United Community Banks, the third-biggest bank based in Georgia, said Wednesday major investors will inject $380 million into the institution, marking the latest sign of investor willingness to pump money into the beleaguered industry.
New York-based Corsair Capital, the largest of the investors, will own up to 22.5 percent of United’s shares through the deal, which includes the purchase of common stock and preferred stock that converts to common should the share price reach $1.90.
Blairsville-based United has been besieged by real estate loan losses for more than two years, and Wednesday's deal is its second major link up with an out-of-state investor.
United officials also announced a plan to sell off $435 million soured or foreclosed assets through the third quarter. United will take a $140 million to $155 million charge related to the asset sales.
United, No. 8 in market share in metro Atlanta, faced regulator and analyst pressure to raise funds. Analysts expected a stock sale of at least $300 million, and bank officials had said a plan would be announced by the end of the month.
Bank President and CEO Jimmy Tallent said in a statement the deal “strengthens our balance sheet, enabling us to address our challenges and to build a much stronger platform for the future.”
Chris Marinac, bank analyst with FIG Partners, said the deal and other recent major investments in living Georgia banks show investors are warming to the state's industry. Hamilton State Bank of Hoschton, for instance, raised more than $230 million earlier this month.
But United has significant work to do to fix a loan portfolio that has seen nine straight quarterly losses, Marinac said.
United recently suspended dividend payments on its $180 million in government assistance.
About the Author
