United Community Banks in Blairsville, Ga., expects an increase in third-quarter chargeoffs tied to a syndicated loan.
The $26 billion-asset company disclosed in a regulatory filing that the issue is tied to a large loan to a wholesale oil distributor led by First Horizon Bank.
The borrower filed for bankruptcy protection in March, at which point United moved the loan to nonaccrual status and included it in its reported nonperforming assets. The borrower entered into liquidation last month.
United said “minimal recovery” is expected, leading it to charge off about $19 million.
Separately, First Horizon estimated at an investor conference that it expects to record about $100 million of third-quarter net chargeoffs.