United Community Banks 8K Results of Operations and Financial Condition | UCB 24 Jan 13

Exhibit 99.1

For Immediate Release

For more information:

Rex S. Schuette

Chief Financial Officer

(706) 781-2266

Rex_Schuette@ucbi.com

UNITED COMMUNITY BANKS, INC. REPORTS

EARNINGS OF $9.3 MILLION FOR FOURTH QUARTER 2012

●

Net income of $9.3 million, or 11 cents per share

●

Loans up $37.2 million from third quarter, or 4 percent annualized

●

Core transaction deposits up $75.2 million in fourth quarter, or 10 percent annualized

●

Solid improvement in credit quality

BLAIRSVILLE, GA – January 24, 2013 – United Community Banks, Inc. (NASDAQ: UCBI) today reported net income of $9.3 million, or 11 cents per share, for the fourth quarter of 2012, and net income of $37.9 million, or 44 cents per share, for the year. The results for the fourth quarter and year reflect modest loan growth, improved credit quality, strong core transaction deposit growth, an increase in fee revenue, and lower operating expenses compared with the same periods a year ago.

“We had another positive quarter and a very productive year in rebuilding our core earnings and positioning United for future growth,” said Jimmy Tallent, president and chief executive officer. “In the fourth quarter we achieved meaningful improvement in every key measure of credit quality, and we continued to build strong momentum in growing new customer loan and deposit relationships.”

Tallent continued, “We grew our loan portfolio by $37 million from the third quarter, for an annualized rate of 4 percent. That was no easy accomplishment in the current business environment. Additionally, our core transaction deposits increased by $75 million, or 10 percent annualized. At the same time we lowered nonperforming assets by 10 percent, to $128 million. This total includes our lowest level of foreclosed properties since 2007, at $18 million. Even more encouraging was the significant drop in net charge-offs to $14.5 million, the lowest level since the second quarter of 2008.”

“This was a good way to end a successful year,” Tallent stated. “During 2012, we achieved $65 million in net new loan growth and we increased core transaction deposits by $311 million or 11 percent. Continued growth in quality loan and deposit relationships remains a top priority.”

The fourth quarter provision for loan losses was $14 million, equal to a year ago and down $1.5 million from the third quarter. Fourth quarter net charge-offs were $14.5 million compared to $20.6 million in the third quarter and $45.6 million in the fourth quarter of 2011.

“The inflow of nonperforming loans in the fourth quarter was $20 million, the lowest quarterly total since the beginning of the economic cycle,” Tallent said. “We expect this trend will lead to lower quarterly charge-offs and loan loss provisions during 2013.”

Taxable equivalent net interest revenue totaled $56.0 million, down $1.34 million from the third quarter of 2012 and down $3.02 million from the fourth quarter of 2011. “The decrease primarily reflects lower yields on our investment securities and loan portfolios, as well as the overlap of new senior debt issued at the beginning of the fourth quarter that was used to repay subordinated debt that matured late in the fourth quarter,” said Tallent.

“The lower yield on our loan portfolio reflects ongoing pricing pressure on new and renewed loans,” Tallent continued. “Our investment securities interest decline was due to reinvestment of cash flows at record low rates. We continue to look for reinvestment opportunities with a focus on floating-rate securities to alleviate market and duration risk. Floating-rate securities, which account for 38 percent of the total investment securities portfolio, improve our interest sensitivity position by reducing our exposure to rising interest rates,” Tallent continued.

The taxable equivalent net interest margin was down 16 basis points from the third quarter and 7 basis points from a year ago to 3.44 percent. “Five of the 16 basis point linked-quarter margin decline was due to the overlap in the replacement of maturing subordinated debt,” stated Tallent. “Another five basis points was due to the scheduled repricing of certain corporate bonds from a fixed to floating rate. These floating rate securities were part of a planned strategy to maintain a neutral to slightly asset-sensitive interest rate position. The balance of the decrease was due to a new loan product offering with a low introductory rate that will reprice in 2013 and continued loan pricing pressures.”

Fee revenue was $14.8 million for the fourth quarter, compared to $13.8 million for the third quarter and $12.7 million a year ago. The increase from prior quarters was primarily due to the higher level of mortgage loans closed and related fees. Mortgage refinancing activity continued at a strong pace through the fourth quarter as mortgage rates remained at record low levels. Closed mortgage loans totaled $100 million in the fourth quarter compared with $108 million in the third quarter and $78.8 million in the fourth quarter of 2011. Service charges and fees on deposit accounts were also up from a year ago due to new fees on low balance deposit accounts that became effective in the first quarter of 2012, and to higher debit card interchange fees.

Other fee revenue was down $217,000 from the third quarter of 2012 and $466,000 from the fourth quarter of 2011 to $2.34 million. The decrease was primarily due to lower hedge ineffectiveness gains and to a fourth quarter 2011 gain of $728,000 from the sale of state low-income housing tax credits.

Operating expenses, excluding foreclosed property costs, were $42.1 million for the fourth quarter of 2012 compared to $41.1 million for the third quarter and $41.8 million a year ago. The increase from a year ago was due primarily to a $2.24 million, one-time credit adjustment in the fourth quarter of 2011 related to our retirement plan that reduced salary and employee benefit expense in that period. Excluding the foreclosed property costs and the one-time credit adjustment, quarterly operating expenses were down $1.9 million from a year ago. Reduced staff levels and related costs were the primary drivers of the decrease. United had 164 fewer staff positions in the fourth quarter of 2012 compared to the fourth quarter of 2011.

Foreclosed property costs for the fourth quarter of 2012 were $4.6 million, compared to $3.7 million in the third quarter and $9.3 million a year ago. Fourth quarter 2012 costs included $1.4 million for maintenance and $3.2 million in net losses and write-downs. For the third quarter of 2012, foreclosed property costs included $962,000 in maintenance and $2.7 million in net losses and write-downs. Fourth quarter 2011 foreclosed property costs included $2.4 million in maintenance and $6.9 million in net losses and write-downs.

As of December 31, 2012, capital ratios were as follows: Tier 1 Risk-Based of 14.2 percent; Tier 1 Leverage of 9.7 percent; Total Risk-Based of 15.8 percent; Tier 1 Common Risk-Based of 8.9 percent; and, Tangible Equity-to-Assets of 8.6 percent.

“By every measure, 2012 has been a year of significant improvement for United Community Banks,” Tallent said. “Reflecting on all that this banking team has accomplished in restoring credit quality, regaining momentum in new business growth, and improving operating efficiency, I cannot help but look forward with excitement.

“We know that challenges remain as the economy continues to be sluggish and rates are at record lows,” Tallent continued. “At the same time we expect credit measures to continue to improve, and this will translate into lower levels of charge-offs and provisioning. We see opportunities to grow our mortgage and advisory services businesses, and will look to expand both. We believe we can grow our loan portfolio and we will accomplish this by continuing to add lenders in key markets, as well as expanding into new markets, like Greenville, South Carolina, where we recently opened a loan production office.”

Tallent concluded, “We constantly evaluate and find ways to improve this company – to make it more productive and efficient while continuing to deliver the best customer service in the industry. Ultimately we are committed to delivering superior financial results on behalf of our shareholders. We are committed, we are up to the challenge, and we look ahead with determination and optimism.”

Conference Call

United will hold a conference call today, Thursday, January 24, 2013, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 86024021. The conference call also will be webcast and can be accessed by selecting ‘Calendar of Events’ within the Investor Relations section of United’s website at www.ucbi.com.

About United Community Banks, Inc.

Headquartered in Blairsville, United Community Banks, Inc. is the third-largest bank holding company in Georgia. United has assets of $6.8 billion and operates 105 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina, east Tennessee and northwest South Carolina. United specializes in providing personalized community banking services to individuals and small to mid-size businesses and also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United’s common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at United’s website at www.ucbi.com.

Safe Harbor

This news release contains forward-looking statements, as defined by federal securities laws, including statements about United’s financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United’s filings with the Securities and Exchange Commission including its 2011 Annual Report on Form 10-K under the sections entitled “Forward-Looking Statements” and “Risk Factors.” Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.

# # #

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Selected Financial Information
																Fourth
	2012												2011			Quarter			For the Twelve						YTD
(in thousands, except per share	Fourth			Third			Second			First			Fourth				2012-2011		Months Ended							2012-2011
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change				2012			2011		Change
INCOME SUMMARY
Interest revenue	$	64,450		$	65,978		$	66,780		$	70,221		$	71,905					$	267,429		$	299,344
Interest expense		8,422			8,607			9,944			11,357			12,855						38,330			65,675
Net interest revenue		56,028			57,371			56,836			58,864			59,050			(5	) %		229,099			233,669			(2	) %
Provision for loan losses		14,000			15,500			18,000			15,000			14,000						62,500			251,000
Fee revenue		14,761			13,764			12,867			15,379			12,667			17			56,771			49,908			14
Total revenue		56,789			55,635			51,703			59,243			57,717						223,370			32,577
Operating expenses		46,726			44,783			44,310			46,955			51,080			(9	)		182,774			261,599			(30	)
Income (loss) before income taxes		10,063			10,852			7,393			12,288			6,637			52			40,596			(229,022	)
Income tax expense (benefit)		802			284			894			760			(3,264	)					2,740			(2,276	)
Net income (loss)		9,261			10,568			6,499			11,528			9,901			(6	)		37,856			(226,746	)
Preferred dividends and discount accretion		3,045			3,041			3,032			3,030			3,025						12,148			11,838
Net income (loss) available to common shareholders	$	6,216		$	7,527		$	3,467		$	8,498		$	6,876			(10	)	$	25,708		$	(238,584	)
PERFORMANCE MEASURES
Per common share:
Diluted income (loss)	$	.11		$	.13		$	.06		$	.15		$	.12			(8	)	$	.44		$	(5.97	)
Book value		6.74			6.75			6.61			6.68			6.62			2			6.74			6.62			2
Tangible book value (2)		6.64			6.64			6.48			6.54			6.47			3			6.64			6.47			3
Key performance ratios:
Return on equity (1)(3)		6.03	%		7.43	%		3.51	%		8.78	%		7.40	%					6.43	%		(93.57	)%
Return on assets (3)		.54			.63			.37			.66			.56						.55			(3.15	)
Net interest margin (3)		3.44			3.60			3.43			3.53			3.51						3.50			3.44
Efficiency ratio		66.04			62.95			63.84			63.31			71.23						64.02			92.27
Equity to assets		8.63			8.75			8.33			8.19			8.28						8.47			7.75
Tangible equity to assets (2)		8.55			8.66			8.24			8.08			8.16						8.38			7.62
Tangible common equity to assets (2)		5.67			5.73			5.45			5.33			5.38						5.54			3.74
Tangible common equity to risk- weighted assets (2)		8.33			8.44			8.37			8.21			8.25						8.33			8.25
ASSET QUALITY *
Non-performing loans	$	109,894		$	115,001		$	115,340		$	129,704		$	127,479					$	109,894		$	127,479
Foreclosed properties		18,264			26,958			30,421			31,887			32,859						18,264			32,859
Total non-performing assets (NPAs)		128,158			141,959			145,761			161,591			160,338						128,158			160,338
Allowance for loan losses		107,137			107,642			112,705			113,601			114,468						107,137			114,468
Net charge-offs		14,505			20,563			18,896			15,867			45,624						69,831			311,227
Allowance for loan losses to loans		2.57	%		2.60	%		2.74	%		2.75	%		2.79	%					2.57	%		2.79	%
Net charge-offs to average loans (3)		1.39			1.99			1.85			1.55			4.39						1.69			7.33
NPAs to loans and foreclosed properties		3.06			3.41			3.51			3.88			3.87						3.06			3.87
NPAs to total assets		1.88			2.12			2.16			2.25			2.30						1.88			2.30
AVERAGE BALANCES ($ in millions)
Loans	$	4,191		$	4,147		$	4,156		$	4,168		$	4,175			-		$	4,166		$	4,307			(3	)
Investment securities		2,088			1,971			2,145			2,153			2,141			(2	)		2,089			1,999			5
Earning assets		6,482			6,346			6,665			6,700			6,688			(3	)		6,547			6,785			(4	)
Total assets		6,778			6,648			6,993			7,045			7,019			(3	)		6,865			7,189			(5	)
Deposits		5,873			5,789			5,853			6,028			6,115			(4	)		5,885			6,275			(6	)
Shareholders’ equity		585			582			583			577			581			1			582			557			4
Common shares - basic (thousands)		57,971			57,880			57,840			57,764			57,646						57,857			39,943
Common shares - diluted (thousands)		57,971			57,880			57,840			57,764			57,646						57,857			39,943
AT PERIOD END ($ in millions)
Loans *	$	4,175		$	4,138		$	4,119		$	4,128		$	4,110			2		$	4,175		$	4,110			2
Investment securities		2,079			2,025			1,984			2,202			2,120			(2	)		2,079			2,120			(2	)
Total assets		6,802			6,699			6,737			7,174			6,983			(3	)		6,802			6,983			(3	)
Deposits		5,952			5,823			5,822			6,001			6,098			(2	)		5,952			6,098			(2	)
Shareholders’ equity		585			585			576			580			575			2			585			575			2
Common shares outstanding (thousands)		57,741			57,710			57,641			57,603			57,561						57,741			57,561

(1) 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). (2) Excludes effect of acquisition related intangibles and associated amortization. (3)Annualized.
*	Excludes loans and foreclosed properties covered by loss sharing agreements with the FDIC.

UNITED COMMUNITY BANKS, INC.

Selected Financial Information

For the Years Ended December 31,
(in thousands, except per share data;
taxable equivalent)	2012			2011			2010			2009			2008
INCOME SUMMARY
Net interest revenue	$	229,099		$	233,669		$	243,052		$	245,227		$	238,704
Operating provision for loan losses (1)		62,500			251,000			234,750			310,000			184,000
Operating fee revenue (2)		56,771			49,908			48,548			50,964			46,081
Total operating revenue (1)(2)		223,370			32,577			56,850			(13,809	)		100,785
Operating expenses (3)		182,774			261,599			242,952			217,050			200,335
Loss on sale of nonperforming assets		-			-			45,349			-			-
Operating income (loss) from continuing operations before taxes		40,596			(229,022	)		(231,451	)		(230,859	)		(99,550	)
Operating income taxes		2,740			(2,276	)		73,218			(91,754	)		(35,651	)
Net operating income (loss) from continuing operations		37,856			(226,746	)		(304,669	)		(139,105	)		(63,899	)
Gain from acquisition, net of tax		-			-			-			7,062			-
Noncash goodwill impairment charges		-			-			(210,590	)		(95,000	)		-
Severance cost, net of tax benefit		-			-			-			(1,797	)		-
Fraud loss provision and subsequent recovery, net of tax benefit		-			-			11,750			-			-
Net income (loss) from discontinued operations		-			-			(101	)		513			449
Gain from sale of subsidiary, net of income taxes and selling costs		-			-			1,266			-			-
Net income (loss)		37,856			(226,746	)		(502,344	)		(228,327	)		(63,450	)
Preferred dividends and discount accretion		12,148			11,838			10,316			10,242			724
Net income (loss) available to common shareholders	$	25,708		$	(238,584	)	$	(512,660	)	$	(238,569	)	$	(64,174	)
PERFORMANCE MEASURES
Per common share:
Diluted operating earnings (loss) from continuing operations (1)(2)(3)	$	.44		$	(5.97	)	$	(16.64	)	$	(12.37	)	$	(6.82	)
Diluted earnings (loss) from continuing operations		.44			(5.97	)		(27.15	)		(19.80	)		(6.82	)
Diluted earnings (loss)		.44			(5.97	)		(27.09	)		(19.76	)		(6.77	)
Cash dividends declared (rounded)		-			-			-			-			.87
Stock dividends declared (6)		-			-			-		3 for 130			2 for 130
Book value		6.74			6.62			15.40			41.78			84.75
Tangible book value (5)		6.64			6.47			14.80			30.09			51.93
Key performance ratios:
Return on equity (4)		6.43			(93.57	) %		(85.08	) %		(34.40	) %		(7.82	) %
Return on assets		.55			(3.15	)		(6.61	)		(2.76	)		(.76	)
Net interest margin		3.50			3.44			3.56			3.29			3.18
Operating efficiency ratio from continuing operations (2)(3)		64.02			92.27			98.98			73.97			70.00
Equity to assets		8.47			7.75			10.77			11.12			10.22
Tangible equity to assets (5)		8.38			7.62			8.88			8.33			6.67
Tangible common equity to assets (5)		5.54			3.74			6.52			6.15			6.57
Tangible common equity to risk-weighted assets (5)		8.33			8.25			5.64			10.39			8.34
ASSET QUALITY *
Non-performing loans	$	109,894		$	127,479		$	179,094		$	264,092		$	190,723
Foreclosed properties		18,264			32,859			142,208			120,770			59,768
Total non-performing assets (NPAs)		128,158			160,338			321,302			384,862			250,491
Allowance for loan losses		107,137			114,468			174,695			155,602			122,271
Operating net charge-offs (1)		69,831			311,227			215,657			276,669			151,152
Allowance for loan losses to loans		2.57	%		2.79	%		3.79	%		3.02	%		2.14	%
Operating net charge-offs to average loans (1)		1.69			7.33			4.42			5.03			2.57
NPAs to loans and foreclosed properties		3.06			3.87			6.77			7.30			4.35
NPAs to total assets		1.88			2.30			4.42			4.81			2.92
AVERAGE BALANCES ($ in millions)
Loans	$	4,166		$	4,307		$	4,961		$	5,548		$	5,891
Investment securities		2,089			1,999			1,453			1,656			1,489
Earning assets		6,547			6,785			6,822			7,465			7,504
Total assets		6,865			7,189			7,605			8,269			8,319
Deposits		5,885			6,275			6,373			6,713			6,524
Shareholders’ equity		582			557			819			920			850
Common shares - Basic (thousands)		57,857			39,943			18,925			12,075			9,474
Common shares - Diluted (thousands)		57,857			39,943			18,925			12,075			9,474
AT YEAR END ($ in millions)
Loans *	$	4,175		$	4,110		$	4,604		$	5,151		$	5,705
Investment securities		2,079			2,120			1,490			1,530			1,617
Total assets		6,802			6,983			7,276			8,000			8,592
Deposits		5,952			6,098			6,469			6,628			7,004
Shareholders’ equity		585			575			469			962			989
Common shares outstanding (thousands)		57,741			57,561			18,937			18,809			9,602

(1) Excludes the subsequent recovery of $11.8 million in previously recognized fraud related loan losses in 2010. (2) Excludes the gain from acquisition of $11.4 million, net of income tax expense of $4.3 million in 2009. (3) Excludes goodwill impairment charges of $211 million and $95 million in 2010 and 2009, respectively, and severance costs of $2.9 million, net of income tax benefit of $1.1 million in 2009. (4) Net income (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). (5) Excludes effect of acquisition related intangibles and associated amortization. (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.

Non-GAAP Performance Measures Reconciliation

Selected Financial Information
	2012												2011			For the Twelve Months Ended
(in thousands, except per share	Fourth			Third			Second			First			Fourth			For the Twelve Months Ended
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			2012			2011			2010				2009			2008

Interest revenue reconciliation
Interest revenue - taxable equivalent	$	64,450		$	65,978		$	66,780		$	70,221		$	71,905		$	267,429		$	299,344		$	343,123			$	404,961		$	466,969
Taxable equivalent adjustment		(381	)		(419	)		(444	)		(446	)		(423	)		(1,690	)		(1,707	)		(2,001	)			(2,132	)		(2,261	)
Interest revenue (GAAP)	$	64,069		$	65,559		$	66,336		$	69,775		$	71,482		$	265,739		$	297,637		$	341,122			$	402,829		$	464,708

Net interest revenue reconciliation
Net interest revenue - taxable equivalent	$	56,028		$	57,371		$	56,836		$	58,864		$	59,050		$	229,099		$	233,669		$	243,052			$	245,227		$	238,704
Taxable equivalent adjustment		(381	)		(419	)		(444	)		(446	)		(423	)		(1,690	)		(1,707	)		(2,001	)			(2,132	)		(2,261	)
Net interest revenue (GAAP)	$	55,647		$	56,952		$	56,392		$	58,418		$	58,627		$	227,409		$	231,962		$	241,051			$	243,095		$	236,443

Provision for loan losses reconciliation
Operating provision for loan losses	$	14,000		$	15,500		$	18,000		$	15,000		$	14,000		$	62,500		$	251,000		$	234,750			$	310,000		$	184,000
Partial recovery of special fraud-related loan loss		-			-			-			-			-			-			-			(11,750	)			-			-
Provision for loan losses (GAAP)	$	14,000		$	15,500		$	18,000		$	15,000		$	14,000		$	62,500		$	251,000		$	223,000			$	310,000		$	184,000

Fee revenue reconciliation
Operating fee revenue	$	14,761		$	13,764		$	12,867		$	15,379		$	12,667		$	56,771		$	49,908		$	48,548			$	50,964		$	46,081
Gain from acquisition		-			-			-			-			-			-			-			-				11,390			-
Fee revenue (GAAP)	$	14,761		$	13,764		$	12,867		$	15,379		$	12,667		$	56,771		$	49,908		$	48,548			$	62,354		$	46,081

Total revenue reconciliation
Total operating revenue	$	56,789		$	55,635		$	51,703		$	59,243		$	57,717		$	223,370		$	32,577		$	56,850			$	(13,809	)	$	100,785
Taxable equivalent adjustment		(381	)		(419	)		(444	)		(446	)		(423	)		(1,690	)		(1,707	)		(2,001	)			(2,132	)		(2,261	)
Gain from acquisition		-			-			-			-			-			-			-			-				11,390			-
Partial recovery of special fraud-related loan loss		-			-			-			-			-			-			-			11,750				-			-
Total revenue (GAAP)	$	56,408		$	55,216		$	51,259		$	58,797		$	57,294		$	221,680		$	30,870		$	66,599			$	(4,551	)	$	98,524

Expense reconciliation
Operating expense	$	46,726		$	44,783		$	44,310		$	46,955		$	51,080		$	182,774		$	261,599		$	288,301			$	217,050		$	200,335
Noncash goodwill impairment charge		-			-			-			-			-			-			-			210,590				95,000			-
Severance costs		-			-			-			-			-			-			-			-				2,898			-
Operating expense (GAAP)	$	46,726		$	44,783		$	44,310		$	46,955		$	51,080		$	182,774		$	261,599		$	498,891			$	314,948		$	200,335

Income (loss) before taxes reconciliation
Income (loss) before taxes	$	10,063		$	10,852		$	7,393		$	12,288		$	6,637		$	40,596		$	(229,022	)	$	(231,451	)		$	(230,859	)	$	(99,550	)
Taxable equivalent adjustment		(381	)		(419	)		(444	)		(446	)		(423	)		(1,690	)		(1,707	)		(2,001	)			(2,132	)		(2,261	)
Gain from acquisition		-			-			-			-			-			-			-			-				11,390			-
Noncash goodwill impairment charge		-			-			-			-			-			-			-			(210,590	)			(95,000	)		-
Severance costs		-			-			-			-			-			-			-			-				(2,898	)		-
Partial recovery of special fraud-related loan loss		-			-			-			-			-			-			-			11,750				-			-
Income (loss) before taxes (GAAP)	$	9,682		$	10,433		$	6,949		$	11,842		$	6,214		$	38,906		$	(230,729	)	$	(432,292	)		$	(319,499	)	$	(101,811	)

Income tax (benefit) expense reconciliation
Income tax (benefit) expense	$	802		$	284		$	894		$	760		$	(3,264	)	$	2,740		$	(2,276	)	$	73,218			$	(91,754	)	$	(35,651	)
Taxable equivalent adjustment		(381	)		(419	)		(444	)		(446	)		(423	)		(1,690	)		(1,707	)		(2,001	)			(2,132	)		(2,261	)
Gain from acquisition, tax expense		-			-			-			-			-			-			-			-				4,328			-
Severance costs, tax benefit		-			-			-			-			-			-			-			-				(1,101	)		-
Income tax (benefit) expense (GAAP)	$	421		$	(135	)	$	450		$	314		$	(3,687	)	$	1,050		$	(3,983	)	$	71,217			$	(90,659	)	$	(37,912	)

Diluted earnings (loss) from continuing operations per common share reconciliation
Diluted operating earnings (loss) from continuing operations per common share	$	.11		$	.13		$	.06		$	.15		$	.12		$	.44		$	(5.97	)	$	(16.64	)		$	(12.37	)	$	(6.82	)
Gain from acquisition		-			-			-			-			-			-			-			-				.58			-
Noncash goodwill impairment charge		-			-			-			-			-			-			-			(11.13	)			(7.86	)		-
Severance costs		-			-			-			-			-			-			-			-				(.15	)		-
Partial recovery of special fraud-related loan loss		-			-			-			-			-			-			-			.62				-			-
Diluted earnings (loss) from continuing operations per common share (GAAP)	$	.11		$	.13		$	.06		$	.15		$	.12		$	.44		$	(5.97	)	$	(27.15	)		$	(19.80	)	$	(6.82	)

Book value per common share reconciliation
Tangible book value per common share	$	6.64		$	6.64		$	6.48		$	6.54		$	6.47		$	6.64		$	6.47		$	14.80			$	30.09		$	51.93
Effect of goodwill and other intangibles		.10			.11			.13			.14			.15			.10			.15			.60				11.69			32.82
Book value per common share (GAAP)	$	6.74		$	6.75		$	6.61		$	6.68		$	6.62		$	6.74		$	6.62		$	15.40			$	41.78		$	84.75

Efficiency ratio from continuing operations reconciliation
Operating efficiency ratio from continuing operations		66.04	%		62.95	%		63.84	%		63.31	%		71.23	%		64.02	%		92.27	%		98.98	%	��		73.97	%		70.00	%
Gain from acquisition		-			-			-			-			-			-			-			-				(2.77	)		-
Noncash goodwill impairment charge		-			-			-			-			-			-			-			72.29				31.17			-
Severance costs		-			-			-			-			-			-			-			-				.95			-
Efficiency ratio from continuing operations (GAAP)		66.04	%		62.95	%		63.84	%		63.31	%		71.23	%		64.02	%		92.27	%		171.27	%			103.32	%		70.00	%

Average equity to assets reconciliation
Tangible common equity to assets		5.67	%		5.73	%		5.45	%		5.33	%		5.38	%		5.54	%		3.74	%		6.52	%			6.15	%		6.57	%
Effect of preferred equity		2.88			2.93			2.79			2.75			2.78			2.84			3.88			2.36				2.18			.10
Tangible equity to assets		8.55			8.66			8.24			8.08			8.16			8.38			7.62			8.88				8.33			6.67
Effect of goodwill and other intangibles		.08			.09			.09			.11			.12			.09			.13			1.89				2.79			3.55
Equity to assets (GAAP)		8.63	%		8.75	%		8.33	%		8.19	%		8.28	%		8.47	%		7.75	%		10.77	%			11.12	%		10.22	%

Tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets		8.33	%		8.44	%		8.37	%		8.21	%		8.25	%		8.33	%		8.25	%		5.64	%			10.39	%		8.34	%
Effect of other comprehensive income		.51			.36			.28			.10			(.03	)		.51			(.03	)		(.42	)			(.87	)		(.91	)
Effect of deferred tax limitation		-			-			-			-			-			-			-			-				(1.27	)		-
Effect of trust preferred		1.15			1.17			1.19			1.15			1.18			1.15			1.18			1.06				.97			.88
Effect of preferred equity		4.24			4.29			4.35			4.23			4.29			4.24			4.29			3.53				3.19			2.90
Tier I capital ratio (Regulatory)		14.23	%		14.26	%		14.19	%		13.69	%		13.69	%		14.23	%		13.69	%		9.81	%			12.41	%		11.21	%

Net charge-offs reconciliation
Operating net charge-offs	$	14,505		$	20,563		$	18,896		$	15,867		$	45,624		$	69,831		$	311,227		$	215,657			$	276,669		$	151,152
Subsequent partial recovery of fraud-related charge-off		-			-			-			-			-			-			-			(11,750	)			-			-
Net charge-offs (GAAP)	$	14,505		$	20,563		$	18,896		$	15,867		$	45,624		$	69,831		$	311,227		$	203,907			$	276,669		$	151,152

Net charge-offs to average loans reconciliation
Operating net charge-offs to average loans		1.39	%		1.99	%		1.85	%		1.55	%		4.39	%		1.69	%		7.33	%		4.42	%			5.03	%		2.57	%
Subsequent partial recovery of fraud-related charge-off		-			-			-			-			-			-			-			(.25	)			-			-
Net charge-offs to average loans (GAAP)		1.39	%		1.99	%		1.85	%		1.55	%		4.39	%		1.69	%		7.33	%		4.17	%			5.03	%		2.57	%

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Loan Portfolio Composition at Period-End (1)
	2012								2011		Linked			Year over
	Fourth		Third		Second		First		Fourth		Quarter			Year
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter		Change			Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,131	$	1,126	$	1,140	$	1,137	$	1,112	$	5		$	19
Income producing commercial RE		682		693		697		706		710		(11	)		(28	)
Commercial & industrial		458		460		450		440		428		(2	)		30
Commercial construction		155		161		169		167		164		(6	)		(9	)
Total commercial		2,426		2,440		2,456		2,450		2,414		(14	)		12
Residential mortgage		829		833		834		836		835		(4	)		(6	)
Home equity lines of credit		385		341		294		295		300		44			85
Residential construction		382		389		409		436		448		(7	)		(66	)
Consumer installment		153		135		126		111		113		18			40
Total loans	$	4,175	$	4,138	$	4,119	$	4,128	$	4,110		37			65

LOANS BY MARKET
North Georgia	$	1,364	$	1,383	$	1,387	$	1,408	$	1,426		(19	)		(62	)
Atlanta MSA		1,288		1,257		1,252		1,239		1,220		31			68
North Carolina		579		579		576		588		597		-			(18	)
Coastal Georgia		400		380		369		366		346		20			54
Gainesville MSA		261		256		259		262		265		5			(4	)
East Tennessee		283		283		276		265		256		-			27
Total loans	$	4,175	$	4,138	$	4,119	$	4,128	$	4,110		37			65

RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development	$	62	$	71	$	78	$	86	$	88		(9	)		(26	)
Land loans		46		41		45		57		61		5			(15	)
Lot loans		193		196		203		204		207		(3	)		(14	)
Total		301		308		326		347		356		(7	)		(55	)

House loans
Spec		41		44		49		57		59		(3	)		(18	)
Sold		40		37		34		32		33		3			7
Total		81		81		83		89		92		-			(11	)
Total residential construction	$	382	$	389	$	409	$	436	$	448		(7	)		(66	)

(1)�� Excludes total loans of $33.4 million, $37.0 million, $41.5 million, $47.2 million and $54.5 million as of December 31, 2012, September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 2011, 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

Loan Portfolio Composition at Year-End (1)
(in millions)	2012		2011		2010		2009		2008
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,131	$	1,112	$	980	$	963	$	955
Income producing commercial RE		682		710		781		816		672
Commercial & industrial		458		428		441		390		410
Commercial construction		155		164		297		363		500
Total commercial		2,426		2,414		2,499		2,532		2,537
Residential mortgage		829		835		944		1,052		1,142
Home equity lines of credit		385		300		335		375		384
Residential construction		382		448		695		1,050		1,479
Consumer / installment		153		113		131		142		163
Total loans	$	4,175	$	4,110	$	4,604	$	5,151	$	5,705

LOANS BY MARKET
North Georgia	$	1,364	$	1,426	$	1,689	$	1,884	$	2,040
Atlanta MSA		1,288		1,220		1,310		1,435		1,706
North Carolina		579		597		702		772		810
Coastal Georgia		400		346		335		405		464
Gainesville MSA		261		265		312		390		420
East Tennessee		283		256		256		265		265
Total loans	$	4,175	$	4,110	$	4,604	$	5,151	$	5,705

(1) Excludes total loans of $33.4 million, $54.5 million, $68.2 million and $85.1 million as of December 31, 2012, 2011, 2010 and 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)

	Fourth Quarter 2012									Third Quarter 2012									Second Quarter 2012
	Non-performing			Foreclosed			Total			Non-performing			Foreclosed			Total			Non-performing			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs			Loans			Properties			NPAs			Loans			Properties			NPAs
NPAs BY CATEGORY
Owner occupied CRE	$	12,599		$	4,989		$	17,588		$	14,140		$	7,170		$	21,310		$	9,399		$	7,914		$	17,313
Income producing CRE		9,549			490			10,039			11,756			1,597			13,353			9,716			2,672			12,388
Commercial & industrial		31,817			-			31,817			32,678			-			32,678			34,982			-			34,982
Commercial construction		23,843			2,204			26,047			18,590			3,121			21,711			18,175			2,732			20,907
Total commercial		77,808			7,683			85,491			77,164			11,888			89,052			72,272			13,318			85,590
Residential mortgage		11,151			4,753			15,904			12,629			6,031			18,660			15,272			5,591			20,863
Home equity lines of credit		1,438			-			1,438			1,367			-			1,367			1,359			-			1,359
Residential construction		18,702			5,828			24,530			22,935			9,039			31,974			25,530			11,512			37,042
Consumer installment		795			-			795			906			-			906			907			-			907
Total NPAs	$	109,894		$	18,264		$	128,158		$	115,001		$	26,958		$	141,959		$	115,340		$	30,421		$	145,761
Balance as a % of
Unpaid Principal		69.5	%		39.7	%		62.8	%		68.8	%		36.4	%		58.8	%		68.8	%		39.3	%		59.4	%

NPAs BY MARKET
North Georgia	$	69,950		$	8,219		$	78,169		$	72,211		$	14,582		$	86,793		$	77,332		$	13,546		$	90,878
Atlanta MSA		18,556			3,442			21,998			21,349			5,926			27,275			17,593			8,651			26,244
North Carolina		11,014			2,579			13,593			9,622			2,771			12,393			10,657			3,287			13,944
Coastal Georgia		3,810			1,609			5,419			6,822			864			7,686			5,822			785			6,607
Gainesville MSA		903			556			1,459			840			1,328			2,168			991			2,998			3,989
East Tennessee		5,661			1,859			7,520			4,157			1,487			5,644			2,945			1,154			4,099
Total NPAs	$	109,894		$	18,264		$	128,158		$	115,001		$	26,958		$	141,959		$	115,340		$	30,421		$	145,761


NPA ACTIVITY
Beginning Balance	$	115,001		$	26,958		$	141,959		$	115,340		$	30,421		$	145,761		$	129,704		$	31,887		$	161,591
Loans placed on non-accrual		20,211			-			20,211			30,535			-			30,535			29,364			-			29,364
Payments received		(6,458	)		-			(6,458	)		(3,646	)		-			(3,646	)		(15,027	)		-			(15,027	)
Loan charge-offs		(11,722	)		-			(11,722	)		(19,227	)		-			(19,227	)		(19,382	)		-			(19,382	)
Foreclosures		(7,138	)		7,138			-			(8,001	)		8,001			-			(9,319	)		9,319			-
Capitalized costs		-			201			201			-			102			102			-			415			415
Note / property sales		-			(12,845	)		(12,845	)		-			(8,822	)		(8,822	)		-			(10,461	)		(10,461	)
Write downs		-			(1,438	)		(1,438	)		-			(2,394	)		(2,394	)		-			(1,008	)		(1,008	)
Net gains (losses) on sales		-			(1,750	)		(1,750	)		-			(350	)		(350	)		-			269			269
Ending Balance	$	109,894		$	18,264		$	128,158		$	115,001		$	26,958		$	141,959		$	115,340		$	30,421		$	145,761

	Fourth Quarter 2012				Third Quarter 2012						Second Quarter 2012
			Net Charge-					Net Charge-						Net Charge-
			Offs to					Offs to						Offs to
	Net		Average		Net			Average			Net			Average
(in thousands)	Charge-Offs		Loans (2)		Charge-Offs			Loans (2)			Charge-Offs			Loans (2)
NET CHARGE-OFFS BY CATEGORY
Owner occupied CRE	$	4,997		1.76	$	6,192			3.56	%	$	1,305			.46	%
Income producing CRE		1,153		.67		1,982			.70			3,044			1.75
Commercial & industrial		135		.12		(259	)		(.23	)		775			.70
Commercial construction		1,688		4.25		3,190			7.74			88			.21
Total commercial		7,973		1.30		11,105			1.81			5,212			.86
Residential mortgage		3,254		1.55		2,846			1.40			1,971			.70
Home equity lines of credit		445		.49		681			.80			1,891			2.60
Residential construction		2,435		2.52		5,676			5.69			9,563			9.14
Consumer installment		398		1.10		255			.78			259			.88
Total	$	14,505		1.39	$	20,563			1.99		$	18,896			1.85


NET CHARGE-OFFS BY MARKET
North Georgia	$	4,474		1.26	$	6,451			1.84	%	$	12,474			3.58	%
Atlanta MSA		3,977		1.27		9,344			3.02			2,307			.75
North Carolina		2,032		1.39		1,674			1.15			3,634			2.52
Coastal Georgia		574		.60		2,486			2.67			211			.23
Gainesville MSA		1,331		2.04		294			.45			(187	)		(.29	)
East Tennessee		2,117		2.98		314			.45			457			.68
Total	$	14,505		1.39	$	20,563			1.99		$	18,896			1.85

(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 Operations (Unaudited)

	Three Months Ended					Twelve Months Ended
	December 31,					December 31,
(in thousands, except per share data)	2012		2011			2012			2011

Interest revenue:
Loans, including fees	$	53,335	$	57,697		$	217,140		$	239,056
Investment securities, including tax exempt of $219, $255, $956 and $1,009		9,841		13,296			44,613			56,260
Federal funds sold, reverse repurchase agreements, commercial paper and deposits in banks		893		489			3,986			2,321
Total interest revenue		64,069		71,482			265,739			297,637
Interest expense:
Deposits:
NOW		462		807			2,049			3,998
Money market		617		800			2,518			5,456
Savings		38		41			150			234
Time		3,674		7,338			19,518			39,151
Total deposit interest expense		4,791		8,986			24,235			48,839
Federal funds purchased, repurchase agreements and other short-term borrowings		524		1,053			2,987			4,250
Federal Home Loan Bank advances		25		441			907			2,042
Long-term debt		3,082		2,375			10,201			10,544
Total interest expense		8,422		12,855			38,330			65,675
Net interest revenue		55,647		58,627			227,409			231,962
Provision for loan losses		14,000		14,000			62,500			251,000
Net interest revenue after provision for loan losses		41,647		44,627			164,909			(19,038	)
Fee revenue:
Service charges and fees		8,375		7,248			31,670			29,110
Mortgage loan and other related fees		3,262		1,825			10,483			5,419
Brokerage fees		751		782			3,082			2,986
Securities gains, net		31		4			7,078			842
Loss from prepayment of debt		-		-			(6,681	)		(791	)
Other		2,342		2,808			11,139			12,342
Total fee revenue		14,761		12,667			56,771			49,908
Total revenue		56,408		57,294			221,680			30,870
Operating expenses:
Salaries and employee benefits		23,586		23,473			96,026			100,095
Communications and equipment		3,320		3,129			12,940			13,135
Occupancy		3,455		3,972			14,304			15,645
Advertising and public relations		987		944			3,855			4,291
Postage, printing and supplies		1,050		1,017			3,899			4,256
Professional fees		2,685		1,996			8,792			9,727
Foreclosed property		4,611		9,302			13,993			78,905
FDIC assessments and other regulatory charges		2,505		2,599			10,097			14,259
Amortization of intangibles		727		746			2,917			3,016
Other		3,800		3,902			15,951			18,270
Total operating expenses		46,726		51,080			182,774			261,599
Net income (loss) before income taxes		9,682		6,214			38,906			(230,729	)
Income tax (benefit) expense		421		(3,687	)		1,050			(3,983	)
Net income (loss)		9,261		9,901			37,856			(226,746	)
Preferred stock dividends and discount accretion		3,045		3,025			12,148			11,838
Net income (loss) available to common shareholders	$	6,216	$	6,876		$	25,708		$	(238,584	)
Earnings (loss) per common share - Basic	$	.11	$	.12		$	.44		$	(5.97	)
Earnings (loss) per common share - Diluted		.11		.12			.44			(5.97	)
Weighted average common shares outstanding - Basic		57,971		57,646			57,857			39,943
Weighted average common shares outstanding - Diluted		57,971		57,646			57,857			39,943

UNITED COMMUNITY BANKS, INC.

Consolidated Balance Sheet
	December 31,			December 31,
(in thousands, except share and per share data)	2012			2011
	(unaudited)			(audited)
ASSETS
Cash and due from banks	$	66,536		$	53,807
Interest-bearing deposits in banks		124,613			139,609
Federal funds sold, reverse repurchase agreements, securities lending, commercial paper and
short-term investments		60,000			185,000
Cash and cash equivalents		251,149			378,416
Securities available for sale		1,834,593			1,790,047
Securities held to maturity (fair value $261,131 and $343,531)		244,184			330,203
Mortgage loans held for sale		28,821			23,881
Loans, net of unearned income		4,175,008			4,109,614
Less allowance for loan losses		(107,137	)		(114,468	)
Loans, net		4,067,871			3,995,146
Assets covered by loss sharing agreements with the FDIC		47,467			78,145
Premises and equipment, net		168,920			175,088
Bank owned life insurance		81,867			80,599
Accrued interest receivable		18,659			20,693
Goodwill and other intangible assets		5,510			8,428
Foreclosed property		18,264			32,859
Other assets		34,954			69,915
Total assets	$	6,802,259		$	6,983,420
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand	$	1,252,605		$	992,109
NOW		1,316,453			1,509,896
Money market		1,149,912			1,038,778
Savings		227,308			199,007
Time:
Less than $100,000		1,055,271			1,332,394
Greater than $100,000		705,558			847,152
Brokered		245,033			178,647
Total deposits		5,952,140			6,097,983
Federal funds purchased, repurchase agreements, and other short-term borrowings		52,574			102,577
Federal Home Loan Bank advances		40,125			40,625
Long-term debt		124,805			120,225
Unsettled securities purchases		-			10,325
Accrued expenses and other liabilities		47,210			36,199
Total liabilities		6,216,854			6,407,934
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
Series B; $1,000 stated value; 180,000 shares issued and outstanding		178,557			177,092
Series D; $1,000 stated value; 16,613 shares issued and outstanding		16,613			16,613
Common stock, $1 par value; 100,000,000 shares authorized;
42,423,870 and 41,647,100 shares issued and outstanding		42,424			41,647
Common stock, non-voting, $1 par value; 30,000,000 shares authorized;
15,316,794 and 15,914,209 shares issued and outstanding		15,317			15,914
Common stock issuable; 133,238 and 93,681 shares		3,119			3,233
Capital surplus		1,057,951			1,054,940
Accumulated deficit		(705,153	)		(730,861	)
Accumulated other comprehensive loss		(23,640	)		(3,309	)
Total shareholders' equity		585,405			575,486
Total liabilities and shareholders' equity	$	6,802,259		$	6,983,420

UNITED COMMUNITY BANKS, INC.

Average Consolidated Balance Sheets and Net Interest Analysis

For the Three Months Ended December 31,

	2012								2011
	Average					Avg.			Average					Avg.
(dollars in thousands, taxable equivalent)	Balance			Interest		Rate			Balance			Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2)	$	4,190,725		$	53,366		5.07	%	$	4,175,320		$	57,773		5.49	%
Taxable securities (3)		2,065,311			9,622		1.86			2,114,069			13,041		2.47
Tax-exempt securities (1)(3)		22,483			358		6.37			27,224			417		6.13
Federal funds sold and other interest-earning assets		203,090			1,104		2.17			371,606			674		.73

Total interest-earning assets		6,481,609			64,450		3.96			6,688,219			71,905		4.27
Non-interest-earning assets:
Allowance for loan losses		(112,846	)							(145,559	)
Cash and due from banks		54,714								54,485
Premises and equipment		169,967								176,182
Other assets (3)		184,398								245,664
Total assets	$	6,777,842							$	7,018,991

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,261,796			462		.15		$	1,451,581			807		.22
Money market		1,200,701			617		.20			1,041,375			800		.30
Savings		224,624			38		.07			198,541			41		.08
Time less than $100,000		1,082,761			1,982		.73			1,358,367			3,668		1.07
Time greater than $100,000		715,902			1,673		.93			875,434			2,867		1.30
Brokered time deposits		135,708			19		.06			180,933			803		1.76
Total interest-bearing deposits		4,621,492			4,791		.41			5,106,231			8,986		.70

Federal funds purchased and other borrowings		67,403			524		3.09			102,776			1,053		4.06
Federal Home Loan Bank advances		39,092			25		.25			40,625			441		4.31
Long-term debt		149,564			3,082		8.20			120,217			2,375		7.84
Total borrowed funds		256,059			3,631		5.64			263,618			3,869		5.82

Total interest-bearing liabilities		4,877,551			8,422		.69			5,369,849			12,855		.95
Non-interest-bearing liabilities:																��
Non-interest-bearing deposits		1,251,327								1,008,327
Other liabilities		63,785								59,908
Total liabilities		6,192,663								6,438,084
Shareholders' equity		585,179								580,907
Total liabilities and shareholders' equity	$	6,777,842							$	7,018,991

Net interest revenue				$	56,028							$	59,050
Net interest-rate spread							3.27	%							3.32	%

Net interest margin (4)							3.44	%							3.51	%

(1)	Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)	Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3)	Securities available for sale are shown at amortized cost. Pretax unrealized gains of $22.2 million in 2012 and $31.3 million in 2011 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 Twelve Months Ended December 31,

	2012								2011
	Average					Avg.			Average					Avg.
(dollars in thousands, taxable equivalent)	Balance			Interest		Rate			Balance			Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2)	$	4,165,520		$	217,467		5.22	%	$	4,307,111		$	239,195		5.55	%
Taxable securities (3)		2,065,162			43,657		2.11			1,973,678			55,251		2.80
Tax-exempt securities (1)(3)		23,759			1,565		6.59			25,693			1,651		6.43
Federal funds sold and other interest-earning assets		292,857			4,740		1.62			478,403			3,247		.68

Total interest-earning assets		6,547,298			267,429		4.08			6,784,885			299,344		4.41
Non-interest-earning assets:
Allowance for loan losses		(114,647	)							(145,656	)
Cash and due from banks		53,247								90,212
Premises and equipment		172,544								178,061
Other assets (3)		206,609								281,233
Total assets	$	6,865,051							$	7,188,735

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,293,510			2,049		.16		$	1,348,493			3,998		.30
Money market		1,140,354			2,518		.22			993,871			5,456		.55
Savings		216,880			150		.07			195,468			234		.12
Time less than $100,000		1,170,202			9,788		.84			1,471,596		��	18,648		1.27
Time greater than $100,000		766,411			8,027		1.05			948,659			14,347		1.51
Brokered time deposits		155,902			1,703		1.09			401,393			6,156		1.53
Total interest-bearing deposits		4,743,259			24,235		.51			5,359,480			48,839		.91

Federal funds purchased and other borrowings		80,593			2,987		3.71			102,727			4,250		4.14
Federal Home Loan Bank advances		124,771			907		.73			47,220			2,042		4.32
Long-term debt		127,623			10,201		7.99			139,666			10,544		7.55
Total borrowed funds		332,987			14,095		4.23			289,613			16,836		5.81

Total interest-bearing liabilities		5,076,246			38,330		.76			5,649,093			65,675		1.16
Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,142,236								915,649
Other liabilities		64,986								66,809
Total liabilities		6,283,468								6,631,551
Shareholders' equity		581,583								557,184
Total liabilities and shareholders' equity	$	6,865,051							$	7,188,735
Net interest revenue				$	229,099							$	233,669
Net interest-rate spread							3.32	%							3.25	%

Net interest margin (4)							3.50	%							3.44	%

(1)	Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)	Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3)	Securities available for sale are shown at amortized cost. Pretax unrealized gains of $23.6 million in 2012 and $32.2 million in 2011 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 (UCB) 8-KResults of Operations and Financial Condition