United Community Banks (UCB) 8-K United Community Banks, Inc. Reports

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 $16.4 MILLION FOR SECOND QUARTER 2014

● Earnings per diluted share of 27 cents, up 8 percent from first quarter

● Loans up $54 million, or 5 percent annualized

● Core transaction deposits up $52 million, or 6 percent annualized

● SBA lending team added to expand business

BLAIRSVILLE, GA – July 24, 2014 – United Community Banks, Inc. (NASDAQ: UCBI) (“United”) today reported net income of $16.4 million, or 27 cents per diluted share, for the second quarter of 2014.  Earnings per share were up 8 percent from the first quarter, reflecting growth in net interest revenue and fee revenue, a lower provision for loan losses and the elimination of preferred stock dividends.  For the first six months, United reported net income of $31.8 million, or 52 cents per diluted share.

“I am very pleased with our second quarter progress in growing our business and earnings” said Jimmy Tallent, president and chief executive officer.  “We have had four consecutive quarters of steady earnings per share growth since the classified asset sales a year ago and are focused on continuing that trend.”

Second quarter taxable equivalent net interest revenue totaled $55.0 million, up $781,000 from the first quarter and the same as the second quarter of 2013.  The taxable equivalent net interest margin was 3.21 percent, equal to the first quarter and down 12 basis points from a year ago.

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“Preserving our net interest margin and growing net interest revenue while also managing our exposure to changes in interest rates are top priorities for continued growth in earnings per share,” said Tallent.  “We remain sharply focused on growing loans and core deposits to increase net interest revenue.  During the second quarter we completed certain balance sheet restructuring activities that included the reduction/restructuring of the securities portfolio, interest rate hedges and wholesale borrowings.  The consequential changes in our securities portfolio, wholesale borrowings and interest rate hedges allowed us to maintain our margin at 3.21 percent and prevent further margin decline in 2014, while maintaining our interest rate risk and sensitivity levels.  We sold $237 million in investment securities at a gain of $4.4 million, which was offset by a similar charge from the repayment of $44 million in costly structured wholesale borrowings.”

The second quarter provision for credit losses was $2.2 million, down $300,000 from the first quarter and down $46.3 million from the second quarter of 2013.  Second quarter net charge-offs were $4.18 million, compared with $4.04 million in the first quarter and $72.4 million a year ago.  Nonperforming assets at quarter-end were $23.7 million, down 23 percent from the first quarter and representing .32 percent of total assets.  This compares to .42 percent at the end of the first quarter, and .44 percent at the end of the second quarter of 2013.

Second quarter fee revenue totaled $14.1 million, up $1.97 million from the first quarter with increases in every category.  When compared to a year earlier, fee revenue was down $1.80 million primarily due to lower mortgage fees and a $1.37 million gain last year on a bank-owned life insurance policy.  Service charges and fees were up approximately $600,000 from both the first quarter and a year ago due to strong debit card transaction volume and new service fees effective January 1.  Mortgage fees were up $523,000 from the first quarter but down $1.13 million from a year ago, the decrease reflecting slower mortgage refinancing activity.  Closed mortgage loans totaled $68.5 million in the second quarter, compared with $46.0 million in the first quarter and $95.2 million in the second quarter of 2013.  Customer swap fees included in other fee revenue were up $357,000 from the first quarter due to an increase in commercial lending activities.  Also included in other fee revenue were gains on the sale of SBA loans of $744,000.  “Going forward, our new focus on growing our SBA business includes selling loans and taking the related gains, while retaining servicing on the loans sold,” commented Tallent.

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Operating expenses, excluding foreclosed property costs, were $40.4 million in the second quarter compared to $38.9 million in the first quarter and $43.7 million a year ago.  Decreases in nearly every expense category from a year ago reflect successful efforts to control operating costs.  The $1.48 million increase from the first quarter was mostly in advertising and public relations, professional fees and other expenses that included a number of non-core costs.  The increase in advertising and public relations primarily reflects the cost for new products and updating brochures and other branded materials. The increase in professional fees is due to higher legal and consulting costs resulting from corporate initiatives.  The increase in other expenses primarily reflects higher lending support costs and a $367,000 loss from the consolidation and sale of a branch facility.

Foreclosed property costs were $102,000 in the second quarter compared to $116,000 in the first quarter and $5.15 million a year ago.  These costs were elevated in the second quarter of 2013 by the accelerated sales of classified assets.

On June 30, 2014, capital ratios were as follows: Tier 1 Risk-Based of 11.8 percent; Total Risk-Based of 13.0 percent; Tier 1 Common Risk-Based of 10.7 percent; Tier 1 Leverage of 8.3 percent; and Tangible Equity-to-Assets of 9.6 percent.

“We had a solid start in 2014 and continued to build momentum through the second quarter,” Tallent said.  “Stabilizing our net interest margin and growing loans, deposits and fee revenue will drive earnings growth.  To that end, we continue to expand our business capabilities and have added senior people to our commercial and specialized lending groups.  In the second quarter we completed the acquisition of a specialty SBA business in Columbia, South Carolina, and added a newly formed SBA national sales team led by Rich Bradshaw, who has a long record of success in SBA and other specialized lending areas.  This team will significantly strengthen our SBA and USDA lending capabilities within and beyond our existing footprint.  I am excited about the opportunities ahead and remain convinced we are on track to achieve our business targets and financial goals for the year.”

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Conference Call

United will hold a conference call today, Thursday, July 24, 2014, 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 60193841.  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.

United Community Banks, Inc. (UCBI) is a bank holding company based in Blairsville, Georgia, with $7.4 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the Southeast’s largest full-service banks, operating 103 offices in Georgia, North Carolina, South Carolina and Tennessee. The bank specializes in personalized community banking services for individuals, small businesses and corporations. A full range of consumer and commercial banking services includes mortgage, advisory, treasury management and other products. National survey organizations consistently recognize United Community Bank for outstanding customer service. Additional information about the company and the bank’s full range of products and services can be found 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 2013 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.

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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
																Second			For the Six
	2014						2013									Quarter			Months Ended						YTD
(in thousands, except per share	Second			First			Fourth			Third			Second			2014-2013			June 30,						2014-2013
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change				2014			2013		Change
INCOME SUMMARY
Interest revenue	$	61,783		$	60,495		$	61,695		$	61,426		$	62,088					$	122,278		$	124,202
Interest expense		6,833			6,326			5,816			7,169			7,157						13,159			14,697
Net interest revenue		54,950			54,169			55,879			54,257			54,931			-	%		109,119			109,505			-	%
Provision for credit losses		2,200			2,500			3,000			3,000			48,500						4,700			59,500
Fee revenue		14,143			12,176			13,519			14,225			15,943			(11	)		26,319			28,854			(9	)
Total revenue		66,893			63,845			66,398			65,482			22,374						130,738			78,859
Operating expenses		40,532			39,050			41,614			40,097			48,823			(17	)		79,582			92,593			(14	)
Income (loss) before income taxes		26,361			24,795			24,784			25,385			(26,449	)					51,156			(13,734	)
Income tax expense (benefit)		10,004			9,395			8,873			9,885			(256,413	)					19,399			(255,463	)
Net income		16,357			15,400			15,911			15,500			229,964						31,757			241,729
Preferred dividends and discount accretion		-			439			2,912			3,059			3,055						439			6,107
Net income available to common shareholders	$	16,357		$	14,961		$	12,999		$	12,441		$	226,909					$	31,318		$	235,622
PERFORMANCE MEASURES
Per common share:
Diluted income	$	.27		$	.25		$	.22		$	.21		$	3.90					$	.52		$	4.05
Book value		11.94			11.66			11.30			10.99			10.90			10			11.94			10.90			10
Tangible book value (2)		11.91			11.63			11.26			10.95			10.82			10			11.91			10.82			10
Key performance ratios:
Return on common equity (1)(3)		8.99	%		8.64	%		7.52	%		7.38	%		197.22	%					8.82	%		108.34	%
Return on assets (3)		.88			.85			.86			.86			13.34						.87			7.09
Net interest margin (3)		3.21			3.21			3.26			3.26			3.33						3.21			3.35
Efficiency ratio		58.65			59.05			60.02			58.55			68.89						58.85			66.98
Equity to assets		9.61			9.52			11.62			11.80			11.57	(4)					9.56			8.90
Tangible equity to assets (2)		9.58			9.50			11.59			11.76			11.53	(4)					9.54			8.83
Tangible common equity to assets (2)		9.58			9.22			8.99			9.02			8.79	(4)					9.40			5.99
Tangible common equity to risk-weighted assets (2)		13.92			13.63			13.18			13.34			13.16						13.92			13.16
ASSET QUALITY *
Non-performing loans	$	20,724		$	25,250		$	26,819		$	26,088		$	27,864					$	20,724		$	27,864
Foreclosed properties		2,969			5,594			4,221			4,467			3,936						2,969			3,936
Total non-performing assets (NPAs)		23,693			30,844			31,040			30,555			31,800						23,693			31,800
Allowance for loan losses		73,248			75,223			76,762			80,372			81,845						73,248			81,845
Net charge-offs		4,175			4,039			4,445			4,473			72,408						8,214			84,792
Allowance for loan losses to loans		1.66	%		1.73	%		1.77	%		1.88	%		1.95	%					1.66	%		1.95	%
Net charge-offs to average loans (3)		.38			.38			.41			.42			6.87						.38			4.07
NPAs to loans and foreclosed properties		.54			.71			.72			.72			.76						.54			.76
NPAs to total assets		.32			.42			.42			.42			.44						.32			.44
AVERAGE BALANCES ($ in millions)
Loans	$	4,376		$	4,356		$	4,315		$	4,250		$	4,253			3		$	4,366		$	4,225			3
Investment securities		2,326			2,320			2,280			2,178			2,161			8			2,323			2,151			8
Earning assets		6,861			6,827			6,823			6,615			6,608			4			6,844			6,578			4
Total assets		7,418			7,384			7,370			7,170			6,915			7			7,401			6,875			8
Deposits		6,187			6,197			6,190			5,987			5,983			3			6,192			5,964			4
Shareholders’ equity		713			703			856			846			636			12			708			612			16
Common shares - basic (thousands)		60,712			60,059			59,923			59,100			58,141						60,386			58,111
Common shares - diluted (thousands)		60,714			60,061			59,925			59,202			58,141						60,388			58,111
AT PERIOD END ($ in millions)
Loans *	$	4,410		$	4,356		$	4,329		$	4,267		$	4,189			5		$	4,410		$	4,189			5
Investment securities		2,190			2,302			2,312			2,169			2,152			2			2,190			2,152			2
Total assets		7,352			7,398			7,425			7,243			7,163			3			7,352			7,163			3
Deposits		6,164			6,248			6,202			6,113			6,012			3			6,164			6,012			3
Shareholders’ equity		722			704			796			852			829			(13	)		722			829			(13	)
Common shares outstanding (thousands)		60,139			60,092			59,432			59,412			57,831						60,139			57,831

(1)  Net income 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.  (4)  Calculated as of period-end.

* 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

	2014						2013									For the Six Months
(in thousands, except per share	Second			First			Fourth			Third			Second			Ended June 30,
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			2014			2013
Interest revenue reconciliation
Interest revenue - taxable equivalent	$	61,783		$	60,495		$	61,695		$	61,426		$	62,088		$	122,278		$	124,202
Taxable equivalent adjustment		(377	)		(357	)		(380	)		(370	)		(368	)		(734	)		(733	)
Interest revenue (GAAP)	$	61,406		$	60,138		$	61,315		$	61,056		$	61,720		$	121,544		$	123,469
Net interest revenue reconciliation
Net interest revenue - taxable equivalent	$	54,950		$	54,169		$	55,879		$	54,257		$	54,931		$	109,119		$	109,505
Taxable equivalent adjustment		(377	)		(357	)		(380	)		(370	)		(368	)		(734	)		(733	)
Net interest revenue (GAAP)	$	54,573		$	53,812		$	55,499		$	53,887		$	54,563		$	108,385		$	108,772
Total revenue reconciliation
Total operating revenue	$	66,893		$	63,845		$	66,398		$	65,482		$	22,374		$	130,738		$	78,859
Taxable equivalent adjustment		(377	)		(357	)		(380	)		(370	)		(368	)		(734	)		(733	)
Total revenue (GAAP)	$	66,516		$	63,488		$	66,018		$	65,112		$	22,006		$	130,004		$	78,126
Income (loss) before taxes reconciliation
Income (loss) before taxes	$	26,361		$	24,795		$	24,784		$	25,385		$	(26,449	)	$	51,156		$	(13,734	)
Taxable equivalent adjustment		(377	)		(357	)		(380	)		(370	)		(368	)		(734	)		(733	)
Income (loss) before taxes (GAAP)	$	25,984		$	24,438		$	24,404		$	25,015		$	(26,817	)	$	50,422		$	(14,467	)
Income tax expense (benefit) reconciliation
Income tax expense (benefit)	$	10,004		$	9,395		$	8,873		$	9,885		$	(256,413	)	$	19,399		$	(255,463	)
Taxable equivalent adjustment		(377	)		(357	)		(380	)		(370	)		(368	)		(734	)		(733	)
Income tax expense (benefit) (GAAP)	$	9,627		$	9,038		$	8,493		$	9,515		$	(256,781	)	$	18,665		$	(256,196	)
Book value per common share reconciliation
Tangible book value per common share	$	11.91		$	11.63		$	11.26		$	10.95		$	10.82		$	11.91		$	10.82
Effect of goodwill and other intangibles		.03			.03			.04			.04			.08			.03			.08
Book value per common share (GAAP)	$	11.94		$	11.66		$	11.30		$	10.99		$	10.90		$	11.94		$	10.90
Average equity to assets reconciliation
Tangible common equity to assets		9.58	%		9.22	%		8.99	%		9.02	%		8.79	%		9.40	%		5.99	%
Effect of preferred equity		-			.28			2.60			2.74			2.74			.14			2.84
Tangible equity to assets		9.58			9.50			11.59			11.76			11.53			9.54			8.83
Effect of goodwill and other intangibles		.03			.02			.03			.04			.04			.02			.07
Equity to assets (GAAP)		9.61	%		9.52	%		11.62	%		11.80	%		11.57	%		9.56	%		8.90	%
Tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets		13.92	%		13.63	%		13.18	%		13.34	%		13.16	%		13.92	%		13.16	%
Effect of other comprehensive income		.53			.36			.39			.49			.29			.53			.29
Effect of deferred tax limitation		(3.74	)		(3.92	)		(4.26	)		(4.72	)		(4.99	)		(3.74	)		(4.99	)
Effect of trust preferred		1.04			1.03			1.04			1.09			1.11			1.04			1.11
Effect of preferred equity		-			-			2.39			4.01			4.11			-			4.11
Tier I capital ratio (Regulatory)		11.75	%		11.10	%		12.74	%		14.21	%		13.68	%		11.75	%		13.68	%

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)
	2014				2013						Linked Quarter Change			Year over Year Change
	Second		First		Fourth		Third		Second
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter
LOANS BY CATEGORY
Owner occupied commercial RE	$	1,163	$	1,142	$	1,134	$	1,129	$	1,119	$	21		$	44
Income producing commercial RE		598		624		623		614		629		(26	)		(31	)
Commercial & industrial		554		495		472		457		437		59			117
Commercial construction		160		148		149		137		133		12			27
Total commercial		2,475		2,409		2,378		2,337		2,318		66			157
Residential mortgage		861		866		875		888		876		(5	)		(15	)
Home equity lines of credit		451		447		441		421		402		4			49
Residential construction		302		318		328		318		332		(16	)		(30	)
Consumer installment		321		316		307		303		261		5			60
Total loans	$	4,410	$	4,356	$	4,329	$	4,267	$	4,189		54			221
LOANS BY MARKET
North Georgia	$	1,175	$	1,205	$	1,240	$	1,262	$	1,265		(30	)		(90	)
Atlanta MSA		1,305		1,290		1,275		1,246		1,227		15			78
North Carolina		555		563		572		575		576		(8	)		(21	)
Coastal Georgia		426		425		423		421		397		1			29
Gainesville MSA		257		262		255		253		256		(5	)		1
East Tennessee		270		272		280		277		282		(2	)		(12	)
South Carolina / Corporate		206		131		88		47		34		75			172
Other (2)		216		208		196		186		152		8			64
Total loans	$	4,410	$	4,356	$	4,329	$	4,267	$	4,189		54			221
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development	$	34	$	37	$	39	$	40	$	42		(3	)		(8	)
Land loans		36		37		38		35		36		(1	)		-
Lot loans		151		159		166		167		173		(8	)		(22	)
Total		221		233		243		242		251		(12	)		(30	)
House loans
Spec		19		19		23		30		34		-			(15	)
Sold		62		66		62		46		47		(4	)		15
Total		81		85		85		76		81		(4	)		-
Total residential construction	$	302	$	318	$	328	$	318	$	332		(16	)		(30	)

(1)  Excludes total loans of $3.1 million, $19.3 million, $20.3 million, $23.3 million and $25.7 million as of June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013, respectively, that are covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.  (2)  Includes purchased indirect auto loans that are not assigned to a geographic region.

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Credit Quality (1)

	Second Quarter 2014									First Quarter 2014									Fourth Quarter 2013
	Non-performing			Foreclosed			Total			Non-performing			Foreclosed			Total			Non-performing			Foreclosed			Total
(in thousands)	Loans			Properties			NPAs			Loans			Properties			NPAs			Loans			Properties			NPAs
NONPERFORMING ASSETS BY CATEGORY
Owner occupied CRE	$	2,975		$	653		$	3,628		$	3,868		$	1,167		$	5,035		$	5,822		$	832		$	6,654
Income producing CRE		1,032			242			1,274			1,278			1,645			2,923			2,518			-			2,518
Commercial & industrial		1,102			-			1,102			822			-			822			427			-			427
Commercial construction		95			-			95			479			-			479			361			-			361
Total commercial		5,204			895			6,099			6,447			2,812			9,259			9,128			832			9,960
Residential mortgage		10,201			1,426			11,627			13,307			2,146			15,453			11,730			2,684			14,414
Home equity lines of credit		510			128			638			1,106			362			1,468			1,448			389			1,837
Residential construction		4,248			520			4,768			3,805			274			4,079			4,264			316			4,580
Consumer installment		561			-			561			585			-			585			249			-			249
Total NPAs	$	20,724		$	2,969		$	23,693		$	25,250		$	5,594		$	30,844		$	26,819		$	4,221		$	31,040
Balance as a % of
Unpaid Principal		66.5	%		50.4	%		63.9	%		65.8	%		53.9	%		63.2	%		65.3	%		44.5	%		61.4	%
NONPERFORMING ASSETS BY MARKET
North Georgia	$	8,216		$	1,392		$	9,608		$	12,166		$	2,058		$	14,224		$	12,352		$	2,494		$	14,846
Atlanta MSA		3,883			510			4,393			2,916			904			3,820			2,830			684			3,514
North Carolina		5,314			615			5,929			6,501			866			7,367			6,567			683			7,250
Coastal Georgia		782			80			862			800			1,607			2,407			2,342			173			2,515
Gainesville MSA		921			49			970			1,145			-			1,145			928			-			928
East Tennessee		1,218			323			1,541			1,428			159			1,587			1,800			187			1,987
South Carolina / Corporate		-			-			-			-			-			-			-			-			-
Other (3)		390			-			390			294			-			294			-			-			-
Total NPAs	$	20,724		$	2,969		$	23,693		$	25,250		$	5,594		$	30,844		$	26,819		$	4,221		$	31,040
NONPERFORMING ASSETS ACTIVITY
Beginning Balance	$	25,250		$	5,594		$	30,844		$	26,819		$	4,221		$	31,040		$	26,088		$	4,467		$	30,555
Loans placed on non-accrual		9,529			-			9,529			9,303			-			9,303			11,043			-			11,043
Payments received		(4,027	)		-			(4,027	)		(1,666	)		-			(1,666	)		(1,688	)		-			(1,688	)
Loan charge-offs		(8,341	)		-			(8,341	)		(4,839	)		-			(4,839	)		(4,621	)		-			(4,621	)
Foreclosures		(1,687	)		1,687			-			(4,367	)		4,367			-			(4,003	)		4,003			-
Capitalized costs		-			-			-			-			-			-			-			-			-
Property sales		-			(4,430	)		(4,430	)		-			(3,238	)		(3,238	)		-			(4,684	)		(4,684	)
Write downs		-			(305	)		(305	)		-			(277	)		(277	)		-			(326	)		(326	)
Net gains (losses) on sales		-			423			423			-			521			521			-			761			761
Ending Balance	$	20,724		$	2,969		$	23,693		$	25,250		$	5,594		$	30,844		$	26,819		$	4,221		$	31,040

	Second Quarter 2014						First Quarter 2014					Fourth Quarter 2013
(in thousands)	Net Charge-Offs			Net Charge- Offs to Average Loans (2)			Net Charge-Offs		Net Charge- Offs to Average Loans (2)			Net Charge-Offs			Net Charge- Offs to Average Loans (2)
NET CHARGE-OFFS BY CATEGORY
Owner occupied CRE	$	(1,836	)		(.64	)%	$	278		.10	%	$	1,638			.57	%
Income producing CRE		435			.29			205		.13			320			.21
Commercial & industrial		662			.52			421		.35			(149	)		(.13	)
Commercial construction		131			.34			-		-			(9	)		(.02	)
Total commercial		(608	)		(.10	)		904		.15			1,800			.30
Residential mortgage		2,509			1.17			1,515		.71			1,426			.64
Home equity lines of credit		466			.42			993		.90			417			.38
Residential construction		1,671			2.13			212		.27			327			.40
Consumer installment		137			.18			415		.54			475			.62
Total	$	4,175			.38		$	4,039		.38		$	4,445			.41
NET CHARGE-OFFS BY MARKET
North Georgia	$	(741	)		(.25	)%	$	1,272		.42	%	$	1,603			.51	%
Atlanta MSA		1,481			.46			1,232		.39			636			.20
North Carolina		2,161			1.55			577		.41			1,104			.76
Coastal Georgia		116			.11			512		.49			345			.33
Gainesville MSA		797			1.23			141		.22			346			.54
East Tennessee		288			.42			239		.35			323			.46
South Carolina / Corporate		-			-			-		-			-			-
Other (3)		73			.14			66		.14			88			.20
Total	$	4,175			.38		$	4,039		.38		$	4,445			.41

(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.
(3)	Includes purchased indirect auto loans that are not assigned to a geographic region.

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)	2014			2013			2014			2013
Interest revenue:
Loans, including fees	$	48,261		$	50,730		$	95,949		$	101,665
Investment securities, including tax exempt of $193, $210, $381 and $422		12,165			10,074			23,772			20,018
Deposits in banks and short-term investments		980			916			1,823			1,786
Total interest revenue		61,406			61,720			121,544			123,469
Interest expense:
Deposits:
NOW		411			419			851			873
Money market		757			534			1,320			1,096
Savings		21			36			41			72
Time		2,018			2,950			3,789			6,241
Total deposit interest expense		3,207			3,939			6,001			8,282
Short-term borrowings		908			522			1,748			1,038
Federal Home Loan Bank advances		80			30			138			49
Long-term debt		2,638			2,666			5,272			5,328
Total interest expense		6,833			7,157			13,159			14,697
Net interest revenue		54,573			54,563			108,385			108,772
Provision for credit losses		2,200			48,500			4,700			59,500
Net interest revenue after provision for credit losses		52,373			6,063			103,685			49,272
Fee revenue:
Service charges and fees		8,527			7,972			16,425			15,375
Mortgage loan and other related fees		1,877			3,003			3,231			5,658
Brokerage fees		1,245			1,063			2,422			1,830
Securities gains, net		4,435			-			4,652			116
Loss from prepayment of debt		(4,446	)		-			(4,446	)		-
Other		2,505			3,905			4,035			5,875
Total fee revenue		14,143			15,943			26,319			28,854
Total revenue		66,516			22,006			130,004			78,126
Operating expenses:
Salaries and employee benefits		24,287			24,734			48,683			48,326
Communications and equipment		3,037			3,468			6,276			6,514
Occupancy		3,262			3,449			6,640			6,816
Advertising and public relations		1,139			1,037			1,765			1,975
Postage, printing and supplies		804			894			1,580			1,757
Professional fees		2,172			2,499			3,599			4,865
Foreclosed property		102			5,151			218			7,484
FDIC assessments and other regulatory charges		1,425			2,505			2,778			5,010
Amortization of intangibles		361			491			748			1,196
Other		3,943			4,595			7,295			8,650
Total operating expenses		40,532			48,823			79,582			92,593
Net income (loss) before income taxes		25,984			(26,817	)		50,422			(14,467	)
Income tax expense (benefit)		9,627			(256,781	)		18,665			(256,196	)
Net income		16,357			229,964			31,757			241,729
Preferred stock dividends and discount accretion		-			3,055			439			6,107
Net income available to common shareholders	$	16,357		$	226,909		$	31,318		$	235,622
Earnings per common share:
Basic	$	.27		$	3.90		$	.52		$	4.05
Diluted		.27			3.90			.52			4.05
Weighted average common shares outstanding:
Basic		60,712			58,141			60,386			58,111
Diluted		60,714			58,141			60,388			58,111

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet (Unaudited)
	June 30,			December 31,			June 30,
(in thousands, except share and per share data)	2014			2013			2013
ASSETS
Cash and due from banks	$	91,791		$	71,230		$	62,564
Interest-bearing deposits in banks		100,270			119,669			141,016
Short-term investments		47,999			37,999			57,000
Cash and cash equivalents		240,060			228,898			260,580
Securities available for sale		1,741,268			1,832,217			1,937,264
Securities held to maturity (fair value $458,864, $485,585 and $226,695)		448,752			479,742			214,947
Mortgage loans held for sale		14,918			10,319			19,150
Loans, net of unearned income		4,410,285			4,329,266			4,189,368
Less allowance for loan losses		(73,248	)		(76,762	)		(81,845	)
Loans, net		4,337,037			4,252,504			4,107,523
Assets covered by loss sharing agreements with the FDIC		3,595			22,882			35,675
Premises and equipment, net		161,614			163,589			167,197
Bank owned life insurance		80,922			80,670			82,276
Accrued interest receivable		19,141			19,598			19,279
Intangible assets		2,731			3,480			4,315
Foreclosed property		2,969			4,221			3,936
Net deferred tax asset		233,149			258,518			272,287
Derivative financial instruments		22,024			23,833			9,017
Other assets		43,886			44,948			29,189
Total assets	$	7,352,066		$	7,425,419		$	7,162,635
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	1,519,635		$	1,388,512		$	1,349,804
NOW		1,334,883			1,427,939			1,225,664
Money market		1,245,912			1,227,575			1,167,889
Savings		279,203			251,125			247,821
Time:
Less than $100,000		805,289			892,961			982,009
Greater than $100,000		554,310			588,689			664,112
Brokered		424,313			424,704			374,530
Total deposits		6,163,545			6,201,505			6,011,829
Short-term borrowings		76,256			53,241			54,163
Federal Home Loan Bank advances		175,125			120,125			70,125
Long-term debt		129,865			129,865			124,845
Derivative financial instruments		36,545			46,232			29,330
Unsettled securities purchases		7,264			29,562			1,582
Accrued expenses and other liabilities		41,497			49,174			41,458
Total liabilities		6,630,097			6,629,704			6,333,332
Shareholders’ equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series A; $10 stated value; 0, 0 and 21,700 shares issued and outstanding		-			-			217
Series B; $1,000 stated value; 0, 105,000 and 180,000 shares issued and outstanding		-			105,000			179,323
Series D; $1,000 stated value; 0, 16,613 and 16,613 shares issued and outstanding		-			16,613			16,613
Common stock, $1 par value; 100,000,000 shares authorized;
50,058,295, 46,243,345 and 43,356,492 shares issued and outstanding		50,058			46,243			43,356
Common stock, non-voting, $1 par value; 26,000,000 shares authorized;
10,080,787, 13,188,206 and 14,474,810 shares issued and outstanding		10,081			13,188			14,475
Common stock issuable; 314,039, 241,832 and 271,215 shares		4,649			3,930			4,705
Capital surplus		1,091,780			1,078,676			1,057,931
Accumulated deficit		(418,583	)		(448,091	)		(473,531	)
Accumulated other comprehensive loss		(16,016	)		(19,844	)		(13,786	)
Total shareholders’ equity		721,969			795,715			829,303
Total liabilities and shareholders’ equity	$	7,352,066		$	7,425,419		$	7,162,635

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
	2014								2013
	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)	$	4,376,174		$	48,435		4.44	%	$	4,253,361		$	50,808		4.79	%
Taxable securities (3)		2,306,457			11,972		2.08			2,139,221			9,864		1.84
Tax-exempt securities (1)(3)		19,592			316		6.45			21,597			344		6.37
Federal funds sold and other interest-earning assets		158,418			1,060		2.68			193,370			1,072		2.22
Total interest-earning assets		6,860,641			61,783		3.61			6,607,549			62,088		3.77
Non-interest-earning assets:
Allowance for loan losses		(76,843	)							(106,417	)
Cash and due from banks		63,853								63,457
Premises and equipment		161,443								168,272
Other assets (3)		408,768								181,987
Total assets	$	7,417,862							$	6,914,848
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,356,141			411		.12		$	1,245,301			419		.13
Money market		1,361,045			757		.22			1,306,522			534		.16
Savings		275,540			21		.03			245,211			36		.06
Time less than $100,000		818,048			933		.46			1,000,511			1,568		.63
Time greater than $100,000		563,489			865		.62			674,200			1,380		.82
Brokered time deposits		334,919			220		.26			195,182			2		.00
Total interest-bearing deposits		4,709,182			3,207		.27			4,666,927			3,939		.34
Federal funds purchased and other borrowings		108,311			908		3.36			72,139			522		2.90
Federal Home Loan Bank advances		154,795			80		.21			58,916			30		.20
Long-term debt		129,865			2,638		8.15			124,838			2,666		8.57
Total borrowed funds		392,971			3,626		3.70			255,893			3,218		5.04
Total interest-bearing liabilities		5,102,153			6,833		.54			4,922,820			7,157		.58
Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,477,849								1,315,812
Other liabilities		125,173								40,603
Total liabilities		6,705,175								6,279,235
Shareholders’ equity		712,687								635,613
Total liabilities and shareholders’ equity	$	7,417,862							$	6,914,848
Net interest revenue				$	54,950							$	54,931
Net interest-rate spread							3.07	%							3.19	%
Net interest margin (4)							3.21	%							3.33	%

(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 $1.86 million in 2014 and pretax unrealized gains of $17.7 million in 2013 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,
	2014								2013
	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)	$	4,365,930		$	96,303		4.45	%	$	4,225,215		$	101,808		4.86	%
Taxable securities (3)		2,303,404			23,391		2.03			2,129,208			19,596		1.84
Tax-exempt securities (1)(3)		19,881			624		6.28			21,665			691		6.38
Federal funds sold and other interest-earning assets		154,651			1,960		2.53			201,478			2,107		2.09
Total interest-earning assets		6,843,866			122,278		3.60			6,577,566			124,202		3.80
Non-interest-earning assets:
Allowance for loan losses		(77,165	)							(108,667	)
Cash and due from banks		62,958								63,873
Premises and equipment		162,112								168,773
Other assets (3)		409,466								173,168
Total assets	$	7,401,237							$	6,874,713
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,385,964			851		.12		$	1,274,144			873		.14
Money market		1,368,975			1,320		.19			1,282,101			1,096		.17
Savings		267,588			41		.03			239,691			72		.06
Time less than $100,000		847,707			1,946		.46			1,020,000			3,317		.66
Time greater than $100,000		570,799			1,783		.63			684,320			2,857		.84
Brokered time deposits		311,579			60		.04			185,210			67		.07
Total interest-bearing deposits		4,752,612			6,001		.25			4,685,466			8,282		.36
Federal funds purchased and other borrowings		110,436			1,748		3.19			72,148			1,038		2.90
Federal Home Loan Bank advances		140,014			138		.20			46,064			49		.21
Long-term debt		129,865			5,272		8.19			124,827			5,328		8.61
Total borrowed funds		380,315			7,158		3.80			243,039			6,415		5.32
Total interest-bearing liabilities		5,132,927			13,159		.52			4,928,505			14,697		.60
Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,439,447								1,278,875
Other liabilities		120,943								55,639
Total liabilities		6,693,317								6,263,019
Shareholders’ equity		707,920								611,694
Total liabilities and shareholders’ equity	$	7,401,237							$	6,874,713
Net interest revenue				$	109,119							$	109,505
Net interest-rate spread							3.08	%							3.20	%
Net interest margin (4)							3.21	%							3.35	%

(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 losses of $1.37 million in 2014 and pretax unrealized gains of $17.4 million in 2013 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.