10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from                      to                     

Commission file number 001-35095

UNITED COMMUNITY BANKS, INC.

(Exact name of registrant as specified in its charter)

Georgia	58-1807304
(State of Incorporation)	(I.R.S. Employer Identification No.)

125 Highway 515 East Blairsville, Georgia	30512
Address of Principal Executive Offices	(Zip Code)

(706) 781-2265

(Telephone Number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     YES  ¨    NO  x

Common stock, par value $1 per share 41,774,770 shares voting and 15,914,209 shares non-voting outstanding as of July 31, 2012.

INDEX

PART I - Financial Information
Item 1. Financial Statements
Consolidated Statement of Operations (unaudited) for the Three and Six Months Ended  June 30, 2012 and 2011	3
Consolidated Statement of Comprehensive (Loss) Income (unaudited) for the Three and Six Months Ended June 30, 2012 and 2011	4
Consolidated Balance Sheet at June 30, 2012 (unaudited), December 31, 2011  (audited) and June 30, 2011 (unaudited)	5
Consolidated Statement of Changes in Shareholders’ Equity (unaudited) for the  Six Months Ended June 30, 2012 and 2011	6
Consolidated Statement of Cash Flows (unaudited) for the Six Months Ended June  30, 2012 and 2011	7
Notes to Consolidated Financial Statements	8
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3. Quantitative and Qualitative Disclosures About Market Risk	52
Item 4. Controls and Procedures	52
PART II - Other Information
Item 1. Legal Proceedings	53
Item 1A. Risk Factors	53
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3. Defaults Upon Senior Securities	53
Item 4. Mine Safety Disclosures	53
Item 5. Other Information	53
Item 6. Exhibits	54

2

Part I – Financial Information

Item 1 – Financial Statements

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Operations (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands, except per share data)	2012			2011			2012			2011
Interest revenue:
Loans, including fees	$	54,178		$	60,958		$	109,937		$	122,065
Investment securities, including tax exempt of $262, $251, $512 and $510		11,062			14,792			24,066			28,396
Federal funds sold, reverse repurchase agreements, commercial paper and deposits in banks		1,096			752			2,108			1,571
Total interest revenue		66,336			76,502			136,111			152,032
Interest expense:
Deposits:
NOW		503			1,036			1,140			2,360
Money market		661			1,499			1,302			3,527
Savings		38			64			75			141
Time		5,073			10,995			11,232			22,727
Total deposit interest expense		6,275			13,594			13,749			28,755
Federal funds purchased, repurchase agreements and other short-term borrowings		904			1,074			1,949			2,116
Federal Home Loan Bank advances		390			570			856			1,160
Long-term debt		2,375			2,747			4,747			5,527
Total interest expense		9,944			17,985			21,301			37,558
Net interest revenue		56,392			58,517			114,810			114,474
Provision for loan losses		18,000			11,000			33,000			201,000
Net interest revenue after provision for loan losses		38,392			47,517			81,810			(86,526	)
Fee revenue:
Service charges and fees		7,816			7,608			15,599			14,328
Mortgage loan and other related fees		2,322			952			4,421			2,446
Brokerage fees		809			691			1,622			1,368
Securities gains, net		6,490			783			7,047			838
Loss from prepayment of debt		(6,199	)		(791	)		(6,681	)		(791	)
Other		1,629			4,662			6,238			7,554
Total fee revenue		12,867			13,905			28,246			25,743
Total revenue		51,259			61,422			110,056			(60,783	)
Operating expenses:
Salaries and employee benefits		24,297			26,436			49,522			51,360
Communications and equipment		3,211			3,378			6,366			6,722
Occupancy		3,539			3,805			7,310			7,879
Advertising and public relations		1,088			1,317			1,934			2,295
Postage, printing and supplies		916			1,085			1,895			2,203
Professional fees		1,952			2,350			3,927			5,680
Foreclosed property		1,851			1,891			5,676			66,790
FDIC assessments and other regulatory charges		2,545			3,644			5,055			9,057
Amortization of intangibles		730			760			1,462			1,522
Other		4,181			4,062			8,118			10,491
Total operating expenses		44,310			48,728			91,265			163,999
Net income (loss) before income taxes		6,949			12,694			18,791			(224,782	)
Income tax expense		450			666			764			526
Net income (loss)		6,499			12,028			18,027			(225,308	)
Preferred stock dividends and discount accretion		3,032			3,016			6,062			5,794
Net income (loss) available to common shareholders	$	3,467		$	9,012		$	11,965		$	(231,102	)
Earnings (loss) per common share - Basic	$	.06		$	.35		$	.21		$	(10.52	)
Earnings (loss) per common share - Diluted		.06			.16			.21			(10.52	)
Weighted average common shares outstanding - Basic		57,840			25,427			57,803			21,965
Weighted average common shares outstanding - Diluted		57,840			57,543			57,803			21,965

See accompanying notes to consolidated financial statements.

3

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Comprehensive (Loss) Income (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2012			2011			2012			2011
Net income (loss)	$	6,499		$	12,028		$	18,027		$	(225,308	)
Other comprehensive loss:
Unrealized (losses) gains on available for sale securities:
Unrealized holding gains arising during period		4,264			10,967			924			10,008
Reclassification adjustment for gains included in net income		(6,490	)		(783	)		(7,047	)		(838	)
Amortization of gains included in net income (loss) on available for sale securities transferred to held to maturity		(400	)		(504	)		(813	)		(1,167	)
Amortization of gains included in net income (loss) on derivative financial instruments accounted for as cash flow hedges		(714	)		(5,399	)		(2,314	)		(9,622	)
Unrealized losses on derivative financial instruments accounted for as cash flow hedges		(4,855	)					(4,855	)
Amortization of prior service cost and actuarial losses included in net periodic pension cost for defined benefit pension plans		154			—			308			—
Total other comprehensive (loss) income		(8,041	)		4,281			(13,797	)		(1,619	)
Comprehensive (loss) income	$	(1,542	)	$	16,309		$	4,230		$	(226,927	)

See accompanying notes to consolidated financial statements.

4

UNITED COMMUNITY BANKS, INC.

Consolidated Balance Sheet

	June 30,			December 31,			June 30,
	2012			2011			2011
(in thousands, except share and per share data)	(unaudited)			(audited)			(unaudited)
ASSETS
Cash and due from banks	$	50,596		$	53,807		$	163,331
Interest-bearing deposits in banks		133,857			139,609			41,863
Federal funds sold, reverse repurchase agreements, commercial paper and short-term investments		120,000			185,000			174,996
Cash and cash equivalents		304,453			378,416			380,190
Securities available for sale		1,701,583			1,790,047			1,816,613
Securities held to maturity (fair value $299,971, $343,531 and $379,231)		282,750			330,203			371,578
Mortgage loans held for sale		18,645			23,881			19,406
Loans, net of unearned income		4,119,235			4,109,614			4,163,447
Less allowance for loan losses		112,705			114,468			127,638
Loans, net		4,006,530			3,995,146			4,035,809
Assets covered by loss sharing agreements with the FDIC		65,914			78,145			95,726
Premises and equipment, net		172,200			175,088			178,208
Bank owned life insurance		81,265			80,599			80,134
Accrued interest receivable		20,151			20,693			21,291
Goodwill and other intangible assets		6,965			8,428			9,922
Foreclosed property		30,421			32,859			47,584
Other assets		46,229			69,915			95,834
Total assets	$	6,737,106		$	6,983,420		$	7,152,295
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	1,150,444		$	992,109		$	899,017
NOW		1,196,507			1,509,896			1,306,109
Money market		1,117,139			1,038,778			989,600
Savings		219,077			199,007			197,927
Time:
Less than $100,000		1,164,451			1,332,394			1,508,444
Greater than $100,000		764,343			847,152			981,154
Brokered		210,506			178,647			300,964
Total deposits		5,822,467			6,097,983			6,183,215
Federal funds purchased, repurchase agreements, and other short-term borrowings		53,656			102,577			103,666
Federal Home Loan Bank advances		125,125			40,625			40,625
Long-term debt		120,265			120,225			150,186
Unsettled securities purchases		—			10,325			35,634
Accrued expenses and other liabilities		39,598			36,199			36,368
Total liabilities		6,161,111			6,407,934			6,549,694
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		177,814			177,092			176,392
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;
41,726,509, 41,647,100 and 41,554,874 shares issued and outstanding		41,727			41,647			41,555
Common stock, non-voting, $1 par value; 30,000,000 shares authorized;
15,914,209 shares issued and outstanding		15,914			15,914			15,914
Common stock issuable; 94,657, 93,681 and 83,575 shares		2,893			3,233			3,574
Capital surplus		1,056,819			1,054,940			1,052,482
Accumulated deficit		(718,896	)		(730,861	)		(723,378	)
Accumulated other comprehensive (loss) income		(17,106	)		(3,309	)		19,232
Total shareholders’ equity		575,995			575,486			602,601
Total liabilities and shareholders’ equity	$	6,737,106		$	6,983,420		$	7,152,295

See accompanying notes to consolidated financial statements.

5

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Changes in Shareholders’ Equity (Unaudited)

For the Six Months Ended June 30,

	Preferred Stock															Non-Voting		Common									Accumulated Other
(in thousands, except share	Series		Series		Series		Series			Series			Common			Common		Stock			Capital			Accumulated			Comprehensive
and per share data)	A		B		D		F			G			Stock			Stock		Issuable			Surplus			Deficit			Income (Loss)			Total
Balance, December 31, 2010	$	217	$	175,711	$	—	$	—		$	—		$	18,937		$	—	$	3,894		$	741,244		$	(492,276	)	$	20,851		$	468,578
Net loss																									(225,308	)					(225,308	)
Other comprehensive loss																												(1,619	)		(1,619	)
Preferred for common equity exchange related to tax benefits preservation plan (1,551,126 common shares)						16,613								(1,551	)							(15,062	)								—
Penalty received on incomplete private equity transaction, net of tax expense																						3,250									3,250
Conversion of Series F and Series G Preferred Stock (20,618,156 voting and 15,914,209 non-voting common shares)								(195,872	)		(151,185	)		20,618			15,914					310,525									—
Common stock issued to dividend reinvestment plan and employee benefit plans (78,584 shares)														79								665									744
Common and preferred stock issued (3,467,699 common shares)								195,872			151,185			3,468								11,035									361,560
Amortization of stock options and restricted stock awards																						758									758
Vesting of restricted stock (1,417 shares issued, 6,382 shares deferred)														1					54			(55	)								—
Deferred compensation plan, net, including dividend equivalents																			127												127
Shares issued from deferred compensation plan (3,209 shares)														3					(501	)		498									—
Tax on option exercise and restricted stock vesting																						(376	)								(376	)
Preferred stock dividends:
Series A																									(7	)					(7	)
Series B				681																					(5,200	)					(4,519	)
Series D																									(587	)					(587	)
Balance, June 30, 2011	$	217	$	176,392	$	16,613	$	—		$	—		$	41,555		$	15,914	$	3,574		$	1,052,482		$	(723,378	)	$	19,232		$	602,601
Balance, December 31, 2011	$	217	$	177,092	$	16,613	$	—		$	—		$	41,647		$	15,914	$	3,233		$	1,054,940		$	(730,861	)	$	(3,309	)	$	575,486
Net income																									18,027						18,027
Other comprehensive loss																												(13,797	)		(13,797	)
Common stock issued to dividend reinvestment plan and to employee benefit plans (60,982 shares)														61								440									501
Amortization of stock options and restricted stock awards																						946									946
Vesting of restricted stock (15,790 shares issued, (8,399 shares deferred)														16					(151	)		206									71
Deferred compensation plan, net, including dividend equivalents																			101												101
Shares issued from deferred compensation plan (2,637 shares)														3					(290	)		287									—
Preferred stock dividends:
Series A																									(6	)					(6	)
Series B				722																					(5,222	)					(4,500	)
Series D																									(834	)					(834	)
Balance, June 30, 2012	$	217	$	177,814	$	16,613	$	—		$	—		$	41,727		$	15,914	$	2,893		$	1,056,819		$	(718,896	)	$	(17,106	)	$	575,995

See accompanying notes to consolidated financial statements.

6

UNITED COMMUNITY BANKS, INC.

Consolidated Statement of Cash Flows (Unaudited)

	Six Months Ended
	June 30,
(in thousands)	2012			2011
Operating activities:
Net income (loss)	$	18,027		$	(225,308	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and accretion		16,511			9,374
Provision for loan losses		33,000			201,000
Stock based compensation		946			758
Securities gains, net		(7,047	)		(838	)
Losses and write downs on sales of other real estate owned		2,943			60,505
Loss on prepayment of borrowings		6,681			791
Changes in assets and liabilities:
Other assets and accrued interest receivable		22,783			29,332
Accrued expenses and other liabilities		(6,754	)		1,078
Mortgage loans held for sale		5,236			16,502
Net cash provided by operating activities		92,326			93,194
Investing activities:
Investment securities held to maturity:
Proceeds from maturities and calls		45,741			34,742
Purchases		—			(141,862	)
Investment securities available for sale:
Proceeds from sales		371,103			106,603
Proceeds from maturities and calls		289,985			220,018
Purchases		(580,652	)		(875,250	)
Net (increase) decrease in loans		(58,765	)		64,778
Proceeds from loan sales		—			99,298
Proceeds collected from FDIC under loss sharing agreements		5,054			11,852
Proceeds from sales of premises and equipment		664			534
Purchases of premises and equipment		(2,581	)		(5,276	)
Proceeds from sale of other real estate		14,620			60,310
Net cash provided by (used in) investing activities		85,169			(424,253	)
Financing activities:
Net change in deposits		(275,516	)		(285,957	)
Net change in federal funds purchased, repurchase agreements, and other short-term borrowings		(53,401	)		2,599
Proceeds from Federal Home Loan Bank advances		1,489,000			—
Settlement of Federal Home Loan Bank advances		(1,406,701	)		(15,291	)
Proceeds from issuance of common stock for dividend reinvestment and employee benefit plans		501			744
Proceeds from issuance of common and preferred stock, net of offering costs		—			361,560
Proceeds from penalty on incomplete private equity transaction		—			3,250
Cash dividends on preferred stock		(5,341	)		(5,113	)
Net cash (used in) provided by financing activities		(251,458	)		61,792
Net change in cash and cash equivalents		(73,963	)		(269,267	)
Cash and cash equivalents at beginning of period		378,416			649,457
Cash and cash equivalents at end of period	$	304,453		$	380,190
Supplemental disclosures of cash flow information:
Cash paid (received) during the period for:
Interest	$	23,222		$	36,703
Income taxes		(27,105	)		1,527
Unsettled securities purchases		—			35,634

See accompanying notes to consolidated financial statements.

7

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Note 1 – Accounting Policies

The accounting and financial reporting policies of United Community Banks, Inc. (“United”) and its subsidiaries conform to accounting principles generally accepted in the United States of America (“GAAP”) and general banking industry practices. The accompanying interim consolidated financial statements have not been audited. All material intercompany balances and transactions have been eliminated. A more detailed description of United’s accounting policies is included in its Annual Report on Form 10-K for the year ended December 31, 2011.

In management’s opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. The results for interim periods are not necessarily indicative of results for the full year or any other interim periods.

Foreclosed property is initially recorded at fair value, less estimated costs to sell. If the fair value, less estimated costs to sell at the time of foreclosure, is less than the loan balance, the deficiency is charged against the allowance for loan losses. If the fair value, less cost to sell, of the foreclosed property decreases during the holding period, a valuation allowance is established with a charge to operating expenses. When the foreclosed property is sold, a gain or loss is recognized on the sale for the difference between the sales proceeds and the carrying amount of the property. Financed sales of foreclosed property are accounted for in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360-20, Real Estate Sales.

Note 2 – Accounting Standards Updates

In July 2012, the Financial Accounting Standards Board issued Accounting Standards Update No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (the revised standard). It allows companies to perform a “qualitative” assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The revised standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, and entities can choose to early adopt the revised guidance. It is not expected to have a material impact on United’s financial position, results of operations or disclosures.

Note 3 – Mergers and Acquisitions

On June 19, 2009, United Community Bank (“UCB” or the “Bank”) purchased substantially all the assets and assumed substantially all the liabilities of Southern Community Bank (“SCB”) from the Federal Deposit Insurance Corporation (“FDIC”), as Receiver of SCB. UCB and the FDIC entered loss sharing agreements regarding future losses incurred on loans and foreclosed loan collateral existing at June 19, 2009. Under the terms of the loss sharing agreements, the FDIC will absorb 80 percent of losses and share 80 percent of loss recoveries on the first $109 million of losses and, absorb 95 percent of losses and share in 95 percent of loss recoveries on losses exceeding $109 million. The term for loss sharing on 1-4 Family loans is ten years, while the term for loss sharing on all other loans is five years.

Under the loss sharing agreement, the portion of the losses expected to be indemnified by the FDIC is considered an indemnification asset in accordance with ASC 805 Business Combinations. The indemnification asset, referred to as “estimated loss reimbursement from the FDIC,” is included in the balance of “Assets covered by loss sharing agreements with the FDIC” on the Consolidated Balance Sheet. The indemnification asset was recognized at fair value, which was estimated at the acquisition date based on the terms of the loss sharing agreement. The indemnification asset is expected to be collected over a four-year average life. No valuation allowance was required.

Loans, foreclosed property and the estimated FDIC reimbursement resulting from the loss sharing agreements with the FDIC are reported as “Assets covered by loss sharing agreements with the FDIC” in the consolidated balance sheet.

The table below shows the components of covered assets at June 30, 2012 (in thousands).

(in thousands)	Purchased Impaired Loans		Other Purchased Loans		Other		Total
Commercial (secured by real estate)	$	—	$	28,021	$	—	$	28,021
Commercial & industrial		—		1,473		—		1,473
Construction and land development		525		4,709		—		5,234
Residential mortgage		145		6,429		—		6,574
Consumer installment		—		152		—		152
Total covered loans		670		40,784		—		41,454
Covered foreclosed property		—		—		14,098		14,098
Estimated loss reimbursement from the FDIC		—		—		10,362		10,362
Total covered assets	$	670	$	40,784	$	24,460	$	65,914

8

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Note 4 – Reverse Repurchase Agreements

United enters into reverse repurchase agreements in order to invest short-term funds. In addition, United enters into repurchase agreements and reverse repurchase agreements with the same counterparty in transactions commonly referred to as collateral swaps that are subject to master netting agreements under which the balances are netted in the balance sheet in accordance with ASC 210-20, Offsetting. The following table presents a summary of amounts outstanding under reverse repurchase agreements including those entered into in connection with repurchase agreements with the same counterparty under master netting agreements (in thousands).

	June 30, 2012
	Reverse Repurchase Agreements (Assets)			Repurchase Agreements (Liabilities)			Net Reported Balance (Asset)
Amounts subject to master netting agreements	$	200,000		$	200,000		$	—
Other reverse repurchase agreements		120,000			—			120,000
Total	$	320,000		$	200,000		$	120,000
Weighted average interest rate		1.27	%		.41	%

In addition to the collateral swap transactions, United has entered into offsetting securities lending agreements with counterparties that function similar to the collateral swaps. United had $80.0 million in offsetting securities lending positions outstanding at June 30, 2012.

Note 5 – Securities

Realized gains and losses are derived using the specific identification method for determining the cost of securities sold. The following table summarizes securities sales activity for the three and six month periods ended June 30, 2012 and 2011 (in thousands).

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Proceeds from sales	$	265,992	$	55,363		$	371,103	$	106,603
Gross gains on sales	$	6,490	$	838		$	7,047	$	1,169
Gross losses on sales		—		(55	)		—		(331	)
Net gains on sales of securities	$	6,490	$	783		$	7,047	$	838

Securities with a carrying value of $1.29 billion, $1.72 billion, and $2.11 billion were pledged to secure public deposits, FHLB advances and other secured borrowings at June 30, 2012, December 31, 2011 and June 30, 2011, respectively. Substantial borrowing capacity remains available under borrowing arrangements with the FHLB with currently pledged securities.

Securities are classified as held to maturity when management has the positive intent and ability to hold them until maturity. Securities held to maturity are carried at amortized cost.

9

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

The amortized cost, gross unrealized gains and losses and fair value of securities held to maturity at June 30, 2012, December 31, 2011 and June 30, 2011 are as follows (in thousands).

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of June 30, 2012
State and political subdivisions	$	51,801	$	5,586	$	—	$	57,387
Mortgage-backed securities (1)		230,949		11,635		—		242,584
Total	$	282,750	$	17,221	$	—	$	299,971
As of December 31, 2011
U.S. Government agencies	$	5,000	$	6	$	—	$	5,006
State and political subdivisions		51,903		4,058		13		55,948
Mortgage-backed securities (1)		273,300		9,619		342		282,577
Total	$	330,203	$	13,683	$	355	$	343,531
As of June 30, 2011
U.S. Government agencies	$	5,000	$	—	$	—	$	5,000
State and political subdivisions		49,122		1,823		292		50,653
Mortgage-backed securities (1)		317,456		6,184		62		323,578
Total	$	371,578	$	8,007	$	354	$	379,231

⁽¹⁾  All are residential type mortgage-backed securities

The cost basis, unrealized gains and losses, and fair value of securities available for sale at June 30, 2012, December 31, 2011 and June 30, 2011 are presented below (in thousands).

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of June 30, 2012
U.S. Government agencies	$	43,618	$	256	$	—	$	43,874
State and political subdivisions		25,704		1,462		7		27,159
Mortgage-backed securities (1)		1,408,047		25,723		339		1,433,431
Corporate bonds		119,198		—		9,160		110,038
Asset-backed securities		85,090		—		592		84,498
Other		2,583		—		—		2,583
Total	$	1,684,240	$	27,441	$	10,098	$	1,701,583
As of December 31, 2011
U.S. Government agencies	$	43,592	$	158	$	—	$	43,750
State and political subdivisions		24,997		1,345		3		26,339
Mortgage-backed securities (1)		1,576,064		33,988		143		1,609,909
Corporate bonds		119,110		—		11,432		107,678
Other		2,371		—		—		2,371
Total	$	1,766,134	$	35,491	$	11,578	$	1,790,047
As of June 30, 2011
U.S. Government agencies	$	77,930	$	61	$	514	$	77,477
State and political subdivisions		25,569		1,207		4		26,772
Mortgage-backed securities (1)		1,556,910		35,991		283		1,592,618
Corporate bonds		119,021		100		1,827		117,294
Other		2,452		—		—		2,452
Total	$	1,781,882	$	37,359	$	2,628	$	1,816,613

⁽¹⁾  All are residential type mortgage-backed securities

10

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

The following table summarizes held to maturity securities in an unrealized loss position as of, December 31, 2011 and June 30, 2011 (in thousands). As of June 30, 2012, there were no held to maturity securities in an unrealized loss position.

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of December 31, 2011
State and political subdivisions	$	—	$	—	$	363	$	13	$	363	$	13
Mortgage-backed securities		10,967		342		—		—		10,967		342
Total unrealized loss position	$	10,967	$	342	$	363	$	13	$	11,330	$	355
As of June 30, 2011
State and political subdivisions	$	10,160	$	292	$	—	$	—	$	10,160	$	292
Mortgage-backed securities		25,160		60		1,937		2		27,097		62
Total unrealized loss position	$	35,320	$	352	$	1,937	$	2	$	37,257	$	354

The following table summarizes available for sale securities in an unrealized loss position as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of June 30, 2012
State and political subdivisions	$	5,696	$	3	$	11	$	4	$	5,707	$	7
Mortgage-backed securities		104,644		332		19,436		7		124,080		339
Corporate bonds		16,500		3,500		93,488		5,660		109,988		9,160
Asset-backed securities		74,097		592		—		—		74,097		592
Total unrealized loss position	$	200,937	$	4,427	$	112,935	$	5,671	$	313,872	$	10,098
As of December 31, 2011
State and political subdivisions	$	—	$	—	$	11	$	3	$	11	$	3
Mortgage-backed securities		98,687		110		22,719		33		121,406		143
Corporate bonds		42,864		5,197		64,765		6,235		107,629		11,432
Total unrealized loss position	$	141,551	$	5,307	$	87,495	$	6,271	$	229,046	$	11,578
As of June 30, 2011
U.S. Government agencies	$	54,482	$	514	$	—	$	—	$	54,482	$	514
State and political subdivisions		301		—		10		4		311		4
Mortgage-backed securities		169,907		283		—		—		169,907		283
Corporate bonds		97,145		1,827		—		—		97,145		1,827
Total unrealized loss position	$	321,835	$	2,624	$	10	$	4	$	321,845	$	2,628

At June 30, 2012, there were 36 available for sale securities and no held to maturity securities that were in an unrealized loss position. United does not intend to sell nor believes it will be required to sell securities in an unrealized loss position prior to the recovery of their amortized cost basis. Unrealized losses at June 30, 2012 were primarily attributable to changes in interest rates, however the unrealized losses in corporate bonds also reflect downgrades in the underlying securities ratings. The bonds remain above investment grade and United does not consider them to be impaired. Unrealized losses at June 30, 2011 were primarily attributable to changes in interest rates.

11

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, among other factors. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analyst’s reports. No impairment charges were recognized during the second quarter or six months ended June 30, 2012 or 2011.

The amortized cost and fair value of held to maturity and available for sale securities at June 30, 2012, by contractual maturity, are presented in the following table (in thousands).

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Government agencies:
5 to 10 years	$	43,618	$	43,874	$	—	$	—
		43,618		43,874		—		—
State and political subdivisions:
Within 1 year		6,567		6,576		—		—
1 to 5 years		14,960		15,982		6,826		7,419
5 to 10 years		3,329		3,676		21,808		24,264
More than 10 years		848		925		23,167		25,704
		25,704		27,159		51,801		57,387
Corporate bonds:
1 to 5 years		28,198		27,182		—		—
5 to 10 years		90,000		82,556		—		—
More than 10 years		1,000		300		—		—
		119,198		110,038		—		—
Asset-backed securities
5 to 10 years		85,090		84,498		—		—
		85,090		84,498		—		—
Other:
More than 10 years		2,583		2,583		—		—
		2,583		2,583		—		—
Total securities other than mortgage-backed securities:
Within 1 year		6,567		6,576		—		—
1 to 5 years		43,158		43,164		6,826		7,419
5 to 10 years		222,037		214,604		21,808		24,264
More than 10 years		4,431		3,808		23,167		25,704
Mortgage-backed securities		1,408,047		1,433,431		230,949		242,584
	$	1,684,240	$	1,701,583	$	282,750	$	299,971

Expected maturities may differ from contractual maturities because issuers and borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

12

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Note 6 – Loans and Allowance for Loan Losses

Major classifications of loans as of June 30, 2012, December 31, 2011 and June 30, 2011, are summarized as follows (in thousands).

	June 30,		December 31,		June 30,
	2012		2011		2011
Commercial (secured by real estate)	$	1,836,477	$	1,821,414	$	1,741,754
Commercial & industrial		450,222		428,249		428,058
Commercial construction		169,338		164,155		195,190
Total commercial		2,456,037		2,413,818		2,365,002
Residential mortgage		1,128,336		1,134,902		1,177,226
Residential construction		408,966		448,391		501,909
Consumer installment		125,896		112,503		119,310
Total loans		4,119,235		4,109,614		4,163,447
Less allowance for loan losses		112,705		114,468		127,638
Loans, net	$	4,006,530	$	3,995,146	$	4,035,809

The Bank makes loans and extensions of credit to individuals and a variety of firms and corporations located primarily in counties in north Georgia, the Atlanta, Georgia metropolitan statistical area, the Gainesville, Georgia metropolitan statistical area, coastal Georgia, western North Carolina and east Tennessee. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate and is dependent upon the real estate market.

Changes in the allowance for loan losses for the three and six months ended June 30, 2012 and 2011 are summarized as follows (in thousands).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Balance beginning of period	$	113,601	$	133,121	$	114,468	$	174,695
Provision for loan losses		18,000		11,000		33,000		201,000
Charge-offs:
Commercial (secured by real estate)		4,418		3,433		8,346		52,140
Commercial & industrial		888		604		1,644		4,966
Commercial construction		88		980		452		50,695
Residential mortgage		4,014		4,667		9,781		41,343
Residential construction		9,846		6,769		15,475		99,024
Consumer installment		408		883		1,161		1,979
Total loans charged-off		19,662		17,336		36,859		250,147
Recoveries:
Commercial (secured by real estate)		69		174		300		274
Commercial & industrial		113		81		200		403
Commercial construction		—		111		30		111
Residential mortgage		152		78		544		371
Residential construction		283		140		598		257
Consumer installment		149		269		424		674
Total recoveries		766		853		2,096		2,090
Net charge-offs		18,896		16,483		34,763		248,057
Balance end of period	$	112,705	$	127,638	$	112,705	$	127,638

13

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

The following table presents the balance and activity in the allowance for loan losses by portfolio segment and the recorded investment in loans by portfolio segment based on the impairment method as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	Commercial (Secured by Real Estate)			Commercial & Industrial			Commercial Construction			Residential Mortgage			Residential Construction			Consumer Installment			Unallocated			Total
Six Months Ended June 30, 2012
Allowance for loan losses:
Beginning balance	$	31,644		$	5,681		$	6,097		$	29,076		$	30,379		$	2,124		$	9,467		$	114,468
Charge-offs		(8,346	)		(1,644	)		(452	)		(9,781	)		(15,475	)		(1,161	)		—			(36,859	)
Recoveries		300			200			30			544			598			424			—			2,096
Provision		6,288			1,061			4,662			6,471			13,712			1,183			(377	)		33,000
Ending balance	$	29,886		$	5,298		$	10,337		$	26,310		$	29,214		$	2,570		$	9,090		$	112,705
Ending allowance attributable to loans:
Individually evaluated for impairment	$	8,544		$	753		$	2,476		$	1,389		$	4,188		$	20		$	—		$	17,370
Collectively evaluated for impairment		21,342			4,545			7,861			24,921			25,026			2,550			9,090			95,335
Total ending allowance balance	$	29,886		$	5,298		$	10,337		$	26,310		$	29,214		$	2,570		$	9,090		$	112,705
Loans:
Individually evaluated for impairment	$	130,838		$	57,747		$	42,833		$	19,844		$	41,906		$	511		$	—		$	293,679
Collectively evaluated for impairment		1,705,639			392,475			126,505			1,108,492			367,060			125,385			—			3,825,556
Total loans	$	1,836,477		$	450,222		$	169,338		$	1,128,336		$	408,966		$	125,896		$	—		$	4,119,235
December 31, 2011
Allowance for loan losses:
Ending allowance attributable to loans:
Individually evaluated for impairment	$	7,491		$	1,117		$	236		$	2,234		$	3,731		$	16		$	—		$	14,825
Collectively evaluated for impairment		24,153			4,564			5,861			26,842			26,648			2,108			9,467			99,643
Total ending allowance balance	$	31,644		$	5,681		$	6,097		$	29,076		$	30,379		$	2,124		$	9,467		$	114,468
Loans:
Individually evaluated for impairment	$	107,831		$	57,828		$	26,245		$	18,376		$	46,687		$	292		$	—		$	257,259
Collectively evaluated for impairment		1,713,583			370,421			137,910			1,116,526			401,704			112,211			—			3,852,355
Total loans	$	1,821,414		$	428,249		$	164,155		$	1,134,902		$	448,391		$	112,503		$	—		$	4,109,614
Six Months Ended June 30, 2011
Allowance for loan losses:
Beginning balance	$	31,191		$	7,580		$	6,780		$	22,305		$	92,571		$	3,030		$	11,238		$	174,695
Charge-offs		(52,140	)		(4,966	)		(50,695	)		(41,343	)		(99,024	)		(1,979	)		—			(250,147	)
Recoveries		274			403			111			371			257			674			—			2,090
Provision		42,671			4,016			51,256			49,063			55,249			498			(1,753	)		201,000
Ending balance	$	21,996		$	7,033		$	7,452		$	30,396		$	49,053		$	2,223		$	9,485		$	127,638
Ending allowance attributable to loans:
Individually evaluated for impairment	$	78		$	—		$	450		$	639		$	—		$	—		$	—		$	1,167
Collectively evaluated for impairment		21,918			7,033			7,002			29,757			49,053			2,223			9,485			126,471
Total ending allowance balance	$	21,996		$	7,033		$	7,452		$	30,396		$	49,053		$	2,223		$	9,485		$	127,638
Loans:
Individually evaluated for impairment	$	14,780		$	—		$	1,015		$	7,247		$	12,611		$	—		$	—		$	35,653
Collectively evaluated for impairment		1,726,974			428,058			194,175			1,169,979			489,298			119,310			—			4,127,794
Total loans	$	1,741,754		$	428,058		$	195,190		$	1,177,226		$	501,909		$	119,310		$	—		$	4,163,447

In calculating specific reserves, United reviews all loans that are on nonaccrual with a balance of $500,000 or greater for impairment, as well as accruing substandard relationships greater than $2 million and all troubled debt restructurings (“TDRs”). A loan is considered impaired when, based on current events and circumstances, it is probable that all amounts due, according to the contractual terms of the loan, will not be collected. All troubled debt restructurings are considered impaired regardless of accrual status. Impaired loans are measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, at the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. Interest payments received on impaired nonaccrual loans are applied as a reduction of the outstanding principal balance. For impaired loans not on nonaccrual status, interest is accrued according to the terms of the loan agreement. Impairment amounts are recorded quarterly and specific reserves are recorded in the allowance for loan losses.

At June 30, 2012, December 31, 2011 and June 30, 2011, loans with a carrying value of $1.61 billion, $1.52 billion and $991 million were pledged as collateral to secure FHLB advances and other contingent funding sources.

14

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

In the first quarter of 2011, United’s Board of Directors adopted an accelerated problem asset disposition plan which included the bulk sale of $267 million in classified loans. Those loans were classified as held for sale at the end of the first quarter and were written down to the expected proceeds from the sale. The charge-offs on the loans transferred to held for sale in anticipation of the bulk loan sale which closed on April 18, 2011, increased first quarter 2011 loan charge-offs by $186 million. The actual loss on the bulk loan sale at closing was less than the amount charged-off in the first quarter, resulting in a $7.27 million reduction of second quarter 2011 charge-offs.

The recorded investments in individually evaluated impaired loans at June 30, 2012, December 31, 2011 and June 30, 2011 were as follows (in thousands).

	June 30,		December 31,		June 30,
	2012		2011		2011
Period-end loans with no allocated allowance for loan losses	$	214,808	$	188,509	$	32,791
Period-end loans with allocated allowance for loan losses		78,871		68,750		2,862
Total	$	293,679	$	257,259	$	35,653
Amount of allowance for loan losses allocated	$	17,370	$	14,825	$	1,167

The average balances of impaired loans and income recognized on impaired loans while they were considered impaired is presented below for the three and six months ended June 30, 2012 and 2011 (in thousands).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Average balance of individually evaluated impaired loans during period	$	287,336	$	42,099	$	283,981	$	68,631
Interest income recognized during impairment		2,421		—		4,688		—
Cash-basis interest income recognized		3,216		—		6,408		—

15

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	June 30, 2012						December 31, 2011						June 30, 2011
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial (secured by real estate)	$	105,788	$	95,543	$	—	$	82,887	$	76,215	$	—	$	19,653	$	13,572	$	—
Commercial & industrial		81,036		56,036		—		77,628		52,628		—		—		—		—
Commercial construction		22,491		21,372		—		24,927		23,609		—		—		—		—
Total commercial		209,315		172,951		—		185,442		152,452		—		19,653		13,572		—
Residential mortgage		13,994		11,578		—		13,845		10,804		—		10,006		6,608		—
Residential construction		46,589		30,094		—		38,955		25,190		—		27,441		12,611		—
Consumer installment		185		185		—		63		63		—		—		—		—
Total with no related allowance recorded		270,083		214,808		—		238,305		188,509		—		57,100		32,791		—
With an allowance recorded:
Commercial (secured by real estate)		35,348		35,295		8,544		31,806		31,616		7,491		1,398		1,208		78
Commercial & industrial		1,711		1,711		753		5,200		5,200		1,117		—		—		—
Commercial construction		21,461		21,461		2,476		2,636		2,636		236		1,441		1,015		450
Total commercial		58,520		58,467		11,773		39,642		39,452		8,844		2,839		2,223		528
Residential mortgage		8,458		8,266		1,389		7,642		7,572		2,234		639		639		639
Residential construction		11,886		11,812		4,188		21,629		21,497		3,731		—		—		—
Consumer installment		335		326		20		235		229		16		—		—		—
Total with an allowance recorded		79,199		78,871		17,370		69,148		68,750		14,825		3,478		2,862		1,167
Total	$	349,282	$	293,679	$	17,370	$	307,453	$	257,259	$	14,825	$	60,578	$	35,653	$	1,167

There were no loans more than 90 days past due and still accruing interest at June 30, 2012, December 31, 2011 or June 30, 2011. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually evaluated impaired loans with larger balances.

The following table presents the recorded investment (unpaid principal less amounts charged-off) in nonaccrual loans by loan class as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	Nonaccrual Loans
	June 30, 2012			December 31, 2011			June 30, 2011
Commercial (secured by real estate)	$	19,115		$	27,322		$	17,764
Commercial & industrial		34,982			34,613			1,998
Commercial construction		18,175			16,655			2,782
Total commercial		72,272			78,590			22,544
Residential mortgage		16,631			22,358			24,809
Residential construction		25,530			25,523			22,643
Consumer installment		907			1,008			1,069
Total	$	115,340		$	127,479		$	71,065
Balance as a percentage of unpaid principal		68.8	%		71.3	%		64.5	%

16

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

The following table presents the aging of the recorded investment in past due loans as of June 30, 2012, December 31, 2011 and June 30, 2011 by class of loans (in thousands).

	Loans Past Due								Loans Not
	30 - 59 Days		60 - 89 Days		> 90 Days		Total		Past Due		Total
As of June 30, 2012
Commercial (secured by real estate)	$	7,053	$	1,342	$	11,996	$	20,391	$	1,816,086	$	1,836,477
Commercial & industrial		663		1,496		389		2,548		447,674		450,222
Commercial construction		3,555		133		950		4,638		164,700		169,338
Total commercial		11,271		2,971		13,335		27,577		2,428,460		2,456,037
Residential mortgage		12,636		2,980		6,756		22,372		1,105,964		1,128,336
Residential construction		4,781		1,189		11,096		17,066		391,900		408,966
Consumer installment		971		325		398		1,694		124,202		125,896
Total loans	$	29,659	$	7,465	$	31,585	$	68,709	$	4,050,526	$	4,119,235
As of December 31, 2011
Commercial (secured by real estate)	$	8,036	$	4,182	$	10,614	$	22,832	$	1,798,582	$	1,821,414
Commercial & industrial		3,869		411		407		4,687		423,562		428,249
Commercial construction		166		—		1,128		1,294		162,861		164,155
Total commercial		12,071		4,593		12,149		28,813		2,385,005		2,413,818
Residential mortgage		15,185		4,617		9,071		28,873		1,106,029		1,134,902
Residential construction		3,940		2,636		10,270		16,846		431,545		448,391
Consumer installment		1,534		308		430		2,272		110,231		112,503
Total loans	$	32,730	$	12,154	$	31,920	$	76,804	$	4,032,810	$	4,109,614
As of June 30, 2011
Commercial (secured by real estate)	$	6,990	$	2,001	$	11,605	$	20,596	$	1,721,158	$	1,741,754
Commercial & industrial		1,496		624		809		2,929		425,129		428,058
Commercial construction		930		651		1,985		3,566		191,624		195,190
Total commercial		9,416		3,276		14,399		27,091		2,337,911		2,365,002
Residential mortgage		13,788		3,594		12,678		30,060		1,147,166		1,177,226
Residential construction		2,942		2,242		15,774		20,958		480,951		501,909
Consumer installment		1,234		353		273		1,860		117,450		119,310
Total loans	$	27,380	$	9,465	$	43,124	$	79,969	$	4,083,478	$	4,163,447

As of June 30, 2012 and December 31, 2011, $10.3 million and $8.65 million of specific reserves were allocated to customers whose loan terms have been modified in troubled debt restructurings. There were no specific reserves established for loans considered to be troubled debt restructurings at June 30, 2011. United committed to lend additional amounts totaling up to $490,000, $1.12 million, and $396,000 as of June 30, 2012 and December 31, 2011, and June 30, 2011 respectively, to customers with outstanding loans that are classified as TDRs.

The modification of the terms of the troubled debt restructurings included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date or an extension of the amortization period, any of which are not available in the current market for new debt with similar risk; a permanent reduction of the principal amount; or a restructuring of the borrower’s debt into an A/B note structure.

17

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

The following table presents additional information on troubled debt restructurings including the number of loan contracts restructured and the pre and post modification recorded investment (dollars in thousands).

	June 30, 2012						December 31, 2011						June 30, 2011
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial (secured by real estate)		96	$	87,104	$	82,325		74	$	70,380	$	69,054		31	$	24,946	$	21,998
Commercial & industrial		29		3,972		3,972		18		806		806		5		156		156
Commercial construction		23		42,796		41,677		11		18,053		18,053		5		9,477		9,477
Total commercial		148		133,872		127,974		103		89,239		87,913		41		34,579		31,631
Residential mortgage		110		17,613		16,950		80		11,943		11,379		29		3,937		3,784
Residential construction		72		25,123		22,178		54		24,921		24,145		46		11,741		10,718
Consumer installment		47		521		511		34		298		293		6		111		111
Total loans		377	$	177,129	$	167,613		271	$	126,401	$	123,730		122	$	50,368	$	46,244

Loans modified under the terms of a TDR during the three and six months ended June 30, 2012 are presented in the table below. In addition, the following table presents loans modified under the terms of a TDR that became 90 days or more delinquent during the three and six months ended June 30, 2012, respectively, that were initially restructured within one year prior to the three and six months ended June 30, 2012, respectively (dollars in thousands).

	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Subsequently Defaulted During the Three Months Ended June 30, 2012
Troubled Debt Restructurings for the Three Months Ended June 30, 2012							Number of Contracts		Recorded Investment
Commercial (secured by real estate)		10	$	7,815	$	7,728		3	$	2,307
Commercial & industrial		7		598		598		1		5
Commercial construction		7		7,702		7,702		—		—
Total commercial		24		16,115		16,028		4		2,312
Residential mortgage		20		5,288		5,112		1		27
Residential construction		20		7,638		6,361		1		121
Consumer installment		8		210		210		1		6
Total loans		72	$	29,251	$	27,711		7	$	2,466
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Subsequently Defaulted During the Six Months Ended June 30, 2012
Troubled Debt Restructurings for the Six Months Ended June 30, 2012							Number of Contracts		Recorded Investment
Commercial (secured by real estate)		34	$	22,914	$	21,469		3	$	2,307
Commercial & industrial		17		3,322		3,322		2		48
Commercial construction		14		28,483		28,483		2		4,174
Total commercial		65		54,719		53,274		7		6,529
Residential mortgage		44		10,567		10,385		4		400
Residential construction		34		11,389		9,550		4		1,597
Consumer installment		15		270		265		1		6
Total loans		158	$	76,945	$	73,474		16	$	8,532

18

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Risk Ratings

United categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, current industry and economic trends, among other factors. United analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. United uses the following definitions for its risk ratings:

Watch. Loans in this category are presently protected from apparent loss; however, weaknesses exist that could cause future impairment, including the deterioration of financial ratios, past due status and questionable management capabilities. These loans require more than the ordinary amount of supervision. Collateral values generally afford adequate coverage, but may not be immediately marketable.

Substandard. These loans are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged. Specific and well-defined weaknesses exist that may include poor liquidity and deterioration of financial ratios. The loan may be past due and related deposit accounts experiencing overdrafts. There is the distinct possibility that the Company will sustain some loss if deficiencies are not corrected. If possible, immediate corrective action is taken.

Doubtful. Specific weaknesses characterized as Substandard that are severe enough to make collection in full highly questionable and improbable. There is no reliable secondary source of full repayment.

Loss. Loans categorized as Loss have the same characteristics as Doubtful however probability of loss is certain. Loans classified as Loss are charged-off.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are generally deposit account overdrafts that have not been assigned a grade.

As of June 30, 2012, December 31, 2011 and June 30, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands).

	Pass		Watch		Substandard		Doubtful / Loss		Not Rated		Total
As of June 30, 2012
Commercial (secured by real estate)	$	1,596,879	$	72,067	$	167,531	$	—	$	—	$	1,836,477
Commercial & industrial		393,893		4,652		50,899		—		778		450,222
Commercial construction		107,201		6,088		56,049		—		—		169,338
Total commercial		2,097,973		82,807		274,479		—		778		2,456,037
Residential mortgage		999,328		39,105		89,903		—		—		1,128,336
Residential construction		290,808		47,182		70,976		—		—		408,966
Consumer installment		121,153		1,117		3,626		—		—		125,896
Total loans	$	3,509,262	$	170,211	$	438,984	$	—	$	778	$	4,119,235
As of December 31, 2011
Commercial (secured by real estate)	$	1,561,204	$	89,830	$	170,380	$	—	$	—	$	1,821,414
Commercial & industrial		369,343		7,630		50,366		—		910		428,249
Commercial construction		114,817		14,173		35,165		—		—		164,155
Total commercial		2,045,364		111,633		255,911		—		910		2,413,818
Residential mortgage		993,779		42,323		98,800		—		—		1,134,902
Residential construction		312,527		38,386		97,478		—		—		448,391
Consumer installment		107,333		1,411		3,759		—		—		112,503
Total loans	$	3,459,003	$	193,753	$	455,948	$	—	$	910	$	4,109,614
As of June 30, 2011
Commercial (secured by real estate)	$	1,508,284	$	98,175	$	135,295	$	—	$	—	$	1,741,754
Commercial & industrial		404,704		3,682		18,647		—		1,025		428,058
Commercial construction		143,609		17,452		34,129		—		—		195,190
Total commercial		2,056,597		119,309		188,071		—		1,025		2,365,002
Residential mortgage		1,046,255		35,775		95,196		—		—		1,177,226
Residential construction		353,769		51,223		96,917		—		—		501,909
Consumer installment		114,718		608		3,984		—		—		119,310
Total loans	$	3,571,339	$	206,915	$	384,168	$	—	$	1,025	$	4,163,447

19

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Note 7 – Foreclosed Property

Major classifications of foreclosed properties at June 30, 2012, December 31, 2011 and June 30, 2011 are summarized as follows (in thousands).

	June 30,			December 31,			June 30,
	2012			2011			2011
Commercial real estate	$	11,639		$	10,866		$	11,944
Commercial construction		2,732			3,336			6,764
Total commercial		14,371			14,202			18,708
Residential mortgage		5,868			7,840			11,346
Residential construction		22,054			29,799			47,916
Total foreclosed property		42,293			51,841			77,970
Less valuation allowance		11,872			18,982			30,386
Foreclosed property, net	$	30,421		$	32,859		$	47,584
Balance as a percentage of original loan unpaid principal		39.3	%		35.9	%		32.6	%

Activity in the valuation allowance for foreclosed property is presented in the following table (in thousands).

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Balance at beginning of period	$	17,746		$	53,023		$	18,982		$	16,565
Additions charged to expense		1,008			3,118			3,119			51,703
Direct write downs		(6,882	)		(25,755	)		(10,229	)		(37,882	)
Balance at end of period	$	11,872		$	30,386		$	11,872		$	30,386

Expenses related to foreclosed assets include (in thousands).

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Net (gain) loss on sales	$	(269	)	$	(3,218	)	$	(176	)	$	8,802
Provision for unrealized losses		1,008			3,118			3,119			51,703
Operating expenses		1,112			1,991			2,733			6,285
Total foreclosed property expense	$	1,851		$	1,891		$	5,676		$	66,790

20

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Note 8 – Earnings Per Share

United is required to report on the face of the consolidated statement of operations, earnings (loss) per common share with and without the dilutive effects of potential common stock issuances from instruments such as options, convertible securities and warrants. Basic earnings (loss) per common share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per common share. During the three and six months ended June 30, 2012 and 2011, United accrued dividends on preferred stock, including accretion of discounts, as shown in the following table (in thousands).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Series A - 6% fixed	$	3	$	4	$	6	$	7
Series B - 5% fixed until December 6, 2013, 9% thereafter		2,614		2,598		5,222		5,200
Series D - LIBOR plus 9.6875%, resets quarterly		415		414		834		587
Total preferred stock dividends	$	3,032	$	3,016	$	6,062	$	5,794

All preferred stock dividends are payable quarterly.

Series B preferred stock was issued at a discount. Dividend amounts shown include discount accretion for each period.

The preferred stock dividends were subtracted from net income (loss) in order to arrive at net income (loss) available to common shareholders. There is no dilution from potentially dilutive securities for the six months ended June 30, 2011, due to the anti-dilutive effect of the net loss for that period.

The following table sets forth the computation of basic and diluted loss per share for the three and six months ended June 30, 2012 and 2011 (in thousands, except per share data).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Net income (loss) available to common shareholders	$	3,467	$	9,012	$	11,965	$	(231,102	)
Weighted average shares outstanding:
Basic		57,840		25,427		57,803		21,965
Effect of dilutive securities
Convertible securities		—		32,116		—		—
Stock options		—		—		—		—
Warrants		—		—		—		—
Diluted		57,840		57,543		57,803		21,965
Earnings (loss) per common share:
Basic	$	.06	$	.35	$	.21	$	(10.52	)
Diluted	$	.06	$	.16	$	.21	$	(10.52	)

At June 30, 2012, United had the following potentially dilutive stock options and warrants outstanding: a warrant to purchase 219,908.49 common shares at $61.39 per share issued to the U.S. Treasury in conjunction with the issuance of United’s fixed rate cumulative preferred perpetual stock, Series B; 129,670 common shares issuable upon exercise of warrants attached to trust preferred securities with an exercise price of $100 per share; 502,743 common shares issuable upon exercise of stock options granted to employees with a weighted average exercise price of $97.92; 414,045 shares issuable upon completion of vesting of restricted stock awards; 1,411,765 common shares issuable upon exercise of warrants exercisable at a price equivalent to $21.25 per share granted to Fletcher International Ltd. (“Fletcher”) in connection with a 2010 asset purchase and sale agreement; 2,476,191 common shares issuable upon conversion of preferred stock if Fletcher or its purported assignee exercises its option to purchase $65 million in convertible preferred stock, convertible at $26.25 per share; 1,162,791 common shares issuable upon exercise of warrants, exercisable at a price equivalent to $30.10 per share to be granted to Fletcher or its purported assignee upon exercise of its option to acquire preferred stock; and 1,551,126 common shares issuable upon exercise of warrants owned by Elm Ridge Off Shore Master Fund, Ltd. and Elm Ridge Value Partners, L.P. (collectively, the “Elm Ridge Parties”), exercisable at $12.50 per share.

21

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Note 9 – Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

United is exposed to certain risks arising from both its business operations and economic conditions. United principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. United manages interest rate risk primarily by managing the amount, sources, and duration of its investment securities portfolio and debt funding and through the use of derivative financial instruments. Specifically, United enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. United’s derivative financial instruments are used to manage differences in the amount, timing, and duration of United’s known or expected cash receipts and its known or expected cash payments principally related to United’s loans, wholesale borrowings and deposits.

In conjunction with the FASB’s fair value measurement guidance, United made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

The table below presents the fair value of United’s derivative financial instruments as well as their classification on the consolidated balance sheet as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

Derivatives accounted for as hedges under ASC 815

		Fair Value
Interest Rate Products	Balance Sheet Location	June 30, 2012		December 31, 2011		June 30, 2011
Asset derivatives	Other assets	$	68	$	—	$	—
Liability derivatives	Other liabilities	$	5,987	$	422	$	—

Derivatives not accounted for as hedges under ASC 815

		Fair Value
Interest Rate Products	Balance Sheet Location	June 30, 2012		December 31, 2011		June 30, 2011
Asset derivatives	Other assets	$	155	$	—	$	—
Liability derivatives	Other liabilities	$	155	$	—	$	—

Derivative contracts that are not accounted for as hedges under ASC 815 are between United and certain commercial loan customers with offsetting positions to dealers under a back-to-back swap program.

Cash Flow Hedges of Interest Rate Risk

United’s objectives in using interest rate derivatives are to add stability to net interest revenue and to manage its exposure to interest rate movements. To accomplish this objective, United primarily uses interest rate swaps as part of its interest rate risk management strategy. At June 30, 2012, United’s interest rate swaps designated as cash flow hedges involve the payment of fixed-rate amounts to a counterparty in exchange for United receiving variable-rate payments over the life of the agreements without exchange of the underlying notional amount. United’s current cash flow hedges are for the purpose of converting variable rate deposits and wholesale borrowings to a fixed rate to protect the company in a rising rate environment. The swaps are forward starting and do not become effective until 2014. At June 30, 2012, United had five swap contracts outstanding with a total notional amount of $400 million that were designated as cash flow hedges. United had no active derivative contracts outstanding at December 31, 2011 or June 30, 2011 that were designated as cash flow hedges of interest rate risk.

22

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

The effective portion of changes in the fair value of derivatives designated, and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense when the swaps become effective in 2014 as interest payments are made on United’s LIBOR based variable-rate wholesale borrowings and indexed deposit accounts. At June 30, 2012, a portion of the amount included in other comprehensive income represents deferred gains from terminated cash flow hedges where the forecasted hedging transaction is expected to remain effective over the remaining unexpired term of the original contract. Such gains are being deferred and recognized over the remaining life of the contract on a straight line basis. During the three and six months ended June 30, 2012, United accelerated the reclassification of $43,000 and $124,000, respectively, in gains from terminated positions as a result of the forecasted transactions becoming probable not to occur. During the next twelve months, United estimates that an additional $2.23 million of the deferred gains on terminated cash flow hedging positions will be reclassified as an increase to interest revenue.

Fair Value Hedges of Interest Rate Risk

United is exposed to changes in the fair value of certain of its fixed rate obligations due to changes in LIBOR, a benchmark interest rate. United uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the benchmark interest rate. Interest rate swaps designated as fair value hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for United making variable rate payments over the life of the agreements without the exchange of the underlying notional amount. At June 30, 2012, United had seven interest rate swaps with an aggregate notional amount of $104 million that were designated as fair value hedges of interest rate risk. As of June 30, 2011, United had no active derivatives designated as fair value hedges of interest rate risk.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in earnings. United includes the gain or loss on the hedged items in the same line item as the offsetting loss or gain on the related derivatives. During the three and six months ended June 30, 2012, United recognized net losses of $223,000 and $189,000, respectively, related to ineffectiveness of the fair value hedging relationships. United also recognized a net reduction of interest expense of $550,000 and $828,000 for the three and six months ended June 30, 2012, related to United’s fair value hedges, which includes net settlements on the derivatives. There were no active fair value hedges during the first six months of 2011.

Tabular Disclosure of the Effect of Derivative Instruments on the Income Statement

The tables below present the effect of United’s derivative financial instruments on the consolidated statement of operations for the three and six months ended June 30, 2012 and 2011.

Derivatives in Fair Value Hedging Relationships (in thousands).

Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative				Amount of Gain (Loss) Recognized in Income on Hedged Item
	2012		2011		2012			2011
Three Months Ended June 30,
Other fee revenue	$	2,087	$	—	$	(2,310	)	$	—
Six Months Ended June 30,
Other fee revenue	$	823	$	—	$	(1,012	)	$	—

23

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Derivatives in Cash Flow Hedging Relationships (in thousands).

	Amount of Gain (Loss) Recognized in Other Comprehensive Income  on Derivative (Effective Portion)					Gain (Loss) Reclassified from Accumulated Other Comprehensive Income  into Income (Effective Portion)
	2012			2011		Location	2012		2011
Three Months Ended June 30,
						Interest revenue	$	671	$	2,589
						Other income		43		2,809
Interest rate products	$	(4,855	)	$	—	Total	$	714	$	5,398
Six Months Ended June 30,
						Interest revenue	$	2,190	$	5,512
						Other income		124		4,112
Interest rate products	$	(4,855	)	$	—	Total	$	2,314	$	9,624

Credit-risk-related Contingent Features

United manages its credit exposure on derivatives transactions by entering into a bi-lateral credit support agreement with each counterparty. The credit support agreements require collateralization of exposures beyond specified minimum threshold amounts. The details of these agreements, including the minimum thresholds, vary by counterparty.

United’s agreements with each of its derivative counterparties contain a provision where if either party defaults on any of its indebtedness, then it could also be declared in default on its derivative obligations. The agreements with derivatives counterparties also include provisions that if not met, could result in United being declared in default. United has agreements with certain of its derivative counterparties that contain a provision where if United fails to maintain its status as a well-capitalized institution or is subject to a prompt corrective action directive, the counterparty could terminate the derivative positions and United would be required to settle its obligations under the agreements.

Note 10 – Stock-Based Compensation

United has an equity compensation plan that allows for grants of incentive stock options, nonqualified stock options, restricted stock awards (also referred to as “nonvested stock” awards), stock awards, performance share awards or stock appreciation rights. Options granted under the plan can have an exercise price no less than the fair market value of the underlying stock at the date of grant. The general terms of the plan include a vesting period (usually four years) with an exercisable period not to exceed ten years. Certain option and restricted stock awards provide for accelerated vesting if there is a change in control (as defined in the plan). As of June 30, 2012, 1,351,000 additional awards could be granted under the plan. Through June 30, 2012, incentive stock options, nonqualified stock options, restricted stock awards and units and base salary stock grants had been granted under the plan.

The following table shows stock option activity for the first six months of 2012.

Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinisic Value ($000)
Outstanding at December 31, 2011		583,647		$	94.48
Forfeited		(2,472	)		48.22
Expired		(78,432	)		73.89
Outstanding at June 30, 2012		502,743			97.92		4.0	$	—
Exercisable at June 30, 2012		478,452			101.71		3.8		—

24

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

The fair value of each option is estimated on the date of grant using the Black-Scholes model. No stock options were granted during the six month periods ended June 30, 2012 or 2011.

Compensation expense relating to stock options of $131,000 and $465,000 was included in earnings for the six months ended June 30, 2012 and 2011, respectively. Deferred tax benefits of $50,000 and $181,000, respectively, were included in the determination of income tax expense for the six month periods ended June 30, 2012 and 2011. The amount of compensation expense for both periods was determined based on the fair value of the options at the time of grant, multiplied by the number of options granted that are expected to vest, which was then amortized over the vesting period. The forfeiture rate for options is estimated to be approximately 3% per year. No options were exercised during the first six months of 2012 or 2011.

The table below presents the activity in restricted stock awards for the first six months of 2012.

Restricted Stock	Shares			Weighted- Average Grant- Date Fair Value
Outstanding at December 31, 2011		414,644		$	12.19
Granted		29,491			9.36
Excercised		(18,690	)		39.13
Cancelled		(11,400	)		10.25
Outstanding at June 30, 2012		414,045			11.43
Vested at June 30, 2012		15,490			35.62

Compensation expense for restricted stock is based on the fair value of restricted stock awards at the time of grant, which is equal to the value of United’s common stock on the date of grant. The value of restricted stock grants that are expected to vest is amortized into expense over the vesting period. For the six months ended June 30, 2012 and 2011, compensation expense of $815,000 and $293,000, respectively, was recognized related to restricted stock awards. The total intrinsic value of the restricted stock was $3.55 million at June 30, 2012.

As of June 30, 2012, there was $3.10 million of unrecognized compensation cost related to non-vested stock options and restricted stock awards granted under the plan. That cost is expected to be recognized over a weighted-average period of 1.93 years. The aggregate grant date fair value of options and restricted stock awards that vested during the six months ended June 30, 2012, was $1.54 million.

Note 11 – Common and Preferred Stock Issued / Common Stock Issuable

United sponsors a Dividend Reinvestment and Share Purchase Plan (“DRIP”) that allows participants who already own United’s common stock to purchase additional shares directly from the company. The DRIP also allows participants to automatically reinvest their quarterly dividends in additional shares of common stock without a commission. The DRIP is currently suspended. United’s 401(k) retirement plan regularly purchases shares of United’s common stock directly from United. In addition, United has an Employee Stock Purchase Program (“ESPP”) that allows eligible employees to purchase shares of common stock at a 5% discount, with no commission charges. For the six months ended June 30, 2012 and 2011, United issued 60,982 and 78,584 shares, respectively, and increased capital by $501,000 and $744,000, respectively, through these programs.

United offers its common stock as an investment option in its deferred compensation plan. The common stock component of the deferred compensation plan is accounted for as an equity instrument and is reflected in the consolidated financial statements as common stock issuable. The deferred compensation plan does not allow for diversification once an election is made to invest in United stock and settlement must be accomplished in shares at the time the deferral period is completed. At June 30, 2012 and 2011, 94,657 and 83,575 shares, respectively, were issuable under the deferred compensation plan.

On February 22, 2011, United entered into a Share Exchange Agreement with the Elm Ridge Parties. Under the Share Exchange Agreement, the Elm Ridge Parties agreed to transfer to United 1,551,126 shares of United’s common stock in exchange for 16,613 shares of United’s cumulative perpetual preferred stock, Series D, and warrants to purchase 1,551,126 common shares with an exercise price of $12.50 per share that expires on August 22, 2013. This exchange transaction did not result in a net increase or decrease to total shareholder’s equity for the year ended December 31, 2011.

25

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Note 12 – Assets and Liabilities Measured at Fair Value

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The table below presents United’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2012, December 31, 2011 and June 30, 2011, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).

	Level 1		Level 2		Level 3		Total
June 30, 2012
Assets
Securities available for sale:
U.S. Government agencies	$	—	$	43,874	$	—	$	43,874
State and political subdivisions		—		27,159		—		27,159
Mortgage-backed securities		—		1,433,431		—		1,433,431
Corporate bonds		—		109,688		350		110,038
Asset-backed securities		—		84,498		—		84,498
Other		—		2,583		—		2,583
Deferred compensation plan assets		2,895		—		—		2,895
Derivative financial instruments		—		223		—		223
Total	$	2,895	$	1,701,456	$	350	$	1,704,701
Liabilities
Deferred compensation plan liability	$	2,895	$	—	$	—	$	2,895
Brokered certificates of deposit		—		102,879		—		102,879
Derivative financial instruments		—		6,142		—		6,142
Total liabilities	$	2,895	$	109,021	$	—	$	111,916
	Level 1		Level 2		Level 3		Total
December 31, 2011
Assets
Securities available for sale:
U.S. Government agencies	$	—	$	43,750	$	—	$	43,750
State and political subdivisions		—		26,339		—		26,339
Mortgage-backed securities		—		1,609,909		—		1,609,909
Corporate bonds		—		107,328		350		107,678
Other		—		2,371		—		2,371
Deferred compensation plan assets		2,859		—		—		2,859
Total	$	2,859	$	1,789,697	$	350	$	1,792,906
Liabilities
Deferred compensation plan liability	$	2,859	$	—	$	—	$	2,859
Brokered certificates of deposit		—		13,107		—		13,107
Derivative financial instruments		—		422		—		422
Total liabilities	$	2,859	$	13,529	$	—	$	16,388
	Level 1		Level 2		Level 3		Total
June 30, 2011
Assets
Securities available for sale:
U.S. Government agencies	$	—	$	77,477	$	—	$	77,477
State and political subdivisions		—		26,772		—		26,772
Mortgage-backed securities		—		1,588,489		4,129		1,592,618
Corporate bonds		—		116,944		350		117,294
Other		—		2,452		—		2,452
Deferred compensation plan assets		3,025		—		—		3,025
Total	$	3,025	$	1,812,134	$	4,479	$	1,819,638
Liabilities
Deferred compensation plan liability	$	3,025	$	—	$	—	$	3,025
Total liabilities	$	3,025	$	—	$	—	$	3,025

26

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

The following table shows a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs that are classified as Level 3 values (in thousands).

	Securities Available for Sale					Securities Available for Sale
	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2012		2011			2012		2011
Balance at beginning of period	$	350	$	4,784		$	350	$	5,284
Amounts included in earnings		—		(5	)		—		(13	)
Paydowns		—		(300	)		—		(792	)
Balance at end of period	$	350	$	4,479		$	350	$	4,479

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

United may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. The table below presents United’s assets and liabilities measured at fair value on a nonrecurring basis as of June 30, 2012, December 31, 2011 and June 30, 2011, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).

	Level 1		Level 2		Level 3		Total
June 30, 2012
Assets
Loans	$	—	$	—	$	160,266	$	160,266
Foreclosed properties		—		—		25,253		25,253
Total	$	—	$	—	$	185,519	$	185,519
December 31, 2011
Assets
Loans	$	—	$	—	$	133,828	$	133,828
Foreclosed properties		—		—		29,102		29,102
Total	$	—	$	—	$	162,930	$	162,930
June 30, 2011
Assets
Loans	$	—	$	—	$	27,810	$	27,810
Foreclosed properties		—		—		41,922		41,922
Total	$	—	$	—	$	69,732	$	69,732

Assets and Liabilities Not Measured at Fair Value

For financial instruments that have quoted market prices, those quotes are used to determine fair value. Financial instruments that have no defined maturity, have a remaining maturity of 180 days or less, or reprice frequently to a market rate, are assumed to have a fair value that approximates reported book value, after taking into consideration any applicable credit risk. If no market quotes are available, financial instruments are valued by discounting the expected cash flows using an estimated current market interest rate for the financial instrument. For off-balance sheet derivative instruments, fair value is estimated as the amount that United would receive or pay to terminate the contracts at the reporting date, taking into account the current unrealized gains or losses on open contracts.

The short maturity of United’s assets and liabilities results in having a significant number of financial instruments whose fair value equals or closely approximates carrying value. Such financial instruments are reported in the following balance sheet captions: cash and cash equivalents, mortgage loans held for sale, federal funds purchased, repurchase agreements and other short-term borrowings. The fair value of securities available for sale equals the balance sheet value.

27

UNITED COMMUNITY BANKS, INC. AND SUBSDIARIES

Notes to Consolidated Financial Statements

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect the premium or discount on any particular financial instrument that could result from the sale of United’s entire holdings. Because no ready market exists for a significant portion of United’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial instruments include the mortgage banking operation, brokerage network, deferred income taxes, premises and equipment and goodwill. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have significant effect on fair value estimates and have not been considered in the estimates.

Off-balance sheet instruments (commitments to extend credit and standby letters of credit) are generally short-term and at variable rates. Therefore, both the carrying amount and the estimated fair value associated with these instruments are immaterial.

The carrying amount and fair values for other financial instruments that are not measured at fair value on a recurring basis in United’s balance sheet at June 30, 2012, December 31, 2011, and June 30, 2011 are as follows (in thousands).

	June 30, 2012
	Carrying		Fair Value Level
	Amount		Level 1		Level 2		Level 3		Total
Assets:
Securities held to maturity	$	282,750	$	—	$	299,971	$	—	$	299,971
Loans, net		4,006,530		—		—		3,830,187		3,830,187
Liabilities:
Deposits		5,822,467		—		5,863,885		—		5,863,885
Federal Home Loan Bank advances		125,125		—		125,125		—		125,125
Long-term debt		120,265		—		—		114,679		114,679

	December 31, 2011				June 30, 2011
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Assets:
Securities held to maturity	$	330,203	$	343,531	$	371,578	$	379,231
Loans, net		3,995,146		3,800,343		4,035,809		3,889,669
Liabilities:
Deposits		6,097,983		6,093,772		6,183,215		6,174,117
Federal Home Loan Bank advances		40,625		43,236		40,625		43,763
Long-term debt		120,225		115,327		150,186		140,771

Note 13 – Reclassification and Reverse Stock Split

Certain 2011 amounts have been reclassified to conform to the 2012 presentation. On June 17, 2011, United completed a 1-for-5 reverse stock split, or recombination, whereby each five shares of United’s common stock was reclassified into one share of common stock and each five shares of United’s non-voting common stock was reclassified into one share of non-voting common stock. All share and per share amounts for all periods presented have been adjusted to reflect the reverse split as though it had occurred prior to the earliest period presented.

Note 14 – Bulk Loan Sale

On April 18, 2011, United completed the bulk sale of $80.6 million of loans that were reported as held for sale at March 31, 2011. The proceeds from the bulk sale were $87.9 million which resulted in a reduction of charge-offs in the second quarter of 2011.

28

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking Statements

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), about United and its subsidiaries. These forward-looking statements are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, and can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “will”, “could”, “should”, “projects”, “plans”, “goal”, “targets”, “potential”, “estimates”, “pro forma”, “seeks”, “intends”, or “anticipates” or the negative thereof or comparable terminology. Forward-looking statements include discussions of strategy, financial projections, guidance and estimates (including their underlying assumptions), statements regarding plans, objectives, expectations or consequences of various transactions, and statements about the future performance, operations, products and services of United and its subsidiaries. We caution our shareholders and other readers not to place undue reliance on such statements.

Our businesses and operations are and will be subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experiences may differ materially from those contained in any forward-looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2011, as well as the following factors:

• our ability to maintain profitability;

• our ability to fully realize our deferred tax asset balances, including net operating loss carry-forwards;

• the condition of the banking system and financial markets;

• the results of our most recent internal credit stress test may not accurately predict the impact on our financial condition if the economy were to continue to deteriorate;

• our ability to raise capital as may be necessary;

• our ability to maintain liquidity or access other sources of funding;

• changes in the cost and availability of funding;

• the success of the local economies in which we operate;

• our concentrations of residential and commercial construction and development loans and commercial real estate loans are subject to unique risks that could adversely affect our earnings;

• changes in prevailing interest rates may negatively affect our net income and the value of our assets;

• the accounting and reporting policies of United;

• if our allowance for loan losses is not sufficient to cover actual loan losses;

• we may be subject to losses due to fraudulent and negligent conduct of our loan customers, third party service providers or employees;

• competition from financial institutions and other financial service providers;

• the U.S. Treasury may change the terms of our fixed rate cumulative perpetual preferred stock, Series B (the “Series B preferred stock”);

• risks with respect to future expansion and acquisitions;

• if the conditions in the stock market, the public debt market and other capital markets deteriorate;

• the impact of the Dodd-Frank Wall Street Reform Act of 2010 and related regulations and other changes in financial services laws and regulations;

• the failure of other financial institutions;

• a special assessment that may be imposed by the Federal Deposit Insurance Corporation (the “FDIC”) on all FDIC-insured institutions in the future, similar to the assessment in 2009 that decreased our earnings;

• the formal investigation by the Securities and Exchange Commission or any penalty, sanction or further restatement of our previously issued financial statements that may result from such investigation;

• the costs and effects of litigation, examinations, investigations, or similar matters, or adverse facts and developments related thereto, including possible dilution;

• regulatory or judicial proceedings, board resolutions, informal memorandums of understanding or formal enforcement actions imposed by regulators that may occur, or any such proceedings or enforcement actions that is more severe than we anticipate.

Additional information with respect to factors that may cause actual results to differ materially from those contemplated by such forward-looking statements may also be included in other reports that United files with the Securities and Exchange Commission. United cautions that the foregoing list of factors is not exclusive and not to place undue reliance on forward-looking statements. United does not intend to update any forward-looking statement, whether written or oral, relating to the matters discussed in this Form 10-Q.

29

Overview

The following discussion is intended to provide insight into the results of operations and financial condition of United Community Banks, Inc. (“United”) and its subsidiaries and should be read in conjunction with the consolidated financial statements and accompanying notes.

United is a bank holding company registered with the Board of Governors of the Federal Reserve under the Bank Holding Company Act of 1956 that was incorporated under the laws of the state of Georgia in 1987 and commenced operations in 1988. At June 30, 2012 United had total consolidated assets of $6.74 billion, total loans of $4.12 billion, excluding the loans acquired from Southern Community Bank (“SCB”) that are covered by loss sharing agreements and therefore have a different risk profile. United also had total deposits of $5.82 billion and shareholders’ equity of $576 million.

United’s activities are primarily conducted by its wholly owned Georgia banking subsidiary, United Community Bank (the “Bank”). The Bank’s operations are conducted under a community bank model that operates 27 “community banks” with local bank presidents and boards in north Georgia, the Atlanta, Georgia metropolitan statistical area (the “Atlanta MSA”), the Gainesville, Georgia metropolitan statistical area (the “Gainesville MSA”), coastal Georgia, western North Carolina, and east Tennessee.

Included in management’s discussion and analysis are certain non-GAAP (accounting principles generally accepted in the United States of America (“GAAP”)) performance measures. United’s management believes that non-GAAP performance measures are useful in analyzing United’s financial performance trends and therefore this section will refer to non-GAAP performance measures. A reconciliation of these non-GAAP performance measures to GAAP performance measures is included in the table on page 33.

United reported a net income of $6.50 million for the second quarter of 2012. This compared to net income of $12.0 million for the second quarter of 2011. Diluted earnings per common share was $.06 for the second quarter of 2012, compared to diluted earnings per common share of $.16 for the second quarter of 2011.

For the six months ended June 30, 2012, United reported net income of $18.0 million. This compared to a net loss of $225 million for the first six months of 2011, which reflects the credit losses taken in the first quarter associated with United’s problem asset disposition plan (the “Problem Asset Disposition Plan”). United’s Board of Directors adopted the Problem Asset Disposition Plan in the first quarter of 2011 following a private placement transaction that raised $380 million in new capital (the “Private Placement”). Diluted earnings per common share was $.21 for the six months ended June 30, 2012, compared with a loss per common share of $10.52 for the same period in 2011.

United’s provision for loan losses was $18.0 million for the three months ended June 30, 2012, compared to $11.0 million for the same period in 2011. Net charge-offs for the second quarter of 2012 were $18.9 million, compared to $16.5 million for the second quarter of 2011. For the six months ended June 30, 2012, United’s provision for loan losses was $33.0 million, compared to $201 million for the same period of 2011. Net charge-offs for the first six months of 2012 were $34.8 million, compared to $248 million for the first six months of 2011. During the first quarter of 2011, performing substandard loans with a pre-charge down carrying amount of $166 million and nonperforming loans with a pre-charge down carrying amount of $101 million were collectively written down to the expected sales proceeds of $80.6 million, in conjunction with a bulk loan sale that was part of the Problem Asset Disposition Plan (the “Bulk Loan Sale”). United recognized net charge-offs of $186 million related to the transfer of loans to the held for sale classification in the first quarter. The Bulk Loan Sale was completed on April 18, 2011. Proceeds from the sale were greater than originally estimated, resulting in a reduction of second quarter charge-offs of $7.27 million.

As of June 30, 2012, United’s allowance for loan losses was $113 million, or 2.74% of loans, compared to $128 million, or 3.07% of loans, at June 30, 2011. Nonperforming assets of $146 million, which excludes assets of Southern Community Bank (“SCB”) that are covered by loss sharing agreements with the FDIC, increased to 2.16% of total assets at June 30, 2012 from 1.66% as of June 30, 2011. Nonperforming asset levels are impacted significantly by the inflow of new nonperforming loans and United’s ability to liquidate foreclosed properties. During the third quarter of 2011, United classified its largest lending relationship of $76.6 million, which caused nonperforming assets to increase from 1.66% of total assets at June 30, 2011. Since that time, nonperforming assets have trended down.

Taxable equivalent net interest revenue was $56.8 million for the second quarter of 2012, compared to $58.9 million for the same period of 2011. The decrease in net interest revenue was primarily the result of the lower yield on the securities portfolio, which was significantly impacted by heavy prepayment activity in the mortgage market. Prepayment activity suppressed the securities portfolio yield by accelerating the amortization of bond purchase premiums and the yields at which the proceeds were reinvested fell short of the yields of the bonds they replaced. Average loans for the quarter declined $110 million from the second quarter of 2011. The impact of the decrease in average loan balances was substantially offset by lower deposit rates. Net interest margin increased from 3.41% for the three months ended June 30, 2011 to 3.43% for the same period in 2012. For the six months ended June 30, 2012, taxable equivalent net interest revenue was $116 million, compared to $115 million for the same period of 2011. Net interest margin increased from 3.36% for the six months ended June 30, 2011 to 3.48% for the same period in 2012. Over the past year, United has maintained above normal levels of liquidity.

30

Operating fee revenue decreased $1.04 million, or 7%, from the second quarter of 2011 and increased $2.50 million, or 10%, from the first six months of 2011. The quarterly decrease was due to a decline in hedge ineffectiveness gains. The second quarter of 2011 included $2.8 million in hedge ineffectiveness gains. In contrast, the second quarter of 2012 included $180,000 in hedge ineffectiveness losses. The year to date increase in operating fee revenue was due to an 81% increase in mortgage loan and related fees as well as a 9% increase in service charges and fees. The increase in service charges and fees is due to new service fees on demand deposit accounts that became effective January 1, 2012. These increases, along with a $2.86 million increase in other fee revenue that resulted mostly from $1.1 million in interest on a prior year Federal tax refund and $728,000 in gains from the sale of state low income housing tax credits that were included in the first quarter of 2012, more than offset the decline in hedge ineffectiveness gains for the period.

For the second quarter of 2012, operating expenses of $44.3 million were down $4.42 million from the second quarter of 2011. Lower salary and employee benefits accounted for $2.14 million of the decrease and lower FDIC assessments and other regulatory charges accounted for $1.10 million of the decrease. For the six months ended June 30, 2012, operating expenses of $91.3 million were down $72.7 million from the same period of 2011. Foreclosed property costs were down $61.1 million from the first six months of 2011, due to the writedowns taken in 2011 associated with the Problem Asset Disposition Plan.

Recent Developments

In the first quarter of 2012, following detailed discussions with the Division of Corporation Finance and the Office of the Chief Accountant of the Securities and Exchange Commission (the “SEC”), United recorded an additional income tax expense of $156.7 million and a charge to other comprehensive income in shareholders’ equity of $10.2 million to establish a full deferred tax asset valuation allowance as of December 31, 2010. Based on these discussions with the SEC, United believes that establishing the full valuation allowance was responsive to the previously disclosed comments made by the SEC regarding United’s net deferred tax assets. As a result of increasing the valuation allowance for its deferred tax assets as of December 31, 2010, United restated its financial statements for the fourth quarter and year ended December 31, 2010 and the first three quarters of 2011, and revised the disclosures contained in its periodic reports filed with the SEC for those periods.

As previously disclosed on United’s Current Report on Form 8-K filed on May 16, 2012, United received from the SEC’s Division of Enforcement a notice of formal investigation that included a subpoena seeking information relating primarily to United’s deferred tax asset valuation allowances, the establishment of which resulted in the restatements described above, and United’s 2009 and 2010 goodwill impairment charges. The notice of investigation stated that it should not be construed as an indication that any violations of law have occurred. United is cooperating fully with the SEC in response to the subpoena.

As previously disclosed on United’s Current Report on Form 8-K filed on July 6, 2012, United has been served with a lawsuit filed by FILB Co-Investments LLC (“FILB”) against United in New York federal court. The lawsuit relates to purported contractual rights that FILB claims were assigned to it by Fletcher International, Ltd (“Fletcher”). United believes the lawsuit is meritless for several reasons, and will defend it aggressively.

The purported assignment to FILB from Fletcher relates to a dispute between those two entities emanating from a redemption request to Fletcher by several investors in one of Fletcher’s funds. That dispute involves judicial proceedings in the Cayman Islands that resulted in the Grand Court of the Cayman Islands ordering the liquidation of a Fletcher fund, with FILB now being managed by a court-appointed liquidator. Fletcher has now filed for bankruptcy protection and is seeking to prevent the liquidation from continuing. United believes that FILB has filed this lawsuit in an attempt to preserve all possible rights, regardless of merit, that might be pursued as a result of the liquidation.

FILB alleges that, among other things, United breached its obligation to deliver 76 shares of preferred stock of United to FILB and that the investment period with respect to FILB’s purportedly assigned right to purchase United’s preferred stock is continuing. FILB also claimed that United’s 2011 reclassification of its common stock in the form of a 1-for-5 reverse stock split, or recombination, should be ignored for purposes of calculating the number of shares of United’s common stock issuable upon the redemption of United’s preferred stock.

United strongly disagrees with each of these claims and fully expects its position to prevail if the litigation proceeds.

Critical Accounting Policies

The accounting and reporting policies of United are in accordance with GAAP and conform to general practices within the banking industry. The more critical accounting and reporting policies include United’s accounting for the allowance for loan losses, fair value measurements, and income taxes. In particular, United’s accounting policies related to allowance for loan losses, fair value measurements and income taxes involve the use of estimates and require significant judgment to be made by management. Different assumptions in the application of these policies could result in material changes in United’s consolidated financial position or consolidated results of operations. See “Asset Quality and Risk Elements” herein for additional discussion of United’s accounting methodologies related to the allowance for loan losses.

GAAP Reconciliation and Explanation

This Form 10-Q contains non-GAAP financial measures, which are performance measures determined by methods other than in accordance with GAAP. Such non-GAAP financial measures include, among others the following: taxable equivalent interest revenue, taxable equivalent net interest revenue, tangible book value per share, tangible equity to assets, tangible common equity to assets and tangible common equity to risk-weighted assets. Management uses these non-GAAP financial measures because it believes they are useful for evaluating our operations and performance over periods of time, as well as in managing and evaluating our business and in discussions about our operations and performance. Management believes these non-GAAP financial measures provide users of our financial information with a meaningful measure for assessing our financial results and credit trends, as well as comparison to financial results for prior periods. These non-GAAP financial measures should not be considered as a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled financial measures used by other companies. A reconciliation of these operating performance measures to GAAP performance measures is included in on the table on page 33.

31

Table 1 - Financial Highlights

Selected Financial Information

																Second
	2012						2011									Quarter			For the Six						YTD
(in thousands, except per share	Second			First			Fourth			Third			Second			2012-2011			Months Ended						2012-2011
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change			2012			2011			Change
INCOME SUMMARY
Interest revenue	$	66,780		$	70,221		$	71,905		$	74,543		$	76,931					$	137,001		$	152,896
Interest expense		9,944			11,357			12,855			15,262			17,985						21,301			37,558
Net interest revenue		56,836			58,864			59,050			59,281			58,946			(4	)%		115,700			115,338			—	%
Provision for loan losses		18,000			15,000			14,000			36,000			11,000						33,000			201,000
Fee revenue		12,867			15,379			12,667			11,498			13,905			(7	)		28,246			25,743			10
Total revenue		51,703			59,243			57,717			34,779			61,851						110,946			(59,919	)
Operating expenses		44,310			46,955			51,080			46,520			48,728			(9	)		91,265			163,999			(44	)
Income (loss) before income taxes		7,393			12,288			6,637			(11,741	)		13,123						19,681			(223,918	)
Income tax expense (benefit)		894			760			(3,264	)		(402	)		1,095						1,654			1,390
Net income (loss)		6,499			11,528			9,901			(11,339	)		12,028			(46	)		18,027			(225,308	)
Preferred dividends and discount accretion		3,032			3,030			3,025			3,019			3,016						6,062			5,794
Net income (loss) available to common shareholders	$	3,467		$	8,498		$	6,876		$	(14,358	)	$	9,012			(62	)	$	11,965		$	(231,102	)
PERFORMANCE MEASURES
Per common share:
Diluted income (loss)	$	.06		$	.15		$	.12		$	(.25	)	$	.16			(63	)	$	.21		$	(10.52	)
Book value		6.61			6.68			6.62			6.77			7.11			(7	)		6.61			7.11			(7	)
Tangible book value (2)		6.48			6.54			6.47			6.61			6.94			(7	)		6.48			6.94			(7	)
Key performance ratios:
Return on equity (1)(3)		3.51	%		8.78	%		7.40	%		(15.06	)%		42.60	%					6.12	%		(345.86	)%
Return on assets (3)		.37			.66			.56			(.64	)		.66						.52			(6.16	)
Net interest margin (3)		3.43			3.53			3.51			3.55			3.41						3.48			3.36
Efficiency ratio		63.84			63.31			71.23			65.73			66.88						63.56			116.28
Equity to assets		8.33			8.19			8.28			8.55			8.06						8.26			7.11
Tangible equity to assets (2)		8.24			8.08			8.16			8.42			7.93						8.16			7.00
Tangible common equity to assets (2)		5.45			5.33			5.38			5.65			1.37						5.39			2.05
Tangible common equity to risk- weighted assets (2)		8.37			8.21			8.25			8.52			8.69						8.37			8.69
ASSET QUALITY *
Non-performing loans	$	115,340		$	129,704		$	127,479		$	144,484		$	71,065					$	115,340		$	71,065
Foreclosed properties		30,421			31,887			32,859			44,263			47,584						30,421			47,584
Total non-performing assets (NPAs)		145,761			161,591			160,338			188,747			118,649						145,761			118,649
Allowance for loan losses		112,705			113,601			114,468			146,092			127,638						112,705			127,638
Net charge-offs		18,896			15,867			45,624			17,546			16,483						34,763			248,057
Allowance for loan losses to loans		2.74	%		2.75	%		2.79	%		3.55	%		3.07	%					2.74	%		3.07	%
Net charge-offs to average loans (3)		1.85			1.55			4.39			1.68			1.58						1.70			11.46
NPAs to loans and foreclosed properties		3.51			3.88			3.87			4.54			2.82						3.51			2.82
NPAs to total assets		2.16			2.25			2.30			2.74			1.66						2.16			1.66
AVERAGE BALANCES ($ in millions)
Loans	$	4,156		$	4,168		$	4,175		$	4,194		$	4,266			(3	)	$	4,162		$	4,432			(6	)
Investment securities		2,145			2,153			2,141			2,150			2,074			3			2,149			1,851			16
Earning assets		6,665			6,700			6,688			6,630			6,924			(4	)		6,682			6,913			(3	)
Total assets		6,993			7,045			7,019			7,000			7,363			(5	)		7,019			7,371			(5	)
Deposits		5,853			6,028			6,115			6,061			6,372			(8	)		5,940			6,465			(8	)
Shareholders’ equity		583			577			581			598			594			(2	)		580			524			11
Common shares - basic (thousands)		57,840			57,764			57,646			57,599			25,427						57,803			21,965
Common shares - diluted (thousands)		57,840			57,764			57,646			57,599			57,543						57,803			21,965
AT PERIOD END ($ in millions)
Loans *	$	4,119		$	4,128		$	4,110		$	4,110		$	4,163			(1	)	$	4,119		$	4,163			(1	)
Investment securities		1,984			2,202			2,120			2,123			2,188			(9	)		1,984			2,188			(9	)
Total assets		6,737			7,174			6,983			6,894			7,152			(6	)		6,737			7,152			(6	)
Deposits		5,822			6,001			6,098			6,005			6,183			(6	)		5,822			6,183			(6	)
Shareholders’ equity		576			580			575			583			603			(4	)		576			603			(4	)
Common shares outstanding (thousands)		57,641			57,603			57,561			57,510			57,469						57,641			57,469

⁽¹⁾  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).

⁽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.

32

Table 1 Continued - Non-GAAP Performance Measures Reconciliation

Selected Financial Information

	2012						2011									For the Six Months Ended
(in thousands, except per share	Second			First			Fourth			Third			Second
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			2012			2011
Interest revenue reconciliation
Interest revenue - taxable equivalent	$	66,780		$	70,221		$	71,905		$	74,543		$	76,931		$	137,001		$	152,896
Taxable equivalent adjustment		(444	)		(446	)		(423	)		(420	)		(429	)		(890	)		(864	)
Interest revenue (GAAP)	$	66,336		$	69,775		$	71,482		$	74,123		$	76,502		$	136,111		$	152,032
Net interest revenue reconciliation
Net interest revenue - taxable equivalent	$	56,836		$	58,864		$	59,050		$	59,281		$	58,946		$	115,700		$	115,338
Taxable equivalent adjustment		(444	)		(446	)		(423	)		(420	)		(429	)		(890	)		(864	)
Net interest revenue (GAAP)	$	56,392		$	58,418		$	58,627		$	58,861		$	58,517		$	114,810		$	114,474
Total revenue reconciliation
Total operating revenue	$	51,703		$	59,243		$	57,717		$	34,779		$	61,851		$	110,946		$	(59,919	)
Taxable equivalent adjustment		(444	)		(446	)		(423	)		(420	)		(429	)		(890	)		(864	)
Total revenue (GAAP)	$	51,259		$	58,797		$	57,294		$	34,359		$	61,422		$	110,056		$	(60,783	)
Income (loss) before taxes reconciliation
Income (loss) before taxes	$	7,393		$	12,288		$	6,637		$	(11,741	)	$	13,123		$	19,681		$	(223,918	)
Taxable equivalent adjustment		(444	)		(446	)		(423	)		(420	)		(429	)		(890	)		(864	)
Income (loss) before taxes (GAAP)	$	6,949		$	11,842		$	6,214		$	(12,161	)	$	12,694		$	18,791		$	(224,782	)
Income tax (benefit) expense reconciliation
Income tax (benefit) expense	$	894		$	760		$	(3,264	)	$	(402	)	$	1,095		$	1,654		$	1,390
Taxable equivalent adjustment		(444	)		(446	)		(423	)		(420	)		(429	)		(890	)		(864	)
Income tax (benefit) expense (GAAP)	$	450		$	314		$	(3,687	)	$	(822	)	$	666		$	764		$	526
Book value per common share reconciliation
Tangible book value per common share	$	6.48		$	6.54		$	6.47		$	6.61		$	6.94		$	6.48		$	6.94
Effect of goodwill and other intangibles		.13			.14			.15			.16			.17			.13			.17
Book value per common share (GAAP)	$	6.61		$	6.68		$	6.62		$	6.77		$	7.11		$	6.61		$	7.11
Average equity to assets reconciliation
Tangible common equity to assets		5.45	%		5.33	%		5.38	%		5.65	%		1.37	%		5.39	%		2.05	%
Effect of preferred equity		2.79			2.75			2.78			2.77			6.56			2.77			4.95
Tangible equity to assets		8.24			8.08			8.16			8.42			7.93			8.16			7.00
Effect of goodwill and other intangibles		.09			.11			.12			.13			.13			.10			.11
Equity to assets (GAAP)		8.33	%		8.19	%		8.28	%		8.55	%		8.06	%		8.26	%		7.11	%
Tangible common equity to risk-weighted assets reconciliation
Tangible common equity to risk-weighted assets		8.37	%		8.21	%		8.25	%		8.52	%		8.69	%		8.37	%		8.69	%
Effect of other comprehensive income		.28			.10			(.03	)		(.29	)		(.42	)		.28			(.42	)
Effect of trust preferred		1.19			1.15			1.18			1.19			1.15			1.19			1.15
Effect of preferred equity		4.35			4.23			4.29			4.33			4.20			4.35			4.20
Tier I capital ratio (Regulatory)		14.19	%		13.69	%		13.69	%		13.75	%		13.62	%		14.19	%		13.62	%

Results of Operations

United reported net income of $6.50 million for the second quarter of 2012. This compared to net income of $12.0 million for the same period in 2011. For the second quarter of 2012, diluted earnings per common share was $.06. This compared to diluted earnings per common share of $.16 for the second quarter of 2011. For the six months ended June 30, 2012, United reported net income of $18.0 million compared to a net operating loss of $225 million for the same period in 2011. The loss for the six months ended June 30, 2011 reflects the Board of Directors’ decision in the first quarter of 2011 to adopt the Problem Asset Disposition Plan to quickly dispose of problem assets following United’s private placement at the end of the first quarter. Diluted earnings per common share was $.21 for the six months ended June 30, 2012, compared with a diluted loss per common share of $10.52 for the same period in 2011.

33

Net Interest Revenue (Taxable Equivalent)

Net interest revenue (the difference between the interest earned on assets and the interest paid on deposits and borrowed funds) is the single largest component of total revenue. United actively manages this revenue source to provide optimal levels of revenue while balancing interest rate, credit and liquidity risks. Taxable equivalent net interest revenue for the three months ended June 30, 2012 was $56.8 million, down $2.11 million, or 4%, from the second quarter of 2011. The decrease in net interest revenue for the second quarter of 2012 compared to the second quarter of 2011 was mostly due to lower yields on the securities and loan portfolios and a smaller balance of interest-earning assets. United continues its intense focus on loan and deposit pricing in an effort to maintain a steady level of net interest revenue.

Average loans decreased $110 million, or 3%, from the second quarter of last year. The decrease in the loan portfolio has begun to stabilize, however there is a high level of competition for quality lending relationships, which continues to put pressure on pricing. While loan balances have declined, United continues to make new loans. During the second quarter of 2012, United funded $86.5 million in new loans, primarily commercial and small business loans in north Georgia, the Atlanta MSA, east Tennessee and coastal Georgia.

Average interest-earning assets for the second quarter of 2012 decreased $259 million, or 4%, from the same period in 2011. Average loans decreased $110 million from the second quarter of 2011 however, this decrease was offset by a $71.6 million increase in average investment securities. The increase in the securities portfolio was due to purchases of floating rate mortgage-backed securities in an effort to temporarily invest excess liquidity, including the proceeds from the new capital raised at the end of the first quarter of 2011. The average yield on interest earning assets for the three months ended June 30, 2012, was 4.03%, down 42 basis points from 4.45% for the same period of 2011. The most significant factors in the lower earning asset yield were the lower average yields on the loan and securities portfolios. For the second quarter of 2012, the yield on total securities decreased 79 basis points from the same period a year ago. The securities portfolio was significantly impacted by heavy prepayment activity in the mortgage market during 2012. Prepayment activity suppressed the securities portfolio yield by accelerating the amortization of bond purchase premiums and the yields at which the proceeds were reinvested fell short of the yields of the bonds they replaced. Partially offsetting the lower loan and securities yields was a higher average yield on other interest-earnings assets due to the use of reverse repurchase agreements including collateral swap transactions where United enters into a repurchase agreement and reverse repurchase agreement simultaneously with the same counterparty subject to a master netting agreement.

Average interest-bearing liabilities decreased $558 million, or 10%, from the second quarter of 2011 due to the rolling off of higher-cost brokered deposits and certificates of deposit as funding needs decreased. The average cost of interest-bearing liabilities for the second quarter of 2012 was .76% compared to 1.24% for the same period of 2011, reflecting United’s ability to reduce deposit pricing. Also contributing to the overall lower rate on interest-bearing liabilities was a shift in the mix of deposits away from more expensive time deposits toward lower-rate transaction deposits.

The banking industry uses two ratios to measure relative profitability of net interest revenue. The net interest spread measures the difference between the average yield on interest-earning assets and the average rate paid on interest-bearing liabilities. The interest rate spread eliminates the effect of non-interest-bearing deposits and gives a direct perspective on the effect of market interest rate movements. The net interest margin is an indication of the profitability of a company’s investments, and is defined as net interest revenue as a percent of average total interest-earning assets, which includes the positive effect of funding a portion of interest-earning assets with customers’ non-interest bearing deposits and stockholders’ equity.

For the three months ended June 30, 2012 and 2011, the net interest spread was 3.27% and 3.21%, respectively, while the net interest margin was 3.43% and 3.41%, respectively.

For the first six months of 2012, net interest revenue was $116 million, an increase of $362,000, or less than 1%, from the first six months of 2011. Average earning assets decreased $231 million, or 3%, during the first six months of 2012 compared to the same period a year earlier. The yield on earning assets decreased 33 basis points from 4.45% for the six months ended June 30, 2011 to 4.12% for the six months ended June 30, 2012 due to declining average loan balances and a declining average loan yield and the abnormally high prepayment activity on mortgage-backed securities in the securities portfolio during 2012. The cost of interest bearing liabilities over the same period decreased 47 basis points. The combined effect of the lower yield on interest-earning assets, which was more than offset by the lower cost of interest-bearing liabilities resulted in the net interest margin increasing 12 basis points from the six months ended June 30, 2011 to the six months ended June 30, 2012.

34

The following table shows the relationship between interest revenue and expense, and the average amounts of interest-earning assets and interest-bearing liabilities for the three months ended June 30, 2012 and 2011.

Table 2 - Average Consolidated Balance Sheets and Net Interest Analysis

For the Three Months Ended June 30,

	2012								2011
	Average					Avg.			Average					Avg.
(dollars in thousands, taxable equivalent)	Balance			Interest		Rate			Balance			Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2)	$	4,155,619		$	54,296		5.25	%	$	4,266,211		$	60,958		5.73	%
Taxable securities (3)		2,121,053			10,800		2.04			2,048,683			14,541		2.84
Tax-exempt securities (1)(3)		24,242			429		7.08			25,044			411		6.56
Federal funds sold and other interest-earning assets		364,099			1,255		1.38			583,832			1,021		.70
Total interest-earning assets		6,665,013			66,780		4.03			6,923,770			76,931		4.45
Non-interest-earning assets:
Allowance for loan losses		(115,955	)							(139,744	)
Cash and due from banks		51,907								119,801
Premises and equipment		173,792								178,949
Other assets (3)		218,347								280,204
Total assets	$	6,993,104							$	7,362,980
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,279,686			503		.16		$	1,310,441			1,036		.32
Money market		1,132,548			661		.23			979,432			1,499		.61
Savings		216,175			38		.07			195,946			64		.13
Time less than $100,000		1,183,845			2,520		.86			1,541,909			4,990		1.30
Time greater than $100,000		778,477			2,063		1.07			988,810			3,873		1.57
Brokered time deposits		150,449			490		1.31			473,161			2,132		1.81
Total interest-bearing deposits		4,741,180			6,275		.53			5,489,699			13,594		.99
Federal funds purchased and other borrowings		97,134			904		3.74			103,156			1,074		4.18
Federal Home Loan Bank advances		278,971			390		.56			52,735			570		4.34
Long-term debt		120,256			2,375		7.94			150,178			2,747		7.34
Total borrowed funds		496,361			3,669		2.97			306,069			4,391		5.75
Total interest-bearing liabilities		5,237,541			9,944		.76			5,795,768			17,985		1.24
Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,112,128								882,151
Other liabilities		60,726								91,353
Total liabilities		6,410,395								6,769,272
Shareholders’ equity		582,709								593,708
Total liabilities and shareholders’ equity	$	6,993,104							$	7,362,980
Net interest revenue				$	56,836							$	58,946
Net interest-rate spread							3.27	%							3.21	%
Net interest margin (4)							3.43	%							3.41	%

⁽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 $25.7 million in 2012 and $32.2 million in 2011 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.

35

The following table shows the relationship between interest revenue and expense, and the average amounts of interest-earning assets and interest-bearing liabilities for the six months ended June 30, 2012 and 2011.

Table 3 - Average Consolidated Balance Sheets and Net Interest Analysis

For the Six Months Ended June 30,

	2012								2011
(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)	$	4,162,030		$	110,138		5.32	%	$	4,431,617		$	122,028		5.55	%
Taxable securities (3)		2,124,422			23,554		2.22			1,825,322			27,886		3.06
Tax-exempt securities (1)(3)		24,840			839		6.76			25,434			835		6.57
Federal funds sold and other interest-earning assets		371,044			2,470		1.33			630,384			2,147		.68
Total interest-earning assets		6,682,336			137,001		4.12			6,912,757			152,896		4.45
Non-interest-earning assets:
Allowance for loan losses		(116,879	)							(154,347	)
Cash and due from banks		53,286								127,031
Premises and equipment		174,321								179,150
Other assets (3)		226,013								306,495
Total assets	$	7,019,077							$	7,371,086
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,368,900			1,140		.17		$	1,341,618			2,360		.35
Money market		1,101,103			1,302		.24			954,128			3,527		.75
Savings		210,789			75		.07			191,708			141		.15
Time less than $100,000		1,227,599			5,546		.91			1,541,130			10,441		1.37
Time greater than $100,000		799,821			4,478		1.13			989,840			8,024		1.63
Brokered time deposits		155,892			1,208		1.56			585,103			4,262		1.47
Total interest-bearing deposits		4,864,104			13,749		.57			5,603,527			28,755		1.03
Federal funds purchased and other borrowings		99,696			1,949		3.93			102,132			2,116		4.18
Federal Home Loan Bank advances		208,672			856		.82			53,923			1,160		4.34
Long-term debt		120,246			4,747		7.94			150,169			5,527		7.42
Total borrowed funds		428,614			7,552		3.54			306,224			8,803		5.80
Total interest-bearing liabilities		5,292,718			21,301		.81			5,909,751			37,558		1.28
Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,076,358								861,864
Other liabilities		70,330								75,083
Total liabilities		6,439,406								6,846,698
Shareholders’ equity		579,671								524,388
Total liabilities and shareholders’ equity	$	7,019,077							$	7,371,086
Net interest revenue				$	115,700							$	115,338
Net interest-rate spread							3.31	%							3.17	%
Net interest margin (4)							3.48	%							3.36	%

⁽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 $24.7 million in 2012 and $29.7 million in 2011 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.

36

The following table shows the relative effect on net interest revenue for changes in the average outstanding amounts (volume) of interest-earning assets and interest-bearing liabilities and the rates earned and paid on such assets and liabilities (rate). Variances resulting from a combination of changes in rate and volume are allocated in proportion to the absolute dollar amounts of the change in each category.

Table 4—Change in Interest Revenue and Expense on a Taxable Equivalent Basis

(in thousands)

	Three Months Ended June 30, 2012									Six Months Ended June 30, 2012
	Compared to 2011									Compared to 2011
	Increase (decrease)									Increase (decrease)
	Due to Changes in									Due to Changes in
	Volume			Rate			Total			Volume			Rate			Total
Interest-earning assets:
Loans	$	(1,549	)	$	(5,113	)	$	(6,662	)	$	(7,247	)	$	(4,643	)	$	(11,890	)
Taxable securities		498			(4,239	)		(3,741	)		4,101			(8,433	)		(4,332	)
Tax-exempt securities		(13	)		31			18			(20	)		24			4
Federal funds sold and other interest-earning assets		(488	)		722			234			(1,137	)		1,460			323
Total interest-earning assets		(1,552	)		(8,599	)		(10,151	)		(4,303	)		(11,592	)		(15,895	)
Interest-bearing liabilities:
NOW accounts		(23	)		(510	)		(533	)		47			(1,267	)		(1,220	)
Money market accounts		205			(1,043	)		(838	)		475			(2,700	)		(2,225	)
Savings deposits		6			(32	)		(26	)		13			(79	)		(66	)
Time deposits less than $100,000		(999	)		(1,471	)		(2,470	)		(1,856	)		(3,039	)		(4,895	)
Time deposits greater than $100,000		(718	)		(1,092	)		(1,810	)		(1,358	)		(2,188	)		(3,546	)
Brokered deposits		(1,167	)		(475	)		(1,642	)		(3,310	)		256			(3,054	)
Total interest-bearing deposits		(2,696	)		(4,623	)		(7,319	)		(5,989	)		(9,017	)		(15,006	)
Federal funds purchased & other borrowings		(61	)		(109	)		(170	)		(50	)		(117	)		(167	)
Federal Home Loan Bank advances		675			(855	)		(180	)		1,227			(1,531	)		(304	)
Long-term debt		(578	)		206			(372	)		(1,160	)		380			(780	)
Total borrowed funds		36			(758	)		(722	)		17			(1,268	)		(1,251	)
Total interest-bearing liabilities		(2,660	)		(5,381	)		(8,041	)		(5,972	)		(10,285	)		(16,257	)
Increase (decrease) in net interest revenue	$	1,108		$	(3,218	)	$	(2,110	)	$	1,669		$	(1,307	)	$	362

Provision for Loan Losses

The provision for loan losses is based on management’s evaluation of losses inherent in the loan portfolio and corresponding analysis of the allowance for loan losses at quarter-end. The provision for loan losses was $18.0 million and $33 million for the second quarter and the first six months of 2012, respectively, compared to $11.0 million and $201 million for the same periods in 2011. The amount of provision recorded in each period was the amount required such that the total allowance for loan losses reflected the appropriate balance, in the estimation of management, and was sufficient to cover inherent losses in the loan portfolio. For the three and six months ended June 30, 2012, net loan charge-offs as an annualized percentage of average outstanding loans were 1.85% and 1.70%, compared to 1.58% and 11.46%, respectively, for the same periods in 2011.

As the residential construction and housing markets have struggled, it has been difficult for many builders and developers to produce cash flow needed to service debt from selling lots and houses. This deterioration of the residential construction and housing market was the primary factor that resulted in higher credit losses and increases in non-performing assets over the last four years. Although a majority of the charge-offs have been within the residential construction and development portion of the portfolio, credit quality deterioration migrated to other loan categories as pressure resulting from economic conditions has persisted and unemployment levels have remained high throughout United’s markets. Additional discussion on credit quality and the allowance for loan losses is included in the Asset Quality and Risk Elements section of this report on page 42.

37

Fee Revenue

Operating fee revenue for the three and six months ended June 30, 2012 was $12.9 million and $28.2 million, respectively, a decrease of $1.04 million, or 7%, compared to second quarter of 2011, and an increase of $2.50 million, or 10%, from the year-to-date period of 2011. The following table presents the components of fee revenue for the second quarters and first six months of 2012 and 2011.

Table 5—Fee Revenue

(in thousands)

	Three Months Ended												Six Months Ended
	June 30,						Change						June 30,						Change
	2012			2011			Amount			Percent			2012			2011			Amount			Percent
Overdraft fees	$	3,232		$	3,657		$	(425	)		(12	)	$	6,477		$	7,168		$	(691	)		(10	)
Debit card fees		3,242			3,279			(37	)		(1	)		6,344			5,809			535			9
Other service charges and fees		1,342			672			670			100			2,778			1,351			1,427			106
Service charges and fees		7,816			7,608			208			3			15,599			14,328			1,271			9
Mortgage loan and related fees		2,322			952			1,370			144			4,421			2,446			1,975			81
Brokerage fees		809			691			118			17			1,622			1,368			254			19
Securities gains, net		6,490			783			5,707						7,047			838			6,209
Losses from prepayment of debt		(6,199	)		(791	)		(5,408	)					(6,681	)		(791	)		(5,890	)
Hedge ineffectiveness		(180	)		2,809			(2,989	)					(65	)		4,112			(4,177	)
Other		1,809			1,853			(44	)		(2	)		6,303			3,442			2,861			83
Total fee revenue	$	12,867		$	13,905		$	(1,038	)		(7	)	$	28,246		$	25,743		$	2,503			10

Service charges and fees of $7.82 million were up $208,000, or 3%, from the second quarter of 2011. For the first six months of 2012, service charges and fees of $15.6 million were up $1.27 million, or 9%, from the same period in 2011. The increase was primarily due to new charges on deposit accounts that more than offset a decline in overdraft fees resulting from decreased utilization of our courtesy overdraft services.

Mortgage loans and related fees for the second quarter and first six months of 2012 were up $1.37 million, or 144%, and $1.98 million, or 81%, respectively, from the same periods in 2011. In the second quarter of 2012, United closed 507 loans totaling $79.8 million compared with 349 loans totaling $50.5 million in the second quarter of 2011. Origination volumes were driven by the changing interest rate environment which had a significant impact on refinancing activity. Year-to-date mortgage production in 2012 amounted to 1,024 loans totaling $161 million, compared to 830 loans totaling $125 million for the same period in 2011.

United recognized net securities gains of $6.49 million and $7.05 million for the three and six months ended June 30, 2012. Net securities gains totaled $783,000 in the second quarter of 2011 and $838,000 for the first six months of 2011. United also recognized charges from the prepayment of Federal Home Loan Bank advances and structured repurchase agreements in the second quarter and first six months of 2012 and 2011. The losses were part of the same balance sheet management activities that resulted in the securities gains. The balance sheet management activities included the sale of $175 million in securities and the prepayment of $75 million in fixed rate borrowings, the effect of which was to reduce sensitivity to rising interest rates and improve the net interest margin. The securities gains and prepayment losses were mostly offsetting and had little net impact on financial results in the periods incurred.

In the second quarter of 2012, United recognized $180,000 in losses from hedge ineffectiveness compared with $2.81 million in gains from hedge ineffectiveness in the second quarter of 2011. For the first six months of 2012, United recognized $65,000 in losses from hedge ineffectiveness compared with $4.11 million in gains for the same period of 2011. Much of the hedge ineffectiveness relates to terminated cash flow hedges where the gains realized on the terminated positions are being deferred over the original term of the derivative instrument. The ineffectiveness, which is caused by a decrease in qualifying prime-based loans, results in the accelerated recognition of the deferred gains. In 2012, a portion of the hedge ineffectiveness gains and losses resulted from ineffectiveness on fair value hedges of brokered deposits. The second quarter of 2012 included $223,000 in hedge ineffectiveness losses on fair value hedges. The first six months of 2012 included $189,000 of net hedge ineffectiveness losses on fair value hedges of brokered deposits.

Other fee revenue of $1.81 million for the second quarter of 2012 was down $44,000, or 2%. For the first six months of 2012, other fee revenue of $6.30 million was up 2.86 million, or 83%, from the same period in 2011. The first quarter of 2012 included $1.1 million in interest received for 2008’s federal tax refund and $728,000 in gains from the sale of low income housing tax credits.

38

Operating Expenses

The following table presents the components of operating expenses for the three and six months ended June 30, 2012 and 2011.

Table 6—Operating Expenses

(in thousands)

	Three Months Ended												Six Months Ended
	June 30,						Change						June 30,					Change
	2012			2011			Amount			Percent			2012			2011		Amount			Percent
Salaries and employee benefits	$	24,297		$	26,436		$	(2,139	)		(8	)	$	49,522		$	51,360	$	(1,838	)		(4	)
Communications and equipment		3,211			3,378			(167	)		(5	)		6,366			6,722		(356	)		(5	)
Occupancy		3,539			3,805			(266	)		(7	)		7,310			7,879		(569	)		(7	)
Advertising and public relations		1,088			1,317			(229	)		(17	)		1,934			2,295		(361	)		(16	)
Postage, printing and supplies		916			1,085			(169	)		(16	)		1,895			2,203		(308	)		(14	)
Professional fees		1,952			2,350			(398	)		(17	)		3,927			5,680		(1,753	)		(31	)
FDIC assessments and other regulatory charges		2,545			3,644			(1,099	)		(30	)		5,055			9,057		(4,002	)		(44	)
Amortization of intangibles		730			760			(30	)		(4	)		1,462			1,522		(60	)		(4	)
Other		4,181			4,062			119			3			8,118			10,491		(2,373	)		(23	)
Total excluding foreclosed property expenses		42,459			46,837			(4,378	)		(9	)		85,589			97,209		(11,620	)		(12	)
Net (gains) losses on sales of foreclosed properties		(269	)		(3,218	)		2,949						(176	)		8,802		(8,978	)
Foreclosed property write downs		1,008			3,118			(2,110	)					3,119			51,703		(48,584	)
Foreclosed property maintenance expenses		1,112			1,991			(879	)		(44	)		2,733			6,285		(3,552	)		(57	)
Total operating expenses	$	44,310		$	48,728		$	(4,418	)		(9	)	$	91,265		$	163,999	$	(72,734	)		(44	)

Operating expenses for the second quarter of 2012 totaled $44.3 million, down $4.42 million, or 9%, from the second quarter of 2011. For the six months ended June 30, 2012, operating expenses totaled $91.3 million, down $72.7 million, or 44%, from the same period in 2011. Higher foreclosed property losses incurred in connection with United’s Problem Asset Disposition Plan were reflected in the six months ended June 30, 2011. Excluding foreclosed property costs, total operating expenses were $42.5 million and $85.6 million for the three and six months ended June 30, 2012, down $4.38 million, or 9%, from the second quarter of 2011 and down $11.6 million, or 12%, from a year ago. Decreases in operating expenses occurred in nearly every category reflecting management’s focused efforts in reducing costs and improving operating efficiency.

Salaries and employee benefits for the second quarter of 2012 were $24.3 million, down $2.14 million, or 8%, from the same period of 2011. For the first six months of 2012, salaries and employee benefits of $49.5 million were down $1.84 million, or 4%, from the first six months of 2011. The decrease was due to a combination of reduced staffing, lower group medical insurance costs and a 50% reduction in the matching contribution on United’s 401(k) and profit sharing plan that became effective on April 1, 2012. Headcount totaled 1,614 at June 30, 2012, compared to 1,767 at June 30, 2011.

Occupancy expense of $3.53 million and $7.31 million, respectively, for the second quarter and first six months of 2012 was down $266,000, or 7%, and down $569,000, or 7%, respectively, compared to the same periods of 2011. The decrease was across all subcategories of occupancy expense including building maintenance, insurance and depreciation.

Advertising and public relations expense for the second quarter of 2012 totaled $1.09 million, down $229,000, or 17%, from the second quarter of 2011. For the six months ended June 30, 2012 and 2011, advertising and public relations expense totaled $1.93 million and $2.30 million, respectively. The decrease for both periods is due to efforts to reduce discretionary spending.

Postage, printing and supplies expense for the second quarter of 2012 totaled $916,000, down $169,000, or 16%, from the same period of 2011. For the six months ended June 30, 2012 and 2011, postage, printing and supplies expense totaled $1.90 million and $2.20 million, respectively. The decrease was primarily due to lower office supplies and outside courier expenses.

Professional fees for the second quarter of 2012 of $1.95 million were down $398,000, or 17%, from the same period in 2011. For the six months ended June 30, 2012 professional fees of $3.93 million were down $1.75 million, or 31%, primarily due to professional service costs associated with the Bulk Loan Sale that were incurred in the first quarter of 2011.

FDIC assessments and other regulatory charges of $2.55 million and $5.06 million for the second quarter and first six months of 2012, decreased $1.10 million, or 30%, from the second quarter of 2011 and decreased $4.00 million, or 44%, compared to the first six months of 2011. The FDIC’s change to an asset based formula effective April 1, 2011 was more favorable to United and lowered United’s assessment. United’s assessment rate was reduced further late in the second quarter of 2011.

Other expense of $4.18 million for the second quarter of 2012 increased $119,000 from the second quarter of 2011. Year-to-date, other expense of $8.12 million decreased $2.37 million from the first six months of 2011. The year-to-date decrease was primarily due to $2.60 million of property taxes and other loan collateral costs incurred to prepare loans for the Bulk Loan Sale. The decrease for the quarter was primarily due to lower loan collection costs.

39

Net gains on sales of foreclosed property totaled $269,000 for the second quarter of 2012, compared to net gains on sale of $3.22 million for the second quarter of 2011. For the six months ended June 30, 2012, net gains on sale were $176,000 compared to net losses on sale of $8.80 million for the same period of the prior year. Foreclosed property write-downs for the second quarter and first six months of 2012 were $1.01 million and $3.12 million compared to $3.12 million and $51.7 million a year ago. The year to date decrease reflected higher write downs in the first half of 2011 on foreclosed properties to expedite sales under the Problem Asset Disposition Plan. Foreclosed property maintenance expenses include legal fees, property taxes, marketing costs, utility services, maintenance and repair charges that totaled $1.11 million and $2.73 million, respectively, for the second quarter and first six months of 2012 compared with $1.99 million and $6.29 million, respectively, a year ago. Foreclosed property costs in general are down in the second quarter from a year ago due to lower balances of foreclosed property after execution of United’s Problem Asset Disposition Plan beginning in the first quarter of 2011.

Income Taxes

Income tax expense for the second quarter of 2012 was $450,000 as compared with income tax expense of $666,000 for the second quarter of 2011, representing an effective tax rate of approximately 6.48% and 5.25%, respectively. Because of the full valuation allowance on United’s net deferred tax asset, United’s tax expense on its pre-tax earnings represents adjustments to its reserve for uncertain tax positions and amounts payable under the Federal Alternative Minimum Tax.

At June 30, 2012, United reported no net deferred tax asset due to a full valuation allowance of $277 million. The Financial Accounting Standard’s Board Accounting Standards Codification (“ASC”) 740, Income Taxes, requires that companies assess whether a valuation allowance should be established against their deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. Management considers both positive and negative evidence and analyzes changes in near-term market conditions as well as other factors which may impact future operating results. In making such judgments, significant weight is given to evidence that can be objectively verified. The deferred tax assets are analyzed quarterly for changes affecting realizability. Because management has determined that the objective negative evidence outweighs the positive evidence, management has established a full valuation allowance against its net deferred tax asset.

As of February 22, 2011, United adopted a tax benefits preservation plan designed to protect its ability to utilize its substantial tax assets. Those tax assets include net operating losses that it could utilize in certain circumstances to offset taxable income and reduce its federal income tax liability and the future tax benefits from potential net unrealized built in losses. United’s ability to use its tax benefits would be substantially limited if it were to experience an ownership change as defined under Section 382. In general, an ownership change would occur if United’s “5-percent shareholders,” as defined under Section 382, collectively increase their ownership in United by more than 50% over a rolling three-year period. The tax benefits preservation plan is designed to reduce the likelihood that United will experience an ownership change by discouraging any person or group from becoming a beneficial owner of 4.99% or more of United’s common stock then outstanding.

In connection with the tax benefits preservation plan, on February 22, 2011, United entered into a share exchange agreement with the Elm Ridge Parties to transfer to the Company 1,551,126 shares of United’s common stock, in exchange for 16,613 shares of the Company’s series D preferred shares and warrants to purchase 1,551,126 shares of common stock. Prior to entering into the share exchange agreement, collectively, the Elm Ridge Parties were United’s largest shareholder. By exchanging the Elm Ridge Parties’ common stock for the Series D Preferred Shares and warrants, United eliminated its only “5-percent shareholder” and, as a result, obtained further protection against an ownership change under Section 382.

Additional information regarding income taxes, including a reconciliation of the differences between the recorded income tax provision and the amount of income tax computed by applying the statutory federal income tax rate to income before income taxes, can be found in Note 15 to the consolidated financial statements filed with United’s Annual Report on Form 10-K for the year ended December 31, 2011.

Balance Sheet Review

Total assets at June 30, 2012, December 31, 2011 and June 30, 2011 were $6.74 billion, $6.98 billion and $7.15 billion, respectively. Average total assets for the second quarter of 2012 were $6.99 billion, down from $7.36 billion in the second quarter of 2011.

40

The following table presents a summary of the loan portfolio.

Table 7—Loans Outstanding (excludes loans covered by loss share agreement)

(in thousands)

	June 30,			December 31,			June 30,
	2012			2011			2011
By Loan Type
Commercial (secured by real estate)	$	1,836,477		$	1,821,414		$	1,741,754
Commercial & industrial		450,222			428,249			428,058
Commercial construction		169,338			164,155			195,190
Total commercial		2,456,037			2,413,818			2,365,002
Residential mortgage		1,128,336			1,134,902			1,177,226
Residential construction		408,966			448,391			501,909
Consumer installment		125,896			112,503			119,310
Total loans	$	4,119,235		$	4,109,614		$	4,163,447
As a percentage of total loans:
Commercial (secured by real estate)		45	%		44	%		42	%
Commercial & industrial		11			10			10
Commercial construction		4			4			5
Total commercial		60			58			57
Residential mortgage		27			28			28
Residential construction		10			11			12
Consumer installment		3			3			3
Total		100	%		100	%		100	%
By Geographic Location
North Georgia	$	1,387,204		$	1,425,811		$	1,499,687
Atlanta MSA		1,252,140			1,219,652			1,188,262
North Carolina		576,141			597,446			626,230
Coastal Georgia		369,280			346,189			325,650
Gainesville MSA		258,916			264,567			274,744
East Tennessee		275,554			255,949			248,874
Total loans	$	4,119,235		$	4,109,614		$	4,163,447

Substantially all of United’s loans are to customers (including customers who have a seasonal residence in United’s market areas) located in the immediate market areas of its community banks in Georgia, North Carolina, and Tennessee, and more than 85% of the loans are secured by real estate. At June 30, 2012, total loans, excluding loans acquired from SCB that are covered by loss sharing agreements with the FDIC, were $4.12 billion, a decrease of $44.2 million, or 1%, from June 30, 2011. The rate of loan growth began to decline in the first quarter of 2007 and the balances have continued to decline over the last four years. The decrease in the loan portfolio began with deterioration in the residential construction and housing markets. This deterioration resulted in part as an oversupply of lot inventory, houses and land within United’s markets, which further slowed construction activities and acquisition and development projects. The resulting recession that began in the housing market led to high rates of unemployment that resulted in stress in the other segments of United’s loan portfolio. Despite the weak economy and lack of loan demand, United has continued to pursue lending opportunities which resulted in $86.5 million in new loans funded during the second quarter of 2012 and net positive loan growth of $9.62 million in the first six months of 2012. The rate of decrease in the loan portfolio dropped significantly following the execution of the Problem Asset Disposition Plan in the first quarter of 2011 and has continued to stabilize resulting in the modest growth in the first half of 2012.

41

Asset Quality and Risk Elements

United manages asset quality and controls credit risk through review and oversight of the loan portfolio as well as adherence to policies designed to promote sound underwriting and loan monitoring practices. United’s credit administration function is responsible for monitoring asset quality, establishing credit policies and procedures and enforcing the consistent application of these policies and procedures among all of the community banks. Additional information on the credit administration function is included in Item 1 under the heading Loan Review and Non-performing Assets in United’s Annual Report on Form 10-K for the year ended December 31, 2011.

United classifies performing loans as “substandard” when there is a well-defined weakness or weaknesses that jeopardize the repayment by the borrower and there is a distinct possibility that United could sustain some loss if the deficiency is not corrected. The table below presents performing substandard loans for the last five quarters.

Table 8 —Performing Substandard Loans

(in thousands)

	June 30,		March 31,		December 31,		September 30,		June 30,
	2012		2012		2011		2011		2011
By Category
Commercial (sec. by RE)	$	148,418	$	133,840	$	143,058	$	134,356	$	117,525
Commercial & industrial		15,916		17,217		15,753		24,868		16,645
Commercial construction		37,876		23,256		18,510		26,530		31,347
Total commercial		202,210		174,313		177,321		185,754		165,517
Residential mortgage		73,277		75,736		76,442		76,707		70,396
Residential construction		45,450		64,274		71,955		76,179		74,277
Consumer installment		2,706		2,610		2,751		2,703		2,923
Total	$	323,643	$	316,933	$	328,469	$	341,343	$	313,113
By Market
North Georgia	$	121,358	$	131,253	$	134,945	$	156,063	$	140,886
Atlanta MSA		105,647		94,191		99,453		97,906		97,931
North Carolina		38,049		38,792		40,302		36,724		30,202
Coastal Georgia		20,164		19,342		24,985		23,966		22,945
Gainesville MSA		20,524		18,745		17,338		19,615		14,957
East Tennessee		17,901		14,610		11,446		7,069		6,192
Total loans	$	323,643	$	316,933	$	328,469	$	341,343	$	313,113

At June 30, 2012, performing substandard loans totaled $324 million and increased $6.71 million from the prior quarter-end, and increased $10.5 million from a year ago. The increase from the second quarter of 2011 was primarily in the commercial secured by real estate and commercial construction categories, primarily in the Atlanta MSA, western North Carolina, Gainesville MSA and east Tennessee markets.

Reviews of substandard performing and non-performing loans, troubled debt restructures, past due loans and larger credits, are conducted on a regular basis with management each quarter and are designed to identify risk migration and potential charges to the allowance for loan losses. These reviews are performed by the responsible lending officers and the loan review department and also consider such factors as the financial strength of borrowers, the value of the applicable collateral, past loan loss experience, anticipated loan losses, changes in risk profile, prevailing economic conditions and other factors. In addition to United’s internal loan review, United also uses external loan review to ensure the independence of the loan review process.

42

The following table presents a summary of the changes in the allowance for loan losses for the three and six months ended June 30, 2012 and 2011.

Table 9—Allowance for Loan Losses

(in thousands)

	Three Months Ended June 30,											Six Months Ended June 30,
	2012			2011								2012		2011
				Problem (1)										Problem (1)
				Asset										Asset
				Disposition										Disposition
	Total			Plan			Other		Total			Total		Plan		Other		Total
Balance beginning of period	$	113,601							$	133,121		$	114,468					$	174,695
Provision for loan losses		18,000								11,000			33,000						201,000
Charge-offs:
Commercial (secured by real estate)		4,418		$	(1,713	)	$	5,146		3,433			8,346	$	44,052	$	8,088		52,140
Commercial (commercial and industrial)		888			(116	)		720		604			1,644		3,411		1,555		4,966
Commercial construction		88			(1,332	)		2,312		980			452		47,237		3,458		50,695
Residential mortgage		4,014			(1,255	)		5,922		4,667			9,781		30,139		11,204		41,343
Residential construction		9,846			(2,842	)		9,611		6,769			15,475		78,653		20,371		99,024
Consumer installment		408			(11	)		894		883			1,161		297		1,682		1,979
Total loans charged-off		19,662			(7,269	)		24,605		17,336			36,859		203,789		46,358		250,147
Recoveries:
Commercial (secured by real estate)		69			—			174		174			300		—		274		274
Commercial (commercial and industrial)		113			—			81		81			200		—		403		403
Commercial construction		—			—			111		111			30		—		111		111
Residential mortgage		152			—			78		78			544		—		371		371
Residential construction		283			—			140		140			598		—		257		257
Consumer installment		149			—			269		269			424		—		674		674
Total recoveries		766			—			853		853			2,096		—		2,090		2,090
Net charge-offs		18,896		$	(7,269	)	$	23,752		16,483			34,763	$	203,789	$	44,268		248,057
Balance end of period	$	112,705							$	127,638		$	112,705					$	127,638
Total loans: *
At period-end	$	4,119,235							$	4,163,447		$	4,119,235					$	4,163,447
Average		4,112,995								4,196,375			4,115,315						4,364,401
Allowance as a percentage of period-end loans		2.74	%							3.07	%		2.74						3.07	%
As a percentage of average loans:
Net charge-offs		1.85								1.58			1.70						11.46
Provision for loan losses		1.76								1.05			1.61						9.29
Allowance as a percentage of non-performing loans		98								180			98						180

* Excludes loans covered by loss sharing agreements with the FDIC

⁽¹⁾ During the first quarter of 2011, United’s Problem Asset Dispostion Plan resulted in charge-offs totaling $186 million related to the Bulk Loan Sale that closed on April 18, 2011. The charge-offs were estimated based on indicative bids from prospective purchasers. Also in the first quarter related to United’s Problem Asset Disposition Plan was an additional $9.5 million in charge-offs related to other bulk loan sales that were completed in the first quarter of 2011 and $15.6 million in charge-offs on foreclosed properties related to the Problem Asset Disposition Plan. The loans sold in the Bulk Loan Sale that closed April 18, 2011 were reported in the loans held for sale category at March 31, 2011 Actual losses upon closing of the Bulk Loan Sale were $179 resulting in a $7.269 million reduction in charge-offs in the second quarter. Total losses related to the Problem Asset Disposition Plan for the first six months of 2011 were $203.8 million.

The provision for loan losses charged to earnings was based upon management’s judgment of the amount necessary to maintain the allowance at a level appropriate to absorb losses inherent in the loan portfolio at the balance sheet date. The amount each quarter is dependent upon many factors, including growth and changes in the composition of the loan portfolio, net charge-offs, delinquencies, management’s assessment of loan portfolio quality, the value of collateral, and other macro-economic factors and trends. The evaluation of these factors is performed quarterly by management through an analysis of the appropriateness of the allowance for loan losses.

At June 30, 2012 the allowance for loan losses was $113 million, or 2.74% of loans, compared with $114 million, or 2.79% of loans, at December 31, 2011 and $128 million, or 3.07% of loans, at June 30, 2011. The declining balance of the allowance for loan losses over the last four quarters reflects an overall improving trend in credit quality of the loan portfolio.

Management believes that the allowance for loan losses at June 30, 2012 reflects the losses inherent in the loan portfolio. This assessment involves uncertainty and judgment; therefore, the adequacy of the allowance for loan losses cannot be determined with precision and may be subject to change in future periods. The amount of any changes could be significant if management’s assessment of loan quality or collateral values change substantially with respect to one or more loan relationships or portfolios. In addition, bank regulatory authorities, as part of their periodic examination of the Bank, may require adjustments to the provision for loan losses in future periods if, in their opinion, the results of their review warrant such additions. See the “Critical Accounting Policies” section for additional information on the allowance for loan losses.

43

Nonperforming Assets

The table below summarizes nonperforming assets, excluding SCB’s assets covered by the loss-sharing agreement with the FDIC. Those assets have been excluded from nonperforming assets, as the loss-sharing agreement with the FDIC and purchase price adjustments to reflect credit losses effectively eliminate the likelihood of recognizing any losses on the covered assets.

Table 10 — Nonperforming Assets

(in thousands)

	June 30,			December 31,			June 30,
	2012			2011			2011
Nonperforming loans*	$	115,340		$	127,479		$	71,065
Foreclosed properties (OREO)		30,421			32,859			47,584
Total nonperforming assets	$	145,761		$	160,338		$	118,649
Nonperforming loans as a percentage of total loans		2.80	%		3.10	%		1.71	%
Nonperforming assets as a percentage of total loans and OREO		3.51			3.87			2.82
Nonperforming assets as a percentage of total assets		2.16			2.30			1.66

* There were no loans 90 days or more past due that were still accruing at period end.

At June 30, 2012, nonperforming loans were $115 million, compared to $127 million at December 31, 2011 and $71.1 million at June 30, 2011. Contributing to the increase in the ratio of nonperforming loans to total loans from June 30, 2011 to June 30, 2012 was the classification of United’s largest lending relationship. Nonperforming assets, which include nonperforming loans and foreclosed real estate, totaled $146 million at June 30, 2012, compared with $160 million at December 31, 2011 and $119 million at June 30, 2011. United sold $10.5 million and $19.1 million, respectively, of foreclosed properties during the second quarter and first six months of 2012. Both of these events helped lower the balance of foreclosed properties by 36% compared to June 30, 2011.

United’s policy is to place loans on nonaccrual status when, in the opinion of management, the principal and interest on a loan is not likely to be repaid in accordance with the loan terms or when the loan becomes 90 days past due and is not well secured and in the process of collection. When a loan is classified on nonaccrual status, interest previously accrued but not collected is reversed against current interest revenue. Principal and interest payments received on a nonaccrual loan are applied to reduce outstanding principal.

44

The following table summarizes non-performing assets by category and market. As with Tables 7, 8 and 10, assets covered by the loss-sharing agreement with the FDIC, related to the acquisition of SCB, are excluded from this table.

Table 11—Nonperforming Assets by Quarter ⁽¹⁾

(in thousands)

	June 30, 2012									December 31, 2011									June 30, 2011
	Nonaccrual			Foreclosed			Total			Nonaccrual			Foreclosed			Total			Nonaccrual			Foreclosed			Total
	Loans			Properties			NPAs			Loans			Properties			NPAs			Loans			Properties			NPAs
BY CATEGORY
Commercial (sec. by RE)	$	19,115		$	10,586		$	29,701		$	27,322		$	9,745		$	37,067		$	17,764		$	6,796		$	24,560
Commercial & industrial		34,982			—			34,982			34,613			—			34,613			1,998			—			1,998
Commercial construction		18,175			2,732			20,907			16,655			3,336			19,991			2,782			6,764			9,546
Total commercial		72,272			13,318			85,590			78,590			13,081			91,671			22,544			13,560			36,104
Residential mortgage		16,631			5,591			22,222			22,358			6,927			29,285			24,809			9,056			33,865
Residential construction		25,530			11,512			37,042			25,523			12,851			38,374			22,643			24,968			47,611
Consumer installment		907			—			907			1,008			—			1,008			1,069			—			1,069
Total NPAs	$	115,340		$	30,421		$	145,761		$	127,479		$	32,859		$	160,338		$	71,065		$	47,584		$	118,649
Balance as a % of Unpaid Principal		68.8	%		39.3	%		59.4	%		71.3	%		35.9	%		59.3	%		64.5	%		32.6	%		46.3	%
BY MARKET
North Georgia	$	77,332		$	13,546		$	90,878		$	88,600		$	15,136		$	103,736		$	28,117		$	21,278		$	49,395
Atlanta MSA		17,593			8,651			26,244			14,480			6,169			20,649			14,700			11,239			25,939
North Carolina		10,657			3,287			13,944			15,100			5,365			20,465			15,153			8,953			24,106
Coastal Georgia		5,822			785			6,607			5,248			1,620			6,868			5,357			2,564			7,921
Gainesville MSA		991			2,998			3,989			2,069			3,760			5,829			4,505			3,174			7,679
East Tennessee		2,945			1,154			4,099			1,982			809			2,791			3,233			376			3,609
Total NPAs	$	115,340		$	30,421		$	145,761		$	127,479		$	32,859		$	160,338		$	71,065		$	47,584		$	118,649

⁽¹⁾  Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of SCB.

Nonperforming assets in the residential construction category were $37.0 million at June 30, 2012, compared with $47.6 million at June 30, 2011, a decrease of $10.6 million, or 22%. Commercial nonperforming assets increased from $36.1 million at June 30, 2011 to $85.6 million at June 30, 2012. Residential mortgage non-performing assets of $22.2 million decreased $11.6 million from June 30, 2011. The overall increase in nonperforming assets was concentrated in the North Georgia market and is mostly due to placing United’s largest lending relationship on nonaccrual status in the third quarter of 2011. Placing this loan relationship on nonaccrual was also the cause of the increase in commercial nonperforming assets from June 30, 2011.

At June 30, 2012, December 31, 2011, and June 30, 2011 United had $168 million, $124 million and $46.2 respectively, in loans with terms that have been modified in a troubled debt restructuring (“TDR”). Included therein were $26.0 million, $17.9 million and $4.75 million of TDRs that were not performing in accordance with their modified terms and were included in nonperforming loans. The remaining TDRs with an aggregate balance of $142 million, $106 million and $41.5 million, respectively, were performing according to their modified terms and are therefore not considered to be nonperforming assets.

At June 30, 2012, December 31, 2011, and June 30, 2011, there were $294 million, $257 million and $35.7 million, respectively, of loans classified as impaired under the definition outlined in the ASC. Included in impaired loans at June 30, 2012, December 31, 2011 and June 30, 2011, was $215 million, $189 million and $32.8 million, respectively that did not require specific reserves or had previously been charged down to net realizable value. The balance of impaired loans at June 30, 2012, December 31, 2011 and June 30, 2011, of $78.9 million, $68.8 million and $2.86 million, respectively, had specific reserves that totaled $17.4 million, $14.8 million and $1.17 million, respectively. The average recorded investment in impaired loans for the second quarters of 2012 and 2011 was $287 million and $42.1 million, respectively. For the three and six months ended June 30, 2012, United recognized $2.42 and $4.69, respectively, in interest revenue on impaired loans. There was no interest revenue recognized on loans while they were impaired for the first six months of 2011. United’s policy is to discontinue the recognition of interest revenue for loans classified as impaired under ASC 310-10-35, Receivables, when a loan meets the criteria for nonaccrual status. Impaired loans increased from 2011 to 2012 due to the classification and change of accrual status of United’s largest lending relationship and the increase in TDRs which are considered impaired.

45

The table below summarizes activity in non-performing assets by quarter. Assets covered by loss sharing agreements with the FDIC, related to the acquisition of SCB, are not included in this table.

Table 12—Activity in Nonperforming Assets by Quarter

(in thousands)

	Second Quarter 2012 (1)									Second Quarter 2011 (1)
	Nonaccrual			Foreclosed			Total			Nonaccrual			Foreclosed			Total
	Loans			Properties			NPAs			Loans			Properties			NPAs
Beginning Balance	$	129,704		$	31,887		$	161,591		$	83,769		$	54,378		$	138,147
Loans placed on non-accrual (2)		29,364			—			29,364			35,911			—			35,911
Payments received		(15,027	)		—			(15,027	)		(7,702	)		—			(7,702	)
Loan charge-offs		(19,382	)		—			(19,382	)		(18,888	)		—			(18,888	)
Foreclosures		(9,319	)		9,319			—			(22,025	)		22,025			—
Capitalized costs		—			415			415			—			20			20
Note / property sales		—			(10,461	)		(10,461	)		—			(28,939	)		(28,939	)
Write downs		—			(1,008	)		(1,008	)		—			(3,118	)		(3,118	)
Net gains (losses) on sales		—			269			269			—			3,218			3,218
Ending Balance	$	115,340		$	30,421		$	145,761		$	71,065		$	47,584		$	118,649
	First Six Months 2012 (1)									First Six Months 2011 (1)(2)
	Nonaccrual			Foreclosed			Total			Nonaccrual			Foreclosed			Total
	Loans			Properties			NPAs			Loans			Properties			NPAs
Beginning Balance	$	127,479		$	32,859		$	160,338		$	179,094		$	142,208		$	321,302
Loans placed on non-accrual (2)		61,801			—			61,801			90,641			—			90,641
Payments received		(20,972	)		—			(20,972	)		(11,252	)		—			(11,252	)
Loan charge-offs		(34,115	)		—			(34,115	)		(62,857	)		—			(62,857	)
Foreclosures		(18,853	)		18,853			—			(39,077	)		39,077			—
Capitalized costs		—			744			744			—			290			290
Note / property sales		—			(19,092	)		(19,092	)		(11,400	)		(73,486	)		(84,886	)
Loans transferred to held for sale		—			—			—			(74,084	)		—			(74,084	)
Write downs		—			(3,119	)		(3,119	)		—			(51,703	)		(51,703	)
Net losses on sales		—			176			176			—			(8,802	)		(8,802	)
Ending Balance	$	115,340		$	30,421		$	145,761		$	71,065		$	47,584		$	118,649

⁽¹⁾  Excludes non-performing loans and foreclosed properties covered by the loss-sharing agreement with the FDIC, related to the acquisition of SCB.

⁽²⁾  The NPA activity shown for the first six months of 2011 is presented with all activity related to loans transferred to the held for sale classification on one line as if those loans were transferred to held for sale at the beginning of the period. During the first quarter of 2011, $27.1 million in loans transferred to held for sale were placed on nonaccrual, $1.1 million in payments were received on nonaccrual loans transferred to held for sale and $66.6 million in charge-offs were recorded on nonaccrual loans transferred to held for sale to mark them down to the expected proceeds from the sale.

Foreclosed property is initially recorded at fair value, less estimated costs to sell. If the fair value, less estimated costs to sell at the time of foreclosure, is less than the loan balance, the deficiency is charged against the allowance for loan losses. If the lesser of fair value, less estimated costs to sell or the listed selling price, less the costs to sell, of the foreclosed property decreases during the holding period, a valuation allowance is established with a charge to foreclosed property expense. When the foreclosed property is sold, a gain or loss is recognized on the sale for the difference between the sales proceeds and the carrying amount of the property. Financed sales of foreclosed property are accounted for in accordance with ASC 360-20, Real Estate Sales.

For the second quarter and first six months of 2012, United transferred $9.32 million and $18.9 million, respectively, of loans into foreclosed property. During the same periods, proceeds from sales of foreclosed property were $10.5 million and $19.1 million, respectively, which includes $2.54 million and $4.47 million of sales that were financed by United, respectively. During the second quarter and first six months of 2011, United transferred $22.0 million and $39.1 million, respectively, of loans into foreclosed property. During the same periods, proceeds from sales of foreclosed properties were $28.9 million and $73.5 million, respectively, which includes $4.63 million and $13.2 million, respectively, of sales that were financed by United. During the first quarter of 2011, United recorded $48.6 million in write-downs on foreclosed property in order to expedite sales in the following quarters as part of its Problem Asset Disposition Plan.

46

Investment Securities

The composition of the investment securities portfolio reflects United’s investment strategy of maintaining an appropriate level of liquidity while providing a relatively stable source of revenue. The investment securities portfolio also provides a balance to interest rate risk and credit risk in other categories of the balance sheet while providing a vehicle for the investment of available funds, furnishing liquidity, and supplying securities to pledge as required collateral for certain deposits. Total investment securities at June 30, 2012 decreased $203 million from a year ago.

At June 30, 2012, United had securities held to maturity with a carrying value of $283 million and securities available for sale totaling $1.70 billion. At June 30, 2012, December 31, 2011, and June 30, 2011, the securities portfolio represented approximately 29%, 30%, and 31% of total assets, respectively.

The investment securities portfolio primarily consists of U.S. government sponsored agency mortgage-backed securities, non-agency mortgage-backed securities, U.S. government agency securities, corporate securities, municipal securities and asset-backed securities. Mortgage-backed securities rely on the underlying pools of mortgage loans to provide a cash flow of principal and interest. The actual maturities of these securities will differ from contractual maturities because loans underlying the securities can prepay. Decreases in interest rates will generally cause an acceleration of prepayment levels. In a declining interest rate environment, United may not be able to reinvest the proceeds from these prepayments in assets that have comparable yields. In a rising rate environment, the opposite occurs. Prepayments tend to slow and the weighted average life extends. This is referred to as extension risk which can lead to lower levels of liquidity due to the delay of cash receipts and can result in the holding of a below market yielding asset for a longer period of time.

Other Intangible Assets

Other intangible assets, primarily core deposit intangibles representing the value of United’s acquired deposit base, are amortizing intangible assets that are required to be tested for impairment only when events or circumstances indicate that impairment may exist. There were no events or circumstances that led management to believe that any impairment exists in United’s other intangible assets.

Deposits

United initiated several programs in early 2009 to improve core earnings by growing customer transaction deposit accounts and lowering overall pricing on deposit accounts to improve its net interest margin and increase net interest revenue. The programs were very successful in increasing core transaction deposit accounts and allowing for the reduction of more costly time deposit balances as United’s funding needs decreased due to lower loan demand. United has continued to pursue customer transaction deposits by stressing its high customer satisfaction scores.

Total deposits as of June 30, 2012 were $5.82 billion, a decrease of $361 million from June 30, 2011. Total non-interest-bearing demand deposit accounts of $1.15 billion increased $251 million, or 28%, due to the success of core deposit programs. Also impacted by the programs were NOW, money market and savings accounts of $2.53 billion which increased $39.1 million, or 2%, from June 30, 2011.

Total time deposits, excluding brokered deposits, as of June 30, 2012 were $1.93 billion, down $561 million from June 30, 2011. Time deposits less than $100,000 totaled $1.16 billion, a decrease of $344 million, or 23%, from a year ago. Time deposits of $100,000 and greater totaled $764 million as of June 30, 2012, a decrease of $217 million, or 22%, from June 30, 2011. United continued to offer low rates on certificates of deposit, allowing balances to decline as United’s funding needs declined due to weak loan demand.

Wholesale Funding

The Bank is a shareholder in the Federal Home Loan Bank (“FHLB”) of Atlanta. Through this affiliation, FHLB secured advances totaled $125.1 million and $40.6 million as of June 30, 2012 and 2011, respectively. United anticipates continued use of this short and long-term source of funds. FHLB advances outstanding at June 30, 2012 had fixed interest rates ranging from .21% to .24%. During the second quarter of 2012 and 2011, United prepaid approximately $25.0 million and $14.5 million, respectively, of fixed-rate advances and incurred prepayment charges of $1.72 million and $791,000, respectively. Additional information regarding FHLB advances is provided in Note 11 to the consolidated financial statements included in United’s Annual Report on Form 10-K for the year ended December 31, 2011.

At June 30, 2012 and 2011, United had $53.7 million and $104 million, respectively, in repurchase agreements and other short-term borrowings outstanding. During the second quarter of 2012, United prepaid $50 million in structured repurchase agreements and incurred prepayment charges of $4.48 million. United takes advantage of these additional sources of liquidity when rates are favorable compared to other forms of short-term borrowings, such as FHLB advances and brokered deposits.

47

Interest Rate Sensitivity Management

The absolute level and volatility of interest rates can have a significant effect on United’s profitability. The objective of interest rate risk management is to identify and manage the sensitivity of net interest revenue to changing interest rates, in order to achieve United’s overall financial goals. Based on economic conditions, asset quality and various other considerations, management establishes tolerance ranges for interest rate sensitivity and manages within these ranges.

United’s net interest revenue, and the fair value of its financial instruments, are influenced by changes in the level of interest rates. United manages its exposure to fluctuations in interest rates through policies established by the Asset/Liability Management Committee (“ALCO”). ALCO meets periodically and has responsibility for approving asset/liability management policies, formulating and implementing strategies to improve balance sheet positioning and/or earnings, and reviewing United’s interest rate sensitivity.

One of the tools management uses to estimate the sensitivity of net interest revenue to changes in interest rates is an asset/liability simulation model. Resulting estimates are based upon a number of assumptions for each scenario, including the level of balance sheet growth, loan and deposit repricing characteristics and the rate of prepayments. The ALCO regularly reviews the assumptions for accuracy based on historical data and future expectations, however, actual net interest revenue may differ from model results. The primary objective of the simulation model is to measure the potential change in net interest revenue over time using multiple interest rate scenarios. The base scenario assumes rates remain flat and is the scenario to which all others are compared in order to measure the change in net interest revenue. Policy limits are based on gradually rising and falling rate scenarios, which are compared to this base scenario. Another commonly analyzed scenario is a most-likely scenario that projects the expected change in rates based on the slope of the yield curve. Other scenarios analyzed may include rate shocks, narrowing or widening spreads, and yield curve steepening or flattening. While policy scenarios focus on a twelve month time frame, longer time horizons are also modeled.

United’s policy is based on the 12-month impact on net interest revenue of interest rate ramps that increase 200 basis points and decrease 200 basis points from the base scenario. In the ramp scenarios, rates change 25 basis points per month over the initial eight months. The policy limits the change in net interest revenue over the first 12 months to a 10% decrease in either scenario. The policy ramp and base scenarios assume a static balance sheet. Historically low rates on June 30, 2012 and 2011 made use of the down 200 basis points scenario problematic. At June 30, 2012 United’s simulation model indicated that a 200 basis point increase in rates would cause an approximate 1.17% increase in net interest revenue over twelve months, and a 25 basis point decrease would cause an approximate 1.23% decrease in net interest revenue over twelve months. At June 30, 2011, United’s simulation model indicated that a 200 basis point increase in rates would cause an approximate .01% increase in net interest revenue and a 25 basis point decrease in rates over twelve months would cause an approximate .75% increase in net interest revenue.

Interest rate sensitivity is a function of the repricing characteristics of the portfolio of assets and liabilities. These repricing characteristics are the time frames within which the interest-earning assets and interest-bearing liabilities are subject to change in interest rates either at replacement, repricing or maturity during the life of the instruments. Interest rate sensitivity management focuses on the maturity structure of assets and liabilities and their repricing characteristics during periods of changes in market interest rates. Effective interest rate sensitivity management seeks to ensure that both assets and liabilities respond to changes in interest rates within an acceptable timeframe, thereby minimizing the effect of interest rate changes on net interest revenue.

United may have some discretion in the extent and timing of deposit repricing depending upon the competitive pressures in the markets in which it operates. Changes in the mix of earning assets or supporting liabilities can either increase or decrease the net interest margin without affecting interest rate sensitivity. The interest rate spread between an asset and its supporting liability can vary significantly even when the timing of repricing for both the asset and the liability remains the same, due to the two instruments repricing according to different indices.

Varying interest rate environments can create unexpected changes in prepayment levels of assets and liabilities that are not reflected in an interest rate sensitivity gap analysis. These prepayments may have significant effect on the net interest margin. Because of these limitations, an interest sensitivity gap analysis alone generally does not provide an accurate assessment of exposure to changes in interest rates.

In order to manage its interest rate sensitivity, United periodically enters into off-balance sheet contracts that are considered derivative financial instruments. Derivative financial instruments can be a cost-effective and capital-effective means of modifying the repricing characteristics of on-balance sheet assets and liabilities. These contracts generally consist of interest rate swaps under which United pays a variable rate (or fixed rate, as may be the case) and receives a fixed rate (or variable rate, as may be the case).

United’s derivative financial instruments are classified as either cash flow or fair value hedges. The change in fair value of cash flow hedges is recognized in other comprehensive income. Fair value hedges recognize currently in earnings both the effect of the change in the fair value of the derivative financial instrument and the offsetting effect of the change in fair value of the hedged asset or liability associated with the particular risk of that asset or liability being hedged.

48

The following table presents United’s active derivative contracts used for hedging purposes.

Table 13—Derivative Financial Instruments

(in thousands)

Type of Instrument

Hedge Designation

Hedged Item

Current Notional

Trade Date

Effective Date

Maturity Date

Pay Rate

Receive Rate

Fair Value (H)

Asset

Liability

Receive Fixed Cancellable Swap

Fair Value

Brokered CD

$

15,000

10/12/11

11/10/11

11/10/31

3 mo. LIBOR minus 60 bps

(A)

$

—

$

529

Receive Fixed Cancellable Swap

Fair Value

Brokered CD

17,000

01/19/12

02/17/12

08/17/27

3 mo. LIBOR minus 45 bps

(B)

—

48

Receive Fixed Cancellable Swap

Fair Value

Brokered CD

17,000

02/14/12

02/27/12

08/27/27

3 mo. LIBOR minus 45 bps

(C)

—

62

Receive Fixed Cancellable Swap

Fair Value

Brokered CD

15,500

03/05/12

03/23/12

09/23/27

3 mo. LIBOR minus 45 bps

(D)

—

66

Receive Fixed Cancellable Swap

Fair Value

Brokered CD

14,000

04/04/12

04/25/12

10/25/27

3 mo. LIBOR minus 40 bps

3.00000%

68

—

Receive Fixed Cancellable Swap

Fair Value

Brokered CD

12,500

05/16/12

06/08/12

06/08/32

3 mo. LIBOR minus 43 bps

(E)

—

180

Receive Fixed Cancellable Swap

Fair Value

Brokered CD

13,000

06/12/12

06/28/12

06/28/32

3 mo. LIBOR minus 38.5 bps

(F)

—

247

Pay Fixed Swap

Cash Flow

Short-Term, Fixed Rate Debt

50,000

04/02/12

04/07/14

04/07/17

1.69500%

3 mo. LIBOR

—

839

Pay Fixed Swap

Cash Flow

Short-Term, Fixed Rate Debt

50,000

04/02/12

04/21/14

04/21/17

1.72125%

3 mo. LIBOR

—

854

Pay Fixed Swap

Cash Flow

Short-Term, Fixed Rate Debt

100,000

04/10/12

03/03/14

03/01/17

1.43750%

3 mo. LIBOR

—

1,027

Pay Fixed Swap

Cash Flow

Money Market Deposts

100,000

05/02/12

05/01/14

05/01/19

1.88750%

1 mo. LIBOR

—

1,952

Pay Fixed Swap

Cash Flow

Money Market Deposts

100,000

05/31/12

07/01/14

07/01/18

1.39250%

1 mo. LIBOR

—

183

Total Hedging Positions

$

504,000

$

68

$

5,987

^(A)  Receive rate is fixed at 5.00% to November 10, 2012, then 4 * ((10-year Constant Maturity Swap rate—2-year Constant Maturity Swap rate)—50 basis points), capped at 5.00% and floored at 0.00%. Swap is callable by counterparty on November 10, 2012 and quarterly thereafter on the 10th with 15 calendar days notice.

^(B)  Receive rate is fixed according to the following schedule: From 2/17/12 to 2/17/20: 2.25%; From 2/17/20 to 2/17/22: 2.30%; From 2/17/22 to 2/17/23: 3.00%; From 2/17/23 to 2/17/24: 4.00%; From 2/17/24 to 2/17/25: 7.00%; From 2/17/25 to 8/17/27: 10.00%. Swap is callable by counterparty quarterly commencing on May 17, 2012 with 20 business days notice prior to the redemption date.

^(C)  Receive rate is fixed according to the following schedule: From 2/27/12 to 2/27/18: 2.00%; From 2/27/18 to 2/27/22: 2.50%; From 2/27/22 to 2/27/23: 3.00%; From 2/27/23 to 2/27/24: 4.00%; From 2/27/24 to 2/27/25: 7.00%; From 2/27/25 to 8/27/27: 10.00%. Swap is callable by counterparty semi-annually commencing on August 27, 2012 with 25 business days notice prior to the redemption date.

^(D)  Receive rate is fixed according to the following schedule: From 3/23/12 to 3/23/17: 2.25%; From 3/23/17 to 3/23/20: 2.38%; From 3/23/20 to 3/23/23: 2.50%; From 3/23/23 to 3/23/24: 3.00%; From 3/23/24 to 3/23/25: 4.00%; From 3/23/25 to 3/23/26: 6.00%; From 3/23/26 to 9/23/27: 10.00%. Swap is callable by counterparty at any time commencing on September 24, 2012 with 15 calendar days notice prior to the redemption date.

^(E)  Receive rate is fixed according to the following schedule: From 6/8/12 to 6/8/17: 2.25%; From 6/8/17 to 6/8/22: 2.70%; From 6/8/22 to 6/8/27: 3.20%; From 6/8/27 to 6/8/28: 4.00%; From 6/8/28 to 6/8/29: 5.00%; From 6/8/29 to 6/8/30: 6.00%; From 6/8/30 to 6/8/31: 8.00%; From 6/8/31 to 6/8/32: 10.00%. Swap is callable by counterparty at any time commencing on December 8, 2012 with 15 calendar days notice prior to the redemption date.

^(F)  Receive rate is fixed according to the following schedule: From 6/28/12 to 6/28/17: 2.30%; From 6/28/17 to 6/28/22: 2.50%; From 6/28/22 to 6/28/27: 3.00%; From 6/28/27 to 6/28/28: 4.00%; From 6/28/28 to 6/28/29: 5.00%; From 6/28/29 to 6/28/30: 6.00%; From 6/28/30 to 6/28/31: 8.00%; From 6/28/31 to 6/28/32: 10.00%. Swap is callable by counterparty at any time commencing on December 28, 2012 with 15 calendar days notice prior to the redemption date.

^(H)  Fair value does not include accrued interest

From time to time, United will terminate swap or floor positions when conditions change and the position is no longer necessary to manage United’s overall sensitivity to changes in interest rates. In those situations where the terminated contract was in an effective hedging relationship at the time of termination and the hedging relationship is expected to remain effective throughout the original term of the contract, the resulting gain or loss is amortized over the remaining life of the original contract. For swap contracts, the gain or loss is amortized over the remaining original contract term using the straight line method of amortization. At June 30, 2012, United had $2.30 million in gains from terminated derivative positions included in other comprehensive income that will be amortized into earnings over their remaining original contract terms. Approximately $2.23 million is expected to be reclassified into interest revenue over the next twelve months.

United’s policy requires all non-customer facing derivative financial instruments be used only for asset/liability management through the hedging of specific transactions or positions, and not for trading or speculative purposes. Management believes that the risk associated with using derivative financial instruments to mitigate interest rate risk sensitivity is minimal and should not have any material unintended effect on our financial condition or results of operations. In order to mitigate potential credit risk, from time to time United may require the counterparties to derivative contracts to pledge securities as collateral to cover the net exposure.

Liquidity Management

The objective of liquidity management is to ensure that sufficient funding is available, at a reasonable cost, to meet the ongoing operational cash needs and to take advantage of revenue producing opportunities as they arise. While the desired level of liquidity will vary depending upon a variety of factors, it is the primary goal of United to maintain a sufficient level of liquidity in all expected economic environments. Liquidity is defined as the ability to convert assets into cash or cash equivalents without significant loss and to raise additional funds by increasing liabilities. Liquidity management involves maintaining United’s ability to meet the daily cash flow requirements of the Bank’s customers, both depositors and borrowers. In addition, because United is a separate entity and apart from the Bank, it must provide for its own liquidity. United is responsible for the payment of dividends declared for its common and preferred shareholders, and interest and principal on any outstanding debt or trust preferred securities.

49

Because substantially all of United’s liquidity is obtained from subsidiary service fees and dividends from the Bank, which are limited by applicable law and an informal memorandum of understanding the Bank has entered into with the FDIC and the Georgia Department of Banking and Finance (the “Bank MOU”), United currently has limited internal capital resources to meet these obligations. United has not received a dividend from the Bank since 2008 and does not anticipate receiving dividends from the Bank until 2013.

Two key objectives of asset/liability management are to provide for adequate liquidity in order to meet the needs of customers and to maintain an optimal balance between interest-sensitive assets and interest-sensitive liabilities to optimize net interest revenue. Daily monitoring of the sources and uses of funds is necessary to maintain a position that meets both requirements.

The asset portion of the balance sheet provides liquidity primarily through loan principal repayments and the maturities and sales of securities, as well as the ability to use these as collateral for borrowings on a secured basis. We also maintain excess funds in short-term interest-bearing assets that provide additional liquidity. Mortgage loans held for sale totaled $18.6 million at June 30, 2012, and typically turn over every 45 days as the closed loans are sold to investors in the secondary market. In addition, at June 30, 2012 United held $646 million in excess liquidity including $94.5 million in cash equivalent balances, primarily balances in excess of reserve requirements at the Federal Reserve Bank and $442 million in floating rate securities.

The liability section of the balance sheet provides liquidity through interest-bearing and noninterest-bearing deposit accounts. Federal funds purchased, Federal Reserve short-term borrowings, FHLB advances and securities sold under agreements to repurchase are additional sources of liquidity and represent United’s incremental borrowing capacity. These sources of liquidity are generally short-term in nature and are used as necessary to fund asset growth and meet other short-term liquidity needs.

At June 30, 2012, United had sufficient qualifying collateral to increase FHLB advances by $629 million and Federal Reserve discount window capacity of $478 million. United also has the ability to raise substantial funds through brokered deposits. In addition to these wholesale sources, United has the ability to attract retail deposits at any time by competing more aggressively on pricing.

As disclosed in United’s consolidated statement of cash flows, net cash provided by operating activities was $92.3 million for the six months ended June 30, 2012. The net income of $18.0 million for the six month period included non-cash expenses for the provision for loan losses of $33.0 million; depreciation, amortization and accretion of $16.5 million and losses and write downs on foreclosed property of $2.94 million. In addition, other assets decreased $22.8 million. Net cash provided by investing activities of $85.2 million consisted primarily of the proceeds from sales, maturities and calls of securities totaling $707 million partially offset by securities purchases of $581 million, a net increase in loans of 58.8 million, and purchases of premises and equipment of $2.58 million. Net cash used in financing activities of $251 million consisted primarily of a $276 million decrease in deposits partially offset by a net increase of $28.9 million in wholesale borrowings. In the opinion of management, United’s liquidity position at June 30, 2012, was sufficient to meet its expected cash flow requirements.

Capital Resources and Dividends

Shareholders’ equity at June 30, 2012 was $576 million, an increase of $509,000 from December 31, 2011. Accumulated other comprehensive loss, which includes unrealized gains and losses on securities available for sale and the unrealized gains and losses on derivatives qualifying as cash flow hedges, is excluded in the calculation of regulatory capital adequacy ratios. Excluding the change in the accumulated other comprehensive income, shareholders’ equity increased $14.3 million from December 31, 2011.

United accrued $3.03 million and $6.06 million, respectively, in dividends, including accretion of discounts, on Series A, Series B and Series D preferred stock in the second quarter and first six months of 2012.

United granted a warrant to Fletcher to purchase common stock equivalent junior preferred stock that would be convertible into 1,411,765 common shares exercisable at a price equivalent to $21.25 per share. United has received purported partial warrant exercise notices from Fletcher with respect to its warrants that include incorrect calculations of the number of settlement shares Fletcher would receive upon exercise. On June 17, 2011, United completed a reclassification of its common stock in the form of 1-for-5 reverse stock split, or recombination. United believes that any current exercise of Fletcher’s warrant would not result in the issuance of any settlement shares because the warrant may only be exercised for net shares via a cashless exercise formula, and the reverse stock split-adjusted market price component of that formula does not exceed the exercise price to yield any net shares. United has responded to Fletcher with United’s calculations related to the warrant.

In addition, in the lawsuit filed by FILB related to purported contractual rights that FILB claims were assigned to it by Fletcher, FILB alleges, like Fletcher, that United’s 2011 reclassification of its common stock should be ignored for purposes of calculating the number of shares United’s common stock issuable upon the redemption of United’s preferred stock and thus result in increasing the number of shares of United common stock that FILB could otherwise obtain. United believes the lawsuit is meritless for several reasons, and will defend it aggressively.

50

In November 2011, United entered into an informal memorandum of understanding with the Federal Reserve Bank and the Georgia Department of Banking and Finance (the “Holding Company MOU”). The Holding Company MOU provides, that United may not incur additional indebtedness, pay cash dividends, make payments on our trust preferred securities or subordinated indebtedness or repurchase outstanding stock without prior approval of the Federal Reserve. Additionally, the Holding Company MOU requires, among other things, that United ensures that the Bank functions in a safe and sound manner. United believes it is in compliance with all requirements of the Holding Company MOU.

The Bank is currently subject to the Bank MOU which requires, among other things, that the Bank maintain its Tier 1 leverage ratio at not less than 8% and its total risk-based capital ratio at not less than 10% during the life of the Bank MOU. Additionally, the Bank MOU requires, among other things, that prior to declaring or paying any cash dividends to United, the Bank must obtain the written consent of its regulators. The Bank believes it is in compliance with all requirements of the Bank MOU.

United’s common stock trades on the Nasdaq Global Select Market under the symbol “UCBI”. Below is a quarterly schedule of high, low and closing stock prices and average daily volume for 2012 and 2011.

Table 14—Stock Price Information

	2012								2011
	High		Low		Close		Avg Daily Volume		High		Low		Close		Avg Daily Volume
First quarter	$	10.30	$	6.37	$	9.75		142,987	$	11.85	$	5.95	$	11.65		227,321
Second quarter		9.77		7.76		8.57		145,132		14.65		9.80		10.56		139,741
Third quarter										11.33		7.67		8.49		214,303
Fourth quarter										8.90		6.22		6.99		202,024

* The stock price information shown above has been adjusted to reflect United’s 1-for-5 reverse stock split as though it had occurred at the beginning of the earliest reported period.

The Federal Reserve Board has issued guidelines for the implementation of risk-based capital requirements by U.S. banks and bank holding companies. These risk-based capital guidelines take into consideration risk factors, as defined by regulators, associated with various categories of assets, both on and off-balance sheet. Under the guidelines, capital strength is measured in two tiers that are used in conjunction with risk-weighted assets to determine the risk-based capital ratios. The guidelines require an 8% total risk-based capital ratio, of which 4% must be Tier I capital. However, to be considered well-capitalized under the guidelines, a 10% total risk-based capital ratio is required, of which 6% must be Tier I capital.

Under the risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature of the collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight associated with the category. The resulting weighted values from each of the risk categories are added together, and generally this sum is the company’s total risk weighted assets. Risk-weighted assets for purposes of United’s capital ratios are calculated under these guidelines.

A minimum leverage ratio is required in addition to the risk-based capital standards and is defined as Tier I capital divided by average assets adjusted for goodwill and deposit-based intangibles. Although a minimum leverage ratio of 3% is required, the Federal Reserve Board requires a bank holding company to maintain a leverage ratio greater than 3% if it is experiencing or anticipating significant growth or is operating with less than well-diversified risks in the opinion of the Federal Reserve Board. The Federal Reserve Board uses the leverage and risk-based capital ratios to assess capital adequacy of banks and bank holding companies.

51

The following table shows United’s capital ratios, as calculated under regulatory guidelines, at June 30, 2012, December 31, 2011 and June 30, 2011.

Table 15—Capital Ratios

(dollars in thousands)

	Regulatory						United Community Banks, Inc. (Consolidated)									United Community Bank
	Guidelines
				Well			June 30,			December 31,			June 30,			June 30,			December 31,			June 30,
	Minimum			Capitalized			2012			2011			2011			2012			2011			2011
Risk-based ratios:
Tier I capital		4.0	%		6.0	%		14.19	%		13.69	%		13.62	%		14.30	%		13.60	%		13.33	%
Total capital		8.0			10.0			15.93			15.41			16.16			15.56			14.87			15.12
Leverage ratio		3.0			5.0			9.09			8.83			8.52			9.16			8.78			8.35
Tier I capital							$	634,811		$	618,695		$	626,485		$	638,823		$	614,532		$	613,016
Total capital								712,422			696,881			742,930			695,369			671,718			695,358

United’s Tier I capital excludes other comprehensive income, and consists of shareholders’ equity and qualifying capital securities, less goodwill and deposit-based intangibles. Tier II capital components include supplemental capital items such as a qualifying allowance for loan losses and qualifying subordinated debt. Tier I capital plus Tier II capital components is referred to as Total Risk-Based capital.

Effect of Inflation and Changing Prices

A bank’s asset and liability structure is substantially different from that of an industrial firm in that primarily all assets and liabilities of a bank are monetary in nature with relatively little investment in fixed assets or inventories. Inflation has an important effect on the growth of total assets and the resulting need to increase equity capital at higher than normal rates in order to maintain an appropriate equity to assets ratio.

United’s management believes the effect of inflation on financial results depends on United’s ability to react to changes in interest rates, and by such reaction, reduce the inflationary effect on performance. United has an asset/liability management program to manage interest rate sensitivity. In addition, periodic reviews of banking services and products are conducted to adjust pricing in view of current and expected costs.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

There have been no material changes in United’s quantitative and qualitative disclosures about market risk as of June 30, 2012 from that presented in the Annual Report on Form 10-K for the year ended December 31, 2011. The interest rate sensitivity position at June 30, 2012 is included in management’s discussion and analysis on page 48 of this report.

Item 4. Controls and Procedures

United’s management, including the Chief Executive Officer and Chief Financial Officer, supervised and participated in an evaluation of the Company’s disclosure controls and procedures as of June 30, 2012. Based on, and as of the date of that evaluation, United’s Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective in accumulating and communicating information to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures of that information under the Securities and Exchange Commission’s rules and forms and that the disclosure controls and procedures are designed to ensure that the information required to be disclosed in reports that are filed or submitted by United under the Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There were no significant changes in the internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

52

Part II. Other Information

Item 1. Legal Proceedings

In the ordinary course of operations, United and the Bank are defendants in various legal proceedings. Additionally, in the ordinary course of business, United and the Bank are subject to regulatory examinations and investigations. Based on our current knowledge and advice of counsel, in the opinion of management there is no such pending or threatened legal matter in which an adverse decision could result in a material adverse change in the consolidated financial condition or results of operations of United.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in United’s Annual Report on Form 10-K for the year ended December 31, 2011.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds – None

Item 3. Defaults upon Senior Securities – None

Item 4. Mine Safety Disclosures—None

Item 5. Other Information – None

53

Item 6. Exhibits

Exhibit No.	Description
31.1	Certification by Jimmy C. Tallent, President and Chief Executive Officer of United Community Banks, Inc., as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Rex S. Schuette, Executive Vice President and Chief Financial Officer of United Community Banks, Inc., as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

54

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

UNITED COMMUNITY BANKS, INC.

/s/ Jimmy C. Tallent 

Jimmy C. Tallent

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Rex S. Schuette

Rex S. Schuette

Executive Vice President and

Chief Financial Officer

(Principal Financial Officer)

/s/ Alan H. Kumler

Alan H. Kumler

Senior Vice President and Controller

(Principal Accounting Officer)

Date: August 7, 2012

55

EX-31.1

Exhibit 31.1

I, Jimmy C. Tallent, certify that:

1. I have reviewed this quarterly report on Form 10-Q of United Community Banks, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a—15(f) and 15d—15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Jimmy C. Tallent
	Jimmy C. Tallent President and Chief Executive Officer of the Registrant
Date: August 7, 2012

EX-31.2

Exhibit 31.2

I, Rex S. Schuette, certify that:

1. I have reviewed this quarterly report on Form 10-Q of United Community Banks, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a—15(f) and 15d—15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Rex S. Schuette
	Rex S. Schuette Executive Vice President and Chief Financial Officer of the  Registrant
Date: August 7, 2012

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of United Community Banks, Inc. (“United”) on Form 10-Q for the period ending June 30, 2012 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jimmy C. Tallent, President and Chief Executive Officer of United, and I, Rex S. Schuette, Executive Vice President and Chief Financial Officer of United, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of United.

By:	/s/ Jimmy C. Tallent
	Jimmy C. Tallent
	President and Chief Executive Officer
By:	/s/ Rex S. Schuette
	Rex S. Schuette
	Executive Vice President and
	Chief Financial Officer
Date: August 7, 2012

XML

Securities (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Amortized cost, gross unrealized gains and losses and fair value of securities held to maturity
Amortized Cost	$ 282,750	$ 330,203	$ 371,578
Gross Unrealized Gains	17,221	13,683	8,007
Gross Unrealized Losses		355	354
Fair Value	299,971	343,531	379,231
U.S. Government agencies [Member]
Amortized cost, gross unrealized gains and losses and fair value of securities held to maturity
Amortized Cost		5,000	5,000
Gross Unrealized Gains		6
Gross Unrealized Losses
Fair Value		5,006	5,000
State and political subdivisions [Member]
Amortized cost, gross unrealized gains and losses and fair value of securities held to maturity
Amortized Cost	51,801	51,903	49,122
Gross Unrealized Gains	5,586	4,058	1,823
Gross Unrealized Losses		13	292
Fair Value	57,387	55,948	50,653
Mortgage-backed securities [Member]
Amortized cost, gross unrealized gains and losses and fair value of securities held to maturity
Amortized Cost	230,949	273,300	317,456
Gross Unrealized Gains	11,635	9,619	6,184
Gross Unrealized Losses		342	62
Fair Value	$ 242,584	$ 282,577	$ 323,578

XML

Loans and Allowance for Loan Losses (Details 9) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Risk category of loans by class of loans
Total loans	$ 4,119,235	$ 4,109,614	$ 4,163,447
Pass [Member]
Risk category of loans by class of loans
Total loans	3,509,262	3,459,003	3,571,339
Watch [Member]
Risk category of loans by class of loans
Total loans	170,211	193,753	206,915
Substandard [Member]
Risk category of loans by class of loans
Total loans	438,984	455,948	384,168
Doubtful /Loss [Member]
Risk category of loans by class of loans
Total loans
Not Rated [Member]
Risk category of loans by class of loans
Total loans	778	910	1,025
Commercial Portfolio Segment [Member]
Risk category of loans by class of loans
Total loans	2,456,037	2,413,818	2,365,002
Commercial Portfolio Segment [Member] | Pass [Member]
Risk category of loans by class of loans
Total loans	2,097,973	2,045,364	2,056,597
Commercial Portfolio Segment [Member] | Watch [Member]
Risk category of loans by class of loans
Total loans	82,807	111,633	119,309
Commercial Portfolio Segment [Member] | Substandard [Member]
Risk category of loans by class of loans
Total loans	274,479	255,911	188,071
Commercial Portfolio Segment [Member] | Doubtful /Loss [Member]
Risk category of loans by class of loans
Total loans
Commercial Portfolio Segment [Member] | Not Rated [Member]
Risk category of loans by class of loans
Total loans	778	910	1,025
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member]
Risk category of loans by class of loans
Total loans	1,836,477	1,821,414	1,741,754
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member] | Pass [Member]
Risk category of loans by class of loans
Total loans	1,596,879	1,561,204	1,508,284
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member] | Watch [Member]
Risk category of loans by class of loans
Total loans	72,067	89,830	98,175
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member] | Substandard [Member]
Risk category of loans by class of loans
Total loans	167,531	170,380	135,295
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member] | Doubtful /Loss [Member]
Risk category of loans by class of loans
Total loans
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member] | Not Rated [Member]
Risk category of loans by class of loans
Total loans
Commercial & industrial [Member] | Commercial Portfolio Segment [Member]
Risk category of loans by class of loans
Total loans	450,222	428,249	428,058
Commercial & industrial [Member] | Commercial Portfolio Segment [Member] | Pass [Member]
Risk category of loans by class of loans
Total loans	393,893	369,343	404,704
Commercial & industrial [Member] | Commercial Portfolio Segment [Member] | Watch [Member]
Risk category of loans by class of loans
Total loans	4,652	7,630	3,682
Commercial & industrial [Member] | Commercial Portfolio Segment [Member] | Substandard [Member]
Risk category of loans by class of loans
Total loans	50,899	50,366	18,647
Commercial & industrial [Member] | Commercial Portfolio Segment [Member] | Doubtful /Loss [Member]
Risk category of loans by class of loans
Total loans
Commercial & industrial [Member] | Commercial Portfolio Segment [Member] | Not Rated [Member]
Risk category of loans by class of loans
Total loans	778	910	1,025
Commercial construction [Member] | Commercial Portfolio Segment [Member]
Risk category of loans by class of loans
Total loans	169,338	164,155	195,190
Commercial construction [Member] | Commercial Portfolio Segment [Member] | Pass [Member]
Risk category of loans by class of loans
Total loans	107,201	114,817	143,609
Commercial construction [Member] | Commercial Portfolio Segment [Member] | Watch [Member]
Risk category of loans by class of loans
Total loans	6,088	14,173	17,452
Commercial construction [Member] | Commercial Portfolio Segment [Member] | Substandard [Member]
Risk category of loans by class of loans
Total loans	56,049	35,165	34,129
Commercial construction [Member] | Commercial Portfolio Segment [Member] | Doubtful /Loss [Member]
Risk category of loans by class of loans
Total loans
Commercial construction [Member] | Commercial Portfolio Segment [Member] | Not Rated [Member]
Risk category of loans by class of loans
Total loans
Residential mortgage [Member]
Risk category of loans by class of loans
Total loans	1,128,336	1,134,902	1,177,226
Residential mortgage [Member] | Pass [Member]
Risk category of loans by class of loans
Total loans	999,328	993,779	1,046,255
Residential mortgage [Member] | Watch [Member]
Risk category of loans by class of loans
Total loans	39,105	42,323	35,775
Residential mortgage [Member] | Substandard [Member]
Risk category of loans by class of loans
Total loans	89,903	98,800	95,196
Residential mortgage [Member] | Doubtful /Loss [Member]
Risk category of loans by class of loans
Total loans
Residential mortgage [Member] | Not Rated [Member]
Risk category of loans by class of loans
Total loans
Residential construction [Member]
Risk category of loans by class of loans
Total loans	408,966	448,391	501,909
Residential construction [Member] | Pass [Member]
Risk category of loans by class of loans
Total loans	290,808	312,527	353,769
Residential construction [Member] | Watch [Member]
Risk category of loans by class of loans
Total loans	47,182	38,386	51,223
Residential construction [Member] | Substandard [Member]
Risk category of loans by class of loans
Total loans	70,976	97,478	96,917
Residential construction [Member] | Doubtful /Loss [Member]
Risk category of loans by class of loans
Total loans
Residential construction [Member] | Not Rated [Member]
Risk category of loans by class of loans
Total loans
Consumer installment [Member]
Risk category of loans by class of loans
Total loans	125,896	112,503	119,310
Consumer installment [Member] | Pass [Member]
Risk category of loans by class of loans
Total loans	121,153	107,333	114,718
Consumer installment [Member] | Watch [Member]
Risk category of loans by class of loans
Total loans	1,117	1,411	608
Consumer installment [Member] | Substandard [Member]
Risk category of loans by class of loans
Total loans	3,626	3,759	3,984
Consumer installment [Member] | Doubtful /Loss [Member]
Risk category of loans by class of loans
Total loans
Consumer installment [Member] | Not Rated [Member]
Risk category of loans by class of loans
Total loans

XML

Loans and Allowance for Loan Losses (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Investments in impaired loans
Total	$ 293,679	$ 35,653	$ 293,679	$ 35,653	$ 257,259
Allowance for Loan Losses Allocated	17,370	1,167	17,370	1,167	14,825
Average impaired loans and income
Average balance of individually evaluated impaired loans during period	287,336	42,099	283,981	68,631
Interest income recognized during impairment	2,421		4,688
Cash-basis interest income recognized	3,216		6,408
Period-end loans with no allocated allowance for loan losses [Member]
Investments in impaired loans
Total	214,808	32,791	214,808	32,791	188,509
Period-end loans with allocated allowance for loan losses [Member]
Investments in impaired loans
Total	$ 78,871	$ 2,862	$ 78,871	$ 2,862	$ 68,750

XML

Assets and Liabilities Measured at Fair Value (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Level 1 [Member]
Assets and liabilities measured at fair value on nonrecurring basis
Loans
Foreclosed properties
Total
Level 2 [Member]
Assets and liabilities measured at fair value on nonrecurring basis
Loans
Foreclosed properties
Total
Fair Value, Measurements, Recurring [Member]
Assets and liabilities measured at fair value on nonrecurring basis
Total	1,704,701	1,792,906	1,819,638
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Assets and liabilities measured at fair value on nonrecurring basis
Total	2,895	2,859	3,025
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Assets and liabilities measured at fair value on nonrecurring basis
Total	1,701,456	1,789,697	1,812,134
Fair Value, Measurements, Recurring [Member] | Level 3 [Member]
Assets and liabilities measured at fair value on nonrecurring basis
Total	350	350	4,479
Fair Value, Measurements, Nonrecurring [Member]
Assets and liabilities measured at fair value on nonrecurring basis
Loans	160,266	133,828	27,810
Foreclosed properties	25,253	29,102	41,922
Total	185,519	162,930	69,732
Fair Value, Measurements, Nonrecurring [Member] | Level 3 [Member]
Assets and liabilities measured at fair value on nonrecurring basis
Loans	160,266	133,828	27,810
Foreclosed properties	25,253	29,102	41,922
Total	$ 185,519	$ 162,930	$ 69,732

XML

Loans and Allowance for Loan Losses (Details Textual) (USD $)	3 Months Ended
	Jun. 30, 2011	Mar. 31, 2011	Jun. 30, 2012	Dec. 31, 2011
Loans and Allowance for Loan Losses (Textual) [Abstract]
All loans that are on nonaccrual or greater for impairment			$ 500,000
Accruing substandard relationship			2,000,000
Sale of classified loans.		267,000,000
Increased charge-offs		186,000,000
Reduction charge-offs	7,270,000
Loans more than 90 days past due and still accruing interest	0		0	0
Specific reserves			10,300,000	8,650,000
Specific reserves for loans considered to be troubled debt restructurings	0
Loans outstanding classified as troubled debt restructurings	396,000		490,000,000,000	1,120,000
Total notional amount designated as cash flow hedges			400,000,000
FHLB [Member]
Loans and Allowance for Loan Losses (Textual) [Abstract]
Pledged as collateral to secure FHLB advances	$ 991,000,000		$ 1,610,000,000	$ 1,520,000,000

XML

Loans and Allowance for Loan Losses (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Allowance for loan losses
Balance beginning of period	$ 113,601	$ 133,121	$ 114,468	$ 174,695
Provision for loan losses	18,000	11,000	33,000	201,000
Total loans charged-off	19,662	17,336	36,859	250,147
Total recoveries	766	853	2,096	2,090
Net charge-offs	18,896	16,483	34,763	248,057
Ending balance	112,705	127,638	112,705	127,638
Commercial (secured by real estate) [Member]
Allowance for loan losses
Balance beginning of period			31,644	31,191
Provision for loan losses			6,288	42,671
Total loans charged-off	4,418	3,433	8,346	52,140
Total recoveries	69	174	300	274
Ending balance	29,886	21,996	29,886	21,996
Commercial & industrial [Member]
Allowance for loan losses
Balance beginning of period			5,681	7,580
Provision for loan losses			1,061	4,016
Total loans charged-off	888	604	1,644	4,966
Total recoveries	113	81	200	403
Ending balance	5,298	7,033	5,298	7,033
Commercial construction [Member]
Allowance for loan losses
Balance beginning of period			6,097	6,780
Provision for loan losses			4,662	51,256
Total loans charged-off	88	980	452	50,695
Total recoveries		111	30	111
Ending balance	10,337	7,452	10,337	7,452
Residential mortgage [Member]
Allowance for loan losses
Balance beginning of period			29,076	22,305
Provision for loan losses			6,471	49,063
Total loans charged-off	4,014	4,667	9,781	41,343
Total recoveries	152	78	544	371
Ending balance	26,310	30,396	26,310	30,396
Residential construction [Member]
Allowance for loan losses
Balance beginning of period			30,379	92,571
Provision for loan losses			13,712	55,249
Total loans charged-off	9,846	6,769	15,475	99,024
Total recoveries	283	140	598	257
Ending balance	29,214	49,053	29,214	49,053
Consumer installment [Member]
Allowance for loan losses
Balance beginning of period			2,124	3,030
Provision for loan losses			1,183	498
Total loans charged-off	408	883	1,161	1,979
Total recoveries	149	269	424	674
Ending balance	$ 2,570	$ 2,223	$ 2,570	$ 2,223

XML

Assets and Liabilities Measured at Fair Value (Tables)

6 Months Ended

Jun. 30, 2012

Assets and Liabilities Measured at Fair Value [Abstract]

Assets and liabilities measured at fair value on a recurring basis

The table below presents United’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2012, December 31, 2011 and June 30, 2011, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).

	Level 1		Level 2		Level 3		Total
June 30, 2012
Assets
Securities available for sale:
U.S. Government agencies	$	—	$	43,874	$	—	$	43,874
State and political subdivisions		—		27,159		—		27,159
Mortgage-backed securities		—		1,433,431		—		1,433,431
Corporate bonds		—		109,688		350		110,038
Asset-backed securities		—		84,498		—		84,498
Other		—		2,583		—		2,583
Deferred compensation plan assets		2,895		—		—		2,895
Derivative financial instruments		—		223		—		223
Total	$	2,895	$	1,701,456	$	350	$	1,704,701
Liabilities
Deferred compensation plan liability	$	2,895	$	—	$	—	$	2,895
Brokered certificates of deposit		—		102,879		—		102,879
Derivative financial instruments		—		6,142		—		6,142
Total liabilities	$	2,895	$	109,021	$	—	$	111,916
	Level 1		Level 2		Level 3		Total
December 31, 2011
Assets
Securities available for sale:
U.S. Government agencies	$	—	$	43,750	$	—	$	43,750
State and political subdivisions		—		26,339		—		26,339
Mortgage-backed securities		—		1,609,909		—		1,609,909
Corporate bonds		—		107,328		350		107,678
Other		—		2,371		—		2,371
Deferred compensation plan assets		2,859		—		—		2,859
Total	$	2,859	$	1,789,697	$	350	$	1,792,906
Liabilities
Deferred compensation plan liability	$	2,859	$	—	$	—	$	2,859
Brokered certificates of deposit		—		13,107		—		13,107
Derivative financial instruments		—		422		—		422
Total liabilities	$	2,859	$	13,529	$	—	$	16,388
	Level 1		Level 2		Level 3		Total
June 30, 2011
Assets
Securities available for sale:
U.S. Government agencies	$	—	$	77,477	$	—	$	77,477
State and political subdivisions		—		26,772		—		26,772
Mortgage-backed securities		—		1,588,489		4,129		1,592,618
Corporate bonds		—		116,944		350		117,294
Other		—		2,452		—		2,452
Deferred compensation plan assets		3,025		—		—		3,025
Total	$	3,025	$	1,812,134	$	4,479	$	1,819,638
Liabilities
Deferred compensation plan liability	$	3,025	$	—	$	—	$	3,025
Total liabilities	$	3,025	$	—	$	—	$	3,025

Assets measured at fair value on recurring basis using significant unobservable inputs

The following table shows a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs that are classified as Level 3 values (in thousands).

	Securities Available for Sale					Securities Available for Sale
	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2012		2011			2012		2011
Balance at beginning of period	$	350	$	4,784		$	350	$	5,284
Amounts included in earnings		—		(5	)		—		(13	)
Paydowns		—		(300	)		—		(792	)
Balance at end of period	$	350	$	4,479		$	350	$	4,479

Presentation of United's assets and liabilities measured at fair value on nonrecurring basis

	Level 1		Level 2		Level 3		Total
June 30, 2012
Assets
Loans	$	—	$	—	$	160,266	$	160,266
Foreclosed properties		—		—		25,253		25,253
Total	$	—	$	—	$	185,519	$	185,519
December 31, 2011
Assets
Loans	$	—	$	—	$	133,828	$	133,828
Foreclosed properties		—		—		29,102		29,102
Total	$	—	$	—	$	162,930	$	162,930
June 30, 2011
Assets
Loans	$	—	$	—	$	27,810	$	27,810
Foreclosed properties		—		—		41,922		41,922
Total	$	—	$	—	$	69,732	$	69,732

Summary of carrying amount and fair values for other financial instruments that are not measured at fair value on a recurring basis

The carrying amount and fair values for other financial instruments that are not measured at fair value on a recurring basis in United’s balance sheet at June 30, 2012, December 31, 2011, and June 30, 2011 are as follows (in thousands).

	June 30, 2012
	Carrying		Fair Value Level
	Amount		Level 1		Level 2		Level 3		Total
Assets:
Securities held to maturity	$	282,750	$	—	$	299,971	$	—	$	299,971
Loans, net		4,006,530		—		—		3,830,187		3,830,187
Liabilities:
Deposits		5,822,467		—		5,863,885		—		5,863,885
Federal Home Loan Bank advances		125,125		—		125,125		—		125,125
Long-term debt		120,265		—		—		114,679		114,679

	December 31, 2011				June 30, 2011
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Assets:
Securities held to maturity	$	330,203	$	343,531	$	371,578	$	379,231
Loans, net		3,995,146		3,800,343		4,035,809		3,889,669
Liabilities:
Deposits		6,097,983		6,093,772		6,183,215		6,174,117
Federal Home Loan Bank advances		40,625		43,236		40,625		43,763
Long-term debt		120,225		115,327		150,186		140,771

XML

Bulk Loan Sale (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Jun. 30, 2011	Mar. 31, 2011
Bulk Loan Sale (Textual) [Abstract]
Bulk sale of loans		$ 80.6
Proceeds from the bulk sale of loans	$ 87.9

XML

Foreclosed Property (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Valuation allowance for foreclosed property
Balance at beginning of period	$ 17,746	$ 53,023	$ 18,982	$ 16,565
Additions charged to expense	1,008	3,118	3,119	51,703
Direct write downs	(6,882)	(25,755)	(10,229)	(37,882)
Balance at end of period	$ 11,872	$ 30,386	$ 11,872	$ 30,386

XML

Assets and Liabilities Measured at Fair Value (Details 3) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Assets:
Securities held to maturity, Carrying Amount	$ 282,750	$ 330,203	$ 371,578
Securities held to maturity, Fair Value	299,971	343,531	379,231
Loans, net, Carrying Amount	4,006,530	3,995,146	4,035,809
Loans, net, Fair Value	3,830,187	3,800,343	3,889,669
Liabilities:
Deposits, Carrying Amount	5,822,467	6,097,983	6,183,215
Deposits, Fair Value	5,863,885	6,093,772	6,174,117
Federal Home Loan Bank advances, Carrying Amount	125,125	40,625	40,625
Federal Home Loan Bank advances, Fair Value	125,125	43,236	43,763
Long-term debt, Carrying Amount	120,265	120,225	150,186
Long-term debt, Fair Value	114,679	115,327	140,771
Assets and Liabilities Measured at Fair Value (Textual) [Abstract]
Maximum remaining maturity of financial instruments having no defined maturity	180 days
Level 1 [Member]
Assets:
Securities held to maturity, Fair Value
Loans, net, Fair Value
Liabilities:
Deposits, Fair Value
Federal Home Loan Bank advances, Fair Value
Long-term debt, Fair Value
Level 2 [Member]
Assets:
Securities held to maturity, Fair Value	299,971
Loans, net, Fair Value
Liabilities:
Deposits, Fair Value	5,863,885
Federal Home Loan Bank advances, Fair Value	125,125
Long-term debt, Fair Value
Level 3 [Member]
Assets:
Securities held to maturity, Fair Value
Loans, net, Fair Value	3,830,187
Liabilities:
Deposits, Fair Value
Federal Home Loan Bank advances, Fair Value
Long-term debt, Fair Value	$ 114,679

XML

Mergers and Acquisitions (Tables)

6 Months Ended

Jun. 30, 2012

Mergers and Acquisitions [Abstract]

Schedule of components of covered assets

The table below shows the components of covered assets at June 30, 2012 (in thousands).

(in thousands)	Purchased Impaired Loans		Other Purchased Loans		Other		Total
Commercial (secured by real estate)	$	—	$	28,021	$	—	$	28,021
Commercial & industrial		—		1,473		—		1,473
Construction and land development		525		4,709		—		5,234
Residential mortgage		145		6,429		—		6,574
Consumer installment		—		152		—		152
Total covered loans		670		40,784		—		41,454
Covered foreclosed property		—		—		14,098		14,098
Estimated loss reimbursement from the FDIC		—		—		10,362		10,362
Total covered assets	$	670	$	40,784	$	24,460	$	65,914

XML

Loans and Allowance for Loan Losses (Details 5) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Recorded investment in nonaccrual loans by loan class
Nonaccrual Loans	$ 115,340	$ 127,479	$ 71,065
Balance as a percentage of unpaid principal	68.80%	71.30%	64.50%
Commercial Portfolio Segment [Member]
Recorded investment in nonaccrual loans by loan class
Nonaccrual Loans	72,272	78,590	22,544
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member]
Recorded investment in nonaccrual loans by loan class
Nonaccrual Loans	19,115	27,322	17,764
Commercial & industrial [Member] | Commercial Portfolio Segment [Member]
Recorded investment in nonaccrual loans by loan class
Nonaccrual Loans	34,982	34,613	1,998
Commercial construction [Member] | Commercial Portfolio Segment [Member]
Recorded investment in nonaccrual loans by loan class
Nonaccrual Loans	18,175	16,655	2,782
Residential mortgage [Member]
Recorded investment in nonaccrual loans by loan class
Nonaccrual Loans	16,631	22,358	24,809
Residential construction [Member]
Recorded investment in nonaccrual loans by loan class
Nonaccrual Loans	25,530	25,523	22,643
Consumer installment [Member]
Recorded investment in nonaccrual loans by loan class
Nonaccrual Loans	$ 907	$ 1,008	$ 1,069

XML

Securities (Details 4) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Available for sale securities in an unrealized loss position
Fair Value Less than 12 Months	$ 200,937	$ 141,551	$ 321,835
Unrealized Loss Less than 12 Months	4,427	5,307	2,624
Fair Value 12 Months or More	112,935	87,495	10
Unrealized Loss 12 Months or More	5,671	6,271	4
Fair Value, Total	313,872	229,046	321,845
Unrealized Loss, Total	10,098	11,578	2,628
U.S. Government agencies [Member]
Available for sale securities in an unrealized loss position
Fair Value Less than 12 Months			54,482
Unrealized Loss Less than 12 Months			514
Fair Value 12 Months or More
Unrealized Loss 12 Months or More
Fair Value, Total			54,482
Unrealized Loss, Total			514
State and political subdivisions [Member]
Available for sale securities in an unrealized loss position
Fair Value Less than 12 Months	5,696		301
Unrealized Loss Less than 12 Months	3
Fair Value 12 Months or More	11	11	10
Unrealized Loss 12 Months or More	4	3	4
Fair Value, Total	5,707	11	311
Unrealized Loss, Total	7	3	4
Mortgage-backed securities [Member]
Available for sale securities in an unrealized loss position
Fair Value Less than 12 Months	104,644	98,687	169,907
Unrealized Loss Less than 12 Months	332	110	283
Fair Value 12 Months or More	19,436	22,719
Unrealized Loss 12 Months or More	7	33
Fair Value, Total	124,080	121,406	169,907
Unrealized Loss, Total	339	143	283
Corporate bonds [Member]
Available for sale securities in an unrealized loss position
Fair Value Less than 12 Months	16,500	42,864	97,145
Unrealized Loss Less than 12 Months	3,500	5,197	1,827
Fair Value 12 Months or More	93,488	64,765
Unrealized Loss 12 Months or More	5,660	6,235
Fair Value, Total	109,988	107,629	97,145
Unrealized Loss, Total	9,160	11,432	1,827
Asset Backed Securities [Member]
Available for sale securities in an unrealized loss position
Fair Value Less than 12 Months	74,097
Unrealized Loss Less than 12 Months	592
Fair Value 12 Months or More
Unrealized Loss 12 Months or More
Fair Value, Total	74,097
Unrealized Loss, Total	$ 592

XML

Reverse Repurchase Agreements (Details Textual) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012
Reverse Repurchase Agreement (Textual) [Abstract]
Offsetting securities lending positions outstanding	$ 80.0

XML

Loans and Allowance for Loan Losses (Details 7) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012 Contract	Dec. 31, 2011 Contract	Jun. 30, 2011 Contract
Additional information on troubled debt restructurings
Number of Contracts	377	271	122
Pre-Modification Outstanding Recorded Investment	$ 177,129	$ 126,401	$ 50,368
Post-Modification Outstanding Recorded Investment	167,613	123,730	46,244
Commercial Portfolio Segment [Member]
Additional information on troubled debt restructurings
Number of Contracts	148	103	41
Pre-Modification Outstanding Recorded Investment	133,872	89,239	34,579
Post-Modification Outstanding Recorded Investment	127,974	87,913	31,631
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member]
Additional information on troubled debt restructurings
Number of Contracts	96	74	31
Pre-Modification Outstanding Recorded Investment	87,104	70,380	24,946
Post-Modification Outstanding Recorded Investment	82,325	69,054	21,998
Commercial & industrial [Member] | Commercial Portfolio Segment [Member]
Additional information on troubled debt restructurings
Number of Contracts	29	18	5
Pre-Modification Outstanding Recorded Investment	3,972	806	156
Post-Modification Outstanding Recorded Investment	3,972	806	156
Commercial construction [Member] | Commercial Portfolio Segment [Member]
Additional information on troubled debt restructurings
Number of Contracts	23	11	5
Pre-Modification Outstanding Recorded Investment	42,796	18,053	9,477
Post-Modification Outstanding Recorded Investment	41,677	18,053	9,477
Residential mortgage [Member]
Additional information on troubled debt restructurings
Number of Contracts	110	80	29
Pre-Modification Outstanding Recorded Investment	17,613	11,943	3,937
Post-Modification Outstanding Recorded Investment	16,950	11,379	3,784
Residential construction [Member]
Additional information on troubled debt restructurings
Number of Contracts	72	54	46
Pre-Modification Outstanding Recorded Investment	25,123	24,921	11,741
Post-Modification Outstanding Recorded Investment	22,178	24,145	10,718
Consumer installment [Member]
Additional information on troubled debt restructurings
Number of Contracts	47	34	6
Pre-Modification Outstanding Recorded Investment	521	298	111
Post-Modification Outstanding Recorded Investment	$ 511	$ 293	$ 111

XML

Common and Preferred Stock Issued / Common Stock Issuable (Details Textual) (USD $)	1 Months Ended	6 Months Ended
	Feb. 22, 2011	Jun. 30, 2012	Jun. 30, 2011
Common and Preferred Stock Issued Common Stock Issuable (Textual) [Abstract]
Warrants expiration date		Aug. 22, 2013
Rate of discount to eligible employee under employee stock purchase program		5.00%
Share issued under employee stock purchase program		60,982	78,584
Increased capital due to share issued under these programs		$ 501,000,000,000	$ 744,000
Shares issuable under deferred compensation plan		94,657	83,575
Transfer of common shares under share exchange agreement	1,551,126
Transfer of shares in exchange of perpetual preferred stock	16,613
Exercise price of warrants	12.50

XML

Earnings Per Share (Details Textual) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended						6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011	Jun. 30, 2012	Dec. 31, 2011	Feb. 22, 2011	Jun. 30, 2012 Fletcher Inc [Member]	Jun. 30, 2012 Elm Ridge Parties [Member]	Jun. 30, 2012 Series A - 6% fixed [Member]	Jun. 30, 2012 Series B - 5% fixed until December 6, 2013, 9% thereafter [Member]	Jun. 30, 2012 Series D - LIBOR plus 9.6875%, resets quarterly [Member]	Jun. 30, 2012 Trust Preferred Securities [Member]
Earnings Per Share (Textual) [Abstract]
Fixed percentage of dividend rate on preferred stock								6.00%	5.00%
Future percentage of dividend rate on preferred stock									9.00%
Variable percentage of dividend rate on preferred stock										9.6875%
Number of common shares potentially dilutive securities						1,162,791	1,551,126		219,908		129,670
Exercise price of warrants					12.50	30.10	12.50		61.39		100.00
Earnings Per Share (Additional Textual) [Abstract]
Exercise of stock options granted to employees			502,743	583,647
Weighted average exercise price of stock options granted to employees			$ 97.92	$ 94.48
Vesting of restricted stock awards			414,045
Shares issuable upon exercise of warrants			1,411,765
Per Shares issuable upon exercise of warrants			$ 21.25
Shares issuable upon conversion of preferred stock			2,476,191
Convertible preferred stock			$ 65
Per shares convertible preferred stock			$ 26.25
Dilution from potentially dilutive securities

XML

Loans and Allowance for Loan Losses (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Allowance for loan losses
Balance beginning of period	$ 113,601	$ 133,121	$ 114,468	$ 174,695
Charge-offs	(19,662)	(17,336)	(36,859)	(250,147)
Recoveries	766	853	2,096	2,090
Provision	18,000	11,000	33,000	201,000
Ending balance	112,705	127,638	112,705	127,638
Ending allowance attributable to loans:
Individually evaluated for impairment	17,370	1,167	17,370	1,167	14,825
Collectively evaluated for impairment	95,335	126,471	95,335	126,471	99,643
Total ending allowance balance	112,705	127,638	112,705	127,638
Loans:
Individually evaluated for impairment	293,679	35,653	293,679	35,653	257,259
Collectively evaluated for impairment	3,825,556	4,127,794	3,825,556	4,127,794	3,852,355
Total loans	4,119,235	4,163,447	4,119,235	4,163,447	4,109,614
Commercial (secured by real estate) [Member]
Allowance for loan losses
Balance beginning of period			31,644	31,191
Charge-offs	(4,418)	(3,433)	(8,346)	(52,140)
Recoveries	69	174	300	274
Provision			6,288	42,671
Ending balance	29,886	21,996	29,886	21,996
Ending allowance attributable to loans:
Individually evaluated for impairment	8,544	78	8,544	78	7,491
Collectively evaluated for impairment	21,342	21,918	21,342	21,918	24,153
Total ending allowance balance	29,886	21,996	29,886	21,996
Loans:
Individually evaluated for impairment	130,838	14,780	130,838	14,780	107,831
Collectively evaluated for impairment	1,705,639	1,726,974	1,705,639	1,726,974	1,713,583
Total loans	1,836,477	1,741,754	1,836,477	1,741,754	1,821,414
Commercial & industrial [Member]
Allowance for loan losses
Balance beginning of period			5,681	7,580
Charge-offs	(888)	(604)	(1,644)	(4,966)
Recoveries	113	81	200	403
Provision			1,061	4,016
Ending balance	5,298	7,033	5,298	7,033
Ending allowance attributable to loans:
Individually evaluated for impairment	753		753		1,117
Collectively evaluated for impairment	4,545	7,033	4,545	7,033	4,564
Total ending allowance balance	5,298	7,033	5,298	7,033
Loans:
Individually evaluated for impairment	57,747		57,747		57,828
Collectively evaluated for impairment	392,475	428,058	392,475	428,058	370,421
Total loans	450,222	428,058	450,222	428,058	428,249
Commercial construction [Member]
Allowance for loan losses
Balance beginning of period			6,097	6,780
Charge-offs	(88)	(980)	(452)	(50,695)
Recoveries		111	30	111
Provision			4,662	51,256
Ending balance	10,337	7,452	10,337	7,452
Ending allowance attributable to loans:
Individually evaluated for impairment	2,476	450	2,476	450	236
Collectively evaluated for impairment	7,861	7,002	7,861	7,002	5,861
Total ending allowance balance	10,337	7,452	10,337	7,452
Loans:
Individually evaluated for impairment	42,833	1,015	42,833	1,015	26,245
Collectively evaluated for impairment	126,505	194,175	126,505	194,175	137,910
Total loans	169,338	195,190	169,338	195,190	164,155
Residential mortgage [Member]
Allowance for loan losses
Balance beginning of period			29,076	22,305
Charge-offs	(4,014)	(4,667)	(9,781)	(41,343)
Recoveries	152	78	544	371
Provision			6,471	49,063
Ending balance	26,310	30,396	26,310	30,396
Ending allowance attributable to loans:
Individually evaluated for impairment	1,389	639	1,389	639	2,234
Collectively evaluated for impairment	24,921	29,757	24,921	29,757	26,842
Total ending allowance balance	26,310	30,396	26,310	30,396
Loans:
Individually evaluated for impairment	19,844	7,247	19,844	7,247	18,376
Collectively evaluated for impairment	1,108,492	1,169,979	1,108,492	1,169,979	1,116,526
Total loans	1,128,336	1,177,226	1,128,336	1,177,226	1,134,902
Residential construction [Member]
Allowance for loan losses
Balance beginning of period			30,379	92,571
Charge-offs	(9,846)	(6,769)	(15,475)	(99,024)
Recoveries	283	140	598	257
Provision			13,712	55,249
Ending balance	29,214	49,053	29,214	49,053
Ending allowance attributable to loans:
Individually evaluated for impairment	4,188		4,188		3,731
Collectively evaluated for impairment	25,026	49,053	25,026	49,053	26,648
Total ending allowance balance	29,214	49,053	29,214	49,053
Loans:
Individually evaluated for impairment	41,906	12,611	41,906	12,611	46,687
Collectively evaluated for impairment	367,060	489,298	367,060	489,298	401,704
Total loans	408,966	501,909	408,966	501,909	448,391
Consumer installment [Member]
Allowance for loan losses
Balance beginning of period			2,124	3,030
Charge-offs	(408)	(883)	(1,161)	(1,979)
Recoveries	149	269	424	674
Provision			1,183	498
Ending balance	2,570	2,223	2,570	2,223
Ending allowance attributable to loans:
Individually evaluated for impairment	20		20		16
Collectively evaluated for impairment	2,550	2,223	2,550	2,223	2,108
Total ending allowance balance	2,570	2,223	2,570	2,223
Loans:
Individually evaluated for impairment	511		511		292
Collectively evaluated for impairment	125,385	119,310	125,385	119,310	112,211
Total loans	125,896	119,310	125,896	119,310	112,503
Unallocated [Member]
Allowance for loan losses
Balance beginning of period			9,467	11,238
Provision			(377)	(1,753)
Ending balance	9,090	9,485	9,090	9,485
Ending allowance attributable to loans:
Collectively evaluated for impairment	9,090	9,485	9,090	9,485	9,467
Total ending allowance balance	$ 9,090	$ 9,485	$ 9,090	$ 9,485

XML

Consolidated Statement of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating activities:
Net income (loss)	$ 18,027	$ (225,308)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and accretion	16,511	9,374
Provision for loan losses	33,000	201,000
Stock based compensation	946	758
Securities gains, net	(7,047)	(838)
Losses and write downs on sales of other real estate owned	2,943	60,505
Loss on prepayment of borrowings	6,681	791
Changes in assets and liabilities:
Other assets and accrued interest receivable	22,783	29,332
Accrued expenses and other liabilities	(6,754)	1,078
Mortgage loans held for sale	5,236	16,502
Net cash provided by operating activities	92,326	93,194
Investment securities held to maturity:
Proceeds from maturities and calls	45,741	34,742
Purchases		(141,862)
Investment securities available for sale:
Proceeds from sales	371,103	106,603
Proceeds from maturities and calls	289,985	220,018
Purchases	(580,652)	(875,250)
Net (increase) decrease in loans	(58,765)	64,778
Proceeds from loan sales		99,298
Proceeds collected from FDIC under loss sharing agreements	5,054	11,852
Proceeds from sales of premises and equipment	664	534
Purchases of premises and equipment	(2,581)	(5,276)
Proceeds from sale of other real estate	14,620	60,310
Net cash provided by (used in) investing activities	85,169	(424,253)
Financing activities:
Net change in deposits	(275,516)	(285,957)
Net change in federal funds purchased, repurchase agreements, and other short-term borrowings	(53,401)	2,599
Proceeds from Federal Home Loan Bank Advances	1,489,000
Settlement of Federal Home Loan Bank advances	(1,406,701)	(15,291)
Proceeds from issuance of common stock for dividend reinvestment and employee benefit plans	501	744
Proceeds from issuance of common and preferred stock, net of offering costs		361,560
Proceeds from penalty on incomplete private equity transaction		3,250
Cash dividends on preferred stock	(5,341)	(5,113)
Net cash (used in) provided by financing activities	(251,458)	61,792
Net change in cash and cash equivalents	(73,963)	(269,267)
Cash and cash equivalents at beginning of period	378,416	649,457
Cash and cash equivalents at end of period	304,453	380,190
Cash paid (received) during the period for:
Interest	23,222	36,703
Income taxes	(27,105)	1,527
Unsettled securities purchases		$ 35,634

XML

Derivatives and Hedging Activities (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended			6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2012 Other assets [Member]	Dec. 31, 2011 Other assets [Member]	Jun. 30, 2011 Other assets [Member]	Jun. 30, 2012 Other liabilities [Member]	Dec. 31, 2011 Other liabilities [Member]	Jun. 30, 2011 Other liabilities [Member]	Jun. 30, 2012 Fair Value Hedging [Member] Other fee revenue [Member]	Jun. 30, 2011 Fair Value Hedging [Member] Other fee revenue [Member]	Jun. 30, 2012 Fair Value Hedging [Member] Other fee revenue [Member]	Jun. 30, 2011 Fair Value Hedging [Member] Other fee revenue [Member]	Jun. 30, 2012 Cash Flow Hedging [Member]	Jun. 30, 2011 Cash Flow Hedging [Member]	Jun. 30, 2012 Cash Flow Hedging [Member]	Jun. 30, 2011 Cash Flow Hedging [Member]	Jun. 30, 2012 Cash Flow Hedging [Member] Interest rate products [Member]	Jun. 30, 2011 Cash Flow Hedging [Member] Interest rate products [Member]	Jun. 30, 2012 Cash Flow Hedging [Member] Interest rate products [Member]	Jun. 30, 2011 Cash Flow Hedging [Member] Interest rate products [Member]	Jun. 30, 2012 Cash Flow Hedging [Member] Interest revenue [Member]	Jun. 30, 2011 Cash Flow Hedging [Member] Interest revenue [Member]	Jun. 30, 2012 Cash Flow Hedging [Member] Interest revenue [Member]	Jun. 30, 2011 Cash Flow Hedging [Member] Interest revenue [Member]	Jun. 30, 2012 Cash Flow Hedging [Member] Other income [Member]	Jun. 30, 2011 Cash Flow Hedging [Member] Other income [Member]	Jun. 30, 2012 Cash Flow Hedging [Member] Other income [Member]	Jun. 30, 2011 Cash Flow Hedging [Member] Other income [Member]
Derivatives in Fair Value Hedging Relationships
Amount of Gain (Loss) Recognized in Income on Derivative							$ 2,087		$ 823
Amount of Gain (Loss) Recognized in Income on Hedged Item							(2,310)		(1,012)
Derivatives in Cash Flow Hedging Relationships
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion)															(4,855)		(4,855)
Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)											714	5,398	2,314	9,624					671	2,589	2,190	5,512	43	2,809	124	4,112
Derivatives accounted for as hedges under ASC 815
Description of location of interest rate derivatives accounted for hedges on balance sheet	Other assets			Other liabilities
Derivatives accounted for as hedges, Asset derivatives. Fair Value	68
Derivatives accounted for as hedges, Liability derivatives, Fair Value				5,987	422
Derivatives not accounted for as hedges under ASC 815
Description of location of interest rate derivatives not accounted for hedges on balance sheet	Other assets			Other liabilities
Derivatives not accounted for as hedges, Asset derivatives, Fair Value	155
Derivatives not accounted for as hedges, Liability derivatives, Fair Value				$ 155

XML

Securities (Details 5) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Amortized cost and fair value of held to maturity and available for sale securities by contractual maturity
Available for Sale, Amortized Cost	$ 1,684,240	$ 1,766,134	$ 1,781,882
Fair Value	1,701,583	1,790,047	1,816,613
Held to Maturity, Amortized Cost	282,750	330,203	371,578
Fair Value	299,971	343,531	379,231
U.S. Government agencies [Member]
Amortized cost and fair value of held to maturity and available for sale securities by contractual maturity
Available for Sale, Amortized Cost, 5 to 10 years	43,618
Available for Sale, Fair Value, 5 to 10 years	43,874
Available for Sale, Amortized Cost	43,618
Fair Value	43,874
Held to Maturity, Amortized Cost, 5 to 10 years
Held to Maturity, Fair Value, 5 to 10 years
Held to Maturity, Amortized Cost		5,000	5,000
Fair Value		5,006	5,000
State and political subdivisions [Member]
Amortized cost and fair value of held to maturity and available for sale securities by contractual maturity
Available for Sale, Amortized Cost, Within 1 year	6,567
Available for Sale, Fair Value, Within 1 year	6,576
Available for Sale, Amortized Cost, 1 to 5 years	14,960
Available for Sale, Fair Value, 1 to 5 years	15,982
Available for Sale, Amortized Cost, 5 to 10 years	3,329
Available for Sale, Fair Value, 5 to 10 years	3,676
Available for Sale, Amortized Cost, More than 10 years	848
Available for Sale, Fair Value, More than 10 years	925
Available for Sale, Amortized Cost	25,704
Fair Value	27,159
Held to Maturity, Amortized Cost, Within 1 year
Held to Maturity, Fair Value, Within 1 year
Held to Maturity, Amortized Cost, 1 to 5 years	6,826
Held to Maturity, Fair Value, 1 to 5 years	7,419
Held to Maturity, Amortized Cost, 5 to 10 years	21,808
Held to Maturity, Fair Value, 5 to 10 years	24,264
Held to Maturity, Amortized Cost, More than 10 years	23,167
Held to Maturity, Fair Value, More than 10 years	25,704
Held to Maturity, Amortized Cost	51,801	51,903	49,122
Fair Value	57,387	55,948	50,653
Corporate bonds [Member]
Amortized cost and fair value of held to maturity and available for sale securities by contractual maturity
Available for Sale, Amortized Cost, 1 to 5 years	28,198
Available for Sale, Fair Value, 1 to 5 years	27,182
Available for Sale, Amortized Cost, 5 to 10 years	90,000
Available for Sale, Fair Value, 5 to 10 years	82,556
Available for Sale, Amortized Cost, More than 10 years	1,000
Available for Sale, Fair Value, More than 10 years	300
Available for Sale, Amortized Cost	119,198
Fair Value	110,038
Held to Maturity, Amortized Cost, 1 to 5 years
Held to Maturity, Fair Value, 1 to 5 years
Held to Maturity, Amortized Cost, 5 to 10 years
Held to Maturity, Fair Value, 5 to 10 years
Held to Maturity, Amortized Cost, More than 10 years
Held to Maturity, Fair Value, More than 10 years
Held to Maturity, Amortized Cost
Fair Value
Asset-backed Securities [Member]
Amortized cost and fair value of held to maturity and available for sale securities by contractual maturity
Available for Sale, Amortized Cost, 5 to 10 years	85,090
Available for Sale, Fair Value, 5 to 10 years	84,498
Available for Sale, Amortized Cost	85,090
Fair Value	84,498
Held to Maturity, Amortized Cost, 5 to 10 years
Held to Maturity, Fair Value, 5 to 10 years
Held to Maturity, Amortized Cost
Fair Value
Other [Member]
Amortized cost and fair value of held to maturity and available for sale securities by contractual maturity
Available for Sale, Amortized Cost, More than 10 years	2,583
Available for Sale, Fair Value, More than 10 years	2,583
Available for Sale, Amortized Cost	2,583
Fair Value	2,583
Held to Maturity, Amortized Cost, More than 10 years
Held to Maturity, Fair Value, More than 10 years
Held to Maturity, Amortized Cost
Fair Value
Total securities other than mortgage-backed securities [Member]
Amortized cost and fair value of held to maturity and available for sale securities by contractual maturity
Available for Sale, Amortized Cost, Within 1 year	6,567
Available for Sale, Fair Value, Within 1 year	6,576
Available for Sale, Amortized Cost, 1 to 5 years	43,158
Available for Sale, Fair Value, 1 to 5 years	43,164
Available for Sale, Amortized Cost, 5 to 10 years	222,037
Available for Sale, Fair Value, 5 to 10 years	214,604
Available for Sale, Amortized Cost, More than 10 years	4,431
Available for Sale, Fair Value, More than 10 years	3,808
Held to Maturity, Amortized Cost, Within 1 year
Held to Maturity, Fair Value, Within 1 year
Held to Maturity, Amortized Cost, 1 to 5 years	6,826
Held to Maturity, Fair Value, 1 to 5 years	7,419
Held to Maturity, Amortized Cost, 5 to 10 years	21,808
Held to Maturity, Fair Value, 5 to 10 years	24,264
Held to Maturity, Amortized Cost, More than 10 years	23,167
Held to Maturity, Fair Value, More than 10 years	25,704
Mortgage-backed securities [Member]
Amortized cost and fair value of held to maturity and available for sale securities by contractual maturity
Available for Sale, Amortized Cost	1,408,047
Fair Value	1,433,431
Held to Maturity, Amortized Cost	230,949	273,300	317,456
Fair Value	$ 242,584	$ 282,577	$ 323,578

XML

Foreclosed Property (Tables)

6 Months Ended

Jun. 30, 2012

Foreclosed Property [Abstract]

Classifications of foreclosed properties

Major classifications of foreclosed properties at June 30, 2012, December 31, 2011 and June 30, 2011 are summarized as follows (in thousands).

	June 30,			December 31,			June 30,
	2012			2011			2011
Commercial real estate	$	11,639		$	10,866		$	11,944
Commercial construction		2,732			3,336			6,764
Total commercial		14,371			14,202			18,708
Residential mortgage		5,868			7,840			11,346
Residential construction		22,054			29,799			47,916
Total foreclosed property		42,293			51,841			77,970
Less valuation allowance		11,872			18,982			30,386
Foreclosed property, net	$	30,421		$	32,859		$	47,584
Balance as a percentage of original loan unpaid principal		39.3	%		35.9	%		32.6	%

Activity in the valuation allowance for foreclosed property

Activity in the valuation allowance for foreclosed property is presented in the following table (in thousands).

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Balance at beginning of period	$	17,746		$	53,023		$	18,982		$	16,565
Additions charged to expense		1,008			3,118			3,119			51,703
Direct write downs		(6,882	)		(25,755	)		(10,229	)		(37,882	)
Balance at end of period	$	11,872		$	30,386		$	11,872		$	30,386

Expenses related to foreclosed assets

Expenses related to foreclosed assets include (in thousands).

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Net (gain) loss on sales	$	(269	)	$	(3,218	)	$	(176	)	$	8,802
Provision for unrealized losses		1,008			3,118			3,119			51,703
Operating expenses		1,112			1,991			2,733			6,285
Total foreclosed property expense	$	1,851		$	1,891		$	5,676		$	66,790

XML

Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2012

Loans and Allowance for Loan Losses [Abstract]

Classifications of loans

Major classifications of loans as of June 30, 2012, December 31, 2011 and June 30, 2011, are summarized as follows (in thousands).

	June 30,		December 31,		June 30,
	2012		2011		2011
Commercial (secured by real estate)	$	1,836,477	$	1,821,414	$	1,741,754
Commercial & industrial		450,222		428,249		428,058
Commercial construction		169,338		164,155		195,190
Total commercial		2,456,037		2,413,818		2,365,002
Residential mortgage		1,128,336		1,134,902		1,177,226
Residential construction		408,966		448,391		501,909
Consumer installment		125,896		112,503		119,310
Total loans		4,119,235		4,109,614		4,163,447
Less allowance for loan losses		112,705		114,468		127,638
Loans, net	$	4,006,530	$	3,995,146	$	4,035,809

Changes in the allowance for loan losses

Changes in the allowance for loan losses for the three and six months ended June 30, 2012 and 2011 are summarized as follows (in thousands).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Balance beginning of period	$	113,601	$	133,121	$	114,468	$	174,695
Provision for loan losses		18,000		11,000		33,000		201,000
Charge-offs:
Commercial (secured by real estate)		4,418		3,433		8,346		52,140
Commercial & industrial		888		604		1,644		4,966
Commercial construction		88		980		452		50,695
Residential mortgage		4,014		4,667		9,781		41,343
Residential construction		9,846		6,769		15,475		99,024
Consumer installment		408		883		1,161		1,979
Total loans charged-off		19,662		17,336		36,859		250,147
Recoveries:
Commercial (secured by real estate)		69		174		300		274
Commercial & industrial		113		81		200		403
Commercial construction		—		111		30		111
Residential mortgage		152		78		544		371
Residential construction		283		140		598		257
Consumer installment		149		269		424		674
Total recoveries		766		853		2,096		2,090
Net charge-offs		18,896		16,483		34,763		248,057
Balance end of period	$	112,705	$	127,638	$	112,705	$	127,638

Allowance for loan losses and recorded investment in loans by portfolio segment based on impairment method

The following table presents the balance and activity in the allowance for loan losses by portfolio segment and the recorded investment in loans by portfolio segment based on the impairment method as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	Commercial (Secured by Real Estate)			Commercial & Industrial			Commercial Construction			Residential Mortgage			Residential Construction			Consumer Installment			Unallocated			Total
Six Months Ended June 30, 2012
Allowance for loan losses:
Beginning balance	$	31,644		$	5,681		$	6,097		$	29,076		$	30,379		$	2,124		$	9,467		$	114,468
Charge-offs		(8,346	)		(1,644	)		(452	)		(9,781	)		(15,475	)		(1,161	)		—			(36,859	)
Recoveries		300			200			30			544			598			424			—			2,096
Provision		6,288			1,061			4,662			6,471			13,712			1,183			(377	)		33,000
Ending balance	$	29,886		$	5,298		$	10,337		$	26,310		$	29,214		$	2,570		$	9,090		$	112,705
Ending allowance attributable to loans:
Individually evaluated for impairment	$	8,544		$	753		$	2,476		$	1,389		$	4,188		$	20		$	—		$	17,370
Collectively evaluated for impairment		21,342			4,545			7,861			24,921			25,026			2,550			9,090			95,335
Total ending allowance balance	$	29,886		$	5,298		$	10,337		$	26,310		$	29,214		$	2,570		$	9,090		$	112,705
Loans:
Individually evaluated for impairment	$	130,838		$	57,747		$	42,833		$	19,844		$	41,906		$	511		$	—		$	293,679
Collectively evaluated for impairment		1,705,639			392,475			126,505			1,108,492			367,060			125,385			—			3,825,556
Total loans	$	1,836,477		$	450,222		$	169,338		$	1,128,336		$	408,966		$	125,896		$	—		$	4,119,235
December 31, 2011
Allowance for loan losses:
Ending allowance attributable to loans:
Individually evaluated for impairment	$	7,491		$	1,117		$	236		$	2,234		$	3,731		$	16		$	—		$	14,825
Collectively evaluated for impairment		24,153			4,564			5,861			26,842			26,648			2,108			9,467			99,643
Total ending allowance balance	$	31,644		$	5,681		$	6,097		$	29,076		$	30,379		$	2,124		$	9,467		$	114,468
Loans:
Individually evaluated for impairment	$	107,831		$	57,828		$	26,245		$	18,376		$	46,687		$	292		$	—		$	257,259
Collectively evaluated for impairment		1,713,583			370,421			137,910			1,116,526			401,704			112,211			—			3,852,355
Total loans	$	1,821,414		$	428,249		$	164,155		$	1,134,902		$	448,391		$	112,503		$	—		$	4,109,614
Six Months Ended June 30, 2011
Allowance for loan losses:
Beginning balance	$	31,191		$	7,580		$	6,780		$	22,305		$	92,571		$	3,030		$	11,238		$	174,695
Charge-offs		(52,140	)		(4,966	)		(50,695	)		(41,343	)		(99,024	)		(1,979	)		—			(250,147	)
Recoveries		274			403			111			371			257			674			—			2,090
Provision		42,671			4,016			51,256			49,063			55,249			498			(1,753	)		201,000
Ending balance	$	21,996		$	7,033		$	7,452		$	30,396		$	49,053		$	2,223		$	9,485		$	127,638
Ending allowance attributable to loans:
Individually evaluated for impairment	$	78		$	—		$	450		$	639		$	—		$	—		$	—		$	1,167
Collectively evaluated for impairment		21,918			7,033			7,002			29,757			49,053			2,223			9,485			126,471
Total ending allowance balance	$	21,996		$	7,033		$	7,452		$	30,396		$	49,053		$	2,223		$	9,485		$	127,638
Loans:
Individually evaluated for impairment	$	14,780		$	—		$	1,015		$	7,247		$	12,611		$	—		$	—		$	35,653
Collectively evaluated for impairment		1,726,974			428,058			194,175			1,169,979			489,298			119,310			—			4,127,794
Total loans	$	1,741,754		$	428,058		$	195,190		$	1,177,226		$	501,909		$	119,310		$	—		$	4,163,447

Recorded investments in individually evaluated impaired loans

The recorded investments in individually evaluated impaired loans at June 30, 2012, December 31, 2011 and June 30, 2011 were as follows (in thousands).

	June 30,		December 31,		June 30,
	2012		2011		2011
Period-end loans with no allocated allowance for loan losses	$	214,808	$	188,509	$	32,791
Period-end loans with allocated allowance for loan losses		78,871		68,750		2,862
Total	$	293,679	$	257,259	$	35,653
Amount of allowance for loan losses allocated	$	17,370	$	14,825	$	1,167

Average balances of impaired loans and income recognized on impaired loans

The average balances of impaired loans and income recognized on impaired loans while they were considered impaired is presented below for the three and six months ended June 30, 2012 and 2011 (in thousands).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Average balance of individually evaluated impaired loans during period	$	287,336	$	42,099	$	283,981	$	68,631
Interest income recognized during impairment		2,421		—		4,688		—
Cash-basis interest income recognized		3,216		—		6,408		—

Loans individually evaluated for impairment by class of loans

The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	June 30, 2012						December 31, 2011						June 30, 2011
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial (secured by real estate)	$	105,788	$	95,543	$	—	$	82,887	$	76,215	$	—	$	19,653	$	13,572	$	—
Commercial & industrial		81,036		56,036		—		77,628		52,628		—		—		—		—
Commercial construction		22,491		21,372		—		24,927		23,609		—		—		—		—
Total commercial		209,315		172,951		—		185,442		152,452		—		19,653		13,572		—
Residential mortgage		13,994		11,578		—		13,845		10,804		—		10,006		6,608		—
Residential construction		46,589		30,094		—		38,955		25,190		—		27,441		12,611		—
Consumer installment		185		185		—		63		63		—		—		—		—
Total with no related allowance recorded		270,083		214,808		—		238,305		188,509		—		57,100		32,791		—
With an allowance recorded:
Commercial (secured by real estate)		35,348		35,295		8,544		31,806		31,616		7,491		1,398		1,208		78
Commercial & industrial		1,711		1,711		753		5,200		5,200		1,117		—		—		—
Commercial construction		21,461		21,461		2,476		2,636		2,636		236		1,441		1,015		450
Total commercial		58,520		58,467		11,773		39,642		39,452		8,844		2,839		2,223		528
Residential mortgage		8,458		8,266		1,389		7,642		7,572		2,234		639		639		639
Residential construction		11,886		11,812		4,188		21,629		21,497		3,731		—		—		—
Consumer installment		335		326		20		235		229		16		—		—		—
Total with an allowance recorded		79,199		78,871		17,370		69,148		68,750		14,825		3,478		2,862		1,167
Total	$	349,282	$	293,679	$	17,370	$	307,453	$	257,259	$	14,825	$	60,578	$	35,653	$	1,167

Recorded investment in nonaccrual loans by loan class

The following table presents the recorded investment (unpaid principal less amounts charged-off) in nonaccrual loans by loan class as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	Nonaccrual Loans
	June 30, 2012			December 31, 2011			June 30, 2011
Commercial (secured by real estate)	$	19,115		$	27,322		$	17,764
Commercial & industrial		34,982			34,613			1,998
Commercial construction		18,175			16,655			2,782
Total commercial		72,272			78,590			22,544
Residential mortgage		16,631			22,358			24,809
Residential construction		25,530			25,523			22,643
Consumer installment		907			1,008			1,069
Total	$	115,340		$	127,479		$	71,065
Balance as a percentage of unpaid principal		68.8	%		71.3	%		64.5	%

Aging of the recorded investment in past due loans

The following table presents the aging of the recorded investment in past due loans as of June 30, 2012, December 31, 2011 and June 30, 2011 by class of loans (in thousands).

	Loans Past Due								Loans Not
	30 - 59 Days		60 - 89 Days		> 90 Days		Total		Past Due		Total
As of June 30, 2012
Commercial (secured by real estate)	$	7,053	$	1,342	$	11,996	$	20,391	$	1,816,086	$	1,836,477
Commercial & industrial		663		1,496		389		2,548		447,674		450,222
Commercial construction		3,555		133		950		4,638		164,700		169,338
Total commercial		11,271		2,971		13,335		27,577		2,428,460		2,456,037
Residential mortgage		12,636		2,980		6,756		22,372		1,105,964		1,128,336
Residential construction		4,781		1,189		11,096		17,066		391,900		408,966
Consumer installment		971		325		398		1,694		124,202		125,896
Total loans	$	29,659	$	7,465	$	31,585	$	68,709	$	4,050,526	$	4,119,235
As of December 31, 2011
Commercial (secured by real estate)	$	8,036	$	4,182	$	10,614	$	22,832	$	1,798,582	$	1,821,414
Commercial & industrial		3,869		411		407		4,687		423,562		428,249
Commercial construction		166		—		1,128		1,294		162,861		164,155
Total commercial		12,071		4,593		12,149		28,813		2,385,005		2,413,818
Residential mortgage		15,185		4,617		9,071		28,873		1,106,029		1,134,902
Residential construction		3,940		2,636		10,270		16,846		431,545		448,391
Consumer installment		1,534		308		430		2,272		110,231		112,503
Total loans	$	32,730	$	12,154	$	31,920	$	76,804	$	4,032,810	$	4,109,614
As of June 30, 2011
Commercial (secured by real estate)	$	6,990	$	2,001	$	11,605	$	20,596	$	1,721,158	$	1,741,754
Commercial & industrial		1,496		624		809		2,929		425,129		428,058
Commercial construction		930		651		1,985		3,566		191,624		195,190
Total commercial		9,416		3,276		14,399		27,091		2,337,911		2,365,002
Residential mortgage		13,788		3,594		12,678		30,060		1,147,166		1,177,226
Residential construction		2,942		2,242		15,774		20,958		480,951		501,909
Consumer installment		1,234		353		273		1,860		117,450		119,310
Total loans	$	27,380	$	9,465	$	43,124	$	79,969	$	4,083,478	$	4,163,447

Additional information on troubled debt restructurings

The following table presents additional information on troubled debt restructurings including the number of loan contracts restructured and the pre and post modification recorded investment (dollars in thousands).

	June 30, 2012						December 31, 2011						June 30, 2011
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial (secured by real estate)		96	$	87,104	$	82,325		74	$	70,380	$	69,054		31	$	24,946	$	21,998
Commercial & industrial		29		3,972		3,972		18		806		806		5		156		156
Commercial construction		23		42,796		41,677		11		18,053		18,053		5		9,477		9,477
Total commercial		148		133,872		127,974		103		89,239		87,913		41		34,579		31,631
Residential mortgage		110		17,613		16,950		80		11,943		11,379		29		3,937		3,784
Residential construction		72		25,123		22,178		54		24,921		24,145		46		11,741		10,718
Consumer installment		47		521		511		34		298		293		6		111		111
Total loans		377	$	177,129	$	167,613		271	$	126,401	$	123,730		122	$	50,368	$	46,244

Loans modified under the terms of TDR

	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Subsequently Defaulted During the Three Months Ended June 30, 2012
Troubled Debt Restructurings for the Three Months Ended June 30, 2012							Number of Contracts		Recorded Investment
Commercial (secured by real estate)		10	$	7,815	$	7,728		3	$	2,307
Commercial & industrial		7		598		598		1		5
Commercial construction		7		7,702		7,702		—		—
Total commercial		24		16,115		16,028		4		2,312
Residential mortgage		20		5,288		5,112		1		27
Residential construction		20		7,638		6,361		1		121
Consumer installment		8		210		210		1		6
Total loans		72	$	29,251	$	27,711		7	$	2,466
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Subsequently Defaulted During the Six Months Ended June 30, 2012
Troubled Debt Restructurings for the Six Months Ended June 30, 2012							Number of Contracts		Recorded Investment
Commercial (secured by real estate)		34	$	22,914	$	21,469		3	$	2,307
Commercial & industrial		17		3,322		3,322		2		48
Commercial construction		14		28,483		28,483		2		4,174
Total commercial		65		54,719		53,274		7		6,529
Residential mortgage		44		10,567		10,385		4		400
Residential construction		34		11,389		9,550		4		1,597
Consumer installment		15		270		265		1		6
Total loans		158	$	76,945	$	73,474		16	$	8,532

Risk category of loans by class of loans

As of June 30, 2012, December 31, 2011 and June 30, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands).

	Pass		Watch		Substandard		Doubtful / Loss		Not Rated		Total
As of June 30, 2012
Commercial (secured by real estate)	$	1,596,879	$	72,067	$	167,531	$	—	$	—	$	1,836,477
Commercial & industrial		393,893		4,652		50,899		—		778		450,222
Commercial construction		107,201		6,088		56,049		—		—		169,338
Total commercial		2,097,973		82,807		274,479		—		778		2,456,037
Residential mortgage		999,328		39,105		89,903		—		—		1,128,336
Residential construction		290,808		47,182		70,976		—		—		408,966
Consumer installment		121,153		1,117		3,626		—		—		125,896
Total loans	$	3,509,262	$	170,211	$	438,984	$	—	$	778	$	4,119,235
As of December 31, 2011
Commercial (secured by real estate)	$	1,561,204	$	89,830	$	170,380	$	—	$	—	$	1,821,414
Commercial & industrial		369,343		7,630		50,366		—		910		428,249
Commercial construction		114,817		14,173		35,165		—		—		164,155
Total commercial		2,045,364		111,633		255,911		—		910		2,413,818
Residential mortgage		993,779		42,323		98,800		—		—		1,134,902
Residential construction		312,527		38,386		97,478		—		—		448,391
Consumer installment		107,333		1,411		3,759		—		—		112,503
Total loans	$	3,459,003	$	193,753	$	455,948	$	—	$	910	$	4,109,614
As of June 30, 2011
Commercial (secured by real estate)	$	1,508,284	$	98,175	$	135,295	$	—	$	—	$	1,741,754
Commercial & industrial		404,704		3,682		18,647		—		1,025		428,058
Commercial construction		143,609		17,452		34,129		—		—		195,190
Total commercial		2,056,597		119,309		188,071		—		1,025		2,365,002
Residential mortgage		1,046,255		35,775		95,196		—		—		1,177,226
Residential construction		353,769		51,223		96,917		—		—		501,909
Consumer installment		114,718		608		3,984		—		—		119,310
Total loans	$	3,571,339	$	206,915	$	384,168	$	—	$	1,025	$	4,163,447

XML

Foreclosed Property (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010
Classifications of foreclosed properties
Total foreclosed property	$ 42,293		$ 51,841	$ 77,970
Less valuation allowance	11,872	17,746	18,982	30,386	53,023	16,565
Foreclosed property, net	30,421		32,859	47,584
Balance as a percentage of original loan unpaid principal	39.30%		35.90%	32.60%
Commercial Portfolio Segment [Member]
Classifications of foreclosed properties
Total foreclosed property	14,371		14,202	18,708
Commercial real estate [Member] | Commercial Portfolio Segment [Member]
Classifications of foreclosed properties
Total foreclosed property	11,639		10,866	11,944
Commercial construction [Member] | Commercial Portfolio Segment [Member]
Classifications of foreclosed properties
Total foreclosed property	2,732		3,336	6,764
Residential construction [Member]
Classifications of foreclosed properties
Total foreclosed property	22,054		29,799	47,916
Residential mortgage [Member]
Classifications of foreclosed properties
Total foreclosed property	$ 5,868		$ 7,840	$ 11,346

XML

Securities (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012 Securities	Jun. 30, 2011	Jun. 30, 2012 Securities	Jun. 30, 2011	Dec. 31, 2011
Securities (Textual) [Abstract]
Carrying value of secure public deposits, FHLB advances and other secured borrowings	$ 1,290,000,000	$ 2,110,000,000	$ 1,290,000,000	$ 2,110,000,000	$ 1,720,000,000
Number of available for sale securities in unrealized loss position	36		36
Number of held to maturity securities in unrealized loss position	0		0
Impairment losses	$ 0	$ 0	$ 0	$ 0

XML

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Accrued dividends on preferred stock including accretion of discounts

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Series A - 6% fixed	$	3	$	4	$	6	$	7
Series B - 5% fixed until December 6, 2013, 9% thereafter		2,614		2,598		5,222		5,200
Series D - LIBOR plus 9.6875%, resets quarterly		415		414		834		587
Total preferred stock dividends	$	3,032	$	3,016	$	6,062	$	5,794

Computation of basic and diluted loss per share

The following table sets forth the computation of basic and diluted loss per share for the three and six months ended June 30, 2012 and 2011 (in thousands, except per share data).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Net income (loss) available to common shareholders	$	3,467	$	9,012	$	11,965	$	(231,102	)
Weighted average shares outstanding:
Basic		57,840		25,427		57,803		21,965
Effect of dilutive securities
Convertible securities		—		32,116		—		—
Stock options		—		—		—		—
Warrants		—		—		—		—
Diluted		57,840		57,543		57,803		21,965
Earnings (loss) per common share:
Basic	$	.06	$	.35	$	.21	$	(10.52	)
Diluted	$	.06	$	.16	$	.21	$	(10.52	)

XML

Derivatives and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2012

Derivatives and Hedging Activities [Abstract]

Derivative financial instruments on consolidated balance sheet

The table below presents the fair value of United’s derivative financial instruments as well as their classification on the consolidated balance sheet as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

Derivatives accounted for as hedges under ASC 815

		Fair Value
Interest Rate Products	Balance Sheet Location	June 30, 2012		December 31, 2011		June 30, 2011
Asset derivatives	Other assets	$	68	$	—	$	—
Liability derivatives	Other liabilities	$	5,987	$	422	$	—

Derivatives not accounted for as hedges under ASC 815

		Fair Value
Interest Rate Products	Balance Sheet Location	June 30, 2012		December 31, 2011		June 30, 2011
Asset derivatives	Other assets	$	155	$	—	$	—
Liability derivatives	Other liabilities	$	155	$	—	$	—

Effect of fair value hedging derivative financial instruments on the consolidated statement of operations

The tables below present the effect of United’s derivative financial instruments on the consolidated statement of operations for the three and six months ended June 30, 2012 and 2011.

Derivatives in Fair Value Hedging Relationships (in thousands).

Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative				Amount of Gain (Loss) Recognized in Income on Hedged Item
	2012		2011		2012			2011
Three Months Ended June 30,
Other fee revenue	$	2,087	$	—	$	(2,310	)	$	—
Six Months Ended June 30,
Other fee revenue	$	823	$	—	$	(1,012	)	$	—

Effect of cash flow hedging derivative financial instruments on other comprehensive income

Derivatives in Cash Flow Hedging Relationships (in thousands).

	Amount of Gain (Loss) Recognized in Other Comprehensive Income  on Derivative (Effective Portion)					Gain (Loss) Reclassified from Accumulated Other Comprehensive Income  into Income (Effective Portion)
	2012			2011		Location	2012		2011
Three Months Ended June 30,
						Interest revenue	$	671	$	2,589
						Other income		43		2,809
Interest rate products	$	(4,855	)	$	—	Total	$	714	$	5,398
Six Months Ended June 30,
						Interest revenue	$	2,190	$	5,512
						Other income		124		4,112
Interest rate products	$	(4,855	)	$	—	Total	$	2,314	$	9,624

XML

Consolidated Statement of Changes in Shareholders' Equity (Unaudited) (Parenthetical)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Common stock issued to dividend reinvestment plan and employee benefit plans	60,982	78,584
Common and preferred stock, shares issued		3,467,699
Vesting of restricted stock, shares issued	15,790	1,417
Vesting of restricted stock, shares deferred	8,399	6,382
Shares issued from deferred compensation plan	2,637	3,209
Series D Preferred Stock
Preferred for common stock equity exchange related to tax benefits preservation plan, shares		1,551,126
Series F Preferred Stock
Number of voting common shares in conversion of series F and series G preferred stock		20,618,156
Number of non-voting common shares in conversion of series F and series G preferred stock		15,914,209
Common and preferred stock, shares issued		3,467,699
Series G Preferred Stock
Number of voting common shares in conversion of series F and series G preferred stock		20,618,156
Number of non-voting common shares in conversion of series F and series G preferred stock		15,914,209
Common and preferred stock, shares issued		3,467,699
Non-Voting Common Stock
Number of voting common shares in conversion of series F and series G preferred stock		20,618,156
Number of non-voting common shares in conversion of series F and series G preferred stock		15,914,209
Common Stock
Preferred for common stock equity exchange related to tax benefits preservation plan, shares		1,551,126
Number of voting common shares in conversion of series F and series G preferred stock		20,618,156
Number of non-voting common shares in conversion of series F and series G preferred stock		15,914,209
Common stock issued to dividend reinvestment plan and employee benefit plans	60,982	78,584
Common and preferred stock, shares issued		3,467,699
Vesting of restricted stock, shares issued	15,790	1,417
Vesting of restricted stock, shares deferred	8,399	6,382
Shares issued from deferred compensation plan	2,637	3,209
Common Stock Issuable
Vesting of restricted stock, shares issued	15,790	1,417
Vesting of restricted stock, shares deferred	8,399	6,382
Shares issued from deferred compensation plan	2,637	3,209
Capital Surplus
Preferred for common stock equity exchange related to tax benefits preservation plan, shares		1,551,126
Number of voting common shares in conversion of series F and series G preferred stock		20,618,156
Number of non-voting common shares in conversion of series F and series G preferred stock		15,914,209
Common stock issued to dividend reinvestment plan and employee benefit plans	60,982	78,584
Common and preferred stock, shares issued		3,467,699
Vesting of restricted stock, shares issued	15,790	1,417
Vesting of restricted stock, shares deferred	8,399	6,382
Shares issued from deferred compensation plan	2,637	3,209

XML

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation [Abstract]

Summary of stock option activity

The following table shows stock option activity for the first six months of 2012.

Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinisic Value ($000)
Outstanding at December 31, 2011		583,647		$	94.48
Forfeited		(2,472	)		48.22
Expired		(78,432	)		73.89
Outstanding at June 30, 2012		502,743			97.92		4.0	$	—
Exercisable at June 30, 2012		478,452			101.71		3.8		—

Summary of activity in restricted stock awards

The table below presents the activity in restricted stock awards for the first six months of 2012.

Restricted Stock	Shares			Weighted- Average Grant- Date Fair Value
Outstanding at December 31, 2011		414,644		$	12.19
Granted		29,491			9.36
Excercised		(18,690	)		39.13
Cancelled		(11,400	)		10.25
Outstanding at June 30, 2012		414,045			11.43
Vested at June 30, 2012		15,490			35.62

XML

Securities (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Cost basis, unrealized gains and losses, and fair value of securities available for sale
Amortized Cost	$ 1,684,240	$ 1,766,134	$ 1,781,882
Gross Unrealized Gains	27,441	35,491	37,359
Gross Unrealized Losses	10,098	11,578	2,628
Fair Value	1,701,583	1,790,047	1,816,613
U.S. Government agencies [Member]
Cost basis, unrealized gains and losses, and fair value of securities available for sale
Amortized Cost	43,618	43,592	77,930
Gross Unrealized Gains	256	158	61
Gross Unrealized Losses			514
Fair Value	43,874	43,750	77,477
State and political subdivisions [Member]
Cost basis, unrealized gains and losses, and fair value of securities available for sale
Amortized Cost	25,704	24,997	25,569
Gross Unrealized Gains	1,462	1,345	1,207
Gross Unrealized Losses	7	3	4
Fair Value	27,159	26,339	26,772
Mortgage-backed securities [Member]
Cost basis, unrealized gains and losses, and fair value of securities available for sale
Amortized Cost	1,408,047	1,576,064	1,556,910
Gross Unrealized Gains	25,723	33,988	35,991
Gross Unrealized Losses	339	143	283
Fair Value	1,433,431	1,609,909	1,592,618
Corporate bonds [Member]
Cost basis, unrealized gains and losses, and fair value of securities available for sale
Amortized Cost	119,198	119,110	119,021
Gross Unrealized Gains			100
Gross Unrealized Losses	9,160	11,432	1,827
Fair Value	110,038	107,678	117,294
Asset-backed securities [Member]
Cost basis, unrealized gains and losses, and fair value of securities available for sale
Amortized Cost	85,090
Gross Unrealized Gains
Gross Unrealized Losses	592
Fair Value	84,498
Other [Member]
Cost basis, unrealized gains and losses, and fair value of securities available for sale
Amortized Cost	2,583	2,371	2,452
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	$ 2,583	$ 2,371	$ 2,452

XML

Loans and Allowance for Loan Losses (Detail 8) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2012 Contract	Jun. 30, 2012 Contract
Number of contracts and the recorded investment
Number of Contracts	72	158
Pre-Modification Outstanding Recorded Investment	$ 29,251	$ 76,945
Post-Modification Outstanding Recorded Investment	27,711	73,474
Number of Contracts	7	16
Recorded Investment	2,466	8,532
Commercial Portfolio Segment [Member]
Number of contracts and the recorded investment
Number of Contracts	24	65
Pre-Modification Outstanding Recorded Investment	16,115	54,719
Post-Modification Outstanding Recorded Investment	16,028	53,274
Number of Contracts	4	7
Recorded Investment	2,312	6,529
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member]
Number of contracts and the recorded investment
Number of Contracts	10	34
Pre-Modification Outstanding Recorded Investment	7,815	22,914
Post-Modification Outstanding Recorded Investment	7,728	21,469
Number of Contracts	3	3
Recorded Investment	2,307	2,307
Commercial & industrial [Member] | Commercial Portfolio Segment [Member]
Number of contracts and the recorded investment
Number of Contracts	7	17
Pre-Modification Outstanding Recorded Investment	598	3,322
Post-Modification Outstanding Recorded Investment	598	3,322
Number of Contracts	1	2
Recorded Investment	5	48
Commercial construction [Member] | Commercial Portfolio Segment [Member]
Number of contracts and the recorded investment
Number of Contracts	7	14
Pre-Modification Outstanding Recorded Investment	7,702	28,483
Post-Modification Outstanding Recorded Investment	7,702	28,483
Number of Contracts		2
Recorded Investment		4,174
Residential mortgage [Member]
Number of contracts and the recorded investment
Number of Contracts	20	44
Pre-Modification Outstanding Recorded Investment	5,288	10,567
Post-Modification Outstanding Recorded Investment	5,112	10,385
Number of Contracts	1	4
Recorded Investment	27	400
Residential construction [Member]
Number of contracts and the recorded investment
Number of Contracts	20	34
Pre-Modification Outstanding Recorded Investment	7,638	11,389
Post-Modification Outstanding Recorded Investment	6,361	9,550
Number of Contracts	1	4
Recorded Investment	121	1,597
Consumer installment [Member]
Number of contracts and the recorded investment
Number of Contracts	8	15
Pre-Modification Outstanding Recorded Investment	210	270
Post-Modification Outstanding Recorded Investment	210	265
Number of Contracts	1	1
Recorded Investment	$ 6	$ 6

XML

Reclassification and Reverse Stock Split (Details)	1 Months Ended
	Jun. 17, 2011
Reclassification and Reverse Stock Split (Textual) [Abstract]
Reserve stock split ratio or recombination	1-for-5
Number of common stock shares reclassified into one share of common stock	5
Non-Voting Common Stock
Reclassification and Reverse Stock Split (Textual) [Abstract]
Number of common stock shares reclassified into one share of common stock	5

XML

Consolidated Statement of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Interest revenue:
Loans, including fees	$ 54,178	$ 60,958	$ 109,937	$ 122,065
Investment securities, including tax exempt of $262, $251, $512 and $510	11,062	14,792	24,066	28,396
Federal funds sold, reverse repurchase agreements, commercial paper and deposits in banks	1,096	752	2,108	1,571
Total interest revenue	66,336	76,502	136,111	152,032
Deposits:
NOW	503	1,036	1,140	2,360
Money market	661	1,499	1,302	3,527
Savings	38	64	75	141
Time	5,073	10,995	11,232	22,727
Total deposit interest expense	6,275	13,594	13,749	28,755
Federal funds purchased, repurchase agreements and other short-term borrowings	904	1,074	1,949	2,116
Federal Home Loan Bank advances	390	570	856	1,160
Long-term debt	2,375	2,747	4,747	5,527
Total interest expense	9,944	17,985	21,301	37,558
Net interest revenue	56,392	58,517	114,810	114,474
Provision for loan losses	18,000	11,000	33,000	201,000
Net interest revenue after provision for loan losses	38,392	47,517	81,810	(86,526)
Fee revenue:
Service charges and fees	7,816	7,608	15,599	14,328
Mortgage loan and other related fees	2,322	952	4,421	2,446
Brokerage fees	809	691	1,622	1,368
Securities gains, net	6,490	783	7,047	838
Loss from prepayment of debt	(6,199)	(791)	(6,681)	(791)
Other	1,629	4,662	6,238	7,554
Total fee revenue	12,867	13,905	28,246	25,743
Total revenue	51,259	61,422	110,056	(60,783)
Operating expenses:
Salaries and employee benefits	24,297	26,436	49,522	51,360
Communications and equipment	3,211	3,378	6,366	6,722
Occupancy	3,539	3,805	7,310	7,879
Advertising and public relations	1,088	1,317	1,934	2,295
Postage, printing and supplies	916	1,085	1,895	2,203
Professional fees	1,952	2,350	3,927	5,680
Foreclosed property	1,851	1,891	5,676	66,790
FDIC assessments and other regulatory charges	2,545	3,644	5,055	9,057
Amortization of intangibles	730	760	1,462	1,522
Other	4,181	4,062	8,118	10,491
Total operating expenses	44,310	48,728	91,265	163,999
Net income (loss) before income taxes	6,949	12,694	18,791	(224,782)
Income tax expense	450	666	764	526
Net income (loss)	6,499	12,028	18,027	(225,308)
Preferred stock dividends and discount accretion	3,032	3,016	6,062	5,794
Net income (loss) available to common shareholders	$ 3,467	$ 9,012	$ 11,965	$ (231,102)
Earnings (loss) per common share - Basic	$ 0.06	$ 0.35	$ 0.21	$ (10.52)
Earnings (loss) per common share - Diluted	$ 0.06	$ 0.16	$ 0.21	$ (10.52)
Weighted average common shares outstanding - Basic	57,840	25,427	57,803	21,965
Weighted average common shares outstanding - Diluted	57,840	57,543	57,803	21,965

XML

Loans and Allowance for Loan Losses (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010
Classifications of loans
Total commercial	$ 2,456,037		$ 2,413,818	$ 2,365,002
Total loans	4,119,235		4,109,614	4,163,447
Less allowance for loan losses	112,705	113,601	114,468	127,638	133,121	174,695
Loans, net	4,006,530		3,995,146	4,035,809
Commercial (secured by real estate) [Member]
Classifications of loans
Total commercial	1,836,477		1,821,414	1,741,754
Total loans	1,836,477		1,821,414	1,741,754
Less allowance for loan losses	29,886		31,644	21,996		31,191
Commercial & industrial [Member]
Classifications of loans
Total commercial	450,222		428,249	428,058
Total loans	450,222		428,249	428,058
Less allowance for loan losses	5,298		5,681	7,033		7,580
Commercial construction [Member]
Classifications of loans
Total commercial	169,338		164,155	195,190
Total loans	169,338		164,155	195,190
Less allowance for loan losses	10,337		6,097	7,452		6,780
Residential mortgage [Member]
Classifications of loans
Total loans	1,128,336		1,134,902	1,177,226
Less allowance for loan losses	26,310		29,076	30,396		22,305
Residential construction [Member]
Classifications of loans
Total loans	408,966		448,391	501,909
Less allowance for loan losses	29,214		30,379	49,053		92,571
Consumer installment [Member]
Classifications of loans
Total loans	125,896		112,503	119,310
Less allowance for loan losses	$ 2,570		$ 2,124	$ 2,223		$ 3,030

XML

Consolidated Balance Sheet (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Held to Maturity, Fair Value	$ 299,971	$ 343,531	$ 379,231
Preferred stock, par value	$ 1	$ 1	$ 1
Preferred stock, shares authorized	10,000,000	10,000,000	10,000,000
Common stock, par value	$ 1	$ 1	$ 1
Common stock, shares authorized	100,000,000	100,000,000	100,000,000
Common stock, shares issued	41,726,509	41,647,100	41,554,874
Common stock, shares outstanding	41,726,509	41,647,100	41,544,874
Common stock issuable, shares	94,657	93,681	83,575
Series A Preferred Stock
Preferred stock, par value	$ 10	$ 10	$ 10
Preferred stock, shares issued	21,700	21,700	21,700
Preferred stock, shares outstanding	21,700	21,700	21,700
Series B Preferred Stock
Preferred stock, par value	$ 1,000	$ 1,000	$ 1,000
Preferred stock, shares issued	180,000	180,000	180,000
Preferred stock, shares outstanding	180,000	180,000	180,000
Series D Preferred Stock
Preferred stock, par value	$ 1,000	$ 0	$ 0
Preferred stock, shares issued	16,613	16,613	16,613
Preferred stock, shares outstanding	16,613	16,613	16,613
Non-Voting Common Stock
Common stock, par value	$ 1	$ 1	$ 1
Common stock, shares authorized	30,000,000	30,000,000	30,000,000
Common stock, shares issued	15,914,209	15,914,209	15,914,209
Common stock, shares outstanding	15,914,209	15,914,209	15,914,209

XML

Earnings Per Share (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Accrued dividends on preferred stock including accretion of discounts
Total preferred stock dividends	$ 3,032	$ 3,016	$ 6,062	$ 5,794
Series A - 6% fixed [Member]
Accrued dividends on preferred stock including accretion of discounts
Total preferred stock dividends	3	4	6	7
Series B - 5% fixed until December 6, 2013, 9% thereafter [Member]
Accrued dividends on preferred stock including accretion of discounts
Total preferred stock dividends	2,614	2,598	5,222	5,200
Series D - LIBOR plus 9.6875%, resets quarterly [Member]
Accrued dividends on preferred stock including accretion of discounts
Total preferred stock dividends	$ 415	$ 414	$ 834	$ 587

XML

Mergers and Acquisitions (Details Textual) (Southern Community Bank [Member], Federal deposit insurance corporation [Member], USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Southern Community Bank [Member] | Federal deposit insurance corporation [Member]
Mergers and Acquisitions (Textual) [Abstract]
Percentage of absorption of losses by FDIC under terms of loss sharing agreements	80.00%
Percentage of recoveries of losses by FDIC under the terms of the loss sharing agreements	80.00%
Percentage of absorption of losses exceeding by FDIC under the terms of the loss sharing agreements	95.00%
Percentage of recoveries of losses exceeding by FDIC under the terms of the loss sharing agreements	95.00%
Exceeding sharing agreements losses	$ 109
Term for loss sharing loans	10 years
Term for other loss sharing loans	5 years
Average life of indemnification assets	4 years

XML

Stock-Based Compensation (Details 1) (USD $)	6 Months Ended
	Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested
Shares Outstanding, Ending Balance	414,045
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested
Shares Outstanding, Beginning Balance	414,644
Shares, Granted	29,491
Shares, Exercised	(18,690)
Shares, Cancelled	(11,400)
Shares Outstanding, Ending Balance	414,045
Shares, Vested at June 30,2012	15,490
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
Weighted-Average Grant-Date Fair Value, Outstanding, Beginning of Period	$ 12.19
Weighted-Average Grant-Date Fair Value, Granted	$ 9.36
Weighted-Average Grant-Date Fair Value, Exercised	$ 39.13
Weighted-Average Grant-Date Fair Value, Cancelled	$ 10.25
Weighted-Average Grant-Date Fair Value, Outstanding, End of Period	$ 11.43
Weighted-Average Grant-Date Fair Value, Vested at June 30,2012	$ 35.62

XML

Reclassification and Reverse Stock Split

6 Months Ended

Jun. 30, 2012

Common and Preferred Stock Issued / Common Stock Issuable And Reclassifications and Reverse Stock Split [Abstract]

Reclassification and Reverse Stock Split

Note 13 – Reclassification and Reverse Stock Split

Certain 2011 amounts have been reclassified to conform to the 2012 presentation. On June 17, 2011, United completed a 1-for-5 reverse stock split, or recombination, whereby each five shares of United’s common stock was reclassified into one share of common stock and each five shares of United’s non-voting common stock was reclassified into one share of non-voting common stock. All share and per share amounts for all periods presented have been adjusted to reflect the reverse split as though it had occurred prior to the earliest period presented.

XML

Reverse Repurchase Agreements (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Summary of amounts outstanding under reverse repurchase
Reverse Repurchase Agreements (Assets)	$ 320,000
Repurchase Agreements (Liabilities)	200,000
Net Reported Balance (Asset)	120,000
Weighted average interest rate - Reverse Repurchase Agreements (Assets)	1.27%
Weighted average interest rate - Repurchase Agreements (Liabilities)	0.41%
Amounts subject to master netting agreements [Member]
Summary of amounts outstanding under reverse repurchase
Reverse Repurchase Agreements (Assets)	200,000
Repurchase Agreements (Liabilities)	200,000
Net Reported Balance (Asset)
Other reverse repurchase agreements [Member]
Summary of amounts outstanding under reverse repurchase
Reverse Repurchase Agreements (Assets)	120,000
Repurchase Agreements (Liabilities)
Net Reported Balance (Asset)	$ 120,000

XML

Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Real Estate Sales

Foreclosed property is initially recorded at fair value, less estimated costs to sell. If the fair value, less estimated costs to sell at the time of foreclosure, is less than the loan balance, the deficiency is charged against the allowance for loan losses. If the fair value, less cost to sell, of the foreclosed property decreases during the holding period, a valuation allowance is established with a charge to operating expenses. When the foreclosed property is sold, a gain or loss is recognized on the sale for the difference between the sales proceeds and the carrying amount of the property. Financed sales of foreclosed property are accounted for in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360-20, Real Estate Sales.

Master netting agreements

In conjunction with the FASB’s fair value measurement guidance, United made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Testing Indefinite-Lived Intangible Assets for Impairment

In July 2012, the Financial Accounting Standards Board issued Accounting Standards Update No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (the revised standard). It allows companies to perform a “qualitative” assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The revised standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, and entities can choose to early adopt the revised guidance. It is not expected to have a material impact on United’s financial position, results of operations or disclosures.

XML

Assets and Liabilities Measured at Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Level 1 [Member]
Assets
Assets, fair value
Level 2 [Member]
Assets
Assets, fair value
Fair Value, Measurements, Recurring [Member]
Assets
Assets, fair value	1,704,701	1,792,906	1,819,638
Liabilities
Liabilities, fair value	111,916	16,388	3,025
Fair Value, Measurements, Recurring [Member] | Deferred compensation plan liability [Member]
Liabilities
Liabilities, fair value	2,895	2,859	3,025
Fair Value, Measurements, Recurring [Member] | Brokered certificates of deposit [Member]
Liabilities
Liabilities, fair value	102,879	13,107
Fair Value, Measurements, Recurring [Member] | Derivative financial instruments [Member]
Liabilities
Liabilities, fair value	6,142	422
Fair Value, Measurements, Recurring [Member] | U.S. Government agencies [Member]
Assets
Assets, fair value	43,874	43,750	77,477
Fair Value, Measurements, Recurring [Member] | State and political subdivisions [Member]
Assets
Assets, fair value	27,159	26,339	26,772
Fair Value, Measurements, Recurring [Member] | Mortgage-backed securities [Member]
Assets
Assets, fair value	1,433,431	1,609,909	1,592,618
Fair Value, Measurements, Recurring [Member] | Corporate bonds [Member]
Assets
Assets, fair value	110,038	107,678	117,294
Fair Value, Measurements, Recurring [Member] | Asset-backed securities [Member]
Assets
Assets, fair value	84,498
Fair Value, Measurements, Recurring [Member] | Other [Member]
Assets
Assets, fair value	2,583	2,371	2,452
Fair Value, Measurements, Recurring [Member] | Deferred compensation plan assets [Member]
Assets
Assets, fair value	2,895	2,859	3,025
Fair Value, Measurements, Recurring [Member] | Derivative financial instruments [Member]
Assets
Assets, fair value	223
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Assets
Assets, fair value	2,895	2,859	3,025
Liabilities
Liabilities, fair value	2,895	2,859	3,025
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Deferred compensation plan liability [Member]
Liabilities
Liabilities, fair value	2,895	2,859	3,025
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Deferred compensation plan assets [Member]
Assets
Assets, fair value	2,895	2,859	3,025
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Assets
Assets, fair value	1,701,456	1,789,697	1,812,134
Liabilities
Liabilities, fair value	109,021	13,529
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Brokered certificates of deposit [Member]
Liabilities
Liabilities, fair value	102,879	13,107
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Derivative financial instruments [Member]
Liabilities
Liabilities, fair value	6,142	422
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | U.S. Government agencies [Member]
Assets
Assets, fair value	43,874	43,750	77,477
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | State and political subdivisions [Member]
Assets
Assets, fair value	27,159	26,339	26,772
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Mortgage-backed securities [Member]
Assets
Assets, fair value	1,433,431	1,609,909	1,588,489
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Corporate bonds [Member]
Assets
Assets, fair value	109,688	107,328	116,944
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Asset-backed securities [Member]
Assets
Assets, fair value	84,498
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other [Member]
Assets
Assets, fair value	2,583	2,371	2,452
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Derivative financial instruments [Member]
Assets
Assets, fair value	223
Fair Value, Measurements, Recurring [Member] | Level 3 [Member]
Assets
Assets, fair value	350	350	4,479
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Mortgage-backed securities [Member]
Assets
Assets, fair value			4,129
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Corporate bonds [Member]
Assets
Assets, fair value	$ 350	$ 350	$ 350

XML

Consolidated Statement of Changes in Shareholders' Equity (Unaudited) (USD $) In Thousands, unless otherwise specified	Total	Series A Preferred Stock	Series B Preferred Stock	Series D Preferred Stock	Series F Preferred Stock	Series G Preferred Stock	Non-Voting Common Stock	Common Stock	Common Stock Issuable	Capital Surplus	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2010	$ 468,578	$ 217	$ 175,711					$ 18,937	$ 3,894	$ 741,244	$ (492,276)	$ 20,851
Net income (loss)	(225,308)										(225,308)
Other comprehensive loss	(1,619)											(1,619)
Preferred for common equity exchange related to tax benefits preservation plan (1,551,126 common shares)				16,613				(1,551)		(15,062)
Penalty received on incomplete private equity transaction, net of tax expense	3,250									3,250
Conversion of Series F and Series G Preferred Stock (20,618,156 voting and 15,914,209 non-voting common shares)					(195,872)	(151,185)	15,914	20,618		310,525
Common stock issued to dividend reinvestment plan and employee benefit plans (78,584 shares)	744							79		665
Common and preferred stock issued (3,467,699 common shares)	361,560				195,872	151,185		3,468		11,035
Amortization of stock option and restricted stock awards	758									758
Vesting of restricted stock								1	54	(55)
Deferred compensation plan, net, including dividend equivalents	127								127
Shares issued from deferred compensation plan								3	(501)	498
Tax on option exercise and restricted stock vesting	(376)									(376)
Preferred stock dividends:
Series A	(7)										(7)
Series B	(4,519)		681								(5,200)
Series D	(587)										(587)
Ending balance at Jun. 30, 2011	602,601	217	176,392	16,613			15,914	41,555	3,574	1,052,482	(723,378)	19,232
Beginning balance at Dec. 31, 2011	575,486	217	177,092	16,613			15,914	41,647	3,233	1,054,940	(730,861)	(3,309)
Net income (loss)	18,027										18,027
Other comprehensive loss	(13,797)											(13,797)
Common stock issued to dividend reinvestment plan and employee benefit plans (78,584 shares)	501							61		440
Amortization of stock option and restricted stock awards	946									946
Vesting of restricted stock	71							16	(151)	206
Deferred compensation plan, net, including dividend equivalents	101								101
Shares issued from deferred compensation plan								3	(290)	287
Preferred stock dividends:
Series A	(6)										(6)
Series B	(4,500)		722								(5,222)
Series D	(834)										(834)
Ending balance at Jun. 30, 2012	$ 575,995	$ 217	$ 177,814	$ 16,613			$ 15,914	$ 41,727	$ 2,893	$ 1,056,819	$ (718,896)	$ (17,106)

XML

Consolidated Statement of Operations (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated Statement of Operations [Abstract]
Tax exempt on investment securities	$ 262	$ 251	$ 512	$ 510

XML

Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share

Note 8 – Earnings Per Share

United is required to report on the face of the consolidated statement of operations, earnings (loss) per common share with and without the dilutive effects of potential common stock issuances from instruments such as options, convertible securities and warrants. Basic earnings (loss) per common share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per common share. During the three and six months ended June 30, 2012 and 2011, United accrued dividends on preferred stock, including accretion of discounts, as shown in the following table (in thousands).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Series A - 6% fixed	$	3	$	4	$	6	$	7
Series B - 5% fixed until December 6, 2013, 9% thereafter		2,614		2,598		5,222		5,200
Series D - LIBOR plus 9.6875%, resets quarterly		415		414		834		587
Total preferred stock dividends	$	3,032	$	3,016	$	6,062	$	5,794

All preferred stock dividends are payable quarterly.

Series B preferred stock was issued at a discount. Dividend amounts shown include discount accretion for each period.

The preferred stock dividends were subtracted from net income (loss) in order to arrive at net income (loss) available to common shareholders. There is no dilution from potentially dilutive securities for the six months ended June 30, 2011, due to the anti-dilutive effect of the net loss for that period.

The following table sets forth the computation of basic and diluted loss per share for the three and six months ended June 30, 2012 and 2011 (in thousands, except per share data).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Net income (loss) available to common shareholders	$	3,467	$	9,012	$	11,965	$	(231,102	)
Weighted average shares outstanding:
Basic		57,840		25,427		57,803		21,965
Effect of dilutive securities
Convertible securities		—		32,116		—		—
Stock options		—		—		—		—
Warrants		—		—		—		—
Diluted		57,840		57,543		57,803		21,965
Earnings (loss) per common share:
Basic	$	.06	$	.35	$	.21	$	(10.52	)
Diluted	$	.06	$	.16	$	.21	$	(10.52	)

At June 30, 2012, United had the following potentially dilutive stock options and warrants outstanding: a warrant to purchase 219,908.49 common shares at $61.39 per share issued to the U.S. Treasury in conjunction with the issuance of United’s fixed rate cumulative preferred perpetual stock, Series B; 129,670 common shares issuable upon exercise of warrants attached to trust preferred securities with an exercise price of $100 per share; 502,743 common shares issuable upon exercise of stock options granted to employees with a weighted average exercise price of $97.92; 414,045 shares issuable upon completion of vesting of restricted stock awards; 1,411,765 common shares issuable upon exercise of warrants exercisable at a price equivalent to $21.25 per share granted to Fletcher International Ltd. (“Fletcher”) in connection with a 2010 asset purchase and sale agreement; 2,476,191 common shares issuable upon conversion of preferred stock if Fletcher or its purported assignee exercises its option to purchase $65 million in convertible preferred stock, convertible at $26.25 per share; 1,162,791 common shares issuable upon exercise of warrants, exercisable at a price equivalent to $30.10 per share to be granted to Fletcher or its purported assignee upon exercise of its option to acquire preferred stock; and 1,551,126 common shares issuable upon exercise of warrants owned by Elm Ridge Off Shore Master Fund, Ltd. and Elm Ridge Value Partners, L.P. (collectively, the “Elm Ridge Parties”), exercisable at $12.50 per share.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 31, 2012
Entity Registrant Name	UNITED COMMUNITY BANKS INC
Entity Central Index Key	0000857855
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		41,774,770
Non-Voting Common Stock
Entity Common Stock, Shares Outstanding		15,914,209

XML

Derivatives and Hedging Activities

6 Months Ended

Jun. 30, 2012

Derivatives and Hedging Activities [Abstract]

Derivatives and Hedging Activities

Note 9 – Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

United is exposed to certain risks arising from both its business operations and economic conditions. United principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. United manages interest rate risk primarily by managing the amount, sources, and duration of its investment securities portfolio and debt funding and through the use of derivative financial instruments. Specifically, United enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. United’s derivative financial instruments are used to manage differences in the amount, timing, and duration of United’s known or expected cash receipts and its known or expected cash payments principally related to United’s loans, wholesale borrowings and deposits.

In conjunction with the FASB’s fair value measurement guidance, United made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

The table below presents the fair value of United’s derivative financial instruments as well as their classification on the consolidated balance sheet as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

Derivatives accounted for as hedges under ASC 815

		Fair Value
Interest Rate Products	Balance Sheet Location	June 30, 2012		December 31, 2011		June 30, 2011
Asset derivatives	Other assets	$	68	$	—	$	—
Liability derivatives	Other liabilities	$	5,987	$	422	$	—

Derivatives not accounted for as hedges under ASC 815

		Fair Value
Interest Rate Products	Balance Sheet Location	June 30, 2012		December 31, 2011		June 30, 2011
Asset derivatives	Other assets	$	155	$	—	$	—
Liability derivatives	Other liabilities	$	155	$	—	$	—

Derivative contracts that are not accounted for as hedges under ASC 815 are between United and certain commercial loan customers with offsetting positions to dealers under a back-to-back swap program.

Cash Flow Hedges of Interest Rate Risk

United’s objectives in using interest rate derivatives are to add stability to net interest revenue and to manage its exposure to interest rate movements. To accomplish this objective, United primarily uses interest rate swaps as part of its interest rate risk management strategy. At June 30, 2012, United’s interest rate swaps designated as cash flow hedges involve the payment of fixed-rate amounts to a counterparty in exchange for United receiving variable-rate payments over the life of the agreements without exchange of the underlying notional amount. United’s current cash flow hedges are for the purpose of converting variable rate deposits and wholesale borrowings to a fixed rate to protect the company in a rising rate environment. The swaps are forward starting and do not become effective until 2014. At June 30, 2012, United had five swap contracts outstanding with a total notional amount of $400 million that were designated as cash flow hedges. United had no active derivative contracts outstanding at December 31, 2011 or June 30, 2011 that were designated as cash flow hedges of interest rate risk.

The effective portion of changes in the fair value of derivatives designated, and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense when the swaps become effective in 2014 as interest payments are made on United’s LIBOR based variable-rate wholesale borrowings and indexed deposit accounts. At June 30, 2012, a portion of the amount included in other comprehensive income represents deferred gains from terminated cash flow hedges where the forecasted hedging transaction is expected to remain effective over the remaining unexpired term of the original contract. Such gains are being deferred and recognized over the remaining life of the contract on a straight line basis. During the three and six months ended June 30, 2012, United accelerated the reclassification of $43,000 and $124,000, respectively, in gains from terminated positions as a result of the forecasted transactions becoming probable not to occur. During the next twelve months, United estimates that an additional $2.23 million of the deferred gains on terminated cash flow hedging positions will be reclassified as an increase to interest revenue.

Fair Value Hedges of Interest Rate Risk

United is exposed to changes in the fair value of certain of its fixed rate obligations due to changes in LIBOR, a benchmark interest rate. United uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the benchmark interest rate. Interest rate swaps designated as fair value hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for United making variable rate payments over the life of the agreements without the exchange of the underlying notional amount. At June 30, 2012, United had seven interest rate swaps with an aggregate notional amount of $104 million that were designated as fair value hedges of interest rate risk. As of June 30, 2011, United had no active derivatives designated as fair value hedges of interest rate risk.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in earnings. United includes the gain or loss on the hedged items in the same line item as the offsetting loss or gain on the related derivatives. During the three and six months ended June 30, 2012, United recognized net losses of $223,000 and $189,000, respectively, related to ineffectiveness of the fair value hedging relationships. United also recognized a net reduction of interest expense of $550,000 and $828,000 for the three and six months ended June 30, 2012, related to United’s fair value hedges, which includes net settlements on the derivatives. There were no active fair value hedges during the first six months of 2011.

Tabular Disclosure of the Effect of Derivative Instruments on the Income Statement

The tables below present the effect of United’s derivative financial instruments on the consolidated statement of operations for the three and six months ended June 30, 2012 and 2011.

Derivatives in Fair Value Hedging Relationships (in thousands).

Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative				Amount of Gain (Loss) Recognized in Income on Hedged Item
	2012		2011		2012			2011
Three Months Ended June 30,
Other fee revenue	$	2,087	$	—	$	(2,310	)	$	—
Six Months Ended June 30,
Other fee revenue	$	823	$	—	$	(1,012	)	$	—

Derivatives in Cash Flow Hedging Relationships (in thousands).

	Amount of Gain (Loss) Recognized in Other Comprehensive Income  on Derivative (Effective Portion)					Gain (Loss) Reclassified from Accumulated Other Comprehensive Income  into Income (Effective Portion)
	2012			2011		Location	2012		2011
Three Months Ended June 30,
						Interest revenue	$	671	$	2,589
						Other income		43		2,809
Interest rate products	$	(4,855	)	$	—	Total	$	714	$	5,398
Six Months Ended June 30,
						Interest revenue	$	2,190	$	5,512
						Other income		124		4,112
Interest rate products	$	(4,855	)	$	—	Total	$	2,314	$	9,624

Credit-risk-related Contingent Features

United manages its credit exposure on derivatives transactions by entering into a bi-lateral credit support agreement with each counterparty. The credit support agreements require collateralization of exposures beyond specified minimum threshold amounts. The details of these agreements, including the minimum thresholds, vary by counterparty.

United’s agreements with each of its derivative counterparties contain a provision where if either party defaults on any of its indebtedness, then it could also be declared in default on its derivative obligations. The agreements with derivatives counterparties also include provisions that if not met, could result in United being declared in default. United has agreements with certain of its derivative counterparties that contain a provision where if United fails to maintain its status as a well-capitalized institution or is subject to a prompt corrective action directive, the counterparty could terminate the derivative positions and United would be required to settle its obligations under the agreements.

XML

Consolidated Statement of Comprehensive (Loss) Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated Statement of Comprehensive (Loss) Income [Abstract]
Net income (loss)	$ 6,499	$ 12,028	$ 18,027	$ (225,308)
Unrealized (losses) gains on available for sale securities:
Unrealized holding gains arising during period	4,264	10,967	924	10,008
Reclassification adjustment for gains included in net income	(6,490)	(783)	(7,047)	(838)
Amortization of gains included in net income (loss) on available for sale securities transferred to held to maturity	(400)	(504)	(813)	(1,167)
Amortization of gains included in net income (loss) on derivative financial instrument accounted for as cash flow hedges	(714)	(5,399)	(2,314)	(9,622)
Unrealized losses on derivative financial instruments accounted for as cash flow hedges	(4,855)		(4,855)
Amortization of prior service cost and actuarial losses included in net periodic pension cost for defined benefit pension plans	154		308
Total other comprehensive (loss) income	(8,041)	4,281	(13,797)	(1,619)
Comprehensive (loss) income	$ (1,542)	$ 16,309	$ 4,230	$ (226,927)

XML

Mergers and Acquisitions

6 Months Ended

Jun. 30, 2012

Mergers and Acquisitions [Abstract]

Mergers and Acquisitions

Note 3 – Mergers and Acquisitions

On June 19, 2009, United Community Bank (“UCB” or the “Bank”) purchased substantially all the assets and assumed substantially all the liabilities of Southern Community Bank (“SCB”) from the Federal Deposit Insurance Corporation (“FDIC”), as Receiver of SCB. UCB and the FDIC entered loss sharing agreements regarding future losses incurred on loans and foreclosed loan collateral existing at June 19, 2009. Under the terms of the loss sharing agreements, the FDIC will absorb 80 percent of losses and share 80 percent of loss recoveries on the first $109 million of losses and, absorb 95 percent of losses and share in 95 percent of loss recoveries on losses exceeding $109 million. The term for loss sharing on 1-4 Family loans is ten years, while the term for loss sharing on all other loans is five years.

Under the loss sharing agreement, the portion of the losses expected to be indemnified by the FDIC is considered an indemnification asset in accordance with ASC 805 Business Combinations. The indemnification asset, referred to as “estimated loss reimbursement from the FDIC,” is included in the balance of “Assets covered by loss sharing agreements with the FDIC” on the Consolidated Balance Sheet. The indemnification asset was recognized at fair value, which was estimated at the acquisition date based on the terms of the loss sharing agreement. The indemnification asset is expected to be collected over a four-year average life. No valuation allowance was required.

Loans, foreclosed property and the estimated FDIC reimbursement resulting from the loss sharing agreements with the FDIC are reported as “Assets covered by loss sharing agreements with the FDIC” in the consolidated balance sheet.

The table below shows the components of covered assets at June 30, 2012 (in thousands).

(in thousands)	Purchased Impaired Loans		Other Purchased Loans		Other		Total
Commercial (secured by real estate)	$	—	$	28,021	$	—	$	28,021
Commercial & industrial		—		1,473		—		1,473
Construction and land development		525		4,709		—		5,234
Residential mortgage		145		6,429		—		6,574
Consumer installment		—		152		—		152
Total covered loans		670		40,784		—		41,454
Covered foreclosed property		—		—		14,098		14,098
Estimated loss reimbursement from the FDIC		—		—		10,362		10,362
Total covered assets	$	670	$	40,784	$	24,460	$	65,914

XML

Accounting Standards Updates

6 Months Ended

Jun. 30, 2012

Accounting Standards Updates [Abstract]

Accounting Standards Updates

Note 2 – Accounting Standards Updates

In July 2012, the Financial Accounting Standards Board issued Accounting Standards Update No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (the revised standard). It allows companies to perform a “qualitative” assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The revised standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, and entities can choose to early adopt the revised guidance. It is not expected to have a material impact on United’s financial position, results of operations or disclosures.

XML

Bulk Loan Sale

6 Months Ended

Jun. 30, 2012

Bulk Loan Sale [Abstract]

Bulk Loan Sale

Note 14 – Bulk Loan Sale

On April 18, 2011, United completed the bulk sale of $80.6 million of loans that were reported as held for sale at March 31, 2011. The proceeds from the bulk sale were $87.9 million which resulted in a reduction of charge-offs in the second quarter of 2011.

XML

Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 10 – Stock-Based Compensation

United has an equity compensation plan that allows for grants of incentive stock options, nonqualified stock options, restricted stock awards (also referred to as “nonvested stock” awards), stock awards, performance share awards or stock appreciation rights. Options granted under the plan can have an exercise price no less than the fair market value of the underlying stock at the date of grant. The general terms of the plan include a vesting period (usually four years) with an exercisable period not to exceed ten years. Certain option and restricted stock awards provide for accelerated vesting if there is a change in control (as defined in the plan). As of June 30, 2012, 1,351,000 additional awards could be granted under the plan. Through June 30, 2012, incentive stock options, nonqualified stock options, restricted stock awards and units and base salary stock grants had been granted under the plan.

The following table shows stock option activity for the first six months of 2012.

Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinisic Value ($000)
Outstanding at December 31, 2011		583,647		$	94.48
Forfeited		(2,472	)		48.22
Expired		(78,432	)		73.89
Outstanding at June 30, 2012		502,743			97.92		4.0	$	—
Exercisable at June 30, 2012		478,452			101.71		3.8		—

The fair value of each option is estimated on the date of grant using the Black-Scholes model. No stock options were granted during the six month periods ended June 30, 2012 or 2011.

Compensation expense relating to stock options of $131,000 and $465,000 was included in earnings for the six months ended June 30, 2012 and 2011, respectively. Deferred tax benefits of $50,000 and $181,000, respectively, were included in the determination of income tax expense for the six month periods ended June 30, 2012 and 2011. The amount of compensation expense for both periods was determined based on the fair value of the options at the time of grant, multiplied by the number of options granted that are expected to vest, which was then amortized over the vesting period. The forfeiture rate for options is estimated to be approximately 3% per year. No options were exercised during the first six months of 2012 or 2011.

The table below presents the activity in restricted stock awards for the first six months of 2012.

Restricted Stock	Shares			Weighted- Average Grant- Date Fair Value
Outstanding at December 31, 2011		414,644		$	12.19
Granted		29,491			9.36
Excercised		(18,690	)		39.13
Cancelled		(11,400	)		10.25
Outstanding at June 30, 2012		414,045			11.43
Vested at June 30, 2012		15,490			35.62

Compensation expense for restricted stock is based on the fair value of restricted stock awards at the time of grant, which is equal to the value of United’s common stock on the date of grant. The value of restricted stock grants that are expected to vest is amortized into expense over the vesting period. For the six months ended June 30, 2012 and 2011, compensation expense of $815,000 and $293,000, respectively, was recognized related to restricted stock awards. The total intrinsic value of the restricted stock was $3.55 million at June 30, 2012.

As of June 30, 2012, there was $3.10 million of unrecognized compensation cost related to non-vested stock options and restricted stock awards granted under the plan. That cost is expected to be recognized over a weighted-average period of 1.93 years. The aggregate grant date fair value of options and restricted stock awards that vested during the six months ended June 30, 2012, was $1.54 million.

XML

Loans and Allowance for Loan Losses

6 Months Ended

Jun. 30, 2012

Loans and Allowance for Loan Losses [Abstract]

Loans and Allowance for Loan Losses

Note 6 – Loans and Allowance for Loan Losses

Major classifications of loans as of June 30, 2012, December 31, 2011 and June 30, 2011, are summarized as follows (in thousands).

	June 30,		December 31,		June 30,
	2012		2011		2011
Commercial (secured by real estate)	$	1,836,477	$	1,821,414	$	1,741,754
Commercial & industrial		450,222		428,249		428,058
Commercial construction		169,338		164,155		195,190
Total commercial		2,456,037		2,413,818		2,365,002
Residential mortgage		1,128,336		1,134,902		1,177,226
Residential construction		408,966		448,391		501,909
Consumer installment		125,896		112,503		119,310
Total loans		4,119,235		4,109,614		4,163,447
Less allowance for loan losses		112,705		114,468		127,638
Loans, net	$	4,006,530	$	3,995,146	$	4,035,809

The Bank makes loans and extensions of credit to individuals and a variety of firms and corporations located primarily in counties in north Georgia, the Atlanta, Georgia metropolitan statistical area, the Gainesville, Georgia metropolitan statistical area, coastal Georgia, western North Carolina and east Tennessee. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate and is dependent upon the real estate market.

Changes in the allowance for loan losses for the three and six months ended June 30, 2012 and 2011 are summarized as follows (in thousands).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Balance beginning of period	$	113,601	$	133,121	$	114,468	$	174,695
Provision for loan losses		18,000		11,000		33,000		201,000
Charge-offs:
Commercial (secured by real estate)		4,418		3,433		8,346		52,140
Commercial & industrial		888		604		1,644		4,966
Commercial construction		88		980		452		50,695
Residential mortgage		4,014		4,667		9,781		41,343
Residential construction		9,846		6,769		15,475		99,024
Consumer installment		408		883		1,161		1,979
Total loans charged-off		19,662		17,336		36,859		250,147
Recoveries:
Commercial (secured by real estate)		69		174		300		274
Commercial & industrial		113		81		200		403
Commercial construction		—		111		30		111
Residential mortgage		152		78		544		371
Residential construction		283		140		598		257
Consumer installment		149		269		424		674
Total recoveries		766		853		2,096		2,090
Net charge-offs		18,896		16,483		34,763		248,057
Balance end of period	$	112,705	$	127,638	$	112,705	$	127,638

The following table presents the balance and activity in the allowance for loan losses by portfolio segment and the recorded investment in loans by portfolio segment based on the impairment method as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	Commercial (Secured by Real Estate)			Commercial & Industrial			Commercial Construction			Residential Mortgage			Residential Construction			Consumer Installment			Unallocated			Total
Six Months Ended June 30, 2012
Allowance for loan losses:
Beginning balance	$	31,644		$	5,681		$	6,097		$	29,076		$	30,379		$	2,124		$	9,467		$	114,468
Charge-offs		(8,346	)		(1,644	)		(452	)		(9,781	)		(15,475	)		(1,161	)		—			(36,859	)
Recoveries		300			200			30			544			598			424			—			2,096
Provision		6,288			1,061			4,662			6,471			13,712			1,183			(377	)		33,000
Ending balance	$	29,886		$	5,298		$	10,337		$	26,310		$	29,214		$	2,570		$	9,090		$	112,705
Ending allowance attributable to loans:
Individually evaluated for impairment	$	8,544		$	753		$	2,476		$	1,389		$	4,188		$	20		$	—		$	17,370
Collectively evaluated for impairment		21,342			4,545			7,861			24,921			25,026			2,550			9,090			95,335
Total ending allowance balance	$	29,886		$	5,298		$	10,337		$	26,310		$	29,214		$	2,570		$	9,090		$	112,705
Loans:
Individually evaluated for impairment	$	130,838		$	57,747		$	42,833		$	19,844		$	41,906		$	511		$	—		$	293,679
Collectively evaluated for impairment		1,705,639			392,475			126,505			1,108,492			367,060			125,385			—			3,825,556
Total loans	$	1,836,477		$	450,222		$	169,338		$	1,128,336		$	408,966		$	125,896		$	—		$	4,119,235
December 31, 2011
Allowance for loan losses:
Ending allowance attributable to loans:
Individually evaluated for impairment	$	7,491		$	1,117		$	236		$	2,234		$	3,731		$	16		$	—		$	14,825
Collectively evaluated for impairment		24,153			4,564			5,861			26,842			26,648			2,108			9,467			99,643
Total ending allowance balance	$	31,644		$	5,681		$	6,097		$	29,076		$	30,379		$	2,124		$	9,467		$	114,468
Loans:
Individually evaluated for impairment	$	107,831		$	57,828		$	26,245		$	18,376		$	46,687		$	292		$	—		$	257,259
Collectively evaluated for impairment		1,713,583			370,421			137,910			1,116,526			401,704			112,211			—			3,852,355
Total loans	$	1,821,414		$	428,249		$	164,155		$	1,134,902		$	448,391		$	112,503		$	—		$	4,109,614
Six Months Ended June 30, 2011
Allowance for loan losses:
Beginning balance	$	31,191		$	7,580		$	6,780		$	22,305		$	92,571		$	3,030		$	11,238		$	174,695
Charge-offs		(52,140	)		(4,966	)		(50,695	)		(41,343	)		(99,024	)		(1,979	)		—			(250,147	)
Recoveries		274			403			111			371			257			674			—			2,090
Provision		42,671			4,016			51,256			49,063			55,249			498			(1,753	)		201,000
Ending balance	$	21,996		$	7,033		$	7,452		$	30,396		$	49,053		$	2,223		$	9,485		$	127,638
Ending allowance attributable to loans:
Individually evaluated for impairment	$	78		$	—		$	450		$	639		$	—		$	—		$	—		$	1,167
Collectively evaluated for impairment		21,918			7,033			7,002			29,757			49,053			2,223			9,485			126,471
Total ending allowance balance	$	21,996		$	7,033		$	7,452		$	30,396		$	49,053		$	2,223		$	9,485		$	127,638
Loans:
Individually evaluated for impairment	$	14,780		$	—		$	1,015		$	7,247		$	12,611		$	—		$	—		$	35,653
Collectively evaluated for impairment		1,726,974			428,058			194,175			1,169,979			489,298			119,310			—			4,127,794
Total loans	$	1,741,754		$	428,058		$	195,190		$	1,177,226		$	501,909		$	119,310		$	—		$	4,163,447

In calculating specific reserves, United reviews all loans that are on nonaccrual with a balance of $500,000 or greater for impairment, as well as accruing substandard relationships greater than $2 million and all troubled debt restructurings (“TDRs”). A loan is considered impaired when, based on current events and circumstances, it is probable that all amounts due, according to the contractual terms of the loan, will not be collected. All troubled debt restructurings are considered impaired regardless of accrual status. Impaired loans are measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, at the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. Interest payments received on impaired nonaccrual loans are applied as a reduction of the outstanding principal balance. For impaired loans not on nonaccrual status, interest is accrued according to the terms of the loan agreement. Impairment amounts are recorded quarterly and specific reserves are recorded in the allowance for loan losses.

At June 30, 2012, December 31, 2011 and June 30, 2011, loans with a carrying value of $1.61 billion, $1.52 billion and $991 million were pledged as collateral to secure FHLB advances and other contingent funding sources.

In the first quarter of 2011, United’s Board of Directors adopted an accelerated problem asset disposition plan which included the bulk sale of $267 million in classified loans. Those loans were classified as held for sale at the end of the first quarter and were written down to the expected proceeds from the sale. The charge-offs on the loans transferred to held for sale in anticipation of the bulk loan sale which closed on April 18, 2011, increased first quarter 2011 loan charge-offs by $186 million. The actual loss on the bulk loan sale at closing was less than the amount charged-off in the first quarter, resulting in a $7.27 million reduction of second quarter 2011 charge-offs.

The recorded investments in individually evaluated impaired loans at June 30, 2012, December 31, 2011 and June 30, 2011 were as follows (in thousands).

	June 30,		December 31,		June 30,
	2012		2011		2011
Period-end loans with no allocated allowance for loan losses	$	214,808	$	188,509	$	32,791
Period-end loans with allocated allowance for loan losses		78,871		68,750		2,862
Total	$	293,679	$	257,259	$	35,653
Amount of allowance for loan losses allocated	$	17,370	$	14,825	$	1,167

The average balances of impaired loans and income recognized on impaired loans while they were considered impaired is presented below for the three and six months ended June 30, 2012 and 2011 (in thousands).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Average balance of individually evaluated impaired loans during period	$	287,336	$	42,099	$	283,981	$	68,631
Interest income recognized during impairment		2,421		—		4,688		—
Cash-basis interest income recognized		3,216		—		6,408		—

The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	June 30, 2012						December 31, 2011						June 30, 2011
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial (secured by real estate)	$	105,788	$	95,543	$	—	$	82,887	$	76,215	$	—	$	19,653	$	13,572	$	—
Commercial & industrial		81,036		56,036		—		77,628		52,628		—		—		—		—
Commercial construction		22,491		21,372		—		24,927		23,609		—		—		—		—
Total commercial		209,315		172,951		—		185,442		152,452		—		19,653		13,572		—
Residential mortgage		13,994		11,578		—		13,845		10,804		—		10,006		6,608		—
Residential construction		46,589		30,094		—		38,955		25,190		—		27,441		12,611		—
Consumer installment		185		185		—		63		63		—		—		—		—
Total with no related allowance recorded		270,083		214,808		—		238,305		188,509		—		57,100		32,791		—
With an allowance recorded:
Commercial (secured by real estate)		35,348		35,295		8,544		31,806		31,616		7,491		1,398		1,208		78
Commercial & industrial		1,711		1,711		753		5,200		5,200		1,117		—		—		—
Commercial construction		21,461		21,461		2,476		2,636		2,636		236		1,441		1,015		450
Total commercial		58,520		58,467		11,773		39,642		39,452		8,844		2,839		2,223		528
Residential mortgage		8,458		8,266		1,389		7,642		7,572		2,234		639		639		639
Residential construction		11,886		11,812		4,188		21,629		21,497		3,731		—		—		—
Consumer installment		335		326		20		235		229		16		—		—		—
Total with an allowance recorded		79,199		78,871		17,370		69,148		68,750		14,825		3,478		2,862		1,167
Total	$	349,282	$	293,679	$	17,370	$	307,453	$	257,259	$	14,825	$	60,578	$	35,653	$	1,167

There were no loans more than 90 days past due and still accruing interest at June 30, 2012, December 31, 2011 or June 30, 2011. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually evaluated impaired loans with larger balances.

The following table presents the recorded investment (unpaid principal less amounts charged-off) in nonaccrual loans by loan class as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	Nonaccrual Loans
	June 30, 2012			December 31, 2011			June 30, 2011
Commercial (secured by real estate)	$	19,115		$	27,322		$	17,764
Commercial & industrial		34,982			34,613			1,998
Commercial construction		18,175			16,655			2,782
Total commercial		72,272			78,590			22,544
Residential mortgage		16,631			22,358			24,809
Residential construction		25,530			25,523			22,643
Consumer installment		907			1,008			1,069
Total	$	115,340		$	127,479		$	71,065
Balance as a percentage of unpaid principal		68.8	%		71.3	%		64.5	%

The following table presents the aging of the recorded investment in past due loans as of June 30, 2012, December 31, 2011 and June 30, 2011 by class of loans (in thousands).

	Loans Past Due								Loans Not
	30 - 59 Days		60 - 89 Days		> 90 Days		Total		Past Due		Total
As of June 30, 2012
Commercial (secured by real estate)	$	7,053	$	1,342	$	11,996	$	20,391	$	1,816,086	$	1,836,477
Commercial & industrial		663		1,496		389		2,548		447,674		450,222
Commercial construction		3,555		133		950		4,638		164,700		169,338
Total commercial		11,271		2,971		13,335		27,577		2,428,460		2,456,037
Residential mortgage		12,636		2,980		6,756		22,372		1,105,964		1,128,336
Residential construction		4,781		1,189		11,096		17,066		391,900		408,966
Consumer installment		971		325		398		1,694		124,202		125,896
Total loans	$	29,659	$	7,465	$	31,585	$	68,709	$	4,050,526	$	4,119,235
As of December 31, 2011
Commercial (secured by real estate)	$	8,036	$	4,182	$	10,614	$	22,832	$	1,798,582	$	1,821,414
Commercial & industrial		3,869		411		407		4,687		423,562		428,249
Commercial construction		166		—		1,128		1,294		162,861		164,155
Total commercial		12,071		4,593		12,149		28,813		2,385,005		2,413,818
Residential mortgage		15,185		4,617		9,071		28,873		1,106,029		1,134,902
Residential construction		3,940		2,636		10,270		16,846		431,545		448,391
Consumer installment		1,534		308		430		2,272		110,231		112,503
Total loans	$	32,730	$	12,154	$	31,920	$	76,804	$	4,032,810	$	4,109,614
As of June 30, 2011
Commercial (secured by real estate)	$	6,990	$	2,001	$	11,605	$	20,596	$	1,721,158	$	1,741,754
Commercial & industrial		1,496		624		809		2,929		425,129		428,058
Commercial construction		930		651		1,985		3,566		191,624		195,190
Total commercial		9,416		3,276		14,399		27,091		2,337,911		2,365,002
Residential mortgage		13,788		3,594		12,678		30,060		1,147,166		1,177,226
Residential construction		2,942		2,242		15,774		20,958		480,951		501,909
Consumer installment		1,234		353		273		1,860		117,450		119,310
Total loans	$	27,380	$	9,465	$	43,124	$	79,969	$	4,083,478	$	4,163,447

As of June 30, 2012 and December 31, 2011, $10.3 million and $8.65 million of specific reserves were allocated to customers whose loan terms have been modified in troubled debt restructurings. There were no specific reserves established for loans considered to be troubled debt restructurings at June 30, 2011. United committed to lend additional amounts totaling up to $490,000, $1.12 million, and $396,000 as of June 30, 2012 and December 31, 2011, and June 30, 2011 respectively, to customers with outstanding loans that are classified as TDRs.

The modification of the terms of the troubled debt restructurings included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date or an extension of the amortization period, any of which are not available in the current market for new debt with similar risk; a permanent reduction of the principal amount; or a restructuring of the borrower’s debt into an A/B note structure.

The following table presents additional information on troubled debt restructurings including the number of loan contracts restructured and the pre and post modification recorded investment (dollars in thousands).

	June 30, 2012						December 31, 2011						June 30, 2011
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial (secured by real estate)		96	$	87,104	$	82,325		74	$	70,380	$	69,054		31	$	24,946	$	21,998
Commercial & industrial		29		3,972		3,972		18		806		806		5		156		156
Commercial construction		23		42,796		41,677		11		18,053		18,053		5		9,477		9,477
Total commercial		148		133,872		127,974		103		89,239		87,913		41		34,579		31,631
Residential mortgage		110		17,613		16,950		80		11,943		11,379		29		3,937		3,784
Residential construction		72		25,123		22,178		54		24,921		24,145		46		11,741		10,718
Consumer installment		47		521		511		34		298		293		6		111		111
Total loans		377	$	177,129	$	167,613		271	$	126,401	$	123,730		122	$	50,368	$	46,244

Loans modified under the terms of a TDR during the three and six months ended June 30, 2012 are presented in the table below. In addition, the following table presents loans modified under the terms of a TDR that became 90 days or more delinquent during the three and six months ended June 30, 2012, respectively, that were initially restructured within one year prior to the three and six months ended June 30, 2012, respectively (dollars in thousands).

	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Subsequently Defaulted During the Three Months Ended June 30, 2012
Troubled Debt Restructurings for the Three Months Ended June 30, 2012							Number of Contracts		Recorded Investment
Commercial (secured by real estate)		10	$	7,815	$	7,728		3	$	2,307
Commercial & industrial		7		598		598		1		5
Commercial construction		7		7,702		7,702		—		—
Total commercial		24		16,115		16,028		4		2,312
Residential mortgage		20		5,288		5,112		1		27
Residential construction		20		7,638		6,361		1		121
Consumer installment		8		210		210		1		6
Total loans		72	$	29,251	$	27,711		7	$	2,466
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Subsequently Defaulted During the Six Months Ended June 30, 2012
Troubled Debt Restructurings for the Six Months Ended June 30, 2012							Number of Contracts		Recorded Investment
Commercial (secured by real estate)		34	$	22,914	$	21,469		3	$	2,307
Commercial & industrial		17		3,322		3,322		2		48
Commercial construction		14		28,483		28,483		2		4,174
Total commercial		65		54,719		53,274		7		6,529
Residential mortgage		44		10,567		10,385		4		400
Residential construction		34		11,389		9,550		4		1,597
Consumer installment		15		270		265		1		6
Total loans		158	$	76,945	$	73,474		16	$	8,532

Risk Ratings

United categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, current industry and economic trends, among other factors. United analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. United uses the following definitions for its risk ratings:

Watch. Loans in this category are presently protected from apparent loss; however, weaknesses exist that could cause future impairment, including the deterioration of financial ratios, past due status and questionable management capabilities. These loans require more than the ordinary amount of supervision. Collateral values generally afford adequate coverage, but may not be immediately marketable.

Substandard. These loans are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged. Specific and well-defined weaknesses exist that may include poor liquidity and deterioration of financial ratios. The loan may be past due and related deposit accounts experiencing overdrafts. There is the distinct possibility that the Company will sustain some loss if deficiencies are not corrected. If possible, immediate corrective action is taken.

Doubtful. Specific weaknesses characterized as Substandard that are severe enough to make collection in full highly questionable and improbable. There is no reliable secondary source of full repayment.

Loss. Loans categorized as Loss have the same characteristics as Doubtful however probability of loss is certain. Loans classified as Loss are charged-off.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are generally deposit account overdrafts that have not been assigned a grade.

As of June 30, 2012, December 31, 2011 and June 30, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands).

	Pass		Watch		Substandard		Doubtful / Loss		Not Rated		Total
As of June 30, 2012
Commercial (secured by real estate)	$	1,596,879	$	72,067	$	167,531	$	—	$	—	$	1,836,477
Commercial & industrial		393,893		4,652		50,899		—		778		450,222
Commercial construction		107,201		6,088		56,049		—		—		169,338
Total commercial		2,097,973		82,807		274,479		—		778		2,456,037
Residential mortgage		999,328		39,105		89,903		—		—		1,128,336
Residential construction		290,808		47,182		70,976		—		—		408,966
Consumer installment		121,153		1,117		3,626		—		—		125,896
Total loans	$	3,509,262	$	170,211	$	438,984	$	—	$	778	$	4,119,235
As of December 31, 2011
Commercial (secured by real estate)	$	1,561,204	$	89,830	$	170,380	$	—	$	—	$	1,821,414
Commercial & industrial		369,343		7,630		50,366		—		910		428,249
Commercial construction		114,817		14,173		35,165		—		—		164,155
Total commercial		2,045,364		111,633		255,911		—		910		2,413,818
Residential mortgage		993,779		42,323		98,800		—		—		1,134,902
Residential construction		312,527		38,386		97,478		—		—		448,391
Consumer installment		107,333		1,411		3,759		—		—		112,503
Total loans	$	3,459,003	$	193,753	$	455,948	$	—	$	910	$	4,109,614
As of June 30, 2011
Commercial (secured by real estate)	$	1,508,284	$	98,175	$	135,295	$	—	$	—	$	1,741,754
Commercial & industrial		404,704		3,682		18,647		—		1,025		428,058
Commercial construction		143,609		17,452		34,129		—		—		195,190
Total commercial		2,056,597		119,309		188,071		—		1,025		2,365,002
Residential mortgage		1,046,255		35,775		95,196		—		—		1,177,226
Residential construction		353,769		51,223		96,917		—		—		501,909
Consumer installment		114,718		608		3,984		—		—		119,310
Total loans	$	3,571,339	$	206,915	$	384,168	$	—	$	1,025	$	4,163,447

XML

Earnings Per Share (Details 1) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Computation of basic and diluted loss per share
Net income (loss) available to common shareholders	$ 3,467	$ 9,012	$ 11,965	$ (231,102)
Weighted average shares outstanding:
Basic	57,840	25,427	57,803	21,965
Effect of dilutive securities
Convertible securities		32,116
Stock options
Warrants
Diluted	57,840	57,543	57,803	21,965
Earnings (loss) per common share:
Basic	$ 0.06	$ 0.35	$ 0.21	$ (10.52)
Diluted	$ 0.06	$ 0.16	$ 0.21	$ (10.52)

XML

Reverse Repurchase Agreements

6 Months Ended

Jun. 30, 2012

Reverse Repurchase Agreements [Abstract]

Reverse Repurchase Agreements

Note 4 – Reverse Repurchase Agreements

United enters into reverse repurchase agreements in order to invest short-term funds. In addition, United enters into repurchase agreements and reverse repurchase agreements with the same counterparty in transactions commonly referred to as collateral swaps that are subject to master netting agreements under which the balances are netted in the balance sheet in accordance with ASC 210-20, Offsetting. The following table presents a summary of amounts outstanding under reverse repurchase agreements including those entered into in connection with repurchase agreements with the same counterparty under master netting agreements (in thousands).

	June 30, 2012
	Reverse Repurchase Agreements (Assets)			Repurchase Agreements (Liabilities)			Net Reported Balance (Asset)
Amounts subject to master netting agreements	$	200,000		$	200,000		$	—
Other reverse repurchase agreements		120,000			—			120,000
Total	$	320,000		$	200,000		$	120,000
Weighted average interest rate		1.27	%		.41	%

In addition to the collateral swap transactions, United has entered into offsetting securities lending agreements with counterparties that function similar to the collateral swaps. United had $80.0 million in offsetting securities lending positions outstanding at June 30, 2012.

XML

Securities

6 Months Ended

Jun. 30, 2012

Securities [Abstract]

Securities

Note 5 – Securities

Realized gains and losses are derived using the specific identification method for determining the cost of securities sold. The following table summarizes securities sales activity for the three and six month periods ended June 30, 2012 and 2011 (in thousands).

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Proceeds from sales	$	265,992	$	55,363		$	371,103	$	106,603
Gross gains on sales	$	6,490	$	838		$	7,047	$	1,169
Gross losses on sales		—		(55	)		—		(331	)
Net gains on sales of securities	$	6,490	$	783		$	7,047	$	838

Securities with a carrying value of $1.29 billion, $1.72 billion, and $2.11 billion were pledged to secure public deposits, FHLB advances and other secured borrowings at June 30, 2012, December 31, 2011 and June 30, 2011, respectively. Substantial borrowing capacity remains available under borrowing arrangements with the FHLB with currently pledged securities.

Securities are classified as held to maturity when management has the positive intent and ability to hold them until maturity. Securities held to maturity are carried at amortized cost.

The amortized cost, gross unrealized gains and losses and fair value of securities held to maturity at June 30, 2012, December 31, 2011 and June 30, 2011 are as follows (in thousands).

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of June 30, 2012
State and political subdivisions	$	51,801	$	5,586	$	—	$	57,387
Mortgage-backed securities (1)		230,949		11,635		—		242,584
Total	$	282,750	$	17,221	$	—	$	299,971
As of December 31, 2011
U.S. Government agencies	$	5,000	$	6	$	—	$	5,006
State and political subdivisions		51,903		4,058		13		55,948
Mortgage-backed securities (1)		273,300		9,619		342		282,577
Total	$	330,203	$	13,683	$	355	$	343,531
As of June 30, 2011
U.S. Government agencies	$	5,000	$	—	$	—	$	5,000
State and political subdivisions		49,122		1,823		292		50,653
Mortgage-backed securities (1)		317,456		6,184		62		323,578
Total	$	371,578	$	8,007	$	354	$	379,231

⁽¹⁾  All are residential type mortgage-backed securities

The cost basis, unrealized gains and losses, and fair value of securities available for sale at June 30, 2012, December 31, 2011 and June 30, 2011 are presented below (in thousands).

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of June 30, 2012
U.S. Government agencies	$	43,618	$	256	$	—	$	43,874
State and political subdivisions		25,704		1,462		7		27,159
Mortgage-backed securities (1)		1,408,047		25,723		339		1,433,431
Corporate bonds		119,198		—		9,160		110,038
Asset-backed securities		85,090		—		592		84,498
Other		2,583		—		—		2,583
Total	$	1,684,240	$	27,441	$	10,098	$	1,701,583
As of December 31, 2011
U.S. Government agencies	$	43,592	$	158	$	—	$	43,750
State and political subdivisions		24,997		1,345		3		26,339
Mortgage-backed securities (1)		1,576,064		33,988		143		1,609,909
Corporate bonds		119,110		—		11,432		107,678
Other		2,371		—		—		2,371
Total	$	1,766,134	$	35,491	$	11,578	$	1,790,047
As of June 30, 2011
U.S. Government agencies	$	77,930	$	61	$	514	$	77,477
State and political subdivisions		25,569		1,207		4		26,772
Mortgage-backed securities (1)		1,556,910		35,991		283		1,592,618
Corporate bonds		119,021		100		1,827		117,294
Other		2,452		—		—		2,452
Total	$	1,781,882	$	37,359	$	2,628	$	1,816,613

⁽¹⁾  All are residential type mortgage-backed securities

The following table summarizes held to maturity securities in an unrealized loss position as of, December 31, 2011 and June 30, 2011 (in thousands). As of June 30, 2012, there were no held to maturity securities in an unrealized loss position.

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of December 31, 2011
State and political subdivisions	$	—	$	—	$	363	$	13	$	363	$	13
Mortgage-backed securities		10,967		342		—		—		10,967		342
Total unrealized loss position	$	10,967	$	342	$	363	$	13	$	11,330	$	355
As of June 30, 2011
State and political subdivisions	$	10,160	$	292	$	—	$	—	$	10,160	$	292
Mortgage-backed securities		25,160		60		1,937		2		27,097		62
Total unrealized loss position	$	35,320	$	352	$	1,937	$	2	$	37,257	$	354

The following table summarizes available for sale securities in an unrealized loss position as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of June 30, 2012
State and political subdivisions	$	5,696	$	3	$	11	$	4	$	5,707	$	7
Mortgage-backed securities		104,644		332		19,436		7		124,080		339
Corporate bonds		16,500		3,500		93,488		5,660		109,988		9,160
Asset-backed securities		74,097		592		—		—		74,097		592
Total unrealized loss position	$	200,937	$	4,427	$	112,935	$	5,671	$	313,872	$	10,098
As of December 31, 2011
State and political subdivisions	$	—	$	—	$	11	$	3	$	11	$	3
Mortgage-backed securities		98,687		110		22,719		33		121,406		143
Corporate bonds		42,864		5,197		64,765		6,235		107,629		11,432
Total unrealized loss position	$	141,551	$	5,307	$	87,495	$	6,271	$	229,046	$	11,578
As of June 30, 2011
U.S. Government agencies	$	54,482	$	514	$	—	$	—	$	54,482	$	514
State and political subdivisions		301		—		10		4		311		4
Mortgage-backed securities		169,907		283		—		—		169,907		283
Corporate bonds		97,145		1,827		—		—		97,145		1,827
Total unrealized loss position	$	321,835	$	2,624	$	10	$	4	$	321,845	$	2,628

At June 30, 2012, there were 36 available for sale securities and no held to maturity securities that were in an unrealized loss position. United does not intend to sell nor believes it will be required to sell securities in an unrealized loss position prior to the recovery of their amortized cost basis. Unrealized losses at June 30, 2012 were primarily attributable to changes in interest rates, however the unrealized losses in corporate bonds also reflect downgrades in the underlying securities ratings. The bonds remain above investment grade and United does not consider them to be impaired. Unrealized losses at June 30, 2011 were primarily attributable to changes in interest rates.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, among other factors. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analyst’s reports. No impairment charges were recognized during the second quarter or six months ended June 30, 2012 or 2011.

The amortized cost and fair value of held to maturity and available for sale securities at June 30, 2012, by contractual maturity, are presented in the following table (in thousands).

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Government agencies:
5 to 10 years	$	43,618	$	43,874	$	—	$	—
		43,618		43,874		—		—
State and political subdivisions:
Within 1 year		6,567		6,576		—		—
1 to 5 years		14,960		15,982		6,826		7,419
5 to 10 years		3,329		3,676		21,808		24,264
More than 10 years		848		925		23,167		25,704
		25,704		27,159		51,801		57,387
Corporate bonds:
1 to 5 years		28,198		27,182		—		—
5 to 10 years		90,000		82,556		—		—
More than 10 years		1,000		300		—		—
		119,198		110,038		—		—
Asset-backed securities
5 to 10 years		85,090		84,498		—		—
		85,090		84,498		—		—
Other:
More than 10 years		2,583		2,583		—		—
		2,583		2,583		—		—
Total securities other than mortgage-backed securities:
Within 1 year		6,567		6,576		—		—
1 to 5 years		43,158		43,164		6,826		7,419
5 to 10 years		222,037		214,604		21,808		24,264
More than 10 years		4,431		3,808		23,167		25,704
Mortgage-backed securities		1,408,047		1,433,431		230,949		242,584
	$	1,684,240	$	1,701,583	$	282,750	$	299,971

Expected maturities may differ from contractual maturities because issuers and borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

XML

Foreclosed Property

6 Months Ended

Jun. 30, 2012

Foreclosed Property [Abstract]

Foreclosed Property

Note 7 – Foreclosed Property

Major classifications of foreclosed properties at June 30, 2012, December 31, 2011 and June 30, 2011 are summarized as follows (in thousands).

	June 30,			December 31,			June 30,
	2012			2011			2011
Commercial real estate	$	11,639		$	10,866		$	11,944
Commercial construction		2,732			3,336			6,764
Total commercial		14,371			14,202			18,708
Residential mortgage		5,868			7,840			11,346
Residential construction		22,054			29,799			47,916
Total foreclosed property		42,293			51,841			77,970
Less valuation allowance		11,872			18,982			30,386
Foreclosed property, net	$	30,421		$	32,859		$	47,584
Balance as a percentage of original loan unpaid principal		39.3	%		35.9	%		32.6	%

Activity in the valuation allowance for foreclosed property is presented in the following table (in thousands).

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Balance at beginning of period	$	17,746		$	53,023		$	18,982		$	16,565
Additions charged to expense		1,008			3,118			3,119			51,703
Direct write downs		(6,882	)		(25,755	)		(10,229	)		(37,882	)
Balance at end of period	$	11,872		$	30,386		$	11,872		$	30,386

Expenses related to foreclosed assets include (in thousands).

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Net (gain) loss on sales	$	(269	)	$	(3,218	)	$	(176	)	$	8,802
Provision for unrealized losses		1,008			3,118			3,119			51,703
Operating expenses		1,112			1,991			2,733			6,285
Total foreclosed property expense	$	1,851		$	1,891		$	5,676		$	66,790

XML

Stock-Based Compensation (Details) (USD $)	6 Months Ended
	Jun. 30, 2012
Summary of stock option activity
Options, Outstanding, Number, Beginning Balance	583,647
Options, Outstanding, Weighted Average Exercise Price, Beginning Balance	$ 94.48
Options, Outstanding, Forfeited	(2,472)
Options, Forfeited, Weighted Average Exercise Price	$ 48.22
Options, Outstanding, Expired	(78,432)
Options, Expired, Weighted Average Exercise Price	$ 73.89
Options, Outstanding, Number, Ending Balance	502,743
Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 97.92
Options, Outstanding, Weighted Average Remaining Contractual Term (Years)	4 years
Options, Outstanding, Aggregate Intrinsic Value
Options, Exercisable, Number	478,452
Options, Exercisable, Weighted Average Exercise Price	$ 101.71
Options, Exercisable, Weighted Average Remaining Contractual Term (Years)	3 years 8 months
Options, Exercisable, Aggregate Intrinsic Value

XML

Stock-Based Compensation (Details Textual) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Stock-based Compensation (Textual) [Abstract]
General terms of plan vesting period	4 years
Award granted under stock-based compensation plan	1,351,000
Stock option granted	0	0
Stock option compensation expense	$ 131,000	$ 465,000
Deferred tax benefits	50,000	181,000
Forfeiture rate for option	3.00%
Stock option exercised	0	0
Restricted stock awards compensation expense	815,000	293,000
Intrinsic value of restricted stock	3,550,000
Unrecognized compensation cost related to non-vested and restricted stock award	3,100,000
Non-vested stock option and restricted stock award, compensation cost not yet recognized, period for recognition	1 year 11 months 5 days
Fair value of option and restricted stock award	$ 1,540,000
Maximum [Member]
Stock-based Compensation (Textual) [Abstract]
General terms of plan vesting period	10 years

XML

Derivatives and Hedging Activities (Details Textual) (USD $)	6 Months Ended		3 Months Ended	6 Months Ended		6 Months Ended			3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2011 Hedges	Jun. 30, 2012	Jun. 30, 2012 Fair Value Hedging [Member] Contract	Jun. 30, 2012 Fair Value Hedging [Member] Contract	Jun. 30, 2011 Fair Value Hedging [Member] Contract	Jun. 30, 2012 Cash Flow Hedging [Member] Contract Derivative_Instruments	Dec. 31, 2011 Cash Flow Hedging [Member] Derivative_Instruments	Jun. 30, 2011 Cash Flow Hedging [Member] Derivative_Instruments	Jun. 30, 2012 Other fee revenue [Member] Cash Flow Hedging [Member]	Jun. 30, 2012 Other fee revenue [Member] Cash Flow Hedging [Member]	Jun. 30, 2012 Interest Expense [Member] Fair Value Hedging [Member]	Jun. 30, 2012 Interest Expense [Member] Fair Value Hedging [Member]
Derivatives and Hedging Activities (Textual) [Abstract]
Number of derivative contracts outstanding			7	7	0	5
Derivative instruments outstanding							0	0
Recognized net losses related to ineffectiveness of the fair value hedging relationships			$ 223,000	$ 189,000					$ 43,000	$ 124,000
Estimated additional amount of deferred gains reclassified to interest revenue						2,230,000
Aggregate notional amount designated as fair value hedges of interest rate risk		104,000,000
Net reduction of interest expense											$ 550,000	$ 828,000
Number of active derivatives designated as fair value hedges	0

XML

Mergers and Acquisitions (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Components of covered assets
Total covered assets	$ 65,914
Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	41,454
Covered foreclosed property	14,098
Estimated loss reimbursement from the FDIC	10,362
Commercial (secured by real estate) [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	28,021
Commercial & industrial [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	1,473
Construction and land development [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	5,234
Residential mortgage [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	6,574
Consumer installment [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	152
Purchased Impaired Loans [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	670
Covered foreclosed property
Estimated loss reimbursement from the FDIC
Total covered assets	670
Purchased Impaired Loans [Member] | Commercial (secured by real estate) [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans
Purchased Impaired Loans [Member] | Commercial & industrial [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans
Purchased Impaired Loans [Member] | Construction and land development [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	525
Purchased Impaired Loans [Member] | Residential mortgage [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	145
Purchased Impaired Loans [Member] | Consumer installment [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans
Other Purchased Loans [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	40,784
Covered foreclosed property
Estimated loss reimbursement from the FDIC
Total covered assets	40,784
Other Purchased Loans [Member] | Commercial (secured by real estate) [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	28,021
Other Purchased Loans [Member] | Commercial & industrial [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	1,473
Other Purchased Loans [Member] | Construction and land development [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	4,709
Other Purchased Loans [Member] | Residential mortgage [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	6,429
Other Purchased Loans [Member] | Consumer installment [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans	152
Other [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans
Covered foreclosed property	14,098
Estimated loss reimbursement from the FDIC	10,362
Total covered assets	24,460
Other [Member] | Commercial (secured by real estate) [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans
Other [Member] | Commercial & industrial [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans
Other [Member] | Construction and land development [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans
Other [Member] | Residential mortgage [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans
Other [Member] | Consumer installment [Member] | Federal deposit insurance corporation [Member]
Components of covered assets
Total covered loans

XML

Loans and Allowance for Loan Losses (Details 6) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Aging of the recorded investment in past due loans
Loans Past Due, 30 - 59 Days	$ 29,659	$ 32,730	$ 27,380
Loans Past Due, 60 - 89 Days	7,465	12,154	9,465
Loans Past Due, Greater than 90 Days	31,585	31,920	43,124
Loans Past Due, Total	68,709	76,804	79,969
Loans Not Past Due	4,050,526	4,032,810	4,083,478
Total loans	4,119,235	4,109,614	4,163,447
Commercial Portfolio Segment [Member]
Aging of the recorded investment in past due loans
Loans Past Due, 30 - 59 Days	11,271	12,071	9,416
Loans Past Due, 60 - 89 Days	2,971	4,593	3,276
Loans Past Due, Greater than 90 Days	13,335	12,149	14,399
Loans Past Due, Total	27,577	28,813	27,091
Loans Not Past Due	2,428,460	2,385,005	2,337,911
Total loans	2,456,037	2,413,818	2,365,002
Commercial (secured by real estate) [Member]
Aging of the recorded investment in past due loans
Total loans	1,836,477	1,821,414	1,741,754
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member]
Aging of the recorded investment in past due loans
Loans Past Due, 30 - 59 Days	7,053	8,036	6,990
Loans Past Due, 60 - 89 Days	1,342	4,182	2,001
Loans Past Due, Greater than 90 Days	11,996	10,614	11,605
Loans Past Due, Total	20,391	22,832	20,596
Loans Not Past Due	1,816,086	1,798,582	1,721,158
Total loans	1,836,477	1,821,414	1,741,754
Commercial & industrial [Member]
Aging of the recorded investment in past due loans
Total loans	450,222	428,249	428,058
Commercial & industrial [Member] | Commercial Portfolio Segment [Member]
Aging of the recorded investment in past due loans
Loans Past Due, 30 - 59 Days	663	3,869	1,496
Loans Past Due, 60 - 89 Days	1,496	411	624
Loans Past Due, Greater than 90 Days	389	407	809
Loans Past Due, Total	2,548	4,687	2,929
Loans Not Past Due	447,674	423,562	425,129
Total loans	450,222	428,249	428,058
Commercial construction [Member]
Aging of the recorded investment in past due loans
Total loans	169,338	164,155	195,190
Commercial construction [Member] | Commercial Portfolio Segment [Member]
Aging of the recorded investment in past due loans
Loans Past Due, 30 - 59 Days	3,555	166	930
Loans Past Due, 60 - 89 Days	133		651
Loans Past Due, Greater than 90 Days	950	1,128	1,985
Loans Past Due, Total	4,638	1,294	3,566
Loans Not Past Due	164,700	162,861	191,624
Total loans	169,338	164,155	195,190
Residential mortgage [Member]
Aging of the recorded investment in past due loans
Loans Past Due, 30 - 59 Days	12,636	15,185	13,788
Loans Past Due, 60 - 89 Days	2,980	4,617	3,594
Loans Past Due, Greater than 90 Days	6,756	9,071	12,678
Loans Past Due, Total	22,372	28,873	30,060
Loans Not Past Due	1,105,964	1,106,029	1,147,166
Total loans	1,128,336	1,134,902	1,177,226
Residential construction [Member]
Aging of the recorded investment in past due loans
Loans Past Due, 30 - 59 Days	4,781	3,940	2,942
Loans Past Due, 60 - 89 Days	1,189	2,636	2,242
Loans Past Due, Greater than 90 Days	11,096	10,270	15,774
Loans Past Due, Total	17,066	16,846	20,958
Loans Not Past Due	391,900	431,545	480,951
Total loans	408,966	448,391	501,909
Consumer installment [Member]
Aging of the recorded investment in past due loans
Loans Past Due, 30 - 59 Days	971	1,534	1,234
Loans Past Due, 60 - 89 Days	325	308	353
Loans Past Due, Greater than 90 Days	398	430	273
Loans Past Due, Total	1,694	2,272	1,860
Loans Not Past Due	124,202	110,231	117,450
Total loans	$ 125,896	$ 112,503	$ 119,310

XML

Assets and Liabilities Measured at Fair Value

6 Months Ended

Jun. 30, 2012

Assets and Liabilities Measured at Fair Value [Abstract]

Assets and Liabilities Measured at Fair Value

Note 12 – Assets and Liabilities Measured at Fair Value

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The table below presents United’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2012, December 31, 2011 and June 30, 2011, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).

	Level 1		Level 2		Level 3		Total
June 30, 2012
Assets
Securities available for sale:
U.S. Government agencies	$	—	$	43,874	$	—	$	43,874
State and political subdivisions		—		27,159		—		27,159
Mortgage-backed securities		—		1,433,431		—		1,433,431
Corporate bonds		—		109,688		350		110,038
Asset-backed securities		—		84,498		—		84,498
Other		—		2,583		—		2,583
Deferred compensation plan assets		2,895		—		—		2,895
Derivative financial instruments		—		223		—		223
Total	$	2,895	$	1,701,456	$	350	$	1,704,701
Liabilities
Deferred compensation plan liability	$	2,895	$	—	$	—	$	2,895
Brokered certificates of deposit		—		102,879		—		102,879
Derivative financial instruments		—		6,142		—		6,142
Total liabilities	$	2,895	$	109,021	$	—	$	111,916
	Level 1		Level 2		Level 3		Total
December 31, 2011
Assets
Securities available for sale:
U.S. Government agencies	$	—	$	43,750	$	—	$	43,750
State and political subdivisions		—		26,339		—		26,339
Mortgage-backed securities		—		1,609,909		—		1,609,909
Corporate bonds		—		107,328		350		107,678
Other		—		2,371		—		2,371
Deferred compensation plan assets		2,859		—		—		2,859
Total	$	2,859	$	1,789,697	$	350	$	1,792,906
Liabilities
Deferred compensation plan liability	$	2,859	$	—	$	—	$	2,859
Brokered certificates of deposit		—		13,107		—		13,107
Derivative financial instruments		—		422		—		422
Total liabilities	$	2,859	$	13,529	$	—	$	16,388
	Level 1		Level 2		Level 3		Total
June 30, 2011
Assets
Securities available for sale:
U.S. Government agencies	$	—	$	77,477	$	—	$	77,477
State and political subdivisions		—		26,772		—		26,772
Mortgage-backed securities		—		1,588,489		4,129		1,592,618
Corporate bonds		—		116,944		350		117,294
Other		—		2,452		—		2,452
Deferred compensation plan assets		3,025		—		—		3,025
Total	$	3,025	$	1,812,134	$	4,479	$	1,819,638
Liabilities
Deferred compensation plan liability	$	3,025	$	—	$	—	$	3,025
Total liabilities	$	3,025	$	—	$	—	$	3,025

The following table shows a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs that are classified as Level 3 values (in thousands).

	Securities Available for Sale					Securities Available for Sale
	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2012		2011			2012		2011
Balance at beginning of period	$	350	$	4,784		$	350	$	5,284
Amounts included in earnings		—		(5	)		—		(13	)
Paydowns		—		(300	)		—		(792	)
Balance at end of period	$	350	$	4,479		$	350	$	4,479

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

United may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. The table below presents United’s assets and liabilities measured at fair value on a nonrecurring basis as of June 30, 2012, December 31, 2011 and June 30, 2011, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).

	Level 1		Level 2		Level 3		Total
June 30, 2012
Assets
Loans	$	—	$	—	$	160,266	$	160,266
Foreclosed properties		—		—		25,253		25,253
Total	$	—	$	—	$	185,519	$	185,519
December 31, 2011
Assets
Loans	$	—	$	—	$	133,828	$	133,828
Foreclosed properties		—		—		29,102		29,102
Total	$	—	$	—	$	162,930	$	162,930
June 30, 2011
Assets
Loans	$	—	$	—	$	27,810	$	27,810
Foreclosed properties		—		—		41,922		41,922
Total	$	—	$	—	$	69,732	$	69,732

Assets and Liabilities Not Measured at Fair Value

For financial instruments that have quoted market prices, those quotes are used to determine fair value. Financial instruments that have no defined maturity, have a remaining maturity of 180 days or less, or reprice frequently to a market rate, are assumed to have a fair value that approximates reported book value, after taking into consideration any applicable credit risk. If no market quotes are available, financial instruments are valued by discounting the expected cash flows using an estimated current market interest rate for the financial instrument. For off-balance sheet derivative instruments, fair value is estimated as the amount that United would receive or pay to terminate the contracts at the reporting date, taking into account the current unrealized gains or losses on open contracts.

The short maturity of United’s assets and liabilities results in having a significant number of financial instruments whose fair value equals or closely approximates carrying value. Such financial instruments are reported in the following balance sheet captions: cash and cash equivalents, mortgage loans held for sale, federal funds purchased, repurchase agreements and other short-term borrowings. The fair value of securities available for sale equals the balance sheet value.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect the premium or discount on any particular financial instrument that could result from the sale of United’s entire holdings. Because no ready market exists for a significant portion of United’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial instruments include the mortgage banking operation, brokerage network, deferred income taxes, premises and equipment and goodwill. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have significant effect on fair value estimates and have not been considered in the estimates.

Off-balance sheet instruments (commitments to extend credit and standby letters of credit) are generally short-term and at variable rates. Therefore, both the carrying amount and the estimated fair value associated with these instruments are immaterial.

The carrying amount and fair values for other financial instruments that are not measured at fair value on a recurring basis in United’s balance sheet at June 30, 2012, December 31, 2011, and June 30, 2011 are as follows (in thousands).

	June 30, 2012
	Carrying		Fair Value Level
	Amount		Level 1		Level 2		Level 3		Total
Assets:
Securities held to maturity	$	282,750	$	—	$	299,971	$	—	$	299,971
Loans, net		4,006,530		—		—		3,830,187		3,830,187
Liabilities:
Deposits		5,822,467		—		5,863,885		—		5,863,885
Federal Home Loan Bank advances		125,125		—		125,125		—		125,125
Long-term debt		120,265		—		—		114,679		114,679

	December 31, 2011				June 30, 2011
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Assets:
Securities held to maturity	$	330,203	$	343,531	$	371,578	$	379,231
Loans, net		3,995,146		3,800,343		4,035,809		3,889,669
Liabilities:
Deposits		6,097,983		6,093,772		6,183,215		6,174,117
Federal Home Loan Bank advances		40,625		43,236		40,625		43,763
Long-term debt		120,225		115,327		150,186		140,771

XML

Reverse Repurchase Agreements (Tables)

6 Months Ended

Jun. 30, 2012

Reverse Repurchase Agreements [Abstract]

Summary of amounts outstanding under reverse repurchase agreements

	June 30, 2012
	Reverse Repurchase Agreements (Assets)			Repurchase Agreements (Liabilities)			Net Reported Balance (Asset)
Amounts subject to master netting agreements	$	200,000		$	200,000		$	—
Other reverse repurchase agreements		120,000			—			120,000
Total	$	320,000		$	200,000		$	120,000
Weighted average interest rate		1.27	%		.41	%

XML

Loans and Allowance for Loan Losses (Details 4) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Loans individually evaluated for impairment by class of loans
Unpaid Principal Balance, with no related allowance recorded	$ 270,083	$ 238,305	$ 57,100
Unpaid Principal Balance, with an allowance recorded	79,199	69,148	3,478
Unpaid Principal Balance	349,282	307,453	60,578
Recorded investment, with no related allowance recorded	214,808	188,509	32,791
Recorded investment, with allowance recorded	78,871	68,750	2,862
Recorded Investment	293,679	257,259	35,653
Allowance for Loan Losses Allocated	17,370	14,825	1,167
Commercial Portfolio Segment [Member]
Loans individually evaluated for impairment by class of loans
Unpaid Principal Balance, with no related allowance recorded	209,315	185,442	19,653
Unpaid Principal Balance, with an allowance recorded	58,520	39,642	2,839
Recorded investment, with no related allowance recorded	172,951	152,452	13,572
Recorded investment, with allowance recorded	58,467	39,452	2,223
Allowance for Loan Losses Allocated	11,773	8,844	528
Commercial (secured by real estate) [Member]
Loans individually evaluated for impairment by class of loans
Allowance for Loan Losses Allocated	8,544	7,491	78
Commercial (secured by real estate) [Member] | Commercial Portfolio Segment [Member]
Loans individually evaluated for impairment by class of loans
Unpaid Principal Balance, with no related allowance recorded	105,788	82,887	19,653
Unpaid Principal Balance, with an allowance recorded	35,348	31,806	1,398
Recorded investment, with no related allowance recorded	95,543	76,215	13,572
Recorded investment, with allowance recorded	35,295	31,616	1,208
Allowance for Loan Losses Allocated	8,544	7,491	78
Commercial & industrial [Member]
Loans individually evaluated for impairment by class of loans
Allowance for Loan Losses Allocated	753	1,117
Commercial & industrial [Member] | Commercial Portfolio Segment [Member]
Loans individually evaluated for impairment by class of loans
Unpaid Principal Balance, with no related allowance recorded	81,036	77,628
Unpaid Principal Balance, with an allowance recorded	1,711	5,200
Recorded investment, with no related allowance recorded	56,036	52,628
Recorded investment, with allowance recorded	1,711	5,200
Allowance for Loan Losses Allocated	753	1,117
Commercial construction [Member]
Loans individually evaluated for impairment by class of loans
Allowance for Loan Losses Allocated	2,476	236	450
Commercial construction [Member] | Commercial Portfolio Segment [Member]
Loans individually evaluated for impairment by class of loans
Unpaid Principal Balance, with no related allowance recorded	22,491	24,927
Unpaid Principal Balance, with an allowance recorded	21,461	2,636	1,441
Recorded investment, with no related allowance recorded	21,372	23,609
Recorded investment, with allowance recorded	21,461	2,636	1,015
Allowance for Loan Losses Allocated	2,476	236	450
Residential mortgage [Member]
Loans individually evaluated for impairment by class of loans
Unpaid Principal Balance, with no related allowance recorded	13,994	13,845	10,006
Unpaid Principal Balance, with an allowance recorded	8,458	7,642	639
Recorded investment, with no related allowance recorded	11,578	10,804	6,608
Recorded investment, with allowance recorded	8,266	7,572	639
Allowance for Loan Losses Allocated	1,389	2,234	639
Residential construction [Member]
Loans individually evaluated for impairment by class of loans
Unpaid Principal Balance, with no related allowance recorded	46,589	38,955	27,441
Unpaid Principal Balance, with an allowance recorded	11,886	21,629
Recorded investment, with no related allowance recorded	30,094	25,190	12,611
Recorded investment, with allowance recorded	11,812	21,497
Allowance for Loan Losses Allocated	4,188	3,731
Consumer installment [Member]
Loans individually evaluated for impairment by class of loans
Unpaid Principal Balance, with no related allowance recorded	185	63
Unpaid Principal Balance, with an allowance recorded	335	235
Recorded investment, with no related allowance recorded	185	63
Recorded investment, with allowance recorded	326	229
Allowance for Loan Losses Allocated	$ 20	$ 16

XML

Securities (Details 3) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Jun. 30, 2011
Held to maturity securities in an unrealized loss position
Fair Value, Less than 12 Months	$ 10,967	$ 35,320
Unrealized Loss, Less than 12 Months	342	352
Fair Value, 12 Months or More	363	1,937
Unrealized Loss, 12 Months or More	13	2
Fair Value, Total	11,330	37,257
Unrealized Loss, Total	355	354
State and political subdivisions [Member]
Held to maturity securities in an unrealized loss position
Fair Value, Less than 12 Months		10,160
Unrealized Loss, Less than 12 Months		292
Fair Value, 12 Months or More	363
Unrealized Loss, 12 Months or More	13
Fair Value, Total	363	10,160
Unrealized Loss, Total	13	292
Mortgage-backed securities [Member]
Held to maturity securities in an unrealized loss position
Fair Value, Less than 12 Months	10,967	25,160
Unrealized Loss, Less than 12 Months	342	60
Fair Value, 12 Months or More		1,937
Unrealized Loss, 12 Months or More		2
Fair Value, Total	10,967	27,097
Unrealized Loss, Total	$ 342	$ 62

XML

Consolidated Balance Sheet (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
ASSETS
Cash and due from banks	$ 50,596	$ 53,807	$ 163,331
Interest-bearing deposits in banks	133,857	139,609	41,863
Federal funds sold, reverse repurchase agreements, commercial paper and short-term investments	120,000	185,000	174,996
Cash and cash equivalents	304,453	378,416	380,190
Securities available for sale	1,701,583	1,790,047	1,816,613
Securities held to maturity (fair value $299,971, $343,531 and $379,231)	282,750	330,203	371,578
Mortgage loans held for sale	18,645	23,881	19,406
Loans, net of unearned income	4,119,235	4,109,614	4,163,447
Less allowance for loan losses	112,705	114,468	127,638
Loans, net	4,006,530	3,995,146	4,035,809
Assets covered by loss sharing agreements with the FDIC	65,914	78,145	95,726
Premises and equipment, net	172,200	175,088	178,208
Bank owned life insurance	81,265	80,599	80,134
Accrued interest receivable	20,151	20,693	21,291
Goodwill and other intangible assets	6,965	8,428	9,922
Foreclosed property	30,421	32,859	47,584
Other assets	46,229	69,915	95,834
Total assets	6,737,106	6,983,420	7,152,295
Deposits:
Demand	1,150,444	992,109	899,017
NOW	1,196,507	1,509,896	1,306,109
Money market	1,117,139	1,038,778	989,600
Savings	219,077	199,007	197,927
Time:
Less than $100,000	1,164,451	1,332,394	1,508,444
Greater than $100,000	764,343	847,152	981,154
Brokered	210,506	178,647	300,964
Total deposits	5,822,467	6,097,983	6,183,215
Federal funds purchased, repurchase agreements, and other short-term borrowings	53,656	102,577	103,666
Federal Home Loan Bank advances	125,125	40,625	40,625
Long-term debt	120,265	120,225	150,186
Unsettled securities purchases		10,325	35,634
Accrued expenses and other liabilities	39,598	36,199	36,368
Total liabilities	6,161,111	6,407,934	6,549,694
Shareholders' equity:
Common stock	41,727	41,647	41,555
Common stock issuable; 94,657, 93,681 and 83,575 shares	2,893	3,233	3,574
Capital surplus	1,056,819	1,054,940	1,052,482
Accumulated deficit	(718,896)	(730,861)	(723,378)
Accumulated other comprehensive (loss) income	(17,106)	(3,309)	19,232
Total shareholders' equity	575,995	575,486	602,601
Total liabilities and shareholders' equity	6,737,106	6,983,420	7,152,295
Series A Preferred Stock
Shareholders' equity:
Preferred stock	217	217	217
Total shareholders' equity	217	217	217
Series B Preferred Stock
Shareholders' equity:
Preferred stock	177,814	177,092	176,392
Total shareholders' equity	177,814	177,092	176,392
Series D Preferred Stock
Shareholders' equity:
Preferred stock	16,613	16,613	16,613
Total shareholders' equity	16,613	16,613	16,613
Non-Voting Common Stock
Shareholders' equity:
Common stock	15,914	15,914	15,914
Total shareholders' equity	$ 15,914	$ 15,914	$ 15,914

XML

Accounting Policies

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Accounting Policies

Note 1 – Accounting Policies

The accounting and financial reporting policies of United Community Banks, Inc. (“United”) and its subsidiaries conform to accounting principles generally accepted in the United States of America (“GAAP”) and general banking industry practices. The accompanying interim consolidated financial statements have not been audited. All material intercompany balances and transactions have been eliminated. A more detailed description of United’s accounting policies is included in its Annual Report on Form 10-K for the year ended December 31, 2011.

In management’s opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. The results for interim periods are not necessarily indicative of results for the full year or any other interim periods.

Foreclosed property is initially recorded at fair value, less estimated costs to sell. If the fair value, less estimated costs to sell at the time of foreclosure, is less than the loan balance, the deficiency is charged against the allowance for loan losses. If the fair value, less cost to sell, of the foreclosed property decreases during the holding period, a valuation allowance is established with a charge to operating expenses. When the foreclosed property is sold, a gain or loss is recognized on the sale for the difference between the sales proceeds and the carrying amount of the property. Financed sales of foreclosed property are accounted for in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360-20, Real Estate Sales.

XML

Foreclosed Property (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Expenses related to foreclosed assets
Net (gain) loss on sales	$ (269)	$ (3,218)	$ (176)	$ 8,802
Provision for unrealized losses	1,008	3,118	3,119	51,703
Operating expenses	1,112	1,991	2,733	6,285
Total foreclosed property expense	$ 1,851	$ 1,891	$ 5,676	$ 66,790

XML

Assets and Liabilities Measured at Fair Value (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Assets measured at fair value on recurring basis using significant unobservable inputs
Balance at beginning of period	$ 350	$ 4,784	$ 350	$ 5,284
Amounts included in earnings		(5)		(13)
Pay downs		(300)		(792)
Balance at end of period	$ 350	$ 4,479	$ 350	$ 4,479

XML

Securities (Tables)

6 Months Ended

Jun. 30, 2012

Securities [Abstract]

Summary of securities sales activity with realized gains and losses derived using specific identification method

Realized gains and losses are derived using the specific identification method for determining the cost of securities sold. The following table summarizes securities sales activity for the three and six month periods ended June 30, 2012 and 2011 (in thousands).

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Proceeds from sales	$	265,992	$	55,363		$	371,103	$	106,603
Gross gains on sales	$	6,490	$	838		$	7,047	$	1,169
Gross losses on sales		—		(55	)		—		(331	)
Net gains on sales of securities	$	6,490	$	783		$	7,047	$	838

Amortized cost, gross unrealized gains and losses and fair value of securities held to maturity

The amortized cost, gross unrealized gains and losses and fair value of securities held to maturity at June 30, 2012, December 31, 2011 and June 30, 2011 are as follows (in thousands).

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of June 30, 2012
State and political subdivisions	$	51,801	$	5,586	$	—	$	57,387
Mortgage-backed securities (1)		230,949		11,635		—		242,584
Total	$	282,750	$	17,221	$	—	$	299,971
As of December 31, 2011
U.S. Government agencies	$	5,000	$	6	$	—	$	5,006
State and political subdivisions		51,903		4,058		13		55,948
Mortgage-backed securities (1)		273,300		9,619		342		282,577
Total	$	330,203	$	13,683	$	355	$	343,531
As of June 30, 2011
U.S. Government agencies	$	5,000	$	—	$	—	$	5,000
State and political subdivisions		49,122		1,823		292		50,653
Mortgage-backed securities (1)		317,456		6,184		62		323,578
Total	$	371,578	$	8,007	$	354	$	379,231

⁽¹⁾  All are residential type mortgage-backed securities

Cost basis, unrealized gains and losses, and fair value of securities available for sale

The cost basis, unrealized gains and losses, and fair value of securities available for sale at June 30, 2012, December 31, 2011 and June 30, 2011 are presented below (in thousands).

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of June 30, 2012
U.S. Government agencies	$	43,618	$	256	$	—	$	43,874
State and political subdivisions		25,704		1,462		7		27,159
Mortgage-backed securities (1)		1,408,047		25,723		339		1,433,431
Corporate bonds		119,198		—		9,160		110,038
Asset-backed securities		85,090		—		592		84,498
Other		2,583		—		—		2,583
Total	$	1,684,240	$	27,441	$	10,098	$	1,701,583
As of December 31, 2011
U.S. Government agencies	$	43,592	$	158	$	—	$	43,750
State and political subdivisions		24,997		1,345		3		26,339
Mortgage-backed securities (1)		1,576,064		33,988		143		1,609,909
Corporate bonds		119,110		—		11,432		107,678
Other		2,371		—		—		2,371
Total	$	1,766,134	$	35,491	$	11,578	$	1,790,047
As of June 30, 2011
U.S. Government agencies	$	77,930	$	61	$	514	$	77,477
State and political subdivisions		25,569		1,207		4		26,772
Mortgage-backed securities (1)		1,556,910		35,991		283		1,592,618
Corporate bonds		119,021		100		1,827		117,294
Other		2,452		—		—		2,452
Total	$	1,781,882	$	37,359	$	2,628	$	1,816,613

⁽¹⁾  All are residential type mortgage-backed securities

Summary of held to maturity securities in an unrealized loss position

The following table summarizes held to maturity securities in an unrealized loss position as of, December 31, 2011 and June 30, 2011 (in thousands). As of June 30, 2012, there were no held to maturity securities in an unrealized loss position.

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of December 31, 2011
State and political subdivisions	$	—	$	—	$	363	$	13	$	363	$	13
Mortgage-backed securities		10,967		342		—		—		10,967		342
Total unrealized loss position	$	10,967	$	342	$	363	$	13	$	11,330	$	355
As of June 30, 2011
State and political subdivisions	$	10,160	$	292	$	—	$	—	$	10,160	$	292
Mortgage-backed securities		25,160		60		1,937		2		27,097		62
Total unrealized loss position	$	35,320	$	352	$	1,937	$	2	$	37,257	$	354

Summary of available for sale securities in an unrealized loss position

The following table summarizes available for sale securities in an unrealized loss position as of June 30, 2012, December 31, 2011 and June 30, 2011 (in thousands).

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of June 30, 2012
State and political subdivisions	$	5,696	$	3	$	11	$	4	$	5,707	$	7
Mortgage-backed securities		104,644		332		19,436		7		124,080		339
Corporate bonds		16,500		3,500		93,488		5,660		109,988		9,160
Asset-backed securities		74,097		592		—		—		74,097		592
Total unrealized loss position	$	200,937	$	4,427	$	112,935	$	5,671	$	313,872	$	10,098
As of December 31, 2011
State and political subdivisions	$	—	$	—	$	11	$	3	$	11	$	3
Mortgage-backed securities		98,687		110		22,719		33		121,406		143
Corporate bonds		42,864		5,197		64,765		6,235		107,629		11,432
Total unrealized loss position	$	141,551	$	5,307	$	87,495	$	6,271	$	229,046	$	11,578
As of June 30, 2011
U.S. Government agencies	$	54,482	$	514	$	—	$	—	$	54,482	$	514
State and political subdivisions		301		—		10		4		311		4
Mortgage-backed securities		169,907		283		—		—		169,907		283
Corporate bonds		97,145		1,827		—		—		97,145		1,827
Total unrealized loss position	$	321,835	$	2,624	$	10	$	4	$	321,845	$	2,628

Amortized cost and fair value of held to maturity and available for sale securities by contractual maturity

The amortized cost and fair value of held to maturity and available for sale securities at June 30, 2012, by contractual maturity, are presented in the following table (in thousands).

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Government agencies:
5 to 10 years	$	43,618	$	43,874	$	—	$	—
		43,618		43,874		—		—
State and political subdivisions:
Within 1 year		6,567		6,576		—		—
1 to 5 years		14,960		15,982		6,826		7,419
5 to 10 years		3,329		3,676		21,808		24,264
More than 10 years		848		925		23,167		25,704
		25,704		27,159		51,801		57,387
Corporate bonds:
1 to 5 years		28,198		27,182		—		—
5 to 10 years		90,000		82,556		—		—
More than 10 years		1,000		300		—		—
		119,198		110,038		—		—
Asset-backed securities
5 to 10 years		85,090		84,498		—		—
		85,090		84,498		—		—
Other:
More than 10 years		2,583		2,583		—		—
		2,583		2,583		—		—
Total securities other than mortgage-backed securities:
Within 1 year		6,567		6,576		—		—
1 to 5 years		43,158		43,164		6,826		7,419
5 to 10 years		222,037		214,604		21,808		24,264
More than 10 years		4,431		3,808		23,167		25,704
Mortgage-backed securities		1,408,047		1,433,431		230,949		242,584
	$	1,684,240	$	1,701,583	$	282,750	$	299,971

XML

Securities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Securities sales activity with realized gains and losses derived using specific identification method
Proceeds from sales	$ 265,992	$ 55,363	$ 371,103	$ 106,603
Gross gains on sales	6,490	838	7,047	1,169
Gross losses on sales		(55)		(331)
Net gains on sales of securities	$ 6,490	$ 783	$ 7,047	$ 838

XML

Common and Preferred Stock Issued / Common Stock Issuable

6 Months Ended

Jun. 30, 2012

Common and Preferred Stock Issued / Common Stock Issuable And Reclassifications and Reverse Stock Split [Abstract]

Common and Preferred Stock Issued / Common Stock Issuable

Note 11 – Common and Preferred Stock Issued / Common Stock Issuable

United sponsors a Dividend Reinvestment and Share Purchase Plan (“DRIP”) that allows participants who already own United’s common stock to purchase additional shares directly from the company. The DRIP also allows participants to automatically reinvest their quarterly dividends in additional shares of common stock without a commission. The DRIP is currently suspended. United’s 401(k) retirement plan regularly purchases shares of United’s common stock directly from United. In addition, United has an Employee Stock Purchase Program (“ESPP”) that allows eligible employees to purchase shares of common stock at a 5% discount, with no commission charges. For the six months ended June 30, 2012 and 2011, United issued 60,982 and 78,584 shares, respectively, and increased capital by $501,000 and $744,000, respectively, through these programs.

United offers its common stock as an investment option in its deferred compensation plan. The common stock component of the deferred compensation plan is accounted for as an equity instrument and is reflected in the consolidated financial statements as common stock issuable. The deferred compensation plan does not allow for diversification once an election is made to invest in United stock and settlement must be accomplished in shares at the time the deferral period is completed. At June 30, 2012 and 2011, 94,657 and 83,575 shares, respectively, were issuable under the deferred compensation plan.

On February 22, 2011, United entered into a Share Exchange Agreement with the Elm Ridge Parties. Under the Share Exchange Agreement, the Elm Ridge Parties agreed to transfer to United 1,551,126 shares of United’s common stock in exchange for 16,613 shares of United’s cumulative perpetual preferred stock, Series D, and warrants to purchase 1,551,126 common shares with an exercise price of $12.50 per share that expires on August 22, 2013. This exchange transaction did not result in a net increase or decrease to total shareholder’s equity for the year ended December 31, 2011.