Optus Bank, M&F Bank announce merger to form largest African American-owned bank

Optus Financial Corporation and M&F Bancorp said July 22 they have a definitive merger agreement that would combine Optus Bank and M&F Bank into the largest African American-owned financial institution in the U.S. The deal, expected to close in the fourth quarter of 2026, carries an aggregate value above $105 million and is aimed at expanding lending, small business support and community investment across the Carolinas.

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 merger is designed to expand access to capital, financial services and community investment in underserved areas across North and South Carolina. - The deal gives the two Minority Depository Institutions more scale to support small businesses, affordable housing and economic mobility.

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 into Optus, and M&F Bank will merge into Optus Bank. - The transaction is expected to close in the fourth quarter of 2026, pending shareholder and regulatory approvals. - The boards of directors of both companies unanimously approved the deal.

The details: - M&F Bancorp shareholders are expected to receive up to $53.30 per common share in cash. - The payment includes $46.57 per share at closing and an additional $6.73 per share tied to the repurchase of certain M&F Bancorp preferred shares before closing or within 12 months after closing. - The aggregate transaction value is expected to exceed $105 million. - The combined institution will operate 10 locations across North and South Carolina. - The combined company will 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. - Optus Bank was founded in 1921 as Victory Savings Bank and is headquartered in Columbia, South Carolina. - M&F Bank was founded in 1907 and is headquartered in Durham, North Carolina. - Optus Bank is South Carolina’s only African American-owned bank. - M&F Bank is the nation’s second-oldest African American-owned financial institution. - Both institutions are federally designated Minority Depository Institutions and certified Community Development Financial Institutions. - Performance Trust Capital Partners, LLC advised Optus, with Nelson Mullins Riley & Scarborough LLP as legal counsel. - Piper Sandler & Co. advised M&F Bancorp, with Brooks, Pierce, McLendon, Humphrey & Leonard, LLP as legal counsel. - More information is available in the companies’ announcement and social channels, including Optus Bank on LinkedIn, Optus Bank on Instagram, Optus Bank on Facebook, and Optus Bank on YouTube.

Between the lines: - The combination brings together two long-standing mission-driven lenders with more than 220 years of combined banking experience. - The transaction underscores continued consolidation among mission-focused community banks and MDIs. - The companies say the larger platform should improve their ability to deliver innovative banking solutions while keeping relationship-based service. - Optus is approaching its 105th anniversary this October, which the companies frame as a symbolic moment for the merger.

What's next: - M&F Bancorp shareholders still need to approve the merger. - Regulators must also approve the transaction before closing. - The parties expect to complete the deal in the fourth quarter of 2026.

The bottom line: - If approved, the merger would create a larger Carolina-based MDI platform with more capital, more reach and a bigger role in serving Black communities and underserved borrowers.