United Community Banks in Greenville, S.C., sold most of its manufactured housing portfolio.
The $27.1 billion-asset company said in press release that it sold a $318.2 million of loans to 21st Mortgage, a division of Clayton Homes.
Including a roughly $11.5 million release of a reserve tied to the loans, transaction costs and other accounting influences, United estimated that the sale will impact third-quarter results by 18 cents a share.
The sale is slightly accretive to regulatory capital ratios.
United, which inherited the business when it bought Reliant Bancorp in January 2022, decided to shut down the business in third quarter of 2023.
“Rather than continue to slowly liquidate the portfolio through normal collections, we took this opportunity to accelerate our exit from this business,” Lynn Harton, United’s chairman and CEO, said in the release.
“In addition to removing a management distraction, the sale also reduces our risk profile slightly,” Harton said. “While only 2% of loans, the portfolio represented 11% of our [year-to-date] net chargeoffs and 18% of our non-performing assets.”
Stephens advised United.