United Community Banks in Greenville, S.C., agreed to sell its equipment finance business to funds managed by Wafra Inc., acting through Navitas TopCo.
The $28.2 billion-asset United said in a press release that it is selling Navitas Capital for $1.9 billion in cash, resulting in a one-time pretax earnings benefit of $109 million. The sale is expected to close in the third quarter.
The business accounts for a tenth of United’s total loans and half of its net chargeoffs over the past 12 months.
United intends to evaluate a range of capital deployment alternatives after closing, including organic growth, balance sheet optimization, share repurchases, and acquisitions.
“Over the past eight years, Navitas has been a valuable contributor to United, delivering strong growth and returns for our business,” Lynn Harton, United’s chairman and CEO, said in the release.
“For the past several quarters, we have had to restrain Navitas’ growth to remain within our self-imposed portfolio limits,” Harton added. “The sale will allow us to focus our resources on our core Southeastern markets and will allow the opportunity for Navitas to continue [its] growth trajectory with a well-established and experienced owner within the equipment finance sector.”