- Key takeaway: Selling Navitas will shrink UCB's loan portfolio in the short-term, but the company hopes to fill the gap quickly through organic growth and possible M&A.
- Supporting data: Navitas generated revenue totaling $166 million in 2025.
- Expert quote: "You can't hold back a growth company too much or you start losing momentum, start losing people." –UCB CEO Lynn Harton
United Community Banks has agreed to sell Navitas, the equipment-finance subsidiary it
The Greenville, South Carolina-based UCB said the sale, which it announced Friday, will give it the wherewithal to consider increased share buybacks, accelerated organic growth and balance-sheet optimization, along with in-footprint merger-and-acquisition opportunities.
The transaction is expected to boost the $28.2 billion-asset UCB's Common Equity Tier 1 capital ratio by 145 basis points to about 14.5%.
"For me, this is a story about the continuing buildout of our Southeastern footprint," UCB CEO Lynn Harton said on a conference call with analysts. "Post-sale, we'll have even more flexibility, from both a liquidity and a capital perspective, to invest in our core strengths."
"It's obviously a very good return from when [UCB] bought this in 2018," Raymond James analyst Michael Rose said on the conference call.
Harton called Navitas, a nationwide small-ticket equipment-finance lender a "solid but noncore asset." According to the CEO Navitas has been a "valued contributor" delivering revenue — $166 million in 2025 — that supported the expansion of UCB's core relationship-banking franchise.
But in recent quarters, Navitas may have done its job too well. The unit's high-revving origination engine made it increasingly difficult for UCB to maintain the portfolio limit it had established for Navitas, 10% of total loans. `
"We needed to figure out some way to continue to invest in the business and grow the business without it overwhelming us," Harton said. UCB had already begun selling some of Navitas' loans to investors. It considered selling a higher proportion of Navitas' output, but its thinking eventually moved in the direction of selling the equipment-finance lender outright.
"You can't hold back a growth company too much or you start losing momentum, start losing people," Harton said. "We were at our limit."
The deal is expected to close in the third quarter. Buyer Wafra has $30 billion of assets under management. Wafra said in a press release that it has secured acquisition financing, along with an additional $1 billion to support Navitas' continued growth, from Bank of America and Wells Fargo.
"Navitas has distinguished itself in the equipment-finance industry by growing successfully through multiple cycles while consistently serving its customers and delivering strong financial performance," Edward Tsai, Wafra's head of real estate assets and infrastructure, said in a press release.
For UCB, the deal with Wafra will generate a one-time, pretax gain totaling $109 million, though parting with Navitas and its $1.9 billion loan portfolio will create what Chief Financial Officer Jefferson Harralson termed an "earnings gap" going forward. Harralson added that the company expects to fill it quickly through organic growth and potential M&A activity.
UCB reported loans totaling $20.1 billion on March 31. Adjusted to reflect the impact of the Navitas sale, first-quarter loans totaled $18.2 billion. At the same time, the sale will strengthen credit quality, since Navitas' equipment-finance loans were riskier than conventional bank loans. Navitas loans accounted for approximately 50% of net charge-offs in the 12 months ending March 31, according to UCB.
While UCB announced plans in April
"We'd just be looking at tuck-in, fill-in [deals] in what we think are attractive markets," Harton said. "The Peach State transaction is a great example of that."
UCB has also been building its organic growth capabilities, hiring 38 bankers since October. That trend is likely to continue in the wake of the Navitas sale.
"We've given [President and Chief Banking Officer Richard Bradshaw] carte blanche to get great bankers and bring them into market," Harton said.
"If it's the right people, we'll bring them on," Bradshaw added.
