Greenville-based United Community Bank is offloading a fast-growing equipment-financing business it bought for $130 million eight years ago for $1.9 billion.
South Carolina’s largest bank traces its recent growth spurt in part to a relatively obscure 2018 acquisition. Now it’s set to cut loose the business — and add a heaping pile of dry powder to its arsenal. United Community Bank is offloading its second niche business since 2024 through its $1.9 billion sale of Navitas Credit Corp., which fronts $5,000 to $5 million to restaurants, gyms and myriad other businesses to finance equipment purchases. The deal with New York-based investment firm Wafra Inc. was announced earlier this month. It’s expected to close within the next 60 days. United Community said the sale will lower its risk profile and raise fresh capital to plow into its core operations. It follows the bank’s decision about two years ago to offload its $318 million manufactured-home loan business at a loss to a company owned by Warren Buffett’s Berkshire Hathaway conglomerate. United Community has owned Navitas since 2018. It snapped up the company, which has an office in Columbia, from its founders for a mere $130 million. “Obviously, a very good return from when you bought this in 2018,” Raymond James banking analyst Michael Rose commented on a June 12 conference call. United Community was headquartered for more than 70 years in tiny Blairsville, Ga., before moving its corporate offices across the state line to Greenville in 2021. The newcomer instantly became the largest bank headquartered in South Carolina. CEO Lynn Harton recounted the rationale for buying Navitas. “For me, this is a story about the continuing build out of our Southeastern footprint,” he said on the conference call this month. “When we purchased Navitas … we were about 40 percent of our current size . … We had not yet entered Florida, Alabama or Nashville. We had … far fewer commercial bankers than we would have liked. We needed a growth engine to support us as we continued to build out the footprint. They delivered on that objective.” Sure enough, Ponte Vedra, Fla.-based Navitas put the pedal to the metal. Its book of business has swelled by more than 540 percent over the past eight years based on outstanding loan balances. The rapid-fire growth eventually created a dilemma for United Community, which was looking to build up its main franchise through a series of acquisitions in Florida, Alabama, Tennessee and North Carolina. Harton said the bank sought to tap the brakes at the equipment-financing unit by capping lending limits and by slowing hiring. “As you think about a company like Navitas, you … can’t hold back a growth company too much or you just start losing momentum, start losing people and those kinds of things. … We needed to figure out some way to continue to invest in the business and grow the business without it overwhelming us,” Harton said. The decision to place Navitas “in a better home” was the best option, he added, “With our relationship-banking momentum building and the outlines of our footprint established, the time is right to sell,” Harton said. Navitas CEO Mike Bruman agreed. “As we look to the future, our growth trajectory and ambitions called for a different capital structure,” he said. Among other benefits, United Community said the transaction “will meaningfully” reduce its risk metrics. While Navitas makes up 10 percent of the total loan portfolio across the entire, it accounted for about half of all write-downs over the past year. As for the $1.9 billion windfall — described as “a unique liquidity position” — it was one of the highlights of the June 12 conference call. Investors and analysts were told the money will be parked at first in low-risk, short-term bonds that can be cashed in within two years. United Community will come up with a plan later about how to reinvest the proceeds in its banking business, possibly through small, targeted acquisitions “should the opportunity present itself,” finance chief Jefferson Harralson said. One such buyout was already in the works before the Navitas deal came to light. United Community is bumping up its presence in its former home state by purchasing the two-branch Peach State Bank & Trust of Gainesville, Ga. The $101 million acquisition is scheduled to close by Sept. 30.
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