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
DILUTED EARNINGS PER SHARE OF 15 CENTS FOR
SECOND QUARTER 2008

BLAIRSVILLE, GA — July 24, 2008 — United Community Banks, Inc. (NASDAQ: UCBI) today announced diluted operating earnings per share of 15 cents for the second quarter of 2008, compared to 46 cents per share for the second quarter of 2007. Total operating revenue on a taxable equivalent basis was $61.4 million for the quarter, compared to $80.8 million for the second quarter of 2007. Net operating income was $7.1 million, compared to $21.1 million in the second quarter of 2007. Operating return on tangible equity was 5.86 percent and return on assets was .34 percent for the second quarter of 2008, compared to 17.52 percent and 1.12 percent a year ago, respectively. Second quarter 2007 financial results included a $15 million special provision for fraud-related loan losses resulting from a failed real estate development near Spruce Pine, North Carolina. Because this was a fraud-related matter and an isolated and non-recurring event, the company has shown the special provision separate from the regular provision for loan losses and has highlighted operating earnings measures, which excluded this provision, to provide a better understanding of our underlying earnings and credit trends.

“While our operating environment continued to be very challenging in the second quarter, our solid earnings base, supported by experienced management and locations in growing markets, continues to sustain our company and keep it positioned to manage through this cycle. Despite this, we were able to cover our credit losses and strengthen our capital ratios,” stated Jimmy Tallent, president and chief executive officer. “We continued to actively manage our loan portfolio, quickly identifying problem loans and aggressively taking action to move these loans and assets off our books.”

1

Loans were down $66 million to $5.93 billion from the second quarter of 2007, and down $35 million on a linked quarter basis as the company continued to reduce its exposure to the residential construction and housing markets. At June 30, 2008, residential construction loans were $1.75 billion, or 29 percent of total loans, a decrease of $268 million from a year ago and $46 million from last quarter.

“Total loans declined from last quarter and a year ago, primarily due to a decrease in residential construction loans and we expect that trend to continue,” Tallent said. “However, we did see solid growth in both commercial and residential mortgage loans of 6 percent and we expect to see slow loan growth for several more quarters. At the same time, we are very pleased with our continued progress in reducing exposure to residential construction and creating a more balanced risk portfolio.”

Total customer deposits increased $148 million, or 2 percent, over second quarter 2007 and increased $417 million, or 29 percent on an annualized basis, over the prior quarter. “We ran a very successful program this quarter to increase liquidity through the promotion of customer time deposits that added $407 million to our liquidity during the second quarter,” stated Tallent. “The time deposit promotion did not erode core deposits, which grew by a modest amount.”

Taxable equivalent net interest revenue of $61.8 million reflected a decrease of $6.2 million from the second quarter of 2007. Taxable equivalent net interest margin was 3.32 percent, compared with 3.55 percent for the first quarter of 2008 and 3.94 percent for the second quarter of 2007. “We continued to see margin compression in the second quarter,” Tallent said. “Continued competitive deposit pricing, coupled with the full quarter impact of declining rates and a higher level of non-performing assets were key contributors.”

2

The second quarter provision for loan losses was $15.5 million. Net charge-offs for the second quarter were $14.3 million compared with $7.1 million for the first quarter of 2008 and $2.1 million for the second quarter of 2007. Annualized net charge-offs to average loans was 97 basis points for the second quarter of 2008 compared to 48 basis points for the first quarter of 2008 and 15 basis points for the second quarter of 2007.

“Net charge-offs increased this quarter as we moved problem credits off our books,” said Tallent. “With the higher level of non-performing loans we expect foreclosure activity will rise for the next two quarters as we move non-performing loans through the collection process. We expect charge-offs to increase as a result.”

At quarter-end, non-performing assets totaled $152.2 million, compared with $89.9 million at March 31, 2008 and $43.6 million at June 30, 2007. The ratio of non-performing assets to total assets at the end of each quarter was 1.84, 1.07 and .54 percent, respectively.

“The significant rise in non-performing assets this quarter is coming from the loan migration process,” stated Tallent. “While non-performing assets were up sharply, most loans were already classified in the prior quarter and moved to non-performing status this quarter. Total classified loans were flat compared to the first quarter. We now are seeing the migration of these problem assets through the collection process.

“A positive development in credit quality this quarter was a decrease in loans past due more than 30 days to 1.10 percent of loans from 1.39 percent in the first quarter,” added Tallent. “Although this was good to see, we know that the uncertainties in the economy will continue and we expect to see further increases in non-performing assets and credit costs this year.”

Fee revenue of $15.1 million was down $1.4 million from the second quarter of 2007 and increased $900,000 from last quarter. Service charges and fees on deposit accounts of $8.0 million were up slightly from last quarter and flat with the second quarter of 2007. Mortgage fees were up $239,000 from last quarter, mostly seasonal, but down $274,000 from last year due to the slowdown in the housing market. Brokerage fees were down $378,000 from last year due to market conditions. Other fee revenue of $1.5 million was down $925,000 from last year primarily due to gains realized last year from the sale of foreclosed properties and a lower level of earnings on bank-owned life insurance and deferred compensation plan assets.

3

Operating expenses of $49.8 million reflected an increase of $2.1 million, or 4 percent, from the second quarter of 2007. Salaries and employee benefit costs of $28.8 million declined $1.3 million, or 4 percent, from last year due to lower incentive accruals. Other expenses of $7.6 million were $3.5 million higher than a year ago due to additional write-downs and related costs on foreclosed properties of $2.5 million and an increase in FDIC insurance premiums of $900,000. “We have continued to manage our salary costs, and have held staff levels flat year over year,” Tallent stated. “Most of the operating expense categories were flat or down compared to last year as we focused on reducing discretionary spending.”

“All of our regulatory capital ratios continue to be very strong,” Tallent continued. “At June 30, 2008 our estimated Tier I Risk-Based Capital ratio was 9.17 percent, Leverage was 7.03 percent and Total Risk-Based was 11.40 percent. Also, our tangible equity-to-asset ratio was 6.77 percent. We have modeled our capital requirements under a number of loss scenarios and believe we have a strong capital position as well as a solid base of core earnings and allowance to work through this credit cycle without issuing common stock.”

“This quarter has been challenging, and we’ve seen increases in non-performing assets and related credit costs,” commented Tallent. “We have made progress getting our arms around these issues and remain intently focused on credit quality, capital and liquidity levels. While we were certainly challenged this quarter, our solid earnings base continues to sustain the company and keep it positioned to grow our business when things improve.”

Conference Call
United Community Banks will hold a conference call on Thursday, July 24, 2008, at 11 a.m. ET to discuss the contents of this news release, as well as share business highlights for the quarter. The telephone number for the conference call is (877) 419-6598 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.

4

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 $8.3 billion and operates 27 community banks with 108 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 atwww.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)

5

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

																Second
	2008						2007									Quarter			For the Six						YTD
(in thousands, except per share	Second			First			Fourth			Third			Second			2008-2007			Months Ended						2008-2007
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change			2008			2007			Change
INCOME SUMMARY
Interest revenue	$	116,984		$	129,041		$	140,768		$	144,884		$	136,237					$	246,025		$	265,265
Interest expense		55,231			62,754			71,038			73,203			68,270						117,985			132,193
Net interest revenue		61,753			66,287			69,730			71,681			67,967			(9	)%		128,040			133,072			(4	)%
Provision for loan losses (1)		15,500			7,500			26,500			3,700			3,700						23,000			7,400
Fee revenue		15,105			14,197			16,100			15,615			16,554			(9	)		29,302			30,936			(5	)
Total operating revenue		61,358			72,984			59,330			83,596			80,821			(24	)		134,342			156,608			(14	)
Operating expenses		49,761			47,529			49,336			48,182			47,702			4			97,290			92,543			5
Income before taxes		11,597			25,455			9,994			35,414			33,119			(65	)		37,052			64,065			(42	)
Income taxes		4,504			9,377			3,960			12,878			12,043						13,881			23,644
Net operating income		7,093			16,078			6,034			22,536			21,076			(66	)		23,171			40,421			(43	)
Fraud loss provision, net of tax (1)		—			—			1,833			—			9,165						—			9,165
Net income	$	7,093		$	16,078		$	4,201		$	22,536		$	11,911			(40	)	$	23,171		$	31,256			(26	)
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic	$	.15		$	.34		$	.13		$	.47		$	.47			(68	)	$	.49		$	.92			(47	)
Diluted		.15			.34			.13			.46			.46			(67	)		.49			.90			(46	)
Return on equity (2)		3.41	%		7.85	%		2.89	%		10.66	%		12.47	%					5.61	%		9.64	%
Return on tangible equity (2)(3)(4)		5.86			13.16			5.06			17.54			17.52						9.46			17.36
Return on assets (4)		.34			.78			.29			1.11			1.12						.56			1.12
Dividend payout ratio		60.00			26.47			69.23			19.15			19.15						36.73			19.57
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings	$	.15		$	.34		$	.09		$	.47		$	.26			(42	)	$	.49		$	.71			(31	)
Diluted earnings		.15			.34			.09			.46			.26			(42	)		.49			.70			(30	)
Cash dividends declared		.09			.09			.09			.09			.09			—			.18			.18			—
Book value		17.75			18.50			17.70			17.51			16.96			5			17.75			16.96			5
Tangible book value (3)		11.03			11.76			10.92			10.81			10.43			6			11.03			10.43			6
Key performance ratios:
Return on equity (2)(4)		3.41	%		7.85	%		2.01	%		10.66	%		7.05	%					5.61	%		9.64	%
Return on assets		.34			.78			.20			1.11			.64						.56			.86
Net interest margin (4)		3.32			3.55			3.73			3.89			3.94						3.43			3.96
Efficiency Ratio		65.05			59.05			57.67			55.34			56.59						61.97			56.57
Dividend payout ratio		60.00			26.47			100.00			19.15			34.62						36.73			25.35
Equity to assets		10.33			10.30			10.20			10.32			8.94						10.31			8.87
Tangible equity to assets (3)		6.77			6.73			6.58			6.65			6.65						6.75			6.65
ASSET QUALITY
Allowance for loan losses	$	91,035		$	89,848		$	89,423		$	90,935		$	92,471					$	91,035		$	92,471
Net charge-offs (1)		14,313			7,075			13,012			5,236			2,124						21,388			3,586
Non-performing loans		123,786			67,728			28,219			46,783			30,849						123,786			30,849
OREO		28,378			22,136			18,039			16,554			12,752						28,378			12,752
Total non-performing assets		152,164			89,864			46,258			63,337			43,601						152,164			43,601
Allowance for loan losses to loans (1)		1.53	%		1.51	%		1.51	%		1.28	%		1.29	%					1.53	%		1.29	%
Net charge-offs to average loans (1)(4)		.97			.48			.87			.35			.15						.72			.13
Non-performing assets to loans and OREO		2.55			1.50			.78	��		1.06			.73						2.55			.73
Non-performing assets to total assets		1.84			1.07			.56			.77			.54						1.84			.54
AVERAGE BALANCES
Loans	$	5,933,143		$	5,958,296		$	5,940,230		$	5,966,933		$	5,619,950			6		$	5,945,720		$	5,512,005			8
Investment securities		1,507,240			1,485,515			1,404,796			1,308,192			1,242,448			21			1,496,377			1,198,075			25
Earning assets		7,478,018			7,491,480			7,424,992			7,332,492			6,915,134			8			7,484,749			6,757,959			11
Total assets		8,295,748			8,305,621			8,210,120			8,083,739			7,519,392			10			8,300,686			7,307,231			14
Deposits		6,461,361			6,051,069			6,151,476			6,246,319			5,945,633			9			6,256,217			5,855,530			7
Shareholders’ equity		856,727			855,659			837,195			834,094			672,348			27			856,193			648,358			32
Common shares — basic		47,060			46,966			47,203			48,348			44,949						47,013			43,980
Common shares — diluted		47,249			47,272			47,652			48,977			45,761						47,260			44,842
AT PERIOD END
Loans	$	5,933,141		$	5,967,839		$	5,929,263		$	5,952,749		$	5,999,093			(1	)	$	5,933,141		$	5,999,093			(1	)
Investment securities		1,430,588			1,508,402			1,356,846			1,296,826			1,213,659			18			1,430,588			1,213,659			18
Total assets		8,264,051			8,386,255			8,207,302			8,180,600			8,087,667			2			8,264,051			8,087,667			2
Deposits		6,696,456			6,175,769			6,075,951			6,154,308			6,361,269			5			6,696,456			6,361,269			5
Shareholders’ equity		837,890			871,452			831,902			833,761			828,731			1			837,890			828,731			1
Common shares outstanding		47,096			47,004			46,903			47,542			48,781						47,096			48,781

(1)	Excludes effect of special $15 million fraud related provision for loan losses recorded in the second quarter of 2007, an additional $3 million provision in the fourth quarter of 2007, and $18 million of related loan charge-offs recorded in the fourth 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.

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

	2008				2007						Linked			Year over
	Second		First		Fourth		Third		Second		Quarter			Year
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter		Change(1)			Change
LOANS BY CATEGORY
Commercial (sec. by RE)	$	1,584	$	1,526	$	1,476	$	1,441	$	1,461		15	%		8	%
Commercial construction		522		548		527		527		509		(19	)		3
Commercial & industrial		417		437		418		408		421		(18	)		(1	)
Total commercial		2,523		2,511		2,421		2,376		2,391		2			6
Residential construction		1,745		1,791		1,830		1,939		2,013		(10	)		(13	)
Residential mortgage		1,494		1,491		1,502		1,459		1,413		1			6
Consumer / installment		171		175		176		179		182		(9	)		(6	)
Total loans	$	5,933	$	5,968	$	5,929	$	5,953	$	5,999		(2	)		(1	)
LOANS BY MARKET
Atlanta MSA	$	1,934	$	1,978	$	2,002	$	2,057	$	2,134		(9	)%		(9	)%
Gainesville MSA		422		415		400		394		384		7			10
North Georgia		2,065		2,071		2,060		2,026		2,032		(1	)		2
Western North Carolina		819		816		806		834		816		1			—
Coastal Georgia		436		439		416		402		396		(3	)		10
East Tennessee		257		249		245		240		237		13			8
Total loans	$	5,933	$	5,968	$	5,929	$	5,953	$	5,999		(2	)		(1	)
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development	$	569	$	583	$	593	$	596	$	602		(10	)%		(5	)%
Land loans		139		130		126		125		113		28			23
Lot loans		401		406		407		403		393		(5	)		2
Total		1,109		1,119		1,126		1,124		1,108		(4	)		—
House loans
Spec		450		460		473		539		596		(9	)%		(24	)%
Sold		186		212		231		276		309		(49	)		(40	)
Total		636		672		704		815		905		(21	)		(30	)
Total residential construction	$	1,745	$	1,791	$	1,830	$	1,939	$	2,013		(10	)		(13	)
RESIDENTIAL CONSTRUCTION — ATLANTA MSA
Dirt loans
Acquisition & development	$	232	$	252	$	258	$	268	$	278		(32	)%		(17	)%
Land loans		50		50		52		50		49		—			2
Lot loans		117		117		117		123		136		—			(14	)
Total		399		419		427		441		463		(19	)		(14	)
House loans
Spec		271		271		280		322		371		—	%		(27	)%
Sold		58		71		77		104		132		(73	)		(56	)
Total		329		342		357		426		503		(15	)		(35	)
Total residential construction	$	728	$	761	$	784	$	867	$	966		(17	)		(25	)

⁽¹⁾ Annualized.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality

	Second Quarter 2008						First Quarter 2008						Fourth Quarter 2007
	Nonaccrual				Total		Nonaccrual				Total		Nonaccrual				Total
(in thousands)	Loans		OREO		NPAs		Loans		OREO		NPAs		Loans		OREO		NPAs
NPAs BY CATEGORY
Commercial (sec. by RE)	$	4,610	$	593	$	5,203	$	4,070	$	653	$	4,723	$	—	$	68	$	68
Commercial construction		3,027		1,859		4,886		1,514		961		2,475		—		507		507
Commercial & industrial		2,950		—		2,950		1,936		—		1,936		3,366		—		3,366
Total commercial		10,587		2,452		13,039		7,520		1,614		9,134		3,366		575		3,941
Residential construction		90,283		22,075		112,358		42,249		16,486		58,735		11,544		14,987		26,531
Residential mortgage		21,792		3,851		25,643		16,965		4,036		21,001		12,479		2,477		14,956
Consumer / installment		1,124		—		1,124		994		—		994		830		—		830
Total NPAs	$	123,786	$	28,378	$	152,164	$	67,728	$	22,136	$	89,864	$	28,219	$	18,039	$	46,258
NPAs BY MARKET
Atlanta MSA	$	89,327	$	15,196	$	104,523	$	37,442	$	16,121	$	53,563	$	11,548	$	13,019	$	24,567
Gainesville MSA		4,885		12		4,897		4,584		909		5,493		1,544		—		1,544
North Georgia		16,117		8,277		24,394		11,969		3,385		15,354		5,469		3,469		8,938
Western North Carolina		9,838		990		10,828		7,775		1,405		9,180		7,455		1,178		8,633
Coastal Georgia		1,575		3,871		5,446		5,266		95		5,361		691		95		786
East Tennessee		2,044		32		2,076		692		221		913		1,512		278		1,790
Total NPAs	$	123,786	$	28,378	$	152,164	$	67,728	$	22,136	$	89,864	$	28,219	$	18,039	$	46,258

	Second Quarter 2008					First Quarter 2008					Fourth Quarter 2007 (1)
			Net Charge-					Net Charge-						Net Charge-
			Offs to					Offs to						Offs to
	Net		Average			Net		Average			Net			Average
(in thousands)	Charge-Offs		Loans (2)			Charge-Offs		Loans (2)			Charge-Offs			Loans (2)
NET CHARGE-OFFS BY CATEGORY
Commercial (sec. by RE)	$	424		.11	%	$	630		.17	%	$	167			.05	%
Commercial construction		125		.09			—		—			—			—
Commercial & industrial		398		.38			304		.29			507			.49
Total commercial		947		.15			934		.15			674			.11
Residential construction		10,343		2.36			4,665		1.03			10,109			2.13
Residential mortgage		2,576		.70			1,011		.27			1,671			.45
Consumer / installment		447		1.05			465		1.06			559			1.25
Total NPAs	$	14,313		.97		$	7,075		.48		$	13,013			.87
NET CHARGE-OFFS BY MARKET
Atlanta MSA	$	10,682		2.22	%	$	4,647		.94	%	$	8,740			1.72	%
Gainesville MSA		360		.34			323		.32			231			.23
North Georgia		1,829		.36			1,280		.25			2,071			.40
Western North Carolina		279		.14			57		.03			285			.14
Coastal Georgia		980		.90			42		.04			(10	)		(.01	)
East Tennessee		183		.29			726		1.18			1,696			2.76
Total NPAs	$	14,313		.97		$	7,075		.48		$	13,013			.87

(1)	Fourth quarter residential construction charge offs exclude $18 million in fraud related charge offs resulting from the failed real estate development near Spruce Pine, North Carolina.
(2)	Annualized.

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

	2008						2007									For the Six Months Ended
	Second			First			Fourth			Third			Second			June 30
	Quarter			Quarter			Quarter			Quarter			Quarter			2008			2007
Special provision for fraud related loan losses	$	—		$	—		$	3,000		$	—		$	15,000		$	—		$	15,000
Income tax effect of special provision		—			—			1,167			—			5,835			—			5,835
After-tax effect of special provision	$	—		$	—		$	1,833		$	—		$	9,165		$	—		$	9,165
Net Income Reconciliation
Operating net income	$	7,093		$	16,078		$	6,034		$	22,536		$	21,076		$	23,171		$	41,421
After-tax effect of special provision and merger-related charges		—			—			(1,833	)		—			(9,165	)		—			(9,165	)
Net income (GAAP)	$	7,093		$	16,078		$	4,201		$	22,536		$	11,911		$	23,171		$	32,256
Basic Earnings Per Share Reconciliation
Basic operating earnings per share	$	.15		$	.34		$	.13		$	.47		$	.47		$	.49		$	.92
Per share effect of special provision and merger-related charges		—			—			(.04	)		—			(.21	)		—			(.21	)
Basic earnings per share (GAAP)	$	.15		$	.34		$	.09		$	.47		$	.26		$	.49		$	.71
Diluted Earnings Per Share Reconciliation
Diluted operating earnings per share	$	.15		$	.34		$	.13		$	.46		$	.46		$	.49		$	.90
Per share effect of special provision and merger-related charges		—			—			(.04	)		—			(.20	)		—			(.20	)
Diluted earnings per share (GAAP)	$	.15		$	.34		$	.09		$	.46		$	.26		$	.49		$	.70
Provision for Loan Losses Reconciliation
Operating provision for loan losses	$	15,500		$	7,500		$	26,500		$	3,700		$	3,700		$	23,000		$	7,400
Special provision for fraud related loan losses		—			—			3,000			—			15,000			—			15,000
Provision for loan losses (GAAP)	$	15,500		$	7,500		$	29,500		$	3,700		$	18,700		$	23,000		$	22,400
Nonperforming Assets Reconciliation
Nonperforming assets excluding fraud-related assets	$	148,219		$	85,182		$	40,956		$	39,761		$	19,968		$	148,218		$	19,968
Fraud-related loans and OREO included in nonperforming assets		3,945			4,682			5,302			23,576			23,633			3,945			23,633
Nonperforming assets (GAAP)	$	152,164		$	89,864		$	46,258		$	63,337		$	43,601		$	152,163		$	43,601
Allowance for Loan Losses Reconciliation
Allowance for loan losses excluding special fraud-related allowance	$	91,035		$	89,848		$	89,423		$	75,935		$	77,471		$	91,035		$	77,471
Fraud-related allowance for loan losses		—			—			—			15,000			15,000			—			15,000
Allowance for loan losses (GAAP)	$	91,035		$	89,848		$	89,423		$	90,935		$	92,471		$	91,035		$	92,471
Net Charge Offs Reconciliation
Net charge offs excluding charge off of fraud-related loans	$	14,313		$	7,075		$	13,012		$	5,236		$	2,124		$	21,388		$	3,586
Fraud-related loans charged off		—			—			18,000			—			—			—			—
Net charge offs (GAAP)	$	14,313		$	7,075		$	31,012		$	5,236		$	2,124		$	21,388		$	3,586
Allowance for Loan Losses to Loans Ratio Reconciliation
Allowance for loan losses to loans ratio excluding fraud-related allowance		1.53	%		1.51	%		1.51	%		1.28	%		1.29	%		1.53	%		1.29	%
Portion of allowance assigned to fraud-related loans		—			—			—			.25			.25			—			.25
Allowance for loan losses to loans ratio (GAAP)		1.53	%		1.51	%		1.51	%		1.53	%		1.54	%		1.53	%		1.54	%
Nonperforming Assets to Total Assets Ratio Reconciliation
Nonperforming assets to total assets ratio excluding fraud-related assets		1.79	%		1.02	%		.50	%		.49	%		.25	%		1.79	%		.25	%
Fraud-related nonperforming assets		.05			.05			.06			.28			.29			.05			.29
Nonperforming assets to total assets ratio (GAAP)		1.84	%		1.07	%		.56	%		.77	%		.54	%		1.84	%		.54	%
Net Charge Offs to Average Loans Ratio Reconciliation
Net charge offs to average loans ratio excluding fraud-related loans		.97	%		.48	%		.87	%		.35	%		.15	%		.97	%		.13	%
Charge offs of fraud-related loans		—			—			1.20			—			—			—			—
Net charge offs to average loans ratio (GAAP)		.97	%		.48	%		2.07	%		.35	%		.15	%		.97	%		.13	%

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)	2008		2007			2008		2007
Interest revenue:
Loans, including fees	$	97,051	$	119,799		$	206,317	$	233,872
Investment securities:
Taxable		18,879		15,476			37,507		29,444
Tax exempt		398		438			792		885
Federal funds sold and deposits in banks		50		80			272		138
Total interest revenue		116,378		135,793			244,888		264,339
Interest expense:
Deposits:
NOW		7,216		11,470			15,803		22,097
Money market		2,310		3,540			5,223		6,080
Savings		180		374			407		683
Time		38,828		41,979			77,712		83,604
Total deposit interest expense		48,534		57,363			99,145		112,464
Federal funds purchased, repurchase agreements, & other short-term borrowings		1,820		3,671			6,138		5,488
Federal Home Loan Bank advances		2,818		5,035			8,563		9,836
Long-term debt		2,059		2,201			4,139		4,405
Total interest expense		55,231		68,270			117,985		132,193
Net interest revenue		61,147		67,523			126,903		132,146
Provision for loan losses		15,500		18,700			23,000		22,400
Net interest revenue after provision for loan losses		45,647		48,823			103,903		109,746
Fee revenue:
Service charges and fees		7,957		7,975			15,770		15,228
Mortgage loan and other related fees		2,202		2,476			4,165		4,699
Consulting fees		2,252		2,241			4,059		3,988
Brokerage fees		814		1,192			1,907		2,136
Securities gains, net		357		1,386			357		1,593
Losses on prepayment of borrowings		—		(1,164	)		—		(1,164	)
Other		1,523		2,448			3,044		4,456
Total fee revenue		15,105		16,554			29,302		30,936
Total revenue		60,752		65,377			133,205		140,682
Operating expenses:
Salaries and employee benefits		28,753		30,022			57,507		58,339
Communications and equipment		3,852		3,845			7,684		7,657
Occupancy		3,704		3,316			7,420		6,507
Advertising and public relations		2,009		2,098			3,360		4,114
Postage, printing and supplies		1,448		1,680			3,040		3,340
Professional fees		1,679		2,010			3,600		3,489
Amortization of intangibles		745		633			1,512		1,197
Other		7,571		4,098			13,167		7,900
Total operating expenses		49,761		47,702			97,290		92,543
Income before income taxes		10,991		17,675			35,915		48,139
Income taxes		3,898		5,764			12,744		16,883
Net income	$	7,093	$	11,911		$	23,171	$	31,256
Net income available to common shareholders	$	7,089	$	11,906		$	23,163	$	31,246
Earnings per common share:
Basic	$	.15	$	.26		$	.49	$	.71
Diluted		.15		.26			.49		.70
Dividends per common share		.09		.09			.18		.18
Weighted average common shares outstanding:
Basic		47,060		44,949			47,013		43,980
Diluted		47,249		45,761			47,260		44,842

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet

	June 30,			December 31,			June 30,
(in thousands, except share and per share data)	2008			2007			2007
	(unaudited)			(audited)			(unaudited)
ASSETS
Cash and due from banks	$	176,240		$	157,549		$	171,095
Interest-bearing deposits in banks		12,455			62,074			23,146
Cash and cash equivalents		188,695			219,623			194,241
Securities available for sale		1,430,588			1,356,846			1,213,659
Mortgage loans held for sale		27,094			28,004			30,615
Loans, net of unearned income		5,933,141			5,929,263			5,999,093
Less allowance for loan losses		91,035			89,423			92,471
Loans, net		5,842,106			5,839,840			5,906,622
Premises and equipment, net		181,395			180,088			171,327
Accrued interest receivable		50,399			62,828			64,538
Goodwill and other intangible assets		323,296			325,305			326,467
Other assets		220,478			194,768			180,198
Total assets	$	8,264,051		$	8,207,302		$	8,087,667
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	696,575		$	700,941		$	773,435
NOW		1,541,609			1,474,818			1,447,789
Money market		418,935			452,917			504,730
Savings		187,088			186,392			207,468
Time:
Less than $100,000		1,744,217			1,573,604			1,651,486
Greater than $100,000		1,573,078			1,364,763			1,428,841
Brokered		534,954			322,516			347,520
Total deposits		6,696,456			6,075,951			6,361,269
Federal funds purchased, repurchase agreements, and other short-term borrowings		288,650			638,462			238,429
Federal Home Loan Bank advances		285,807			519,782			499,060
Long-term debt		107,996			107,996			113,151
Accrued expenses and other liabilities		47,252			33,209			47,027
Total liabilities		7,426,161			7,375,400			7,258,936
Shareholders’ equity:
Preferred stock, $1 par value; $10 stated value; 10,000,000 shares authorized; 25,800, 25,800 and 32,200 shares issued and outstanding		258			258			322
Common stock, $1 par value; 100,000,000 shares authorized; 48,809,301, 48,809,301 and 48,781,351 shares issued		48,809			48,809			48,781
Common stock issuable; 105,579, 73,250 and 60,761 shares		2,696			2,100			1,816
Capital surplus		462,939			462,881			461,226
Retained earnings		362,089			347,391			329,229
Treasury stock; 1,713,310 and 1,905,921 shares, at cost		(39,222	)		(43,798	)		—
Accumulated other comprehensive income (loss)		321			14,261			(12,643	)
Total shareholders’ equity		837,890			831,902			828,731
Total liabilities and shareholders’ equity	$	8,264,051		$	8,207,302		$	8,087,667

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

	2008								2007
	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)	$	5,933,143		$	97,080		6.58	%	$	5,619,950		$	119,569		8.53	%
Taxable securities (3)		1,471,958			18,879		5.13			1,200,268			15,476		5.16
Tax-exempt securities (1)(3)		35,282			655		7.43			42,180			721		6.83
Federal funds sold and other interest-earning assets		37,635			370		3.93			52,736			471		3.57
Total interest-earning assets		7,478,018			116,984		6.29			6,915,134			136,237		7.90
Non-interest-earning assets:
Allowance for loan losses		(93,776	)							(73,323	)
Cash and due from banks		144,589								130,046
Premises and equipment		181,454								158,290
Other assets (3)		585,463								389,245
Total assets	$	8,295,748							$	7,519,392
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,505,280		$	7,216		1.93		$	1,379,423		$	11,470		3.34
Money market		422,419			2,310		2.20			354,815			3,540		4.00
Savings		186,826			180		.39			186,490			374		.80
Time less than $100,000		1,642,677			17,285		4.23			1,627,708			19,978		4.92
Time greater than $100,000		1,484,032			16,135		4.37			1,372,410			17,892		5.23
Brokered		535,898			5,408		4.06			332,857			4,109		4.95
Total interest-bearing deposits		5,777,132			48,534		3.38			5,253,703			57,363		4.38
Federal funds purchased and other borrowings		383,378			1,820		1.91			275,319			3,671		5.35
Federal Home Loan Bank advances		412,268			2,818		2.75			419,287			5,035		4.82
Long-term debt		107,996			2,059		7.67			113,270			2,201		7.79
Total borrowed funds		903,642			6,697		2.98			807,876			10,907		5.42
Total interest-bearing liabilities		6,680,774			55,231		3.33			6,061,579			68,270		4.52
Non-interest-bearing liabilities:
Non-interest-bearing deposits		684,229								691,930
Other liabilities		74,018								93,535
Total liabilities		7,439,021								6,847,044
Shareholders’ equity		856,727								672,348
Total liabilities and shareholders’ equity	$	8,295,748							$	7,519,392
Net interest revenue				$	61,753							$	67,967
Net interest-rate spread							2.96	%							3.38	%
Net interest margin (4)							3.32	%							3.94	%

(1)	Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)	Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued.
(3)	Securities available for sale are shown at amortized cost. Pretax unrealized gains of $13.0 million in 2008 and pretax unrealized losses of $7.8 million in 2007 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,

	2008								2007
	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)	$	5,945,720		$	206,332		6.98	%	$	5,512,005		$	233,437		8.54	%
Taxable securities (3)		1,460,090			37,507		5.14			1,155,308			29,444		5.10
Tax-exempt securities (1)(3)		36,287			1,303		7.18			42,767			1,456		6.81
Federal funds sold and other interest-earning assets		42,652			883		4.14			47,879			928		3.88
Total interest-earning assets		7,484,749			246,025		6.60			6,757,959			265,265		7.91
Non-interest-earning assets:
Allowance for loan losses		(92,901	)							(70,769	)
Cash and due from banks		149,648								125,367
Premises and equipment		181,405								152,593
Other assets (3)		577,785								342,081
Total assets	$	8,300,686							$	7,307,231
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,483,699		$	15,803		2.14		$	1,351,277		$	22,097		3.30
Money market		430,734			5,223		2.44			308,541			6,080		3.97
Savings		185,819			407		.44			180,913			683		.76
Time less than $100,000		1,597,995			35,508		4.47			1,634,569			39,774		4.91
Time greater than $100,000		1,424,670			32,505		4.59			1,378,870			35,808		5.24
Brokered		455,150			9,699		4.29			333,800			8,022		4.85
Total interest-bearing deposits		5,578,067			99,145		3.57			5,187,970			112,464		4.37
Federal funds purchased and other borrowings		467,596			6,138		2.64			207,663			5,488		5.33
Federal Home Loan Bank advances		536,883			8,563		3.21			407,583			9,836		4.87
Long-term debt		107,995			4,139		7.71			113,251			4,405		7.84
Total borrowed funds		1,112,474			18,840		3.41			728,497			19,729		5.46
Total interest-bearing liabilities		6,690,541			117,985		3.55			5,916,467			132,193		4.51
Non-interest-bearing liabilities:
Non-interest-bearing deposits		678,150								667,560
Other liabilities		75,802								74,846
Total liabilities		7,444,493								6,658,873
Shareholders’ equity		856,193								648,358
Total liabilities and shareholders’ equity	$	8,300,686							$	7,307,231
Net interest revenue				$	128,040							$	133,072
Net interest-rate spread							3.05	%							3.40	%
Net interest margin (4)							3.43	%							3.96	%

(1)	Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)	Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued.
(3)	Securities available for sale are shown at amortized cost. Pretax unrealized gains of $14.5 million in 2008 and pretax unrealized losses of $8.9 million in 2007 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.