SOURCE: United Community Banks, Inc.

United Community Banks, Inc.

April 28, 2011 05:30 ET

United Community Banks, Inc. Reports Net Operating Loss of $142.5 Million for First Quarter 2011

BLAIRSVILLE, GA--(Marketwire - Apr 28, 2011) - United Community Banks, Inc. (NASDAQ: UCBI)

--  Completed strategically significant $380 million private equity
    offering
--  Executed major elements of our asset disposition plan to de-risk
    balance sheet:
    --  completed $267 million bulk loan sale on April 18
    --  sold $77.5 million in loans and foreclosed properties
    --  aggressively wrote down foreclosed properties to 30 percent of
        unpaid principal balance
--  Nonperforming assets down 57 percent from prior quarter and at lowest
    level in three years
--  Allowance for loan losses remains strong at 3.17 percent of loans
--  Core transaction deposits up 13 percent on an annualized basis

United Community Banks, Inc. (NASDAQ: UCBI) today reported a net operating loss from continuing operations of $142.5 million, or $1.57 per diluted share, for the first quarter of 2011. The higher net operating loss reflects the board of directors' decision to adopt an aggressive asset disposition plan to quickly sell and write down problem assets following United's private equity offering.

"The asset disposition plan includes bulk sales of classified loans, as well as aggressive write-downs of foreclosed properties to levels significantly less than the appraised values in order to accelerate their sales," stated Jimmy Tallent, president and chief executive officer. "The completion of the $380 million offering and the execution of our asset disposition plan are key accomplishments toward our goal of achieving sustained profitability beginning in the second quarter of 2011."

The accelerated disposition of classified loans through bulk sales and transfers to foreclosed properties represented $211.1 million of the $231.6 million in net charge-offs for the first quarter. The bulk loan sale included performing substandard loans of $166.1 million and nonperforming loans of $100.5 million. These classified loans were written down in the first quarter to the expected sales proceeds of $80.6 million, resulting in loan charge-offs of $186.0 million. The bulk loan sale transaction was completed on April 18, 2011.

Additionally, United sold $20.9 million in other classified loans and transferred $32.6 million in nonperforming loans to foreclosed properties during the first quarter resulting in additional loan charge-offs of $25.1 million. Remaining net charge-offs of $20.5 million for the quarter were due to the inflow of nonperforming loans and other activities. These actions reduced nonperforming loans to $83.8 million at quarter-end, down from $179.1 million at the end of the fourth quarter of 2010 and from $280.8 million a year ago.

"The first quarter provision for loan losses and net charge-offs -- $190 million and $231.6 million, respectively -- are significantly higher than prior quarters and reflect the execution of our asset disposition plan," said Tallent. "We reduced the allowance for loan losses to $133.1 million, or 3.17 percent of loans -- which remains at a prudent and conservative level."

Execution of the asset disposition plan also included the sale of $56.6 million in foreclosed properties during the first quarter at a loss of $12.0 million, and a $48.6 million write-down of remaining foreclosed properties to accelerate their dispositions. At March 31, 2011, foreclosed properties were $54.4 million and were written down well below appraised values to 30 percent of their original unpaid principal balance.

Total non-performing assets were $138 million at quarter-end, compared with $321 million at December 31, 2010 and $417 million at March 31, 2010; reflecting the lowest level since March 31, 2008.

"We made tremendous progress during the first quarter toward our goal of returning to profitability," stated Jimmy Tallent. "With classified assets at a more manageable level, we can turn our focus toward other activities. The economy and the real estate market remain weak so we will move forward cautiously, but with a renewed sense of optimism. I am excited about the opportunities that lie ahead for us."

Total loans were $4.2 billion at quarter-end, down $410 million from the prior quarter-end and down $798 million from a year ago, reflecting the higher level of net charge-offs resulting from the transfer of the bulk sale loans to the loans held-for-sale category. Residential construction loans were $550 million, or 13 percent of total loans, down $145 million from the prior quarter-end and down $410 million from a year ago. The decline during the first quarter was partially offset by $52.6 million in new customer loans, primarily commercial and small business lending in north Georgia and metropolitan Atlanta.

Taxable equivalent net interest revenue of $56.4 million was $4.9 million lower than the first quarter of 2010, primarily due to the $574 million reduction in average loan balances. Also contributing to lower net interest revenue in the first quarter was the reversal of $2.0 million in interest on performing classified loans that were included in the bulk sale transaction. The net interest margin was 3.30 percent for the first quarter of 2011, down 19 basis points from a year ago and down 28 basis points from the fourth quarter of 2010. Interest reversals on the performing classified loans that were included in the bulk loan sale accounted for 11 basis points of the decrease. In addition, maintenance of higher levels of liquidity further lowered first quarter net interest margin by 49 basis points. This compares to 30 basis points in the fourth quarter of 2010 and 18 basis points for the first quarter of 2010.

Tallent credited United bankers for their focus on servicing customers and growing the franchise while management worked out the capital transaction and asset disposition plan. "We grew core transaction deposits in the first quarter by $89 million, or 13 percent on an annualized basis," Tallent said. "This was due in part to a core deposit marketing initiative that we launched in 2009 and that focuses on our strong customer service culture. I have been extremely pleased with the impact it has had on deposit growth and cross-selling activities this past year. Core transaction deposits are the lifeblood of this company, and this was their ninth consecutive quarter of growth. Since the beginning of 2009, we have grown core transaction deposits by $638 million, and that is nothing short of phenomenal."

Operating fee revenue was $11.8 million in the first quarter of 2011, compared to $11.7 million a year ago. Service charges and fees were $6.7 million, down $727,000 from a year ago, due primarily to lower overdraft fees resulting from recent regulatory changes that required customers to provide consent before using overdraft services. Other fee revenue of $2.9 million reflected an increase of $780,000 from a year ago due to the acceleration of deferred gains relating to the ineffectiveness of terminated cash flow hedges on certain prime-based loans.

First quarter operating expenses were $115.3 million, up $60.5 million from a year ago. The increase was due primarily to the asset disposition plan, the $60.6 million of write-downs and losses on foreclosed properties, and the $3.6 million in associated costs for property taxes and professional fees related to the bulk loan sale and private equity offering. Excluding these costs from both periods, operating expenses for the first quarter totaled $51.1 million compared to $46.7 million a year ago. Salary and benefit costs totaled $24.9 million and increased $564,000 from last year due primarily to higher health insurance costs. Professional fees of $3.3 million were $1.4 million higher than a year ago, reflecting the $1.0 million for transaction costs in the first quarter of 2011 and higher credit-related workout costs. FDIC assessments and other regulatory charges of $5.4 million reflected an increase of $1.8 million from a year ago as a result of a higher deposit insurance assessment rate and an increase in the level of insured deposits. Other operating expenses of $6.4 million were $2.5 million more than a year ago due to the $2.6 million of property taxes incurred this quarter in connection with the bulk loan sale transaction.

Foreclosed property costs for the first quarter of 2011 were $64.9 million as compared to $10.8 million a year ago. For 2011, these costs included $60.6 million for write-downs and losses on sales and $4.3 million for maintenance and other foreclosed property costs. For 2010, write-downs and losses on sales were $8.1 million while maintenance costs were $2.7 million. Included in write-downs and losses for the first quarter of 2011 were $48.6 million of mark-downs on foreclosed properties to expedite sales and $12.0 million of losses related to the $56.6 million in sales of foreclosed properties during the first quarter.

The effective tax rate for the first quarter of 2011 was 40 percent, equal to the first quarter of 2010. The effective tax rate for the balance of 2011 is expected to return to a normal range of 35 to 36 percent; however, this rate could vary significantly depending on the level of earnings.

As of March 31, 2011, the capital ratios for United were as follows: Tier 1 Risk Based of 7.8 percent; Tier 1 Leverage of 5.1 percent; and, Total Risk Based of 15.6 percent. The quarterly average tangible equity-to-assets ratio was 8.7 percent and the tangible common equity-to-assets ratio was 5.5 percent. The holding company regulatory capital ratios reflect limitations on the inclusion of certain capital elements in Tier 1 Capital which resulted in the exclusion of a significant portion of the cumulative preferred stock issued in the private equity offering. Upon shareholder approval, which is expected at our shareholders meeting in June, the new cumulative preferred stock will convert to common stock and will be fully included in Tier 1 Capital. Assuming conversion of the cumulative preferred stock, United's pro forma capital ratios as of March 31, 2011 would have been as follows: Tier 1 Risk Based of 13.2 percent; Tier 1 Leverage of 8.5 percent; Total Risk Based of 15.7 percent; and, tangible common equity-to-assets of 6.3 percent.

"The first quarter of 2011 marks a significant and dramatic turning point," Tallent said. "We're heading into the remainder of 2011 with strong capital and a healthy, de-risked balance sheet. The weak economy and high unemployment remain, but opportunities are beginning to surpass challenges, and that is something we have not been able to say in quite some time."

Conference Call

United Community Banks will hold a conference call today, Thursday, April 28, 2011, 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 password '56062275.' The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of the company's website 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 $8.0 billion and operates 27 community banks with 106 banking offices 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 United's 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 anticipated 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 "Risk Factors" of United Community Banks, Inc.'s annual report filed on Form 10-K with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.




UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information


                      2011                         2010
                   ---------   ------------------------------------------
(in thousands,
 except per share
 data; taxable       First     Fourth      Third      Second      First
 equivalent)        Quarter    Quarter     Quarter    Quarter    Quarter
                   ---------   --------   ---------   --------   --------
INCOME SUMMARY
Interest revenue   $  75,965   $ 81,215   $  84,360   $ 87,699   $ 89,849
Interest expense      19,573     21,083      24,346     26,072     28,570
                   ---------   --------   ---------   --------   --------
    Net interest
     revenue          56,392     60,132      60,014     61,627     61,279
Operating
 provision for
 loan losses (1)     190,000     47,750      50,500     61,500     75,000
Operating fee
 revenue (2)          11,838     12,442      12,861     11,579     11,666
                   ---------   --------   ---------   --------   --------
   Total operating
    revenue (1)(2)  (121,770)    24,824      22,375     11,706     (2,055)
Operating expenses
 (3)                 115,271     64,918      64,906     58,308     54,820
Loss on sale of
 nonperforming
 assets                    -          -           -     45,349          -
                   ---------   --------   ---------   --------   --------
    Operating loss
     from continuing
     operations
     before taxes   (237,041)   (40,094)    (42,531)   (91,951)   (56,875)
Operating income
 tax benefit         (94,555)   (16,520)    (16,706)   (32,419)   (22,417)
                   ---------   --------   ---------   --------   --------
    Net operating
     loss from
     continuing
     operations
     (1)(2)(3)      (142,486)   (23,574)    (25,825)   (59,532)   (34,458)
Noncash goodwill
 impairment
 charges                   -          -    (210,590)         -          -
Partial reversal
 of fraud loss
 provision, net of
 tax expense               -      7,179           -          -          -
Loss from
 discontinued
 operations                -          -           -          -       (101)
Gain from sale of
 subsidiary, net
 of income taxes
 and selling costs         -          -           -          -      1,266
                   ---------   --------   ---------   --------   --------
    Net loss        (142,486)   (16,395)   (236,415)   (59,532)   (33,293)
Preferred
 dividends and
 discount
 accretion             2,778      2,586       2,581      2,577      2,572
                   ---------   --------   ---------   --------   --------
Net loss available
 to common
 shareholders      $(145,264)  $(18,981)  $(238,996)  $(62,109)  $(35,865)
                   =========   ========   =========   ========   ========
PERFORMANCE
 MEASURES
  Per common share:
    Diluted operating
     loss from
     continuing
     operations
     (1)(2)(3)     $   (1.57)  $   (.28)  $    (.30)  $   (.66)  $   (.39)
    Diluted loss
     from
     continuing
     operations        (1.57)      (.20)      (2.52)      (.66)      (.39)
    Diluted loss       (1.57)      (.20)      (2.52)      (.66)      (.38)
    Book value          2.96       4.84        5.14       7.71       7.95
    Tangible book
     value (5)          2.89       4.76        5.05       5.39       5.62
  Key performance
   ratios:
    Return on
     equity (4)(6)   (147.11)%   (17.16)%   (148.04)%   (35.89)%   (20.10)%
    Return on
     assets (6)        (7.61)      (.89)     (12.47)     (3.10)     (1.70)
    Net interest
     margin (6)         3.30       3.58        3.57       3.60       3.49
    Operating
     efficiency
     ratio from
     continuing
     operations
     (2)(3)           169.08      89.45       89.38     141.60      75.22
    Equity to
     assets             8.82       8.85       11.37      11.84      11.90
    Tangible
     equity to
     assets (5)         8.73       8.75        9.19       9.26       9.39
    Tangible
     common equity
     to assets (5)      5.51       6.35        6.78       6.91       7.13
    Tangible
     common equity
     to
     risk-weighted
     assets (5)         6.40       9.05        9.60       9.97      10.03
ASSET QUALITY *
  Non-performing
   loans           $  83,769   $179,094   $ 217,766   $224,335   $280,802
  Foreclosed
   properties         54,378    142,208     129,964    123,910    136,275
                   ---------   --------   ---------   --------   --------
    Total non-
     performing
     assets (NPAs)   138,147    321,302     347,730    348,245    417,077
  Allowance for
   loan losses       133,121    174,695     174,613    174,111    173,934
  Operating net
   charge-offs (1)   231,574     47,668      49,998     61,323     56,668
  Allowance for
   loan losses to
   loans                3.17%      3.79%       3.67%      3.57%      3.48%
  Operating net
   charge-offs to
   average loans
   (1)(6)              20.71       4.03        4.12       4.98       4.51
  NPAs to loans
   and foreclosed
   properties           3.25       6.77        7.11       6.97       8.13
  NPAs to total
   assets               1.73       4.32        4.96       4.55       5.32
AVERAGE BALANCES
 ($ in millions)
  Loans            $   4,599   $  4,768   $   4,896   $  5,011   $  5,173
  Investment
   securities          1,625      1,354       1,411      1,532      1,518
  Earning assets       6,902      6,680       6,676      6,854      7,085
  Total assets         7,595      7,338       7,522      7,704      7,946
  Deposits             6,560      6,294       6,257      6,375      6,570
  Shareholders'
   equity                670        649         855        912        945
  Common shares -
   basic
   (thousands)        92,330     94,918      94,679     94,524     94,390
  Common shares -
   diluted
   (thousands)        92,330     94,918      94,679     94,524     94,390
AT PERIOD END ($
 in millions)
  Loans *          $   4,194   $  4,604   $   4,760   $  4,873   $  4,992
  Investment
   securities          1,884      1,490       1,310      1,488      1,527
  Total assets         7,974      7,443       7,013      7,652      7,837
  Deposits             6,598      6,469       5,999      6,330      6,488
  Shareholders'
   equity                850        636         662        904        926
  Common shares
   outstanding
   (thousands)       104,516     94,685      94,433     94,281     94,176


(1) Excludes the partial reversal of a previously established provision
    for fraud-related loan losses of $11.8 million, net of tax expense of
    $4.6 million in the fourth quarter of 2010.  Operating charge-offs
    also exclude the $11.8 million related partial recovery of the
    previously charged off amount. (2)  Excludes revenue generated by
    discontinued operations in the first quarter of 2010.  (3)  Excludes
    the goodwill impairment charge of $211 million in the third quarter of
    2010 and expenses relating to discontinued operations in the first
    quarter of 2010.  (4)  Net loss available to common shareholders,
    which is net of preferred stock dividends, divided by average realized
    common equity, which excludes accumulated other comprehensive income
    (loss).  (5)  Excludes effect of acquisition related intangibles and
    associated amortization.  (6) Annualized.

* Excludes loans and foreclosed properties covered by loss sharing
  agreements with the FDIC.



UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

                                         2011         2010        First
                                     ----------   ----------     Quarter
(in thousands, except per share         First        First      2011-2010
data; taxable equivalent)              Quarter      Quarter      Change
                                     ----------   ----------   ----------
INCOME SUMMARY
Interest revenue                     $   75,965   $   89,849
Interest expense                         19,573       28,570
                                     ----------   ----------
    Net interest revenue                 56,392       61,279           (8)%
Operating provision for loan
 losses (1)                             190,000       75,000
Operating fee revenue (2)                11,838       11,666            1
                                     ----------   ----------
   Total operating revenue (1)(2)      (121,770)      (2,055)
Operating expenses (3)                  115,271       54,820          110
Loss on sale of nonperforming assets          -            -
                                     ----------   ----------
   Operating loss from continuing
    operations before taxes            (237,041)     (56,875)        (317)
Operating income tax benefit            (94,555)     (22,417)
                                     ----------   ----------
   Net operating loss from continuing
    operations (1)(2)(3)               (142,486)     (34,458)        (314)
Noncash goodwill impairment charges           -            -
Partial reversal of fraud loss
 provision, net of tax expense                -            -
Loss from discontinued operations             -         (101)
Gain from sale of subsidiary, net of
 income taxes and selling costs               -        1,266
                                     ----------   ----------
   Net loss                            (142,486)     (33,293)        (328)
Preferred dividends and discount
 accretion                                2,778        2,572
                                     ----------   ----------
Net loss available to common
 shareholders                        $ (145,264)  $  (35,865)
                                     ==========   ==========
PERFORMANCE MEASURES
  Per common share:
    Diluted operating loss from
     continuing operations (1)(2)(3) $    (1.57)  $     (.39)        (303)
    Diluted loss from continuing
     operations                           (1.57)        (.39)        (303)
    Diluted loss                          (1.57)        (.38)        (313)
    Book value                             2.96         7.95          (63)
    Tangible book value (5)                2.89         5.62          (49)
  Key performance ratios:
    Return on equity (4)(6)             (147.11)%     (20.10)%
    Return on assets (6)                  (7.61)       (1.70)
    Net interest margin (6)                3.30         3.49
    Operating efficiency ratio from
     continuing operations (2)(3)        169.08        75.22
    Equity to assets                       8.82        11.90
    Tangible equity to assets (5)          8.73         9.39
    Tangible common equity to assets
     (5)                                   5.51         7.13
    Tangible common equity to
     risk-weighted assets (5)              6.40        10.03
ASSET QUALITY *
  Non-performing loans               $   83,769   $  280,802
  Foreclosed properties                  54,378      136,275
                                     ----------   ----------
    Total non-performing assets
     (NPAs)                             138,147      417,077
  Allowance for loan losses             133,121      173,934
  Operating net charge-offs (1)         231,574       56,668
  Allowance for loan losses to loans       3.17%        3.48%
  Operating net charge-offs to
   average loans (1)(6)                   20.71         4.51
  NPAs to loans and foreclosed
   properties                              3.25         8.13
  NPAs to total assets                     1.73         5.32
AVERAGE BALANCES ($ in millions)
  Loans                              $    4,599   $    5,173          (11)
  Investment securities                   1,625        1,518            7
  Earning assets                          6,902        7,085           (3)
  Total assets                            7,595        7,946           (4)
  Deposits                                6,560        6,570            -
  Shareholders' equity                      670          945          (29)
  Common shares - basic (thousands)      92,330       94,390
  Common shares - diluted
   (thousands)                           92,330       94,390
AT PERIOD END ($ in millions)
  Loans *                            $    4,194   $    4,992          (16)
  Investment securities                   1,884        1,527           23
  Total assets                            7,974        7,837            2
  Deposits                                6,598        6,488            2
  Shareholders' equity                      850          926           (8)
  Common shares outstanding
   (thousands)                          104,516       94,176

(1) Excludes the partial reversal of a previously established provision
    for fraud-related loan losses of $11.8 million, net of tax expense of
    $4.6 million in the fourth quarter of 2010.  Operating charge-offs also
    exclude the $11.8 million related partial recovery of the previously
    charged off amount. (2)  Excludes revenue generated by discontinued
    operations in the first quarter of 2010.  (3)  Excludes the goodwill
    impairment charge of $211 million in the third quarter of 2010 and
    expenses relating to discontinued operations in the first quarter of
    2010.  (4)  Net loss available to common shareholders, which is net of
    preferred stock dividends, divided by average realized common equity,
    which excludes accumulated other comprehensive income (loss).
    (5)  Excludes effect of acquisition related intangibles and associated
    amortization.  (6) Annualized.

* Excludes loans and foreclosed properties covered by loss sharing
  agreements with the FDIC.




UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation
Selected Financial Information

                      2011                         2010
                   ----------  -------------------------------------------
(in thousands,
 except per share
data; taxable        First      Fourth      Third      Second      First
 equivalent)         Quarter    Quarter     Quarter    Quarter    Quarter
                   ----------  ---------  ----------  ---------  ---------
Interest revenue
 reconciliation
Interest revenue -
 taxable
 equivalent        $   75,965  $  81,215  $   84,360  $  87,699  $  89,849
Taxable equivalent
 adjustment              (435)      (497)       (511)      (500)      (493)
                   ----------  ---------  ----------  ---------  ---------
    Interest
     revenue
     (GAAP)        $   75,530  $  80,718  $   83,849  $  87,199  $  89,356
                   ==========  =========  ==========  =========  =========
Net interest
 revenue
 reconciliation
Net interest
 revenue - taxable
 equivalent        $   56,392  $  60,132  $   60,014  $  61,627  $  61,279
Taxable equivalent
 adjustment              (435)      (497)       (511)      (500)      (493)
                   ----------  ---------  ----------  ---------  ---------
    Net interest
     revenue
     (GAAP)        $   55,957  $  59,635  $   59,503  $  61,127  $  60,786
                   ==========  =========  ==========  =========  =========
Provision for loan
 losses
 reconciliation
Operating
 provision for
 loan losses       $  190,000  $  47,750  $   50,500  $  61,500  $  75,000
Partial reversal
 of special
 fraud-related
 provision for
 loan loss                  -    (11,750)          -          -          -
                   ----------  ---------  ----------  ---------  ---------
    Provision for
     loan losses
     (GAAP)        $  190,000  $  36,000  $   50,500  $  61,500  $  75,000
                   ==========  =========  ==========  =========  =========
Total revenue
 reconciliation
Total operating
 revenue           $ (121,770) $  24,824  $   22,375  $  11,706  $  (2,055)
Taxable equivalent
 adjustment              (435)      (497)       (511)      (500)      (493)
Partial reversal
 of special
 fraud-related
 provision for
 loan loss                  -     11,750           -          -          -
                   ----------  ---------  ----------  ---------  ---------
    Total revenue
     (GAAP)        $ (122,205) $  36,077  $   21,864  $  11,206  $  (2,548)
                   ==========  =========  ==========  =========  =========
Expense
 reconciliation
Operating expense  $  115,271  $  64,918  $   64,906  $ 103,657  $  54,820
Noncash goodwill
 impairment charge          -          -     210,590          -          -
                   ----------  ---------  ----------  ---------  ---------
    Operating
     expense
     (GAAP)        $  115,271  $  64,918  $  275,496  $ 103,657  $  54,820
                   ==========  =========  ==========  =========  =========
Loss from
 continuing
 operations before
 taxes
 reconciliation
Operating loss
 from continuing
 operations before
 taxes             $ (237,041) $ (40,094) $  (42,531) $ (91,951) $ (56,875)
Taxable equivalent
 adjustment              (435)      (497)       (511)      (500)      (493)
Noncash goodwill
 impairment charge          -          -    (210,590)         -          -
Partial reversal
 of special
 fraud-related
 provision for
 loan loss                  -     11,750           -          -          -
                   ----------  ---------  ----------  ---------  ---------
    Loss from
     continuing
     operations
     before taxes
     (GAAP)        $ (237,476) $ (28,841) $ (253,632) $ (92,451) $ (57,368)
                   ==========  =========  ==========  =========  =========
Income tax benefit
 reconciliation
Operating income
 tax benefit       $  (94,555) $ (16,520) $  (16,706) $ (32,419) $ (22,417)
Taxable equivalent
 adjustment              (435)      (497)       (511)      (500)      (493)
Partial reversal
 of special
 fraud-related
 provision for
 loan loss                  -      4,571           -          -          -
                   ----------  ---------  ----------  ---------  ---------
    Income tax
     benefit
     (GAAP)        $  (94,990) $ (12,446) $  (17,217) $ (32,919) $ (22,910)
                   ==========  =========  ==========  =========  =========
Diluted loss from
 continuing
 operations per
 common share
 reconciliation
Diluted operating
 loss from
 continuing
 operations per
 common share      $    (1.57) $    (.28) $     (.30) $    (.66) $    (.39)
Noncash goodwill
 impairment charge          -          -       (2.22)         -          -
Partial reversal
 of special
 fraud-related
 provision for
 loan loss                  -        .08           -          -          -
                   ----------  ---------  ----------  ---------  ---------
    Diluted loss
     from continuing
     operations
     per common
     share (GAAP)  $    (1.57) $    (.20) $    (2.52) $    (.66) $    (.39)
                   ==========  =========  ==========  =========  =========
Book value per
 common share
 reconciliation
Tangible book
 value per common
 share             $     2.89  $    4.76  $     5.05  $    5.39  $    5.62
Effect of goodwill
 and other
 intangibles              .07        .08         .09       2.32       2.33
                   ----------  ---------  ----------  ---------  ---------
   Book value per
    common share
    (GAAP)         $     2.96  $    4.84  $     5.14  $    7.71  $    7.95
                   ==========  =========  ==========  =========  =========
Efficiency ratio
 from continuing
 operations
 reconciliation
Operating
 efficiency ratio
 from continuing
 operations            169.08%     89.45%      89.38%    141.60%     75.22%
Noncash goodwill
 impairment charge          -          -      290.00          -          -
                   ----------  ---------  ----------  ---------  ---------
    Efficiency
     ratio from
     continuing
     operations
     (GAAP)            169.08%     89.45%     379.38%    141.60%     75.22%
                   ==========  =========  ==========  =========  =========
Average equity to
 assets
 reconciliation
Tangible common
 equity to assets        5.51%      6.35%       6.78%      6.91%      7.13%
Effect of
 preferred equity        3.22       2.40        2.41       2.35       2.26
                   ----------  ---------  ----------  ---------  ---------
    Tangible
     equity to
     assets              8.73       8.75        9.19       9.26       9.39
Effect of goodwill
 and other
 intangibles              .09        .10        2.18       2.58       2.51
                   ----------  ---------  ----------  ---------  ---------
    Equity to
     assets (GAAP)       8.82%      8.85%      11.37%     11.84%     11.90%
                   ==========  =========  ==========  =========  =========
Actual tangible
 common equity to
 risk-weighted
 assets
 reconciliation
Tangible common
 equity to
 risk-weighted
 assets                  6.40%      9.05%       9.60%      9.97%     10.03%
Effect of other
 comprehensive
 income                  (.58)      (.62)       (.81)      (.87)      (.85)
Effect of deferred
 tax limitation         (5.10)     (3.34)      (2.94)     (2.47)     (1.75)
Effect of trust
 preferred               1.12       1.06        1.06       1.03       1.00
Effect of
 preferred equity        5.97       3.52        3.51       3.41       3.29
                   ----------  ---------  ----------  ---------  ---------
    Tier I capital
     ratio
     (Regulatory)        7.81%      9.67%      10.42%     11.07%     11.72%
                   ==========  =========  ==========  =========  =========
Net charge-offs
 reconciliation
Operating net
 charge-offs       $  231,574  $  47,668  $   49,998  $  61,323  $  56,668
Subsequent partial
 recovery of
 fraud-related
 charge-off                 -    (11,750)          -          -          -
                   ----------  ---------  ----------  ---------  ---------
    Net charge-offs
     (GAAP)        $  231,574  $  35,918  $   49,998  $  61,323  $  56,668
                   ==========  =========  ==========  =========  =========
Net charge-offs to
 average loans
 reconciliation
Operating net
 charge-offs to
 average loans          20.71%      4.03%       4.12%      4.98%      4.51%
Subsequent partial
 recovery of
 fraud-related
 charge-off                 -      (1.00)          -          -          -
                   ----------  ---------  ----------  ---------  ---------
    Net charge-offs
     to average
     loans (GAAP)       20.71%      3.03%       4.12%      4.98%      4.51%
                   ==========  =========  ==========  =========  =========



UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)

                                     2011                2010
                                    ------- -------------------------------
                                    First   Fourth  Third   Second  First
(in millions)                       Quarter Quarter Quarter Quarter Quarter
                                    ------- ------- ------- ------- -------
LOANS BY CATEGORY
Commercial (sec. by RE)             $ 1,692 $ 1,761 $ 1,781 $ 1,780 $ 1,765
Commercial construction                 213     297     310     342     357
Commercial & industrial                 431     441     456     441     381
                                    ------- ------- ------- ------- -------
     Total commercial                 2,336   2,499   2,547   2,563   2,503
Residential construction                550     695     764     820     960
Residential mortgage                  1,187   1,279   1,316   1,356   1,390
Consumer / installment                  121     131     133     134     139
                                    ------- ------- ------- ------- -------
     Total loans                    $ 4,194 $ 4,604 $ 4,760 $ 4,873 $ 4,992
                                    ======= ======= ======= ======= =======


LOANS BY MARKET
Atlanta MSA                         $ 1,179 $ 1,310 $ 1,365 $ 1,373 $ 1,404
Gainesville MSA                         282     312     316     343     372
North Georgia                         1,531   1,689   1,755   1,808   1,814
Western North Carolina                  640     702     719     738     756
Coastal Georgia                         312     335     345     356     388
East Tennessee                          250     256     260     255     258
                                    ------- ------- ------- ------- -------
     Total loans                    $ 4,194 $ 4,604 $ 4,760 $ 4,873 $ 4,992
                                    ======= ======= ======= ======= =======


RESIDENTIAL CONSTRUCTION
Dirt loans
   Acquisition & development        $   116 $   174 $   190 $   214 $   290
   Land loans                            69      99     104     110     124
   Lot loans                            228     275     303     311     321
                                    ------- ------- ------- ------- -------
      Total                             413     548     597     635     735
                                    ------- ------- ------- ------- -------

House loans
   Spec                                  88      97     109     125     153
   Sold                                  49      50      58      60      72
                                    ------- ------- ------- ------- -------
      Total                             137     147     167     185     225
                                    ------- ------- ------- ------- -------
Total residential construction      $   550 $   695 $   764 $   820 $   960
                                    ======= ======= ======= ======= =======


RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
   Acquisition & development        $    22 $    30 $    34 $    40 $    66
   Land loans                            19      23      27      32      43
   Lot loans                             24      32      45      39      47
                                    ------- ------- ------- ------- -------
      Total                              65      85     106     111     156
                                    ------- ------- ------- ------- -------

House loans
   Spec                                  34      38      42      48      58
   Sold                                  11      10      11      10      14
                                    ------- ------- ------- ------- -------
      Total                              45      48      53      58      72
                                    ------- ------- ------- ------- -------
Total residential construction      $   110 $   133 $   159 $   169 $   228
                                    ======= ======= ======= ======= =======

(1) Excludes total loans of $63.3 million, $68.2 million, $75.2 million,
    $80.8 million and $79.5 million as of March 31, 2011, December 31,
    2010, September 30, 2010, June 30, 2010 and March 31, 2010,
    respectively, that are covered by the loss-sharing agreement with the
    FDIC, related to the acquisition of Southern Community Bank.



UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)

                                     2011        2010
                                    ------- ---------------
                                                                     Year
                                                            Linked   over
                                     First  Fourth   First  Quarter  Year
(in millions)                       Quarter Quarter Quarter Change  Change
                                    ------- ------- ------- ------  ------
LOANS BY CATEGORY
Commercial (sec. by RE)             $ 1,692 $ 1,761 $ 1,765 $  (69) $  (73)
Commercial construction                 213     297     357    (84)   (144)
Commercial & industrial                 431     441     381    (10)     50
                                    ------- ------- -------
     Total commercial                 2,336   2,499   2,503   (163)   (167)
Residential construction                550     695     960   (145)   (410)
Residential mortgage                  1,187   1,279   1,390    (92)   (203)
Consumer / installment                  121     131     139    (10)    (18)
                                    ------- ------- -------
     Total loans                    $ 4,194 $ 4,604 $ 4,992   (410)   (798)
                                    ======= ======= =======


LOANS BY MARKET
Atlanta MSA                         $ 1,179 $ 1,310 $ 1,404   (131)   (225)
Gainesville MSA                         282     312     372    (30)    (90)
North Georgia                         1,531   1,689   1,814   (158)   (283)
Western North Carolina                  640     702     756    (62)   (116)
Coastal Georgia                         312     335     388    (23)    (76)
East Tennessee                          250     256     258     (6)     (8)
                                    ------- ------- -------
     Total loans                    $ 4,194 $ 4,604 $ 4,992   (410)   (798)
                                    ======= ======= =======


RESIDENTIAL CONSTRUCTION
Dirt loans
   Acquisition & development        $   116 $   174 $   290    (58)   (174)
   Land loans                            69      99     124    (30)    (55)
   Lot loans                            228     275     321    (47)    (93)
                                    ------- ------- -------
      Total                             413     548     735   (135)   (322)
                                    ------- ------- -------

House loans
   Spec                                  88      97     153     (9)    (65)
   Sold                                  49      50      72     (1)    (23)
                                    ------- ------- -------
      Total                             137     147     225    (10)    (88)
                                    ------- ------- -------
Total residential construction      $   550 $   695 $   960   (145)   (410)
                                    ======= ======= =======


RESIDENTIAL CONSTRUCTION - ATLANTA MSA
Dirt loans
   Acquisition & development        $    22 $    30 $    66     (8)    (44)
   Land loans                            19      23      43     (4)    (24)
   Lot loans                             24      32      47     (8)    (23)
                                    ------- ------- -------
      Total                              65      85     156    (20)    (91)
                                    ------- ------- -------

House loans
   Spec                                  34      38      58     (4)    (24)
   Sold                                  11      10      14      1      (3)
                                    ------- ------- -------
      Total                              45      48      72     (3)    (27)
                                    ------- ------- -------
Total residential construction      $   110 $   133 $   228    (23)   (118)
                                    ======= ======= =======

(1) Excludes total loans of $63.3 million, $68.2 million, $75.2 million,
    $80.8 million and $79.5 million as of March 31, 2011, December 31,
    2010, September 30, 2010, June 30, 2010 and March 31, 2010,
    respectively, that are covered by the loss-sharing agreement with the
    FDIC, related to the acquisition of Southern Community Bank.



UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
                                           First Quarter 2011 (2)
                                  ----------------------------------------
                                 Non-performing  Foreclosed       Total
(in thousands)                        Loans      Properties       NPAs
                                  ------------  ------------  ------------
NPAs BY CATEGORY
Commercial (sec. by RE)           $     20,648  $      7,886  $     28,534
Commercial construction                  3,701        11,568        15,269
Commercial & industrial                  2,198             -         2,198
                                  ------------  ------------  ------------
     Total commercial                   26,547        19,454        46,001
Residential construction                32,038        25,807        57,845
Residential mortgage                    23,711         9,117        32,828
Consumer / installment                   1,473             -         1,473
                                  ------------  ------------  ------------
     Total NPAs                   $     83,769  $     54,378  $    138,147
                                  ============  ============  ============
     Balance as a % of
      Unpaid Principal                    57.3%         30.3%         42.4%

NPAs BY MARKET
Atlanta MSA                       $     21,501  $     16,913  $     38,414
Gainesville MSA                          4,332         2,157         6,489
North Georgia                           30,214        23,094        53,308
Western North Carolina                  18,849         7,802        26,651
Coastal Georgia                          5,847         3,781         9,628
East Tennessee                           3,026           631         3,657
                                  ------------  ------------  ------------
     Total NPAs                   $     83,769  $     54,378  $    138,147
                                  ============  ============  ============


NPA ACTIVITY
Beginning Balance                 $    179,094  $    142,208  $    321,302
Loans placed on non-accrual             54,730             -        54,730
Payments received                       (3,550)            -        (3,550)
Loan charge-offs                       (43,969)            -       (43,969)
Foreclosures                           (17,052)       17,052             -
Capitalized costs                            -           270           270
Note / property sales                  (11,400)      (44,547)      (55,947)
Loans held for sale                    (74,084)            -       (74,084)
Write downs                                  -       (48,585)      (48,585)
Net losses on sales                          -       (12,020)      (12,020)
                                  ------------  ------------  ------------
     Ending Balance               $     83,769  $     54,378  $    138,147
                                  ============  ============  ============

(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) The NPA activity shown for the first quarter of 2011 is presented with
    all activity related to loans transferred to the loans held for sale
    classification on one line as if those loans were transferred to held
    for sale at the beginning of the period.
(3) Includes charge-offs on loans related to United's previously announced
    asset disposition plan.  Such charge-offs severely distorted charge off
    rates for the first quarter of 2011.  A separate schedule has been
    included in this earnings release presenting the components of net
    charge-offs by loan category and geographic market for the first
    quarter of 2011.
(4) North Carolina residential construction net charge-offs for the fourth
    quarter of 2010 exclude a $11.8 million partial recovery of a 2007
    fraud-related charge-off.
(5) Annualized.




UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
                                            Fourth Quarter 2010
                                  ----------------------------------------
                                 Non-performing  Foreclosed       Total
(in thousands)                        Loans      Properties       NPAs
                                  ------------  ------------  ------------
NPAs BY CATEGORY
Commercial (sec. by RE)           $     44,927  $     23,659  $     68,586
Commercial construction                 21,374        17,808        39,182
Commercial & industrial                  5,611             -         5,611
                                  ------------  ------------  ------------
     Total commercial                   71,912        41,467       113,379
Residential construction                54,505        78,231       132,736
Residential mortgage                    51,083        22,510        73,593
Consumer / installment                   1,594             -         1,594
                                  ------------  ------------  ------------
     Total NPAs                   $    179,094  $    142,208  $    321,302
                                  ============  ============  ============
     Balance as a % of
      Unpaid Principal                    67.2%         64.4%         65.9%

NPAs BY MARKET
Atlanta MSA                       $     48,289  $     41,154  $     89,443
Gainesville MSA                          5,171         9,273        14,444
North Georgia                           83,551        66,211       149,762
Western North Carolina                  25,832        11,553        37,385
Coastal Georgia                         11,145        11,901        23,046
East Tennessee                           5,106         2,116         7,222
                                  ------------  ------------  ------------
     Total NPAs                   $    179,094  $    142,208  $    321,302
                                  ============  ============  ============


NPA ACTIVITY
Beginning Balance                 $    217,766  $    129,964  $    347,730
Loans placed on non-accrual             81,023             -        81,023
Payments received                       (7,250)            -        (7,250)
Loan charge-offs                       (47,913)            -       (47,913)
Foreclosures                           (61,432)       61,432             -
Capitalized costs                            -           170           170
Note / property sales                   (3,100)      (33,509)      (36,609)
Loans held for sale                          -             -             -
Write downs                                  -        (8,031)       (8,031)
Net losses on sales                          -        (7,818)       (7,818)
                                  ------------  ------------  ------------
     Ending Balance               $    179,094  $    142,208  $    321,302
                                  ============  ============  ============

(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) The NPA activity shown for the first quarter of 2011 is presented with
    all activity related to loans transferred to the loans held for sale
    classification on one line as if those loans were transferred to held
    for sale at the beginning of the period.
(3) Includes charge-offs on loans related to United's previously announced
    asset disposition plan.  Such charge-offs severely distorted charge off
    rates for the first quarter of 2011.  A separate schedule has been
    included in this earnings release presenting the components of net
    charge-offs by loan category and geographic market for the first
    quarter of 2011.
(4) North Carolina residential construction net charge-offs for the fourth
    quarter of 2010 exclude a $11.8 million partial recovery of a 2007
    fraud-related charge-off.
(5) Annualized.




UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
                                             Third Quarter 2010
                                  ----------------------------------------
                                 Non-performing  Foreclosed       Total
(in thousands)                        Loans      Properties       NPAs
                                  ------------  ------------  ------------
NPAs BY CATEGORY
Commercial (sec. by RE)           $     53,646  $     14,838  $     68,484
Commercial construction                 17,279        15,125        32,404
Commercial & industrial                  7,670             -         7,670
                                  ------------  ------------  ------------
     Total commercial                   78,595        29,963       108,558
Residential construction                79,321        73,206       152,527
Residential mortgage                    58,107        26,795        84,902
Consumer / installment                   1,743             -         1,743
                                  ------------  ------------  ------------
     Total NPAs                   $    217,766  $    129,964  $    347,730
                                  ============  ============  ============
     Balance as a % of
      Unpaid Principal                    70.0%         65.9%         68.4%

NPAs BY MARKET
Atlanta MSA                       $     65,304  $     32,785  $     98,089
Gainesville MSA                         11,905         5,685        17,590
North Georgia                           92,295        67,439       159,734
Western North Carolina                  31,545        11,559        43,104
Coastal Georgia                         10,611        10,951        21,562
East Tennessee                           6,106         1,545         7,651
                                  ------------  ------------  ------------
     Total NPAs                   $    217,766  $    129,964  $    347,730
                                  ============  ============  ============


NPA ACTIVITY
Beginning Balance                 $    224,335  $    123,910  $    348,245
Loans placed on non-accrual            119,783             -       119,783
Payments received                      (11,469)            -       (11,469)
Loan charge-offs                       (52,647)            -       (52,647)
Foreclosures                           (59,844)       59,844             -
Capitalized costs                            -           601           601
Note / property sales                   (2,392)      (40,203)      (42,595)
Loans held for sale                          -             -             -
Write downs                                  -        (7,051)       (7,051)
Net losses on sales                          -        (7,137)       (7,137)
                                  ------------  ------------  ------------
     Ending Balance               $    217,766  $    129,964  $    347,730
                                  ============  ============  ============

(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) The NPA activity shown for the first quarter of 2011 is presented with
    all activity related to loans transferred to the loans held for sale
    classification on one line as if those loans were transferred to held
    for sale at the beginning of the period.
(3) Includes charge-offs on loans related to United's previously announced
    asset disposition plan.  Such charge-offs severely distorted charge off
    rates for the first quarter of 2011.  A separate schedule has been
    included in this earnings release presenting the components of net
    charge-offs by loan category and geographic market for the first
    quarter of 2011.
(4) North Carolina residential construction net charge-offs for the fourth
    quarter of 2010 exclude a $11.8 million partial recovery of a 2007
    fraud-related charge-off.
(5) Annualized.




UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)


                        First Quarter    Fourth Quarter     Third Quarter
                          2011 (3)          2010 (4)            2010
                      ----------------- ----------------- -----------------
                                 Net               Net              Net
                               Charge-           Charge-           Charge-
                        Net    Offs to    Net    Offs to    Net    Offs to
                      Charge-  Average  Charge-  Average  Charge-  Average
(in thousands)          Offs   Loans(5)   Offs   Loans(5)   Offs   Loans(5)
                      -------- -------  -------- -------  -------- -------
NET CHARGE-OFFS BY
 CATEGORY
Commercial (sec. by
 RE)                  $ 48,607   11.07% $  6,493    1.45% $ 14,212    3.16%
Commercial
 construction           49,715   76.95     3,924    5.12     1,972    2.40
Commercial &
 industrial              4,040    3.64     2,891    2.54     1,207    1.07
                      --------          --------          --------
   Total commercial    102,362   16.66    13,308    2.09    17,391    2.70
Residential
 construction           92,138   58.20    24,497   13.28    23,934   11.99
Residential mortgage    36,383   11.62     9,176    2.80     7,695    2.29
Consumer /
 installment               691    2.16       687    2.06       978    2.90
                      --------          --------          --------
   Total              $231,574   20.71  $ 47,668    4.03  $ 49,998    4.12
                      ========          ========          ========


NET CHARGE-OFFS BY
 MARKET
Atlanta MSA           $ 56,489   17.86% $ 15,222    4.48% $ 13,753    3.97%
Gainesville MSA          8,616   11.93     3,434    4.37     1,143    1.40
North Georgia          123,305   29.66    18,537    4.26    26,554    5.92
Western North
 Carolina               26,447   15.61     5,154    2.87     5,509    2.99
Coastal Georgia         12,003   14.80     3,670    4.27     2,702    3.05
East Tennessee           4,714    7.47     1,651    2.53       337     .52
                      --------          --------          --------
   Total              $231,574   20.71  $ 47,668    4.03  $ 49,998    4.12
                      ========          ========          ========

(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)  The NPA activity shown for the first quarter of 2011 is presented with
all activity related to loans transferred to the loans held for sale
classification on one line as if those loans were transferred to held for
sale at the beginning of the period.
(3)  Includes charge-offs on loans related to United's previously announced
asset disposition plan.  Such charge-offs severely distorted charge off
rates for the first quarter of 2011.  A separate schedule has been included
in this earnings release presenting the components of net charge-offs by
loan category and geographic market for the first quarter of 2011.
(4)  North Carolina residential construction net charge-offs for the fourth
quarter of 2010 exclude a $11.8 million partial recovery of a 2007
fraud-related charge-off.
(5)  Annualized.





UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality - Net Charge-Offs First Quarter 2011 (1)

                            Asset Disposition Plan
                      -----------------------------------
                      Bulk Loan Sale (2)                            First
                      -----------------  Other   Fore-     Other   Quarter
                      Perform-   Non-    Bulk     closure   Net    2011 Net
                       ing    performing Loan    Charge-   Charge-  Charge-
(in thousands)         Loans    Loans    Sales(3) Offs(4)   Offs     Offs
                      -------- -------- -------- -------- -------- --------
NET CHARGE-OFFS BY
 CATEGORY
Commercial (sec. by
 RE)                  $ 29,451 $ 11,091 $  3,318 $  1,905 $  2,842 $ 48,607
Commercial
 construction           32,530   15,328      292      419    1,146   49,715
Commercial &
 industrial                365    2,303      859        -      513    4,040
                      -------- -------- -------- -------- -------- --------
   Total commercial     62,346   28,722    4,469    2,324    4,501  102,362
Residential
 construction           43,018   23,459    3,325   11,693   10,643   92,138
Residential mortgage    13,917   14,263    1,676    1,538    4,989   36,383
Consumer /
 installment                86      168       30       24      383      691
                      -------- -------- -------- -------- -------- --------
   Total              $119,367 $ 66,612 $  9,500 $ 15,579 $ 20,516 $231,574
                      ======== ======== ======== ======== ======== ========

NET CHARGE-OFFS BY
 MARKET
Atlanta MSA           $ 37,186 $  8,545 $  1,428 $  6,034 $  3,296 $ 56,489
Gainesville MSA          3,563    2,442      957      700      954    8,616
North Georgia           57,969   47,699    2,508    6,585    8,544  123,305
Western North
 Carolina               11,138    4,743    2,415    1,402    6,749   26,447
Coastal Georgia          6,835    2,180    2,013      634      341   12,003
East Tennessee           2,676    1,003      179      224      632    4,714
                      -------- -------- -------- -------- -------- --------
   Total              $119,367 $ 66,612 $  9,500 $ 15,579 $ 20,516 $231,574
                      ======== ======== ======== ======== ======== ========

(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)  Charge-offs totaling $186 million were recognized on the bulk loan
sale in the first quarter of 2011.  The loans were transferred to the loans
held for sale category in anticipation of the second quarter bulk loan sale
that was completed on April 18, 2011.
(3)  Losses on smaller bulk sale transactions completed during the first
quarter of 2011.
(4)  Loan charge-offs recognized in the first quarter of 2011 related to
loans transferred to foreclosed properties.  Such charge-offs were elevated
in the first quarter as a result of the asset disposition plan, which
called for aggressive write downs to expedite sales in the second and third
quarters of 2011.





UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality - Bulk Loan Sale Summary (1)


                                                 Performing Loans
                                       ------------------------------------
                                        Carrying   Charge-Offs  Loans Held
(in thousands)                         Amount (2)      (3)      for Sale(4)
                                       ----------- ------------ -----------
BY CATEGORY
Commercial (sec. by RE)                $    40,902 $     29,451 $    11,451
Commercial construction                     45,490       32,530      12,960
Commercial & industrial                        504          365         139
                                       ----------- ------------ -----------
     Total commercial                       86,896       62,346      24,550
Residential construction                    59,747       43,018      16,729
Residential mortgage                        19,342       13,917       5,425
Consumer / installment                         120           86          34
                                       ----------- ------------ -----------
     Total                             $   166,105 $    119,367 $    46,738
                                       =========== ============ ===========
BY MARKET
Atlanta MSA                            $    51,647 $     37,186 $    14,461
Gainesville MSA                              4,949        3,563       1,386
North Georgia                               80,831       57,969      22,862
Western North Carolina                      15,468       11,138       4,330
Coastal Georgia                              9,493        6,835       2,658
East Tennessee                               3,717        2,676       1,041
                                       ----------- ------------ -----------
     Total                             $   166,105 $    119,367 $    46,738
                                       =========== ============ ===========

(1)  This schedule presents a summary of classified loans included in the
bulk loan sale transaction that closed on April 18, 2011.
(2)  This column represents the book value, or carrying amount, of the
loans prior to charge offs to mark loans to expected proceeds from sale.
(3)  This column represents the charge-offs required to adjust the loan
balances to the expected proceeds from the sale based on indicative bids
received from prospective buyers, including principal payments received or
committed advances made after the cutoff date through March 31, 2011 that
are part of the settlement.
(4)  This column represents the expected proceeds from the bulk sale based
on indicative bids received from prospective buyers and equals the balance
shown on the consolidated balance sheet as loans held for sale.





UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality - Bulk Loan Sale Summary (1)

                                              Nonperforming Loans
                                      -------------------------------------
                                       Carrying   Charge-Offs   Loans Held
(in thousands)                        Amount (2)      (3)       for Sale(4)
                                      ----------- ------------- -----------
BY CATEGORY
Commercial (sec. by RE)               $    17,202 $      11,091 $     6,111
Commercial construction                    22,440        15,328       7,112
Commercial & industrial                     3,398         2,303       1,095
                                      ----------- ------------- -----------
     Total commercial                      43,040        28,722      14,318
Residential construction                   35,509        23,459      12,050
Residential mortgage                       21,717        14,263       7,454
Consumer / installment                        237           168          69
                                      ----------- ------------- -----------
     Total                            $   100,503 $      66,612 $    33,891
                                      =========== ============= ===========
BY MARKET
Atlanta MSA                           $    13,755 $       8,545 $     5,210
Gainesville MSA                             3,695         2,442       1,253
North Georgia                              70,901        47,699      23,202
Western North Carolina                      7,228         4,743       2,485
Coastal Georgia                             3,528         2,180       1,348
East Tennessee                              1,396         1,003         393
                                      ----------- ------------- -----------
     Total                            $   100,503 $      66,612 $    33,891
                                      =========== ============= ===========

(1)  This schedule presents a summary of classified loans included in the
bulk loan sale transaction that closed on April 18, 2011.
(2)  This column represents the book value, or carrying amount, of the
loans prior to charge offs to mark loans to expected proceeds from sale.
(3)  This column represents the charge-offs required to adjust the loan
balances to the expected proceeds from the sale based on indicative bids
received from prospective buyers, including principal payments received or
committed advances made after the cutoff date through March 31, 2011 that
are part of the settlement.
(4)  This column represents the expected proceeds from the bulk sale based
on indicative bids received from prospective buyers and equals the balance
shown on the consolidated balance sheet as loans held for sale.





UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality - Bulk Loan Sale Summary (1)

                                                  Total Loans
                                      -------------------------------------
                                       Carrying    Charge-Offs  Loans Held
(in thousands)                        Amount (2)       (3)      for Sale(4)
                                      ----------- ------------- -----------
BY CATEGORY
Commercial (sec. by RE)               $    58,104 $      40,542 $    17,562
Commercial construction                    67,930        47,858      20,072
Commercial & industrial                     3,902         2,668       1,234
                                      ----------- ------------- -----------
     Total commercial                     129,936        91,068      38,868
Residential construction                   95,256        66,477      28,779
Residential mortgage                       41,059        28,180      12,879
Consumer / installment                        357           254         103
                                      ----------- ------------- -----------
     Total                            $   266,608 $     185,979 $    80,629
                                      =========== ============= ===========
BY MARKET
Atlanta MSA                           $    65,402 $      45,731 $    19,671
Gainesville MSA                             8,644         6,005       2,639
North Georgia                             151,732       105,668      46,064
Western North Carolina                     22,696        15,881       6,815
Coastal Georgia                            13,021         9,015       4,006
East Tennessee                              5,113         3,679       1,434
                                      ----------- ------------- -----------
     Total                            $   266,608 $     185,979 $    80,629
                                      =========== ============= ===========

(1)  This schedule presents a summary of classified loans included in the
bulk loan sale transaction that closed on April 18, 2011.
(2)  This column represents the book value, or carrying amount, of the
loans prior to charge offs to mark loans to expected proceeds from sale.
(3)  This column represents the charge-offs required to adjust the loan
balances to the expected proceeds from the sale based on indicative bids
received from prospective buyers, including principal payments received or
committed advances made after the cutoff date through March 31, 2011 that
are part of the settlement.
(4)  This column represents the expected proceeds from the bulk sale based
on indicative bids received from prospective buyers and equals the balance
shown on the consolidated balance sheet as loans held for sale.





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

                                                       Three Months Ended
                                                            March 31,
                                                      --------------------
(in thousands, except per share data)                   2011       2010
                                                      ---------  ---------
Interest revenue:
 Loans, including fees                                $  61,107  $  72,215
 Investment securities, including tax exempt of $259
  and $311                                               13,604     16,203
 Federal funds sold, commercial paper and deposits in
  banks                                                     819        938
                                                      ---------  ---------
   Total interest revenue                                75,530     89,356
                                                      ---------  ---------
Interest expense:
 Deposits:
  NOW                                                     1,324      1,854
  Money market                                            2,028      1,757
  Savings                                                    77         84
  Time                                                   11,732     20,198
                                                      ---------  ---------
   Total deposit interest expense                        15,161     23,893
 Federal funds purchased, repurchase agreements and
  other short-term borrowings                             1,042      1,038
 Federal Home Loan Bank advances                            590        977
 Long-term debt                                           2,780      2,662
                                                      ---------  ---------
  Total interest expense                                 19,573     28,570
                                                      ---------  ---------
  Net interest revenue                                   55,957     60,786
 Provision for loan losses                              190,000     75,000
                                                      ---------  ---------
  Net interest revenue after provision for loan losses (134,043)   (14,214)
                                                      ---------  ---------
Fee revenue:
 Service charges and fees                                 6,720      7,447
 Mortgage loan and other related fees                     1,494      1,479
 Brokerage fees                                             677        567
 Securities gains, net                                       55         61
 Other                                                    2,892      2,112
                                                      ---------  ---------
  Total fee revenue                                      11,838     11,666
                                                      ---------  ---------
  Total revenue                                        (122,205)    (2,548)
                                                      ---------  ---------
Operating expenses:
 Salaries and employee benefits                          24,924     24,360
 Communications and equipment                             3,344      3,273
 Occupancy                                                4,074      3,814
 Advertising and public relations                           978      1,043
 Postage, printing and supplies                           1,118      1,225
 Professional fees                                        3,330      1,943
 Foreclosed property                                     64,899     10,813
 FDIC assessments and other regulatory charges            5,413      3,626
 Amortization of intangibles                                762        802
 Other                                                    6,429      3,921
                                                      ---------  ---------
  Total operating expenses                              115,271     54,820
                                                      ---------  ---------
 Loss from continuing operations before income taxes   (237,476)   (57,368)
 Income tax benefit                                     (94,990)   (22,910)
                                                      ---------  ---------
  Net loss from continuing operations                  (142,486)   (34,458)
 (Loss) income from discontinued operations, net
  of income taxes                                             -       (101)
 Gain from sale of subsidiary, net of income taxes
  and selling costs                                           -      1,266
                                                      ---------  ---------
  Net loss                                             (142,486)   (33,293)
 Preferred stock dividends and discount accretion         2,778      2,572
                                                      ---------  ---------
  Net loss available to common shareholders           $(145,264) $ (35,865)
                                                      =========  =========
Loss from continuing operations per common share -
 Basic / Diluted                                      $   (1.57) $    (.39)
Loss per common share - Basic / Diluted                   (1.57)      (.38)
Weighted average common shares outstanding - Basic /
 Diluted                                                 92,330     94,390





UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet

(in thousands, except share and per
share data)
                                      March 31,   December 31,  March 31,
                                         2011         2010        2010
                                     -----------  -----------  -----------
                                     (unaudited)   (audited)   (unaudited)
 ASSETS
   Cash and due from banks           $   153,891  $    95,994  $   105,613
   Interest-bearing deposits in
    banks                                465,656      111,901       99,893
   Federal funds sold, commercial
    paper and short-term investments     470,087      441,562      183,049
                                     -----------  -----------  -----------
       Cash and cash equivalents       1,089,634      649,457      388,555
   Securities available for sale       1,638,494    1,224,417    1,526,589
   Securities held to maturity (fair
    value $248,361 and $267,988)         245,430      265,807            -
   Loans held for sale                    80,629            -            -
   Mortgage loans held for sale           25,364       35,908       21,998
   Loans, net of unearned income       4,194,372    4,604,126    4,992,045
        Less allowance for loan
         losses                          133,121      174,695      173,934
                                     -----------  -----------  -----------
               Loans, net              4,061,251    4,429,431    4,818,111
   Assets covered by loss sharing
    agreements with the FDIC             125,789      131,887      169,287
   Premises and equipment, net           179,143      178,239      181,217
   Accrued interest receivable            21,687       24,299       30,492
   Goodwill and other intangible
    assets                                10,684       11,446      224,394
   Foreclosed property                    54,378      142,208      136,275
   Net deferred tax asset                266,367      166,937       92,986
   Other assets                          174,742      183,160      247,114
                                     -----------  -----------  -----------
       Total assets                  $ 7,973,592  $ 7,443,196  $ 7,837,018
                                     ===========  ===========  ===========
 LIABILITIES AND SHAREHOLDERS'
  EQUITY
 Liabilities:
   Deposits:
        Demand                       $   864,708  $   793,414  $   740,727
        NOW                            1,320,136    1,424,781    1,344,973
        Money market                     967,938      891,252      729,283
        Savings                          193,591      183,894      186,699
        Time:
             Less than $100,000        1,576,505    1,496,700    1,643,059
             Greater than $100,000       990,289    1,002,359    1,132,034
             Brokered                    684,581      676,772      710,813
                                     -----------  -----------  -----------
                      Total deposits   6,597,748    6,469,172    6,487,588
    Federal funds purchased,
     repurchase agreements, and
     other short-term borrowings         102,107      101,067      102,480
    Federal Home Loan Bank advances       55,125       55,125      114,303
    Long-term debt                       150,166      150,146      150,086
    Unsettled securities purchases       177,532            -       17,588
    Accrued expenses and other
     liabilities                          40,766       32,171       39,078
                                     -----------  -----------  -----------
         Total liabilities             7,123,444    6,807,681    6,911,123
                                     -----------  -----------  -----------
 Shareholders' equity:
     Preferred stock, $1 par value;
      10,000,000 shares authorized;
          Series A; $10 stated
           value; 21,700 shares
           issued and outstanding            217          217          217
          Series B; $1,000 stated
           value; 180,000 shares
           issued and outstanding        176,049      175,711      174,727
          Series D; $1,000 stated
           value; 16,613 shares
           issued and outstanding         16,613            -            -
          Series F; $1,000 stated
           value; 195,872 shares
           issued and outstanding        195,872            -            -
          Series G; $1,000 stated
           value; 151,185 shares
           issued and outstanding        151,185            -            -
     Common stock, $1 par value;
      200,000,000 shares authorized;
      104,515,553, 94,685,003 and
      94,175,857 shares issued
      and outstanding                    104,516       94,685       94,176
     Common stock issuable; 397,138,
      336,437 and 262,002 shares           3,681        3,894        4,127
     Capital surplus                     655,350      665,496      622,803
     Accumulated deficit                (480,831)    (335,567)     (15,481)
     Accumulated other comprehensive
      income                              27,496       31,079       45,326
                                     -----------  -----------  -----------
         Total shareholders' equity      850,148      635,515      925,895
                                     -----------  -----------  -----------
         Total liabilities and
          shareholders' equity       $ 7,973,592  $ 7,443,196  $ 7,837,018
                                     ===========  ===========  ===========




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

                                                             2011
                                                 -------------------------
                                                   Average            Avg.
(dollars in thousands, taxable equivalent)         Balance   Interest Rate
                                                 ----------  -------- ----
Assets:
Interest-earning assets:
  Loans, net of unearned income (1)(2)           $4,598,860  $ 61,070 5.39%
  Taxable securities (3)                          1,599,481    13,345 3.34
  Tax-exempt securities (1)(3)                       25,827       424 6.57
  Federal funds sold and other interest-earning
   assets                                           677,453     1,126  .66
                                                 ----------  --------
     Total interest-earning assets                6,901,621    75,965 4.45
                                                 ----------  --------
Non-interest-earning assets:
  Allowance for loan losses                        (169,113)
  Cash and due from banks                           134,341
  Premises and equipment                            179,353
  Other assets (3)                                  548,348
                                                 ----------
     Total assets                                $7,594,550
                                                 ==========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
    NOW                                         $1,373,142  $  1,324  .39
    Money market                                   928,542     2,028  .89
    Savings                                        187,423        77  .17
    Time less than $100,000                      1,540,342     5,451 1.44
    Time greater than $100,000                     990,881     4,151 1.70
    Brokered                                       698,288     2,130 1.24
                                                 ----------  --------
       Total interest-bearing deposits            5,718,618    15,161 1.08
                                                 ----------  --------
 Federal funds purchased and other borrowings       101,097     1,042 4.18
 Federal Home Loan Bank advances                     55,125       590 4.34
 Long-term debt                                     150,157     2,780 7.51
                                                 ----------  --------
      Total borrowed funds                          306,379     4,412 5.84
                                                 ----------  --------
      Total interest-bearing liabilities          6,024,997    19,573 1.32
                                                             --------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits                     841,351
  Other liabilities                                  58,634
                                                 ----------
     Total liabilities                            6,924,982
Shareholders' equity                                669,568
                                                 ----------
     Total liabilities and shareholders' equity  $7,594,550
                                                 ==========
Net interest revenue                                         $ 56,392
                                                             ========
Net interest-rate spread                                              3.13%
                                                                      ====
Net interest margin (4)                                               3.30%
                                                                      ====

(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 $27.2 million in 2011 and $43.2 million in 2010 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 Three Months Ended March 31,

                                                              2010
                                                 -------------------------
                                                   Average            Avg.
(dollars in thousands, taxable equivalent)         Balance   Interest Rate
                                                 ----------  -------- ----
Assets:
Interest-earning assets:
  Loans, net of unearned income (1)(2)           $5,172,847  $ 72,219 5.66%
  Taxable securities (3)                          1,487,646    15,892 4.27
  Tax-exempt securities (1)(3)                       30,050       509 6.78
  Federal funds sold and other interest-earning
   assets                                           394,348     1,229 1.25
                                                 ----------  --------
     Total interest-earning assets                7,084,891    89,849 5.13
                                                 ----------  --------
Non-interest-earning assets:
  Allowance for loan losses                        (187,288)
  Cash and due from banks                           104,545
  Premises and equipment                            181,927
  Other assets (3)                                  762,228
                                                 ----------
     Total assets                                $7,946,303
                                                 ==========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
  Interest-bearing deposits:
    NOW                                          $1,361,696  $  1,854  .55
    Money market                                    723,470     1,757  .98
    Savings                                         180,448        84  .19
    Time less than $100,000                       1,692,652     8,891 2.13
    Time greater than $100,000                    1,155,776     6,770 2.38
    Brokered                                        736,999     4,537 2.50
                                                 ----------  --------
      Total interest-bearing deposits             5,851,041    23,893 1.66
                                                 ----------  --------
 Federal funds purchased and other borrowings       102,058     1,038 4.12
 Federal Home Loan Bank advances                    114,388       977 3.46
 Long-term debt                                     150,078     2,662 7.19
                                                 ----------  --------
      Total borrowed funds                          366,524     4,677 5.18
                                                 ----------  --------
      Total interest-bearing liabilities          6,217,565    28,570 1.86
                                                             --------
Non-interest-bearing liabilities:
  Non-interest-bearing deposits                     718,975
  Other liabilities                                  64,337
                                                 ----------
      Total liabilities                           7,000,877
Shareholders' equity                                945,426
                                                 ----------
      Total liabilities and shareholders' equity $7,946,303
                                                 ==========
Net interest revenue                                         $ 61,279
                                                             ========
Net interest-rate spread                                              3.27%
                                                                      ====
Net interest margin (4)                                               3.49%
                                                                      ====

(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 $27.2 million in 2011 and $43.2 million in 2010 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.

Contact Information

  • For more information:
    Rex S. Schuette
    Chief Financial Officer
    (706) 781-2266
    Email Contact