United Community Banks, Inc. Reports Earnings of $11.8 Million for First Quarter 2013

BLAIRSVILLE, GA--(Marketwired - Apr 25, 2013) - United Community Banks, Inc. (NASDAQ: UCBI)

• Net income of $11.8 million, or 15 cents per share

• Loans up $18.6 million from fourth quarter, or 2 percent annualized

• Core transaction deposits up $81.2 million in first quarter, or 10 percent annualized

• Solid improvement in key credit quality measures

United Community Banks, Inc. (NASDAQ: UCBI) today reported net income of $11.8 million, or 15 cents per share, for the first quarter of 2013. The first quarter results reflect modest loan growth, improved credit quality, strong core transaction deposit growth, and lower operating expenses compared with the same period a year ago.

"We are off to a good start to what we expect to be another productive year," said Jimmy Tallent, president and chief executive officer. "The first quarter continued our trend of meaningful improvement in every key measure of credit quality. We made particularly strong progress slowing nonperforming loan inflows which, at $9.67 million, were less than half the fourth quarter level. Nonperforming assets were $113 million and 1.65 percent of total assets at the end of the first quarter. That is down $15 million, or 12 percent, from the end of the fourth quarter, and down $49 million, or 30 percent, from a year ago. Additionally, core transaction deposits increased by $81 million, or 10 percent annualized."

Tallent continued, "We grew our loan portfolio by $19 million from the fourth quarter, for an annualized rate of 2 percent. Achieving quality loan growth remains a challenge in what continues to be a sluggish economy. We achieved this growth by bringing on new commercial lenders and by offering new retail loan products that are tailored to meet our customers' financing needs at competitive rates."

The first quarter provision for loan losses was $11 million, down $4 million from a year ago and $3 million from the fourth quarter. First quarter net charge-offs were $12.4 million compared to $14.5 million in the fourth quarter and $15.9 million a year ago.

"The inflow of nonperforming loans was the lowest quarterly total since the beginning of the economic cycle," Tallent said. "The benefit of this trend, which we expect to continue, was clearly evident in our lower net charge-offs and provisioning."

Taxable equivalent net interest revenue totaled $54.7 million, down $1.37 million from the fourth quarter and down $4.21 million from the first quarter a year ago. "The decrease primarily reflects lower yields on our loan and investment securities portfolios," said Tallent. "The lower loan portfolio yield reflects ongoing pricing pressure on new and renewed loans, and new retail product offerings with low introductory rates. The lower investment securities yield is due to reinvestment of cash flows at record low rates. We continue to look for reinvestment opportunities, with a focus on floating-rate securities, to alleviate market and duration risk. Floating-rate securities account for 34 percent of the investment securities portfolio, and improve our interest sensitivity position by reducing exposure to rising interest rates. We would like a higher yield but will not go out on the curve to chase one."

The taxable equivalent net interest margin was down six basis points from the fourth quarter, and 15 basis points from a year ago, to 3.38 percent. "Our net interest margin will remain under pressure as long as interest rates remain at this unprecedented low level," stated Tallent. "To offset the impact on net interest revenue, we remain sharply focused on growing our loan portfolio in the mid-single digit range by focusing on retail loans and by continuing to add commercial lenders in key markets."

First quarter fee revenue was $12.8 million, compared to $14.8 million in the fourth quarter and $15.4 million a year ago. The decrease from the preceding quarter was primarily due to a slow-down in mortgage refinancing activity, a lower overdraft fee total related to transaction and activity levels, and an incentive in the fourth quarter from our debit card network services provider. Closed mortgage loans totaled $69.8 million in the first quarter compared with $100 million in the fourth quarter and $81.7 million in the first quarter of 2012. The decrease in other fee revenue compared to a year earlier was primarily due to two non-core items in the first quarter of 2012: a federal tax refund of $1.1 million and $728,000 in gains from the sale of low income housing tax credits.

Operating expenses, excluding foreclosed property costs and a $4 million fourth quarter charge for settlement of litigation, were $41.4 million in the first quarter of 2013 compared to $42.1 million for the fourth quarter of 2012 and $43.1 million a year ago. The decrease from both periods was due to management's efforts to reduce costs and operate more efficiently, primarily through reduction in staff levels and related costs.

Foreclosed property costs were $2.33 million in the first quarter of 2013, compared to $4.61 million in the fourth quarter of 2012 and $3.83 million a year ago. First quarter 2013 costs included $1.19 million for maintenance and $1.15 million in net losses and write-downs. For the fourth quarter of 2012, foreclosed property costs included $1.42 million in maintenance and $3.19 million in net losses and write-downs. First quarter 2012 foreclosed property costs included $1.62 million in maintenance and $2.20 million in net losses and write-downs.

As of March 31, 2013, capital ratios were as follows: Tier 1 Risk-Based of 14.3 percent; Tier 1 Leverage of 9.7 percent; Total Risk-Based of 15.9 percent; Tier 1 Common Risk-Based of 8.9 percent; and, Tangible Equity-to-Assets of 8.5 percent.

"We know that challenges remain as the economy continues to struggle and interest rates are at record lows," Tallent continued. "Our focus is on growing net interest revenue by growing loans in a prudent and balanced manner, and pursuing opportunities to grow mortgage and advisory services market share. The environment forces us to be more efficient and work smarter to achieve our goals, and this team is fully committed and up to the challenge. We do expect continued improvement in credit measures that will translate into lower charge-off and provisioning levels."

Tallent concluded, "We constantly look for ways to improve our financial performance by growing our business and improving operating efficiency, all while maintaining the best customer satisfaction scores in the industry. We remain firmly committed to improving our financial results while delivering the best banking experience and growing shareholder value."

Conference Call
United will hold a conference call today, Thursday, April 25, 2013, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 31826472. The conference call also will be webcast and can be accessed by selecting 'Calendar of Events' within the Investor Relations section of United's website at www.ucbi.com.

About United Community Banks, Inc.
Headquartered in Blairsville, United Community Banks, Inc. is the third-largest bank holding company in Georgia. United has assets of $6.8 billion and operates 103 banking offices throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina, east Tennessee and northwest South Carolina. United specializes in providing personalized community banking services to individuals and small to mid-size businesses and also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United's common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at United's website at www.ucbi.com.

Safe Harbor
This news release contains forward-looking statements, as defined by federal securities laws, including statements about United's financial outlook and business environment. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some of the risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to United's filings with the Securities and Exchange Commission including its 2012 Annual Report on Form 10-K under the sections entitled "Forward-Looking Statements" and "Risk Factors." Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
																			First
				2013			2012												Quarter
(in thousands, except per share data; taxable equivalent)				First Quarter			Fourth Quarter			Third Quarter			Second Quarter			First Quarter			2013-2012 Change
INCOME SUMMARY
Interest revenue				$	62,134		$	64,450		$	65,978		$	66,780		$	70,221
Interest expense					7,475			8,422			8,607			9,944			11,357
	Net interest revenue				54,659			56,028			57,371			56,836			58,864		(7	)%
Provision for loan losses					11,000			14,000			15,500			18,000			15,000
Fee revenue					12,826			14,761			13,764			12,867			15,379		(17	)
	Total revenue				56,485			56,789			55,635			51,703			59,243
Operating expenses					43,770			50,726			44,783			44,310			46,955		(7	)
Income before income taxes					12,715			6,063			10,852			7,393			12,288		3
Income tax expense					950			802			284			894			760
	Net income				11,765			5,261			10,568			6,499			11,528		2
Preferred dividends and discount accretion					3,052			3,045			3,041			3,032			3,030
Net income available to common shareholders				$	8,713		$	2,216		$	7,527		$	3,467		$	8,498		3
PERFORMANCE MEASURES
	Per common share:
		Diluted income		$	.15		$	.04		$	.13		$	.06		$	.15		-
		Book value			6.85			6.67			6.75			6.61			6.68		3
		Tangible book value (2)			6.76			6.57			6.64			6.48			6.54		3
	Key performance ratios:
		Return on equity (1)(3)			8.51	%		2.15	%		7.43	%		3.51	%		8.78	%
		Return on assets (3)			.70			.31			.63			.37			.66
		Net interest margin (3)			3.38			3.44			3.60			3.43			3.53
		Efficiency ratio			64.97			71.69			62.95			63.84			63.31
		Equity to assets			8.60			8.63			8.75			8.33			8.19
		Tangible equity to assets (2)			8.53			8.55			8.66			8.24			8.08
		Tangible common equity to assets (2)			5.66			5.67			5.73			5.45			5.33
		Tangible common equity to risk-weighted assets (2)			8.45			8.26			8.44			8.37			8.21
ASSET QUALITY *
	Non-performing loans			$	96,006		$	109,894		$	115,001		$	115,340		$	129,704
	Foreclosed properties				16,734			18,264			26,958			30,421			31,887
		Total non-performing assets (NPAs)			112,740			128,158			141,959			145,761			161,591
	Allowance for loan losses				105,753			107,137			107,642			112,705			113,601
	Net charge-offs				12,384			14,505			20,563			18,896			15,867
	Allowance for loan losses to loans				2.52	%		2.57	%		2.60	%		2.74	%		2.75	%
	Net charge-offs to average loans (3)				1.21			1.39			1.99			1.85			1.55
	NPAs to loans and foreclosed properties				2.68			3.06			3.41			3.51			3.88
	NPAs to total assets				1.65			1.88			2.12			2.16			2.25
AVERAGE BALANCES($ in millions)
	Loans			$	4,197		$	4,191		$	4,147		$	4,156		$	4,168		1
	Investment securities				2,141			2,088			1,971			2,145			2,153		(1	)
	Earning assets				6,547			6,482			6,346			6,665			6,700		(2	)
	Total assets				6,834			6,778			6,648			6,993			7,045		(3	)
	Deposits				5,946			5,873			5,789			5,853			6,028		(1	)
	Shareholders' equity				588			585			582			583			577		2
	Common shares - basic (thousands)				58,081			57,971			57,880			57,840			57,764
	Common shares - diluted (thousands)				58,081			57,971			57,880			57,840			57,764
AT PERIOD END($ in millions)
	Loans *			$	4,194		$	4,175		$	4,138		$	4,119		$	4,128		2
	Investment securities				2,141			2,079			2,025			1,984			2,202		(3	)
	Total assets				6,849			6,802			6,699			6,737			7,174		(5	)
	Deposits				6,026			5,952			5,823			5,822			6,001		-
	Shareholders' equity				592			581			585			576			580		2
	Common shares outstanding (thousands)				57,767			57,741			57,710			57,641			57,603
(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.
* 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
			2013				2012
(in thousands, except per share data; taxable equivalent)			First Quarter				Fourth Quarter				Third Quarter				Second Quarter				First Quarter
Interest revenue reconciliation
Interest revenue - taxable equivalent			$	62,134			$	64,450			$	65,978			$	66,780			$	70,221
Taxable equivalent adjustment				(365	)			(381	)			(419	)			(444	)			(446	)
	Interest revenue (GAAP)		$	61,769			$	64,069			$	65,559			$	66,336			$	69,775
Net interest revenue reconciliation
Net interest revenue - taxable equivalent			$	54,659			$	56,028			$	57,371			$	56,836			$	58,864
Taxable equivalent adjustment				(365	)			(381	)			(419	)			(444	)			(446	)
	Net interest revenue (GAAP)		$	54,294			$	55,647			$	56,952			$	56,392			$	58,418
Total revenue reconciliation
Total operating revenue			$	56,485			$	56,789			$	55,635			$	51,703			$	59,243
Taxable equivalent adjustment				(365	)			(381	)			(419	)			(444	)			(446	)
	Total revenue (GAAP)		$	56,120			$	56,408			$	55,216			$	51,259			$	58,797
Income before taxes reconciliation
Income before taxes			$	12,715			$	6,063			$	10,852			$	7,393			$	12,288
Taxable equivalent adjustment				(365	)			(381	)			(419	)			(444	)			(446	)
	Income before taxes (GAAP)		$	12,350			$	5,682			$	10,433			$	6,949			$	11,842
Income tax expense reconciliation
Income tax expense			$	950			$	802			$	284			$	894			$	760
Taxable equivalent adjustment				(365	)			(381	)			(419	)			(444	)			(446	)
	Income tax expense (GAAP)		$	585			$	421			$	(135	)		$	450			$	314
Book value per common share reconciliation
Tangible book value per common share			$	6.76			$	6.57			$	6.64			$	6.48			$	6.54
Effect of goodwill and other intangibles				.09				.10				.11				.13				.14
	Book value per common share (GAAP)		$	6.85			$	6.67			$	6.75			$	6.61			$	6.68
Average equity to assets reconciliation
Tangible common equity to assets				5.66	%			5.67	%			5.73	%			5.45	%			5.33	%
Effect of preferred equity				2.87				2.88				2.93				2.79				2.75
	Tangible equity to assets			8.53				8.55				8.66				8.24				8.08
Effect of goodwill and other intangibles				.07				.08				.09				.09				.11
	Equity to assets (GAAP)			8.60	%			8.63	%			8.75	%			8.33	%			8.19	%
Tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets				8.45	%			8.26	%			8.44	%			8.37	%			8.21	%
Effect of other comprehensive income				.49				.51				.36				.28				.10
Effect of trust preferred				1.15				1.15				1.17				1.19				1.15
Effect of preferred equity				4.22				4.24				4.29				4.35				4.23
	Tier I capital ratio (Regulatory)			14.31	%			14.16	%			14.26	%			14.19	%			13.69	%

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End (1)
				2013			2012
(in millions)				First Quarter			Fourth Quarter			Linked Quarter Change
LOANS BY CATEGORY
Owner occupied commercial RE				$	1,130		$	1,131		$	(1	)
Income producing commercial RE					674			682			(8	)
Commercial & industrial					454			458			(4	)
Commercial construction					152			155			(3	)
	Total commercial				2,410			2,426			(16	)
Residential mortgage					850			829			21
Home equity lines of credit					396			385			11
Residential construction					372			382			(10	)
Consumer installment					166			153			13
	Total loans			$	4,194		$	4,175			19
LOANS BY MARKET
North Georgia				$	1,363		$	1,364			(1	)
Atlanta MSA					1,317			1,288			29
North Carolina					575			579			(4	)
Coastal Georgia					398			400			(2	)
Gainesville MSA					259			261			(2	)
East Tennessee					282			283			(1	)
	Total loans			$	4,194		$	4,175			19
RESIDENTIAL CONSTRUCTION
Dirt loans
	Acquisition & development			$	57		$	62			(5	)
	Land loans				42			46			(4	)
	Lot loans				188			193			(5	)
		Total			287			301			(14	)
House loans
	Spec				40			41			(1	)
	Sold				45			40			5
		Total			85			81			4
Total residential construction				$	372		$	382			(10	)
(1) Excludes total loans of $28.3 million, $33.4 million, $37.0 million, $41.5 million and $47.2 million as of March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, 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)
				2013			2012
(in millions)				First Quarter			First Quarter			Year over Year Change
LOANS BY CATEGORY
Owner occupied commercial RE				$	1,130		$	1,137		$	(7	)
Income producing commercial RE					674			706			(32	)
Commercial & industrial					454			440			14
Commercial construction					152			167			(15	)
	Total commercial				2,410			2,450			(40	)
Residential mortgage					850			836			14
Home equity lines of credit					396			295			101
Residential construction					372			436			(64	)
Consumer installment					166			111			55
	Total loans			$	4,194		$	4,128			66
LOANS BY MARKET
North Georgia				$	1,363		$	1,408			(45	)
Atlanta MSA					1,317			1,239			78
North Carolina					575			588			(13	)
Coastal Georgia					398			366			32
Gainesville MSA					259			262			(3	)
East Tennessee					282			265			17
	Total loans			$	4,194		$	4,128			66
RESIDENTIAL CONSTRUCTION
Dirt loans
	Acquisition & development			$	57		$	86			(29	)
	Land loans				42			57			(15	)
	Lot loans				188			204			(16	)
		Total			287			347			(60	)
House loans
	Spec				40			57			(17	)
	Sold				45			32			13
		Total			85			89			(4	)
Total residential construction				$	372		$	436			(64	)
(1) Excludes total loans of $28.3 million, $33.4 million, $37.0 million, $41.5 million and $47.2 million as of March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, 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)
				2013			2012
				First			Fourth			Third			Second			First
(in millions)				Quarter			Quarter			Quarter			Quarter			Quarter
LOANS BY CATEGORY
Owner occupied commercial RE				$	1,130		$	1,131		$	1,126		$	1,140		$	1,137
Income producing commercial RE					674			682			693			697			706
Commercial & industrial					454			458			460			450			440
Commercial construction					152			155			161			169			167
	Total commercial				2,410			2,426			2,440			2,456			2,450
Residential mortgage					850			829			833			834			836
Home equity lines of credit					396			385			341			294			295
Residential construction					372			382			389			409			436
Consumer installment					166			153			135			126			111
	Total loans			$	4,194		$	4,175		$	4,138		$	4,119		$	4,128
LOANS BY MARKET
North Georgia				$	1,363		$	1,364		$	1,383		$	1,387		$	1,408
Atlanta MSA					1,317			1,288			1,257			1,252			1,239
North Carolina					575			579			579			576			588
Coastal Georgia					398			400			380			369			366
Gainesville MSA					259			261			256			259			262
East Tennessee					282			283			283			276			265
	Total loans			$	4,194		$	4,175		$	4,138		$	4,119		$	4,128
RESIDENTIAL CONSTRUCTION
Dirt loans
	Acquisition & development			$	57		$	62		$	71		$	78		$	86
	Land loans				42			46			41			45			57
	Lot loans				188			193			196			203			204
		Total			287			301			308			326			347
House loans
	Spec				40			41			44			49			57
	Sold				45			40			37			34			32
		Total			85			81			81			83			89
Total residential construction				$	372		$	382		$	389		$	409		$	436
(1) Excludes total loans of $28.3 million, $33.4 million, $37.0 million, $41.5 million and $47.2 million as of March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, 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 2013
			Non-performing				Foreclosed				Total
(in thousands)			Loans				Properties				NPAs
NPAs BY CATEGORY
Owner occupied CRE			$	8,142			$	4,750			$	12,892
Income producing CRE				9,162				834				9,996
Commercial & industrial				29,545				-				29,545
Commercial construction				22,359				3,027				25,386
	Total commercial			69,208				8,611				77,819
Residential mortgage				10,901				3,463				14,364
Home equity lines of credit				916				-				916
Residential construction				14,592				4,660				19,252
Consumer installment				389				-				389
	Total NPAs		$	96,006			$	16,734			$	112,740
	Balance as a % of Unpaid Principal			66.3	%			45.0	%			62.0	%
NPAs BY MARKET
North Georgia			$	63,210			$	6,616			$	69,826
Atlanta MSA				17,380				3,524				20,904
North Carolina				8,519				2,533				11,052
Coastal Georgia				3,523				1,449				4,972
Gainesville MSA				911				370				1,281
East Tennessee				2,463				2,242				4,705
	Total NPAs		$	96,006			$	16,734			$	112,740
NPA ACTIVITY
Beginning Balance			$	109,894			$	18,264			$	128,158
Loans placed on non-accrual				9,665				-				9,665
Payments received				(6,809	)			-				(6,809	)
Loan charge-offs				(10,456	)			-				(10,456	)
Foreclosures				(6,288	)			6,288				-
Capitalized costs				-				54				54
Note / property sales				-				(6,726	)			(6,726	)
Write downs				-				(1,041	)			(1,041	)
Net losses on sales				-				(105	)			(105	)
	Ending Balance		$	96,006			$	16,734			$	112,740
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
(2) Annualized.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
			Fourth Quarter 2012
			Non-performing				Foreclosed				Total
(in thousands)			Loans				Properties				NPAs
NPAs BY CATEGORY
Owner occupied CRE			$	12,599			$	4,989			$	17,588
Income producing CRE				9,549				490				10,039
Commercial & industrial				31,817				-				31,817
Commercial construction				23,843				2,204				26,047
	Total commercial			77,808				7,683				85,491
Residential mortgage				11,151				4,753				15,904
Home equity lines of credit				1,438				-				1,438
Residential construction				18,702				5,828				24,530
Consumer installment				795				-				795
	Total NPAs		$	109,894			$	18,264			$	128,158
	Balance as a% of Unpaid Principal			69.5	%			39.7	%			62.8	%
NPAs BY MARKET
North Georgia			$	69,950			$	8,219			$	78,169
Atlanta MSA				18,556				3,442				21,998
North Carolina				11,014				2,579				13,593
Coastal Georgia				3,810				1,609				5,419
Gainesville MSA				903				556				1,459
East Tennessee				5,661				1,859				7,520
	Total NPAs		$	109,894			$	18,264			$	128,158
NPA ACTIVITY
Beginning Balance			$	115,001			$	26,958			$	141,959
Loans placed on non-accrual				20,211				-				20,211
Payments received				(6,458	)			-				(6,458	)
Loan charge-offs				(11,722	)			-				(11,722	)
Foreclosures				(7,138	)			7,138				-
Capitalized costs				-				201				201
Note / property sales				-				(12,845	)			(12,845	)
Write downs				-				(1,438	)			(1,438	)
Net losses on sales				-				(1,750	)			(1,750	)
	Ending Balance		$	109,894			$	18,264			$	128,158
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
(2) Annualized.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality (1)
			Third Quarter 2012
			Non-performing				Foreclosed				Total
(in thousands)			Loans				Properties				NPAs
NPAs BY CATEGORY
Owner occupied CRE			$	14,140			$	7,170			$	21,310
Income producing CRE				11,756				1,597				13,353
Commercial & industrial				32,678				-				32,678
Commercial construction				18,590				3,121				21,711
	Total commercial			77,164				11,888				89,052
Residential mortgage				12,629				6,031				18,660
Home equity lines of credit				1,367				-				1,367
Residential construction				22,935				9,039				31,974
Consumer installment				906				-				906
	Total NPAs		$	115,001			$	26,958			$	141,959
	Balance as a % of Unpaid Principal			68.8	%			36.4	%			58.8	%
NPAs BY MARKET
North Georgia			$	72,211			$	14,582			$	86,793
Atlanta MSA				21,349				5,926				27,275
North Carolina				9,622				2,771				12,393
Coastal Georgia				6,822				864				7,686
Gainesville MSA				840				1,328				2,168
East Tennessee				4,157				1,487				5,644
	Total NPAs		$	115,001			$	26,958			$	141,959
NPA ACTIVITY
Beginning Balance			$	115,340			$	30,421			$	145,761
Loans placed on non-accrual				30,535				-				30,535
Payments received				(3,646	)			-				(3,646	)
Loan charge-offs				(19,227	)			-				(19,227	)
Foreclosures				(8,001	)			8,001				-
Capitalized costs				-				102				102
Note / property sales				-				(8,822	)			(8,822	)
Write downs				-				(2,394	)			(2,394	)
Net losses on sales				-				(350	)			(350	)
	Ending Balance		$	115,001			$	26,958			$	141,959
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
(2) Annualized.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality(1)
			First Quarter 2013							Fourth Quarter 2012						Third Quarter 2012
(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			$	1,922			.69	%		$	4,997		1.76	%		$	6,192			3.56	%
Income producing CRE				3,321			1.99				1,153		.67				1,982			.70
Commercial & industrial				1,501			1.34				135		.12				(259	)		(.23	)
Commercial construction				(4	)		(.01	)			1,688		4.25				3,190			7.74
	Total commercial			6,740			1.14				7,973		1.30				11,105			1.81
Residential mortgage				1,635			.79				3,254		1.55				2,846			1.40
Home equity lines of credit				512			.53				445		.49				681			.80
Residential construction				2,973			3.22				2,435		2.52				5,676			5.69
Consumer installment				524			1.35				398		1.10				255			.78
	Total		$	12,384			1.21			$	14,505		1.39			$	20,563			1.99
NET CHARGE-OFFS BY MARKET
North Georgia			$	4,910			1.42	%		$	4,474		1.26	%		$	6,451			1.84	%
Atlanta MSA				3,295			1.07				3,977		1.27				9,344			3.02
North Carolina				2,249			1.59				2,032		1.39				1,674			1.15
Coastal Georgia				821			.85				574		.60				2,486			2.67
Gainesville MSA				430			.67				1,331		2.04				294			.45
East Tennessee				679			.98				2,117		2.98				314			.45
	Total		$	12,384			1.21			$	14,505		1.39			$	20,563			1.99
(1) Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of Southern Community Bank.
(2) Annualized.

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Operations (Unaudited)
					Three Months Ended
					March 31,
(in thousands, except per share data)					2013			2012
Interest revenue:
	Loans, including fees				$	50,934		$	55,759
	Investment securities, including tax exempt of $212 and $250					9,965			13,004
	Deposits in banks and short-term investments					870			1,012
			Total interest revenue			61,769			69,775
Interest expense:
	Deposits:
		NOW				454			637
		Money market				562			641
		Savings				36			37
		Time				3,226			6,159
			Total deposit interest expense			4,278			7,474
	Short-term borrowings					516			1,045
	Federal Home Loan Bank advances					19			466
	Long-term debt					2,662			2,372
		Total interest expense				7,475			11,357
		Net interest revenue				54,294			58,418
	Provision for loan losses					11,000			15,000
		Net interest revenue after provision for loan losses				43,294			43,418
Fee revenue:
	Service charges and fees					7,403			7,783
	Mortgage loan and other related fees					2,655			2,099
	Brokerage fees					767			813
	Securities gains, net					116			557
	Loss from prepayment of debt					-			(482	)
	Other					1,885			4,609
		Total fee revenue				12,826			15,379
		Total revenue				56,120			58,797
Operating expenses:
	Salaries and employee benefits					23,592			25,225
	Communications and equipment					3,046			3,155
	Occupancy					3,367			3,771
	Advertising and public relations					938			846
	Postage, printing and supplies					863			979
	Professional fees					2,366			1,975
	Foreclosed property					2,333			3,825
	FDIC assessments and other regulatory charges					2,505			2,510
	Amortization of intangibles					705			732
	Other					4,055			3,937
		Total operating expenses				43,770			46,955
		Net income before income taxes				12,350			11,842
	Income tax expense					585			314
		Net income				11,765			11,528
	Preferred stock dividends and discount accretion					3,052			3,030
		Net income available to common shareholders			$	8,713		$	8,498
Earnings per common share - basic / diluted					$	.15		$	.15
Weighted average common shares outstanding - basic / diluted						58,081			57,764

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet
(in thousands, except share and per share data)						March 31, 2013				December 31, 2012				March 31, 2012
						(unaudited)				(audited)				(audited)
ASSETS
Cash and due from banks						$	57,638			$	66,536			$	53,147
Interest-bearing deposits in banks							107,390				124,613				139,439
Short-term investments							82,000				60,000				235,000
		Cash and cash equivalents					247,028				251,149				427,586
Securities available for sale							1,909,426				1,834,593				1,898,815
Securities held to maturity (fair value $247,087, $261,131 and $318,490)							231,087				244,184				303,636
Mortgage loans held for sale							18,290				28,821				24,809
Loans, net of unearned income							4,193,560				4,175,008				4,127,566
		Less allowance for loan losses					(105,753	)			(107,137	)			(113,601	)
			Loans, net				4,087,807				4,067,871				4,013,965
Assets covered by loss sharing agreements with the FDIC							42,096				47,467				72,854
Premises and equipment, net							168,036				168,920				174,419
Bank owned life insurance							82,114				81,867				80,956
Accrued interest receivable							18,302				18,659				20,292
Goodwill and other intangible assets							4,805				5,510				7,695
Foreclosed property							16,734				18,264				31,887
Unsettled securities sales							-				5,763				43,527
Other assets							23,643				29,191				73,252
		Total assets				$	6,849,368			$	6,802,259			$	7,173,693
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
	Deposits:
		Demand				$	1,298,425			$	1,252,605			$	1,101,757
		NOW					1,281,454				1,316,453				1,389,016
		Money market					1,165,836				1,149,912				1,123,734
		Savings					243,347				227,308				214,150
		Time:
			Less than $100,000				1,019,396				1,055,271				1,207,479
			Greater than $100,000				685,174				705,558				796,882
		Brokered					332,220				245,033				167,521
				Total deposits			6,025,852				5,952,140				6,000,539
	Short-term borrowings						51,999				52,574				101,925
	Federal Home Loan Bank advances						125				40,125				215,125
	Long-term debt						124,825				124,805				120,245
	Unsettled securities purchases						-				-				119,565
	Accrued expenses and other liabilities						54,349				51,210				36,755
		Total liabilities					6,257,150				6,220,854				6,594,154
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					178,937				178,557				177,451
		Series D; $1,000 stated value; 16,613 shares issued and outstanding					16,613				16,613				16,613
	Common stock, $1 par value; 100,000,000 shares authorized; 43,063,761, 42,423,870 and 41,688,647 shares issued and outstanding						43,064				42,424				41,689
	Common stock, non-voting, $1 par value; 30,000,000 shares authorized; 14,703,636, 15,316,794 and 15,914,209 shares issued and outstanding						14,704				15,317				15,914
	Common stock issuable; 133,469, 133,238 and 90,126 shares						2,726				3,119				2,948
	Capital surplus						1,059,222				1,057,951				1,056,135
	Accumulated deficit						(700,440	)			(709,153	)			(722,363	)
	Accumulated other comprehensive loss						(22,825	)			(23,640	)			(9,065	)
		Total shareholders' equity					592,218				581,405				579,539
		Total liabilities and shareholders' equity				$	6,849,368			$	6,802,259			$	7,173,693

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,
					2013									2012
(dollars in thousands, taxable equivalent)					Average Balance			Interest			Avg. Rate			Average Balance			Interest			Avg. Rate
Assets:
Interest-earning assets:
	Loans, net of unearned income (1)(2)				$	4,196,757		$	50,999		4.93	%		$	4,168,440		$	55,842		5.39	%
	Taxable securities (3)					2,119,085			9,753		1.84				2,127,794			12,754		2.40
	Tax-exempt securities (1)(3)					21,733			347		6.39				25,438			410		6.45
	Federal funds sold and other interest-earning assets					209,674			1,035		1.97				377,988			1,215		1.29
		Total interest-earning assets				6,547,249			62,134		3.84				6,699,660			70,221		4.21
Non-interest-earning assets:
	Allowance for loan losses					(110,941	)								(117,803	)
	Cash and due from banks					64,294									54,664
	Premises and equipment					169,280									174,849
	Other assets (3)					164,250									233,676
		Total assets			$	6,834,132								$	7,045,046
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
	Interest-bearing deposits:
		NOW			$	1,303,308			454		.14			$	1,458,112			637		.18
		Money market				1,257,409			562		.18				1,069,658			641		.24
		Savings				234,110			36		.06				205,402			37		.07
		Time less than $100,000				1,039,707			1,749		.68				1,271,351			3,026		.96
		Time greater than $100,000				694,553			1,477		.86				821,164			2,415		1.18
		Brokered time deposits				175,128			-		.00				161,335			718		1.79
			Total interest-bearing deposits			4,704,215			4,278		.37				4,987,022			7,474		.60
		Federal funds purchased and other borrowings				72,157			516		2.90				102,258			1,045		4.11
		Federal Home Loan Bank advances				33,069			19		.23				138,372			466		1.35
		Long-term debt				124,816			2,662		8.65				120,237			2,372		7.93
			Total borrowed funds			230,042			3,197		5.64				360,867			3,883		4.33
			Total interest-bearing liabilities			4,934,257			7,475		.61				5,347,889			11,357		.85
Non-interest-bearing liabilities:
		Non-interest-bearing deposits				1,241,527									1,040,587
		Other liabilities				70,839									79,612
			Total liabilities			6,246,623									6,468,088
Shareholders' equity						587,509									576,958
			Total liabilities and shareholders' equity		$	6,834,132								$	7,045,046
Net interest revenue								$	54,659								$	58,864
Net interest-rate spread											3.23	%								3.36	%
Net interest margin (4)											3.38	%								3.53	%
(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 $17.1 million in 2013 and $23.6 million in 2012 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.