Optus Bank and M&F Bank agree to merge

Optus Financial Corporation and M&F Bancorp said Tuesday they signed a definitive merger agreement that would combine two of the nation’s oldest Black-owned and minority depository banks. The deal is expected to create the largest African American owned financial institution in the U.S. and close in the fourth quarter of 2026, pending approvals.

Why it matters: - The combined Optus Bank and M&F Bank would become the largest African American owned financial institution in the United States. - The deal brings together two mission-driven Minority Depository Institutions with more than 220 years of combined banking experience. - The new bank would expand access to capital, support small business growth, finance affordable housing and strengthen community investment across the Carolinas.

What happened: - Optus Financial Corporation, parent of Optus Bank, and M&F Bancorp, parent of Mechanics & Farmers Bank, announced a definitive merger agreement on July 22, 2026. - M&F Bancorp will merge with and into Optus, and M&F Bank will merge with and into Optus Bank. - The transaction is expected to close in the fourth quarter of 2026, pending shareholder and regulatory approvals.

The details: - M&F Bancorp shareholders are expected to receive up to $53.30 per common share in cash. - That consideration includes $46.57 per share at closing and up to $6.73 per share tied to the repurchase of certain M&F Bancorp preferred stock within 12 months after closing. - The aggregate transaction value is expected to exceed $105 million. - The combined institution would operate 10 locations across North and South Carolina. - The combined bank would have about $1.27 billion in total assets as of March 31, 2026. - James H. Sills III, president and CEO of M&F Bancorp, will serve as CEO of the combined holding company and bank. - Paul Mitchell, chairman of Optus and Optus Bank, will remain chairman of both entities. - The boards of directors of both companies unanimously approved the transaction. - Performance Trust Capital Partners advised Optus, with Nelson Mullins Riley & Scarborough as legal counsel. - Piper Sandler & Co. advised M&F Bancorp, with Brooks, Pierce, McLendon, Humphrey & Leonard as legal counsel.

Between the lines: - The combination joins two long-standing MDIs with deep ties to Black communities in the Carolinas. - Optus is approaching its 105th anniversary in October and traces its roots to Victory Savings Bank, founded in 1921. - M&F Bank dates to 1907 and is widely recognized as one of the nation’s oldest African American owned financial institutions. - The transaction reflects continued consolidation among mission-driven community banks seeking more scale and broader lending capacity.

What's next: - M&F Bancorp shareholders still need to approve the merger. - Regulators also must sign off before closing. - The combined institution is expected to keep operating as a mission-driven MDI and CDFI focused on financial inclusion and economic opportunity. - Optus Bank said the partnership should broaden service capabilities while preserving its relationship-based banking model.

The bottom line: - If approved, the merger would create a larger, better-capitalized Black-owned bank with deeper reach and more resources for community lending in the Carolinas and beyond.