Expensive garage sale, United Community Banks (NYSE: UCB) sells equipment finance unit for $1.9 billion

United Community Banks Inc. (NYSE: UCB) announced it has agreed to sell its equipment finance business to funds managed by Wafra Inc. for $1.9 billion in cash.

The transaction involves the sale of Navitas Credit Corp. and NLFC Reinsurance Corp., which collectively operate as United’s equipment finance division. The purchase price represents a 7% premium to the par value of Navitas’ loan portfolio.

United expects the sale to generate a one-time pre-tax earnings benefit of $109 million and result in 3% accretion to tangible book value per share. The transaction is projected to generate 145 basis points of common equity tier 1 capital.

The equipment finance business represents 10% of United’s total loan portfolio but accounts for approximately 50% of the bank’s net charge-offs over the 12 months ended March 31, 2026. Following the sale, United’s pro forma loan-to-deposit ratio will be 74%.

“Over the past eight years, Navitas has been a valuable contributor to United, delivering strong growth and returns for our business,” said Lynn Harton, chairman and chief executive officer. “We have also expanded our core franchise since we acquired Navitas, which has resulted in better in-market relationship-based growth opportunities within the community bank franchise.”

Navitas operates with 207 employees across six locations and had $1.8 billion in owned receivables as of March 31, 2026. All Navitas employees and executive leadership are expected to remain with the business under Wafra’s ownership.