Adds analyst comment in paragraph 4, CEO comment in paragraphs 6-7

June 12 (Reuters) - United Community Banks UCB.N is selling its equipment finance business, Navitas, to alternative investment firm Wafra for $1.9 billion, as the regional lender aims to sharpen focus on its core Southeastern markets while boosting capital and liquidity.

The deal, which includes Navitas Credit and NLFC Reinsurance, is expected to reduce the risk profile of United's loan portfolio and cut potential earnings volatility, the Greenville, South Carolina-based lender, which has $28 billion in assets, said on Friday.

The equipment finance business accounted for United's 50% of net charge-offs, or debts that are unlikely to be recovered, in the 12 months ended March 31. The $1.9-billion purchase price represents a 7% premium to the par value of the loan portfolio.

"This is a solid deal for UCB, as they set themselves up for elevated growth at the core bank, have increased capital optionality for buybacks or M&A, and take away one of the main investor drawbacks in the form of the heightened charge-offs at Navitas," Piper Sandler analyst Stephen Scouten said.

Founded in 2008, Ponte Vedra, Florida-based Navitas specializes in financing essential equipment purchases for small and mid-sized businesses. United bought Navitas in early 2018.

"Focus was always the core bank. Accordingly, we placed an internal limit on Navitas' size at 10% of total UCB loans. We've been near that limit for some time. To execute against that limit, we began selling Navitas loans and slowed internal hiring at the company," CEO Lynn Harton told analysts.

United looked at various alternatives, including selling more loans and securitization, before opting for a sale, Harton said.

Proceeds from the deal, likely to close in the third quarter, are expected to be invested in lower-risk securities in the short term.

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

BofA Securities advised United, while Bank of America and Wells Fargo are providing financing.