The $27.1 billion-asset United Community said Tuesday  that the deal closed Aug. 30. The transaction resulted in a $21.1 million after-tax loss for United Community, though the company said the impact on third-quarter earnings would be neutral once proceeds from the sale are reinvested.

Capital levels should also remain unchanged since reduction in tangible common equity levels generated by the loan sale will be offset by the pending sale of United Community's investment advisory subsidiary, FinTrust Capital Advisors, announced in July.   

While both sales resulted in relatively small up-front losses, United Community concluded the manufactured housing and investment advisory business lines fell outside its core operations and it was better off moving forward without them. 

Manufactured housing represented a relatively small slice of United Community's overall loan portfolio but produced an outsize share of charge-offs and nonperforming assets, according to Chairman and CEO Lynn Harton, who characterized the business as a "management distraction" Tuesday in a press release. The portfolio had been in runoff mode following United Community's decision to cease originations in the 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," Harton said in the press release.  

Likewise, the cost of continuing to grow FinWise would be expensive, "and generally would require capital to buy advisors and their books at relatively high prices," Harton said on a July 24 conference call with analysts. 

Harton described 21st Century Mortgage as the premier lender in the manufactured housing sector "with great capability to service the customers." United Community was thrust into the manufactured housing business in January 2022 with its $517 million acquisition of Brentwood, Tennessee-based Reliant Bancorp.