SecProbe.io

June 17, 2011
 Via Email

Rex S. Schuette Executive Vice President and Chief Financial Officer United Community Banks, Inc. 125 Highway 515 East Blairsville, GA 30512
Re: United Community Banks, Inc.
Registration Statement on Form S-1 Filed May 23, 2011 File No. 333-174420 Form 10-K for Fiscal Year Ended December 31, 2010 Filed March 16, 2011 Form 10-Q for Fiscal Quarter Ended March 31, 2011 Filed May 4, 2011 File No. 001-35095

Dear Mr. Schuette:

We have reviewed your registration statem ent and have the following comments.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.
 Please respond to this letter by amending your registration statement and providing the
requested information.  If you do not believe  our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your re gistration statement and the information you
provide in response to these comments, we may have additional comments.
 Form S-1 filed May 23, 2011

 General

1. We note the bank is currently subject to a memorandum of understanding (“MOU”) with
the FDIC and Georgia Department of Banking and Finance.  Please revise to include a
recent developments section and disclose all material actions taken in response to the
MOU.  Disclose whether your capital ratios  were in compliance with the MOU as of
March 31, 2011.

Rex S. Schuette United Community Banks, Inc. June 17, 2011 Page 2

 2. We note foreclosed property costs were up $54.1 million in the first quarter of 2011
compared to the first quarter of 2010.  On  page 39 of your Form 10-Q for the quarter
ended March 31, 2010, you attribute most of th is increased expense to higher write
downs on foreclosed properties incurred to  expedite sales under the Problem Asset
Disposition Plan.  Please tell us, with a view toward revised disclosure, whether you
expect to continue to incur elevated foreclosed property costs.
3. We note you have incurred increasing losses si nce 2008.  Please revise  to include a risk
factor in the registration stat ement that addresses your recent  quarterly and annual losses,
including the loss incurr ed in the most recent quarter.  We note you have incorporated by
reference the risk factors from the Form 10-K for the year ended December 31, 2010, including the second risk factor on page 16.
 Prospectus Cover Page

4. We note there is no existing market for the cumulative perpetual pr eferred stock or the
warrants.  Accordingly, an at-the-market offering is not permitted for these securities.  Please revise to disclose that the selling sh areholders will sell at a price of $x.xx per
share/warrant until the sh ares/warrants are quoted on the OTCBB and thereafter at
prevailing market prices or pr ivately negotiated prices.  In addition, disclose the current
interest rate on the preferred and the exercise price of the warrants and whether or not
they have a cashless exercise feature.
 A Warning About Forward …, page ii

5. Move this section to after the risk factors section.

Risk Factors
Future dividend payments are restricted …, page 3

6. Revise to disclose the dividend rate terms and the annual accrual based on the current
rate.  In addition, disclose if there are a ny arrangements, agreements or understandings
regarding the issuance of add itional preferred stock and add a cross-reference to another
location in the prospectus where “subject to  certain limited exceptions” is more fully
described.
 Plan of Distribution, page 4

7. Please disclose that you will file a post-effec tive amendment to the registration statement
to update the plan of distribu tion in the event you engage und erwriters, broker-dealers or
agents to offer the securities.

Rex S. Schuette United Community Banks, Inc. June 17, 2011 Page 3

 Selling Shareholders, page 6

8. Please revise to name the natural persons w ho have or share voting or investment power
for each identified selling shareholder.  In a ddition, indicate if either seller is a broker-
dealer or an affiliate of a broker-dealer.  If  so, add appropriate disclosure of seller’s
intentions at the date of purchase.
 Tax Benefits Preservation Plan, page 7

9. We note the representations here and on page  18 of the Form 10-Q for the first quarter
that management does not believe there wa s an ownership change under Section 382 of
the Internal Revenue Code prior to, or in c onnection with, the privat e equity transaction
completed in the first quarter.  Please revise  your disclosure here to address, by bullets,
the negative aspects of the pl an, e.g., how the net operating lo sses could be lost, impact
on liquidity or poison pill elements, tes ting dates under section 382, reductions based on
market value, etc.  Disclose the amounts at ri sk.  In this regard, pl ease add a risk factor
that addresses the potential risks related to  a change of owners hip or market value
changes.
 Item 15.  Recent Sales of Unregistered Securities

10. Revise to disclose the Fletcher option and wa rrant issuance.  In a ddition, add disclosure
here to the Fletcher issuance as well as the other 2011 issuances as to how they were
structured to comply with IRS Section 382.  Alternately, a dd this disclosure on page 7
under “Tax Benefits Preservation Plan.”  Also  add a risk factor addressing the potential
dilution associated with these issuances a nd the potential indemnification issuances.

11. Revise to disclose the exemption from regi stration claimed for each unregistered sale
identified in this section a nd state briefly the facts relied upon to make the exemption
available.  Refer to Item 701(d) of Regulati on S-K.  In addition, disclose the aggregate
offering amount for each unregistered offering.
 Exhibit 5

12. Please arrange for counsel to opine that th e warrants are bindi ng obligations under the
state contract law governing the warrant agreement.
13. Refer to the second sentence of the last pa ragraph.  Counsel may limit reliance on the
opinion with regard to purpose, but not pe rson.  Please arrange for counsel to revise
accordingly.

Rex S. Schuette United Community Banks, Inc. June 17, 2011 Page 4

 Form 10-K for Fiscal Year Ended December 31, 2010

 Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

Overview, page 27

14. Provide us with sufficient information so that we may better understand the nature and
your accounting for the fraud loan loss provisi on recorded previously and subsequently
reversed in fiscal 2010.
 Item 11.  Executive Compensation

Base Salary, page 20 of Definitive Proxy Statement on Schedule 14A

15. We note the disclosure in the first pa ragraph on page 21 that Mr. Freeman’s
compensation was reduced by $95,000 in 2010.  Pleas e reconcile this statement with the
amounts disclosed in the summary compensation table.
 Non-Equity Incentive Awards, page 21 of  Definitive Proxy Statement on Schedule 14A

16. It appears based on your disc losure that the qualitative performance measures were
established as quantifiable perf ormance targets.  Please tell us what these targets were
and revise future filings accordingly.  Refe r to Item 402(b)(2)(v) of Regulation S-K.
 Form 10-Q for Fiscal Quarter Ended March 31, 2011

Item 1.  Financial Statements
 Notes to Consolidated Financial Statements

Note 5 – Loans and Allowance for Loan Losses, page 11

17. In regard to the table on page  12, tell us the reasons and ba sis for not having any of the
allowance for loan losses asso ciated with loans “individually  evaluated for impairment”
at either March 31, 2011 or at December 31, 2011 and only a minimal amount associated
with these types of loans at March 31, 2010.  Given the significant levels of nonaccrual
loans at each of the above noted dates, as we ll as the levels of lo an loss provisions and
charge-offs recorded, it would s eem that a larger portion of the allowance for loans losses
would be associated with these types of loans.  Please provide us with sufficient
information so that we will have a better understanding of your allowance for loan loss
evaluation process of impaired loans.
 Note 6 – Foreclosed Property, page 17

18. Tell us the reasons and basis for the significant increase in the foreclosed asset provision
and in the level of direct write-downs  during the quarter ended March 31, 2011.
Specifically address the asset disposition pl an implemented in 2011 and the impact this

Rex S. Schuette United Community Banks, Inc. June 17, 2011 Page 5

 had on the timing and amount of the provision s and write-downs.  Further, address at
what point in time these write-downs were taken and what your appraisal policy is in
regard to OREO.

 Note 7 - Earnings Per Share, page 17

19. We note the equity transactions completed in the quarter ended March 31, 2011.  Please
tell us whether these transactions constituted a change of ownership which would result in the potential issuance of common shares under the indemnif ication provisions. Further,
address how you have accounted for the indemnification provisions.

Note 10 – Common and Preferred Stock I ssued /Common Stock Issuable, page 21

20. Regarding the share exchange agreement with  Elm Ridge in Februa ry 2011, provide us
with sufficient information to support your accounting that there was no increase or
decrease in shareholders’ equity.  Furthe r, tell us how you have accounted for the
warrants issued in the transaction.
 Note 13 – Transactions with Fl etcher International, page 22

21. In regard to the April 2010 tr ansactions with Fletcher Inte rnational, plea se address the
following:
 Tell us and disclose the nature and terms of  the loan made in conjunction with the
nonperforming assets sale;
 Tell us and disclose whether this loan is  performing under its contractual terms and
whether there have been a ny delinquencies to date;
 Tell us and disclose the expiration date of  the warrant and whether the warrant to
acquire common stock has been exercised;
 Tell us and disclose whether all of the shar es of the Series C Preferred stock were
purchased by May 31, 2011;
 Tell us how the company has or will account for the commitment payment received
from Fletcher for the Series C Preferre d stock not purchased by May 31, 2011; and
 Tell us and disclose whether the additiona l warrant to purchase common stock has
been issued.
 Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

Recent Developments, page 28

22. Regarding the sale of substandard and nonperf orming loans to CF Southeast LLC and CF
Southeast Trust 2011-1 which occurred in April of 2011, please provide us with a
detailed analysis (with references to the a ppropriate accounting literat ure), similar to what

Rex S. Schuette United Community Banks, Inc. June 17, 2011 Page 6

 was provided and disclosed rega rding the Fletcher Interna tional Ltd. Transaction, which
supports your accounting for the transactions.
 Income Taxes, page 40

23. We note that you have recorded a net deferre d tax asset of $167 million at December 31,
2010 and $266 million as of March 31, 2011.  Your  disclosures regarding the realization
of the net deferred tax asset seem to focus on your ability to carry the losses forward to
future profitable years.  Given the significant losses recognized in each of the last three
fiscal years and in the interim period of fiscal 2011, please provide us with a detailed
analysis to support your conclusion that no a dditional valuation allo wance was warranted.
Your response should addre ss both the positive and negativ e evidence you considered in
making this determination in accordance with ASC 740.  Provide us with this information for each of the periods ended Marc h 31, 2011, December 31, 2010, and December 31,
2009.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing incl udes the information the Securities Act of 1933 and
all applicable Securities Act rules require.  Since the company and its management are in
possession of all facts relating to a company’s disc losure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

Notwithstanding our comments, in the event you request acceleration of  the effective date
of the pending registration statement please pr ovide a written statement from the company
acknowledging that:
 should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose the Co mmission from taking any action with respect
to the filing;

 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

 the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

Please refer to Rules 460 and 461 regarding re quests for acceleration.  We will consider a
written request for acceleration of  the effective date of the regi stration statement as confirmation
of the fact that those reques ting acceleration are aware of thei r respective responsibilities under
the Securities Act of 1933 and the Securities Excha nge Act of 1934 as they relate to the proposed
public offering of the securities specified in th e above registration stat ement.  Please allow

Rex S. Schuette United Community Banks, Inc. June 17, 2011 Page 7

 adequate time for us to review any amendment prior to the requested effective date of the
registration statement.
 You may contact Marc Thomas, Staff A ccountant, at (202) 551-3452 or Hugh West,
Accounting Branch Chief, at (202) 551-3872 if you have questions regarding comments on the
financial statements and related matters.  Plea se contact Matt McNair, St aff Attorney, at (202)
551-3583 or me at (202) 551-3434 with any other questions.

Sincerely,
   /s/ Michael R. Clampitt
Michael R. Clampitt Senior Counsel
 cc: James W. Stevens
      Kilpatrick Townse nd & Stockton LLP