United Community Banks (UCB) 8-K United Community Banks, Inc. Reports Net Operating Loss for First Quarter 2009

Exhibit 99.1

For Immediate Release

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

UNITED COMMUNITY BANKS, INC. REPORTS
NET OPERATING LOSS FOR FIRST QUARTER 2009

• Provision for loan losses of $65 million exceeded charge-offs by $22 million

• Allowance-to-loans ratio of 2.56 percent, up from 2.14 percent last quarter

• Non-cash goodwill impairment charge of $70 million, or $1.45 per diluted share, primarily due to stock price decline

• Severance costs of $2.9 million, or 4 cents per diluted share, related to reduction in work force

• Margin improvement of 38 basis points this quarter to 3.08 percent

• Capital levels remain strong

BLAIRSVILLE, GA — April 23, 2009 — United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss of $32 million, or 71 cents per diluted share, for the first quarter of 2009. The net operating loss was primarily driven by higher credit costs, including the $22 million build-up in the allowance for loan losses. Net operating loss does not reflect a $70 million non-cash charge for impairment of goodwill and $2.9 million in severance costs relating to a reduction in work force, both of which are considered non-recurring expenses and therefore excluded from operating earnings. Including these non-recurring expenses the net loss for the quarter was $103.8 million, or $2.20 per diluted share.

“The $70 million goodwill impairment charge is a non-cash accounting adjustment to the company’s balance sheet that does not affect cash flow or liquidity and has no impact on our regulatory or tangible capital ratios,” stated Jimmy Tallent, president and chief executive officer. “During the fourth quarter our stock price traded well above tangible book value, and our goodwill test indicated no impairment at year-end. However, our stock price declined sharply during the first quarter, as did those of most financial services companies. When we updated our impairment test as of March 31, 2009, we had impairment of $70 million driven primarily by the stock price decline.”

“The recession and its effect on the housing and construction markets, particularly in Atlanta, continued to drive credit quality issues in our loan portfolio,” added Tallent. “A rise in the level of classified and non-performing assets, and deterioration in property valuations, led us to increase our allowance by $22 million over net charge-offs. While we remain committed to moving through this credit cycle as quickly as possible, our efforts have been hindered by this difficult environment.”

Loans were $5.6 billion at quarter end, down $335 million from a year ago and down $72 million on a linked-quarter basis, reflecting the company’s continued efforts to reduce exposure to the residential construction market. At March 31, 2009, residential construction loans were $1.4 billion, or 25 percent of total loans, a decrease of $361 million from a year ago and $49 million from the fourth quarter of 2008.

Taxable equivalent net interest revenue of $57.4 million reflected an increase of $5.5 million from last quarter and a decrease of $8.9 million from a year ago. The taxable equivalent net interest margin was 3.08 percent compared with 2.70 percent for the fourth quarter of 2008, and 3.55 percent for the first quarter of 2008.

“In the latter part of the fourth quarter, we were able to take several steps that contributed to the expansion in our first quarter margin,” stated Tallent. “We improved our loan pricing and credit spreads, decreased deposit interest rates and, with an overall improvement in liquidity, we were able to let higher-cost time deposits and brokered deposits run off. We will continue to actively pursue strategies to improve our margin, while balancing liquidity needs with our goal of maximizing pre-tax, pre-provision earnings.”

2

“Core deposits, excluding public funds, increased in every category this quarter reflective of our new initiatives and programs for customer referrals and cross selling,” stated Tallent. “We added 21,918 new services this quarter, an annual growth rate of 11 percent, that expanded customer relationships and we opened 3,585 net new customer accounts.”

The first quarter provision for loan losses was $65 million, compared with $85 million for the fourth quarter of 2008. Net charge-offs for the first quarter were $43.3 million compared with $74 million for the fourth quarter of 2008. At quarter-end, non-performing assets totaled $334.5 million compared with $250.5 million at December 31, 2008. The ratio of non-performing assets to total assets at the end of the first and fourth quarters was 4.11 percent and 2.94 percent, respectively. The allowance for loan losses to total loans was 2.56 percent and 2.14 percent.

“The recession continued to negatively affect our credit quality, particularly within our Atlanta residential construction portfolio,” Tallent said. “Although we have seen some deterioration in other loan categories and markets, our principal challenge remains in the residential construction portfolio. The rise in non-performing assets was driven primarily by continued weakness in the Atlanta housing and construction markets, and to softened demand from buyers. We expect the challenges to continue in 2009 and the level of charge-offs and non-performing assets to be elevated over historical levels. However, we will aggressively work through our problem credits and pursue the best economic outcome for our company in each instance.”

Fee revenue of $12.8 million was up $2.1 million from the fourth quarter, but down $1.4 million from the first quarter of 2008. Service charges and fees on deposit accounts of $7.0 million reflected a $779,000 decrease from a year ago due to lower activity and fewer transaction charges. Consulting fees were down $786,000 from last year primarily due to the consulting assistance provided to United for a company-wide initiative to improve efficiency and profitability. Consulting fees were further affected by weakness in the financial services industry that hindered sales efforts and delayed consulting contracts. Mortgage loan fees of $2.7 million were up $688,000 due to a record high level of refinancing activity.

3

Operating expenses, before the recognition of goodwill impairment and severance costs, were $52.6 million reflecting an increase of $5.0 million from the first quarter of 2008 and at the same level as the fourth quarter of 2008. The increase year over year was primarily due to higher foreclosed property costs of $3.4 million and an increase in FDIC insurance premiums of $1.4 million. For the first quarter of 2009, salaries and employee benefit costs of $28.8 million were at the same level as a year ago. First quarter 2009 staff costs did not reflect the reduction in work force of 191 staff, since most of the reduction in work force occurred at the end of the quarter with the remainder transitioning through the year-end. Severance and related benefit costs of $2.9 million were related to the reduction in staff.

“The decision to reduce staff was among the most difficult in my 25 years at United,” commented Tallent. “Unfortunately, their departure came as a result of economic conditions that were not within our control, but had a powerful influence on our business decision for the reduction in staff. We expect to save $10 million in annual staff and benefit costs. Also, we have completed a company-wide performance improvement project with fee revenue enhancements and expense savings of $7 million annually that should be fully implemented by year-end. We expect to realize over half of the $17 million of annual savings this year.”

The effective tax rate for the first quarter of 2009 was 14 percent, compared to 35.5 percent for the first quarter of 2008. “The tax rate was lower this quarter because goodwill and the related impairment charge are not recognized, nor deductible, for tax reporting purposes,” stated Tallent. “Also affecting the first quarter tax rate was a $2.3 million net reserve for deferred tax assets relating to state tax credits that are expected to expire unused. The projected effective tax rate for the balance of 2009 is 38 percent.”

United continues to maintain a strong capital position. At March 31, 2008, the company’s regulatory capital ratios were as follows: Tier I Risk-Based Capital of 10.9 percent; Leverage of 7.9 percent; and, Total Risk-Based of 13.6 percent. Also, the average tangible equity to assets ratio was 8.3 percent and the average tangible common equity to assets ratio was 6.1 percent.

4

“While we continue to aggressively dispose of problem credits and improve our margin, we have been pursuing ways to build on the growth opportunities identified throughout our markets,” Tallent said. “A key part of this plan was recently launched with the reorganization of our Atlanta region that enables us to more efficiently pursue, and better meet the needs of, small business and commercial customers. This new structure and redeployed team will not only increase and deepen our current customer relationships, but also expand our commercial and small business lending capabilities. Also, they will contribute to additional core deposits as well as further rebalance our loan portfolio, while reducing our exposure to any one segment of the market. Even though we will be using considerable resources to address the credit challenges for the remainder of the year, we will continue to plan ahead and position ourselves to capitalize on new opportunities across our footprint as the economy improves.”

Conference Call

United Community Banks will hold a conference call today, Thursday, April 23, 2009, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. The telephone number for the conference call is (877) 741-4240 and the pass code is “UCBI.” The conference call will also be available by web cast within the Investor Relations section of the company’s web site at www.ucbi.com.

About United Community Banks, Inc.

Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $8.1 billion and operates 27 community banks with 107 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 3 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

																First
	2009			2008												Quarter
	First			Fourth			Third			Second			First			2009-2008
(in thousands, except per share data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change
INCOME SUMMARY
Interest revenue	$	103,562		$	108,434		$	112,510		$	116,984		$	129,041
Interest expense		46,150			56,561			53,719			55,231			62,754
Net interest revenue		57,412			51,873			58,791			61,753			66,287			(13)	%
Provision for loan losses		65,000			85,000			76,000			15,500			7,500
Fee revenue		12,846			10,718			13,121			15,105			14,197			(10	)
Total revenue		5,258			(22,409	)		(4,088	)		61,358			72,984		NM
Operating expenses (1)		52,569			52,439			56,970			49,761			47,529			11
Operating (loss) income before taxes		(47,311	)		(74,848	)		(61,058	)		11,597			25,455		NM
Income tax (benefit) expense		(15,335	)		(28,101	)		(21,184	)		4,504			9,377
Net operating (loss) income (1)		(31,976	)		(46,747	)		(39,874	)		7,093			16,078		NM
Noncash goodwill impairment charge		70,000			—			—			—			—
Severance costs, net of tax benefit		1,797			—			—			—			—
Net (loss) income		(103,773	)		(46,747	)		(39,874	)		7,093			16,078		NM
Preferred dividends		2,554			712			4			4			4
Net (loss) income available to common shareholders	$	(106,327	)	$	(47,459	)	$	(39,878	)	$	7,089		$	16,074		NM
PERFORMANCE MEASURES
Per common share:
Diluted operating (loss) earnings (1)	$	(.71	)	$	(.99	)	$	(.84	)	$	.15		$	.34		NM
Per share impact of goodwill impairment charge		(1.45	)		—			—			—			—
Per share impact of severance costs		(.04	)		—			—			—			—
Diluted (loss) earnings		(2.20	)		(.99	)		(.84	)		.15			.34		NM
Cash dividends declared		—			—			—			.09			.09
Stock dividends declared (5)	1 for 130			1 for 130			1 for 130				—			—
Book value		14.70			16.95			17.12			17.75			18.50			(21	)
Tangible book value (3)		9.65			10.39			10.48			11.03			11.76			(18	)
Key performance ratios:
Return on tangible equity (2)(3)	NM		%	NM		%	NM		%		5.86	%		13.16	%
Return on equity (2)(4)	NM			NM			NM				3.41			7.85
Return on assets (4)	NM			NM			NM				.34			.78
Net interest margin (4)		3.08			2.70			3.17			3.32			3.55
Operating efficiency ratio (3)		79.29			81.34			79.35			65.05			59.03
Equity to assets		11.64			10.08			10.28			10.33			10.30
Tangible equity to assets (3)		8.30			6.59			6.65			6.77			6.73
Tangible common equity to assets (3)		6.13			6.23			6.65			6.77			6.73
ASSET QUALITY
Net charge-offs	$	43,281		$	74,028		$	55,736		$	14,313		$	7,075
Non-performing loans (NPLs)		259,155			190,723			139,266			123,786			67,728
Foreclosed properties		75,383			59,768			38,438			28,378			22,136
Total non-performing assets (NPAs)		334,538			250,491			177,704			152,164			89,864
Allowance for loan losses		143,990			122,271			111,299			91,035			89,848
Allowance for loan losses to loans		2.56	%		2.14	%		1.91	%		1.53	%		1.51	%
Net charge-offs to average loans (4)		3.09			5.09			3.77			.97			.48
NPAs to loans and foreclosed properties		5.86			4.35			3.03			2.55			1.50
NPAs to total assets		4.11			2.94			2.20			1.84			1.07
AVERAGE BALANCES
Loans	$	5,675,054		$	5,784,139		$	5,889,168		$	5,933,143		$	5,958,296			(5	)
Investment securities		1,712,654			1,508,808			1,454,740			1,507,240			1,485,515			15
Earning assets		7,530,230			7,662,536			7,384,287			7,478,018			7,491,480			1
Total assets		8,312,648			8,449,097			8,146,880			8,295,748			8,305,621			—
Deposits		6,780,531			6,982,229			6,597,339			6,461,361			6,051,069			12
Shareholders’ equity		967,505			851,956			837,487			856,727			855,659			13
Common shares — basic		48,324			47,844			47,417			47,158			47,052
Common shares — diluted		48,324			47,844			47,417			47,249			47,272
AT PERIOD END
Loans	$	5,632,705		$	5,704,861		$	5,829,937		$	5,933,141		$	5,967,839			(6	)
Investment securities		1,719,033			1,617,187			1,400,827			1,430,588			1,508,402			14
Total assets		8,140,909			8,520,765			8,072,543			8,264,051			8,386,255			(3	)
Deposits		6,616,488			7,003,624			6,689,335			6,696,456			6,175,769			7
Shareholders’ equity		888,853			989,382			816,880			837,890			871,452			2
Common shares outstanding		48,487			48,009			47,596			47,096			47,004

(1)	Excludes the non-recurring goodwill impairment charge of $70 million and severance costs of $2.9 million, net of income tax benefit of $1.1 million in the first quarter of 2009.
(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)	Number of new shares issued for shares currently held.
NM	— Not meaningful.

6

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

	2009		2008								Linked			Year over
	First		Fourth		Third		Second		First		Quarter			Year
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter		Change(1)			Change
LOANS BY CATEGORY
Commercial (sec. by RE)	$	1,779	$	1,627	$	1,604	$	1,584	$	1,526		37	%		17	%
Commercial construction		377		500		509		522		548		(98	)		(31	)
Commercial & industrial		387		410		425		417		437		(22	)		(11	)
Total commercial		2,543		2,537		2,538		2,523		2,511		1			1
Residential construction		1,430		1,479		1,596		1,745		1,791		(13	)		(20	)
Residential mortgage		1,504		1,526		1,528		1,494		1,491		(6	)		1
Consumer / installment		156		163		168		171		175		(17	)		(11	)
Total loans	$	5,633	$	5,705	$	5,830	$	5,933	$	5,968		(5	)		(6	)
LOANS BY MARKET
Atlanta MSA	$	1,660	$	1,706	$	1,800	$	1,934	$	1,978		(11)	%		(16	)%
Gainesville MSA		422		420		426		422		415		2			2
North Georgia		2,014		2,040		2,066		2,065		2,071		(5	)		(3	)
Western North Carolina		808		810		815		819		816		(1	)		(1	)
Coastal Georgia		460		464		458		436		439		(3	)		5
East Tennessee		269		265		265		257		249		6			8
Total loans	$	5,633	$	5,705	$	5,830	$	5,933	$	5,968		(5	)		(6	)
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development	$	445	$	484	$	516	$	569	$	583		(32	)%		(24	)%
Land loans		155		153		142		139		130		5			19
Lot loans		390		358		385		401		406		36			(4	)
Total		990		995		1,043		1,109		1,119		(2	)		(12	)
House loans
Spec		317		347		393		450		460		(35	)%		(31	)%
Sold		123		137		160		186		212		(41	)		(42	)
Total		440		484		553		636		672		(36	)		(35	)
Total residential construction	$	1,430	$	1,479	$	1,596	$	1,745	$	1,791		(13	)		(20	)
RESIDENTIAL CONSTRUCTION — ATLANTA MSA
Dirt loans
Acquisition & development	$	148	$	167	$	185	$	232	$	252		(46	)%		(41	)%
Land loans		52		56		47		50		50		(29	)		4
Lot loans		98		86		103		117		117		56			(16	)
Total		298		309		335		399		419		(14	)		(29	)
House loans
Spec		164		189		227		271		271		(53	)%		(39	)%
Sold		33		40		49		58		71		(70	)		(54	)
Total		197		229		276		329		342		(56	)		(42	)
Total residential construction	$	495	$	538	$	611	$	728	$	761		(32	)		(35	)

⁽¹⁾ Annualized.

7

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality

	First Quarter 2009						Fourth Quarter 2008						Third Quarter 2008
	Nonaccrual				Total		Nonaccrual				Total		Nonaccrual				Total
(in thousands)	Loans		OREO		NPAs		Loans		OREO		NPAs		Loans		OREO		NPAs
NPAs BY CATEGORY
Commercial (sec. by RE)	$	18,188	$	3,811	$	21,999	$	15,188	$	2,427	$	17,615	$	9,961	$	854	$	10,815
Commercial construction		6,449		2,948		9,397		1,513		2,333		3,846		2,924		375		3,299
Commercial & industrial		12,066		—		12,066		1,920		—		1,920		1,556		—		1,556
Total commercial		36,703		6,759		43,462		18,621		4,760		23,381		14,441		1,229		15,670
Residential construction		187,656		58,327		245,983		144,836		48,572		193,408		102,095		32,453		134,548
Residential mortgage		33,148		10,297		43,445		25,574		6,436		32,010		21,335		4,756		26,091
Consumer / installment		1,648		—		1,648		1,692		—		1,692		1,395		—		1,395
Total NPAs	$	259,155	$	75,383	$	334,538	$	190,723	$	59,768	$	250,491	$	139,266	$	38,438	$	177,704
NPAs BY MARKET
Atlanta MSA	$	131,020	$	48,574	$	179,594	$	105,476	$	42,336	$	147,812	$	80,805	$	27,011	$	107,816
Gainesville MSA		17,448		694		18,142		16,208		1,110		17,318		15,105		648		15,753
North Georgia		66,875		20,811		87,686		31,631		12,785		44,416		20,812		8,337		29,149
Western North Carolina		21,240		3,067		24,307		18,509		2,986		21,495		13,432		1,509		14,941
Coastal Georgia		15,699		1,286		16,985		11,863		138		12,001		3,682		601		4,283
East Tennessee		6,873		951		7,824		7,036		413		7,449		5,430		332		5,762
Total NPAs	$	259,155	$	75,383	$	334,538	$	190,723	$	59,768	$	250,491	$	139,266	$	38,438	$	177,704

	First Quarter 2009					Fourth Quarter 2008					Third Quarter 2008
			Net Charge-					Net Charge-					Net Charge-
			Offs to					Offs to					Offs to
	Net		Average			Net		Average			Net		Average
(in thousands)	Charge-Offs		Loans (1)			Charge-Offs		Loans (1)			Charge-Offs		Loans (1)
NET CHARGE-OFFS BY CATEGORY
Commercial (sec. by RE)	$	826		.20	%	$	4,460		1.10	%	$	257		.06	%
Commercial construction		54		.05			1,442		1.14			225		.17
Commercial & industrial		873		.89			3,416		3.24			1,018		.96
Total commercial		1,753		.28			9,318		1.46			1,500		.24
Residential construction		37,762		10.52			57,882		14.93			50,228		11.94
Residential mortgage		2,984		.80			5,852		1.52			3,332		.88
Consumer / installment		782		1.99			976		2.34			676		1.58
Total	$	43,281		3.09		$	74,028		5.09		$	55,736		3.77
NET CHARGE-OFFS BY MARKET
Atlanta MSA	$	26,228		6.16	%	$	49,309		10.80	%	$	48,313		10.08	%
Gainesville MSA		1,105		1.18			7,994		8.60			1,470		1.49
North Georgia		8,208		1.64			9,872		1.91			4,567		.88
Western North Carolina		3,669		1.83			2,371		1.16			855		.42
Coastal Georgia		3,229		2.84			3,150		2.70			249		.22
East Tennessee		842		1.28			1,332		2.02			282		.43
Total	$	43,281		3.09		$	74,028		5.09		$	55,736		3.77

⁽¹⁾ Annualized.

8

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

	Three Months Ended
	March 31,
(in thousands, except per share data)	2009			2008
Interest revenue:
Loans, including fees	$	81,880		$	109,266
Investment securities, including tax exempt of $319 and $394		20,752			19,022
Federal funds sold, commercial paper and deposits in banks		442			222
Total interest revenue		103,074			128,510
Interest expense:
Deposits:
NOW		3,337			8,587
Money market		2,237			2,913
Savings		127			227
Time		36,053			38,884
Total deposit interest expense		41,754			50,611
Federal funds purchased, repurchase agreements and other short-term borrowings		553			4,318
Federal Home Loan Bank advances		1,074			5,745
Long-term debt		2,769			2,080
Total interest expense		46,150			62,754
Net interest revenue		56,924			65,756
Provision for loan losses		65,000			7,500
Net interest revenue after provision for loan losses		(8,076	)		58,256
Fee revenue:
Service charges and fees		7,034			7,813
Mortgage loan and other related fees		2,651			1,963
Consulting fees		1,021			1,807
Brokerage fees		689			1,093
Securities gains, net		303			—
Other		1,148			1,521
Total fee revenue		12,846			14,197
Total revenue		4,770			72,453
Operating expenses:
Salaries and employee benefits		28,839			28,754
Communications and equipment		3,729			3,832
Occupancy		3,807			3,716
Advertising and public relations		1,109			1,351
Postage, printing and supplies		1,182			1,592
Professional fees		2,293			1,921
Foreclosed preoperty		4,319			911
FDIC assessments and other regulatory charges		2,682			1,266
Amortization of intangibles		739			767
Other		3,870			3,419
Goodwill impairment		70,000			—
Severance costs		2,898			—
Total operating expenses		125,467			47,529
(Loss) income before income taxes		(120,697	)		24,924
Income tax (benefit) expense		(16,924	)		8,846
Net (loss) income		(103,773	)		16,078
Preferred stock dividends		2,554			4
Net (loss) income available to common shareholders	$	(106,327	)	$	16,074
(Loss) earnings per common share:
Basic	$	(2.20	)	$	.34
Diluted		(2.20	)		.34
Weighted average common shares outstanding:
Basic		48,324			47,052
Diluted		48,324			47,272

9

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet

	March 31,			December 31,			March 31,
(in thousands, except share and per share data)	2009			2008			2008
	(unaudited)			(audited)			(unaudited)
ASSETS
Cash and due from banks	$	103,707		$	116,395		$	169,538
Interest-bearing deposits in banks		5,792			8,417			13,417
Federal funds sold, commercial paper and short-term investments		24,983			368,609			—
Cash and cash equivalents		134,482			493,421			182,955
Securities available for sale		1,719,033			1,617,187			1,508,402
Mortgage loans held for sale		43,161			20,334			28,451
Loans, net of unearned income		5,632,705			5,704,861			5,967,839
Less allowance for loan losses		143,990			122,271			89,848
Loans, net		5,488,715			5,582,590			5,877,991
Premises and equipment, net		178,980			179,160			180,746
Accrued interest receivable		45,514			46,088			59,585
Goodwill and other intangible assets		251,060			321,798			324,041
Other assets		279,964			260,187			224,084
Total assets	$	8,140,909		$	8,520,765		$	8,386,255
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	665,447		$	654,036		$	690,028
NOW		1,284,791			1,543,385			1,523,942
Money market		500,261			466,750			431,623
Savings		177,001			170,275			187,911
Time:
Less than $100,000		1,911,627			1,953,235			1,535,742
Greater than $100,000		1,350,190			1,422,974			1,375,000
Brokered		727,171			792,969			431,523
Total deposits		6,616,488			7,003,624			6,175,769
Federal funds purchased, repurchase agreements, and other short-term borrowings		158,690			108,411			532,896
Federal Home Loan Bank advances		260,125			235,321			615,324
Long-term debt		151,006			150,986			107,996
Accrued expenses and other liabilities		65,747			33,041			82,818
Total liabilities		7,252,056			7,531,383			7,514,803
Shareholders’ equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series A; $10 stated value; 25,800 shares issued and outstanding		258			258			258
Series B; $1,000 stated value; 180,000 shares issued and outstanding		173,480			173,180			—
Common stock, $1 par value; 100,000,000 shares authorized; 48,809,301 shares issued		48,809			48,809			48,809
Common stock issuable; 161,807, 129,304 and 90,505 shares		3,270			2,908			2,410
Capital surplus		452,277			460,708			463,095
Retained earnings		158,201			265,405			359,248
Treasury stock; 322,603, 799,892 and 1,805,078 shares, at cost		(5,992	)		(16,465	)		(41,351	)
Accumulated other comprehensive income		58,550			54,579			38,983
Total shareholders’ equity		888,853			989,382			871,452
Total liabilities and shareholders’ equity	$	8,140,909		$	8,520,765		$	8,386,255

10

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,

	2009								2008
	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)	$	5,675,054		$	81,749		5.84	%	$	5,958,296		$	109,252		7.37	%
Taxable securities (3)		1,682,603			20,433		4.86			1,448,224			18,628		5.15
Tax-exempt securities (1)(3)		30,051			522		6.95			37,291			648		6.95
Federal funds sold and other interest-earning assets		142,522			858		2.41			47,669			513		4.30
Total interest-earning assets		7,530,230			103,562		5.56			7,491,480			129,041		6.92
Non-interest-earning assets:
Allowance for loan losses		(128,798	)							(92,025	)
Cash and due from banks		104,411								154,706
Premises and equipment		179,495								181,355
Other assets (3)		627,310								570,105
Total assets	$	8,312,648							$	8,305,621
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,358,149		$	3,337		1.00		$	1,462,116		$	8,587		2.36
Money market		477,325			2,237		1.90			439,049			2,913		2.67
Savings		172,708			127		.30			184,812			227		.49
Time less than $100,000		1,942,897			17,217		3.59			1,553,313			18,223		4.72
Time greater than $100,000		1,393,188			12,825		3.73			1,365,307			16,370		4.82
Brokered		786,171			6,011		3.10			374,402			4,291		4.61
Total interest-bearing deposits		6,130,438			41,754		2.76			5,378,999			50,611		3.78
Federal funds purchased and other borrowings		150,517			553		1.49			551,812			4,318		3.15
Federal Home Loan Bank advances		204,941			1,074		2.13			661,498			5,745		3.49
Long-term debt		150,997			2,769		7.44			107,996			2,080		7.75
Total borrowed funds		506,455			4,396		3.52			1,321,306			12,143		3.70
Total interest-bearing liabilities		6,636,893			46,150		2.82			6,700,305			62,754		3.77
Non-interest-bearing liabilities:
Non-interest-bearing deposits		650,093								672,070
Other liabilities		58,157								77,587
Total liabilities		7,345,143								7,449,962
Shareholders’ equity		967,505								855,659
Total liabilities and shareholders’ equity	$	8,312,648							$	8,305,621
Net interest revenue				$	57,412							$	66,287
Net interest-rate spread							2.74	%							3.15	%
Net interest margin (4)							3.08	%							3.55	%

(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 $10.6 million in 2009 and $15.9 million in 2008 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.

 11