		Quarter		Quarter(2)		Quarter		Actual			Actual			Acquired
LOANS BY CATEGORY
Commercial (sec. by RE)	$	1,441	$	1,461	$	1,227	$	1,230	$	1,158		(5	)%		24	%		2	%
Commercial & industrial		408		421		315		296		272		(12	)		50			14
Total commercial		1,849		1,882		1,542		1,526		1,430		(7	)		29			5
Construction & land dev		2,466		2,522		2,336		2,334		2,065		(9	)		19			1
Residential mortgage		1,459		1,413		1,353		1,338		1,300		13			12			8
Consumer / installment		179		182		171		179		170		(7	)		5			(1	)
Total loans	$	5,953	$	5,999	$	5,402	$	5,377	$	4,965		(3	)		20			4
LOANS BY MARKET
Atlanta Region	$	2,451	$	2,518	$	2,015	$	2,005	$	1,696		(11	)%		45	%		(3	)%
North Georgia		2,026		2,032		2,010		2,034		1,984		(1	)		2			2
Coastal Georgia		402		396		372		358		343		6			17			17
Western North Carolina		834		816		782		773		752		9			11			11
East Tennessee		240		237		223		207		190		5			26			26
Total loans	$	5,953	$	5,999	$	5,402	$	5,377	$	4,965		(3	)		20			4

(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			Nine Months Ended
	Quarter			September 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		$	62,956
After-tax effect of special provision		(9,165	)		(9,165	)
Net income (GAAP)	$	11,911		$	53,791
Basic Earnings Per Share Reconciliation
Basic operating earnings per share	$	.47		$	1.38
Per share effect of special provision		(.21	)		(.20	)
Basic earnings per share (GAAP)	$	.26		$	1.18
Diluted Earnings Per Share Reconciliation
Diluted operating earnings per share	$	.46		$	1.36
Per share effect of special provision		(.20	)		(.20	)
Diluted earnings per share (GAAP)	$	.26		$	1.16

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income(unaudited)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in thousands, except per share data)	2007		2006			2007			2006
Interest revenue:
Loans, including fees	$	127,213	$	103,190		$	361,085		$	285,038
Investment securities:
Taxable		16,637		11,822			46,081			34,661
Tax exempt		428		474			1,313			1,497
Federal funds sold and deposits in banks		134		365			272			685
Total interest revenue		144,412		115,851			408,751			321,881
Interest expense:
Deposits:
NOW		12,046		8,100			34,143			21,429
Money market		5,002		2,155			11,082			4,969
Savings		553		226			1,236			680
Time		42,862		34,694			126,467			89,679
Total deposit interest expense		60,463		45,175			172,928			116,757
Federal funds purchased, repurchase agreements, & other short-term borrowings		4,738		2,254			10,226			5,814
Federal Home Loan Bank advances		5,902		5,828			15,738			18,837
Long-term debt		2,100		2,174			6,505			6,495
Total interest expense		73,203		55,431			205,397			147,903
Net interest revenue		71,209		60,420			203,354			173,978
Provision for loan losses		3,700		3,700			26,100			10,900
Net interest revenue after provision for loan losses		67,509		56,720			177,254			163,078
Fee revenue:
Service charges and fees		7,855		6,914			23,083			20,095
Mortgage loan and other related fees		2,118		1,928			6,817			5,149
Consulting fees		2,381		2,040			6,369			5,196
Brokerage fees		895		784			3,031			2,430
Securities gains (losses), net		225		(382	)		1,818			(385	)
Losses on prepayment of borrowings		—		(346	)		(1,164	)		(636	)
Other		2,141		1,208			6,597			4,031
Total fee revenue		15,615		12,146			46,551			35,880
Total revenue		83,124		68,866			223,805			198,958
Operating expenses:
Salaries and employee benefits		29,698		26,087			88,037			74,440
Communications and equipment		3,936		3,863			11,593			10,970
Occupancy		3,617		2,945			10,124			8,793
Advertising and public relations		1,537		1,882			5,651			5,718
Postage, printing and supplies		1,479		1,379			4,819			4,184
Professional fees		1,920		938			5,409			3,168
Amortization of intangibles		771		503			1,968			1,509
Other		5,224		3,844			13,124			10,767
Total operating expenses		48,182		41,441			140,725			119,549
Income before income taxes		34,942		27,425			83,080			79,409
Income taxes		12,406		10,012			29,289			29,028
Net income	$	22,536	$	17,413		$	53,791		$	50,381
Net income available to common shareholders	$	22,532	$	17,408		$	53,777		$	50,366
Earnings per common share:
Basic	$	.47	$	.43		$	1.18		$	1.25
Diluted		.46		.42			1.16			1.22
Dividends per common share		.09		.08			.27			.24
Weighted average common shares outstanding:
Basic		48,348		40,223			45,452			40,156
Diluted		48,977		41,460			46,235			41,327

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet

	September 30,			December 31,			September 30,
(in thousands, except share and per share data)	2007			2006			2006
	(unaudited)			(audited)			(unaudited)
ASSETS
Cash and due from banks	$	162,710		$	158,348		$	130,038
Interest-bearing deposits in banks		75,745			12,936			16,032
Cash and cash equivalents		238,455			171,284			146,070
Securities available for sale		1,296,826			1,107,153			980,273
Mortgage loans held for sale		23,717			35,325			21,522
Loans, net of unearned income		5,952,749			5,376,538			4,965,365
Less allowance for loan losses		90,935			66,566			60,901
Loans, net		5,861,814			5,309,972			4,904,464
Premises and equipment, net		174,918			139,716			129,217
Accrued interest receivable		67,385			58,291			47,336
Goodwill and other intangible assets		326,080			167,058			120,430
Other assets		191,405			112,450			105,978
Total assets	$	8,180,600		$	7,101,249		$	6,455,290
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	737,357		$	659,892		$	666,891
NOW		1,464,956			1,307,654			1,104,516
Money market		495,092			255,862			236,469
Savings		195,132			175,631			167,531
Time:
Less than $100,000		1,595,278			1,650,906			1,523,843
Greater than $100,000		1,358,302			1,397,245			1,248,738
Brokered		308,191			325,696			361,231
Total deposits		6,154,308			5,772,886			5,309,219
Federal funds purchased, repurchase agreements, and other short-term borrowings		502,081			65,884			56,026
Federal Home Loan Bank advances		519,381			489,084			412,572
Long-term debt		107,996			113,151			111,869
Accrued expenses and other liabilities		63,073			43,477			38,870
Total liabilities		7,346,839			6,484,482			5,928,556
Shareholders’ equity:
Preferred stock, $1 par value; $10 stated value; 10,000,000 shares authorized; 25,800, 32,200 and 32,200 shares issued and outstanding		258			322			322
Common stock, $1 par value; 100,000,000 shares authorized; 48,809,301, 42,890,863 and 40,268,604 shares issued and outstanding		48,809			42,891			40,269
Common stock issuable; 66,366, 29,821 and 22,741 shares		1,954			862			638
Capital surplus		462,499			270,383			199,773
Retained earnings		347,478			306,261			291,281
Treasury stock; 1,266,935 shares as of September 30, 2007, at cost		(30,969	)		—			—
Accumulated other comprehensive loss		3,732			(3,952	)		(5,549	)
Total shareholders’ equity		833,761			616,767			526,734
Total liabilities and shareholders’ equity	$	8,180,600		$	7,101,249		$	6,455,290

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended September 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)	$	5,966,933		$	126,992		8.44	%	$	4,865,886		$	103,061		8.40	%
Taxable securities(3)		1,266,609			16,637		5.25			984,189			11,822		4.80
Tax-exempt securities(1) (3)		41,583			704		6.77			45,792			780		6.81
Federal funds sold and other interest-earning assets		57,367			551		3.84			46,843			641		5.47
Total interest-earning assets		7,332,492			144,884		7.85			5,942,710			116,304		7.77
Non-interest-earning assets:
Allowance for loan losses		(93,832	)							(60,606	)
Cash and due from banks		141,536								116,004
Premises and equipment		173,605								125,423
Other assets(3)		529,938								226,674
Total assets	$	8,083,739							$	6,350,205
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,431,168		$	12,046		3.34		$	1,094,911		$	8,100		2.94
Money market		496,005			5,002		4.00			216,131			2,155		3.96
Savings		201,031			553		1.09			170,079			226		.53
Time less than $100,000		1,624,698			20,151		4.92			1,446,388			16,503		4.53
Time greater than $100,000		1,391,139			18,192		5.19			1,162,207			14,382		4.91
Brokered		358,614			4,519		5.00			340,301			3,809		4.44
Total interest-bearing deposits		5,502,655			60,463		4.36			4,430,017			45,175		4.05
Federal funds purchased and other borrowings		348,472			4,738		5.39			162,372			2,254		5.51
Federal Home Loan Bank advances		474,555			5,902		4.93			438,875			5,828		5.27
Long-term debt		119,596			2,100		6.97			111,869			2,174		7.71
Total borrowed funds		942,623			12,740		5.36			713,116			10,256		5.71
Total interest-bearing liabilities		6,445,278			73,203		4.51			5,143,133			55,431		4.28
Non-interest-bearing liabilities:
Non-interest-bearing deposits		743,664								655,151
Other liabilities		60,703								41,130
Total liabilities		7,249,645								5,839,414
Shareholders’ equity		834,094								510,791
Total liabilities and shareholders’ equity	$	8,083,739							$	6,350,205
Net interest revenue				$	71,681							$	60,873
Net interest-rate spread							3.34	%							3.49	%
Net interest margin(4)							3.89	%							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 $13.3 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 Nine Months Ended September 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)	$	5,665,314		$	360,430		8.51	%	$	4,688,512		$	284,683		8.12	%
Taxable securities(3)		1,192,815			46,081		5.15			988,504			34,661		4.68
Tax-exempt securities(1) (3)		42,368			2,160		6.80			47,588			2,463		6.90
Federal funds sold and other interest-earning assets		51,076			1,479		3.86			35,451			1,425		5.36
Total interest-earning assets		6,951,573			410,150		7.89			5,760,055			323,232		7.50
Non-interest-earning assets:
Allowance for loan losses		(78,541	)							(57,716	)
Cash and due from banks		130,816								122,603
Premises and equipment		159,674								120,664
Other assets(3)		405,388								212,541
Total assets	$	7,568,910							$	6,158,147
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,378,200		$	34,143		3.31		$	1,093,145		$	21,429		2.62
Money market		371,716			11,082		3.99			186,957			4,969		3.55
Savings		187,693			1,236		.88			173,448			680		.52
Time less than $100,000		1,631,243			59,925		4.91			1,354,421			42,604		4.21
Time greater than $100,000		1,383,004			54,000		5.22			1,068,376			36,938		4.62
Brokered		342,162			12,541		4.90			327,877			10,137		4.13
Total interest-bearing deposits		5,294,018			172,927		4.37			4,204,224			116,757		3.71
Federal funds purchased and other borrowings		255,115			10,226		5.36			152,303			5,814		5.10
Federal Home Loan Bank advances		430,151			15,738		4.89			510,168			18,837		4.94
Long-term debt		115,390			6,505		7.54			111,868			6,495		7.76
Total borrowed funds		800,656			32,469		5.42			774,339			31,146		5.38
Total interest-bearing liabilities		6,094,674			205,396		4.51			4,978,563			147,903		3.97
Non-interest-bearing liabilities:
Non-interest-bearing deposits		693,207								644,626
Other liabilities		70,079								41,651
Total liabilities		6,857,960								5,664,840
Shareholders’ equity		710,950								493,307
Total liabilities and shareholders’ equity	$	7,568,910							$	6,158,147
Net interest revenue				$	204,753							$	175,329
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 $10.4 million in 2007 and $19.1 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.