UPDATE 2-United Community Banks to sell equipment finance business to Wafra for $1.9 billion

United Community Banks, Inc.

United Community Banks, Inc.

UCB

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June 12 (Reuters) - United Community Banks UCB.N said on Friday it would sell its equipment finance business to alternative investment firm Wafra for $1.9 billion, as the regional lender aims to sharpen focus on its core franchise.

The sale of Navitas reinforces United's focus on its Southeastern relationship banking business, while enhancing its liquidity and capital strength, the Greenville, South Carolina-based lender said in a statement. Its shares rose 4% in premarket trading.

The deal, which includes Navitas Credit and NLFC Reinsurance, is also expected to reduce the risk profile of United's loan portfolio and cut potential earnings volatility. The equipment finance business accounted for 50% of net charge-offs, or debts that are unlikely to be recovered, in the 12 months ended March 31.

The purchase price represents a 7% premium to the par value of the loan portfolio.

United bought the equipment finance business, which represents 10% of its total loan portfolio, in 2018. Deal proceeds are expected to be deployed in lower-risk securities in the short term.

Wafra will pay a $17.5 million termination fee to United if the deal falls through under certain conditions.

The transaction is expected to be completed in the third quarter of 2026. BofA Securities advised United on the transaction.


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