TWO OF THE NATION’S OLDEST BLACK-OWNED BANKS ARE JOINING FORCES IN A PROPOSED MERGER

Two of the nation’s oldest Black-owned banks are joining forces in a proposed merger that would create the largest Black-owned bank in the United States by assets. South Carolina-based Optus Financial Corporation, the parent company of Optus Bank, and North Carolina-based M&F Bancorp, the parent company of Mechanics & Farmers Bank, announced a definitive merger agreement that would combine the institutions into a single bank with approximately $1.27 billion in total assets.

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The merger would bring together more than 220 years of combined banking history. M&F Bank was founded in 1907 and is the oldest Black-owned bank in North Carolina, while Optus Bank traces its roots to 1921. The combined institution is expected to operate 10 branches across North and South Carolina and continue its focus on expanding access to capital, homeownership, and small business lending in underserved communities.

Under the agreement, M&F Bancorp shareholders would receive cash for their shares, with the total transaction valued at more than $105 million. James H. Sills III, the current president and CEO of M&F Bancorp, is expected to become CEO of the combined company, while Optus Chairman Paul Mitchell would remain chairman. The merger is expected to close in the fourth quarter of 2026, subject to shareholder and regulatory approval.

The roughly $105 million deal, set to close in the fourth quarter, will create a $1.3 billion-asset entity, the largest Black-owned bank in the country, the institutions said Wednesday.

Dan Ennis Senior Editor

Two of the nation’s oldest Black-owned banks are combining in a deal worth $105 million or more that’s set to close in the fourth quarter.

Durham, North Carolina-based Mechanics & Farmers Bank will merge into Columbia, South Carolina-based Optus Bank to create a roughly $1.3 billion-asset institution with 10 locations across two states, the lenders announced Wednesday.

Paul Mitchell, the chairman of Optus Bank and its holding company, called the combination “a defining moment – not only for our organizations, but for mission-driven banking in America.”

Optus and M&F are each federally designated minority depository institutions and certified community development financial institutions with more than a century of history. And both are often tapped as targets of investment when larger banks and organizations are looking to make a statement.

For example, at the height of recent racial equity consciousness in the U.S. – months after the killing of George Floyd by police – Optus and M&F were both among 11 Black-owned banks in which Wells Fargo pledged to invest. Similarly, Optus and M&F were the first beneficiaries of a $100 million investment by State Street into MDIs and CDFIs in 2024. And when the NFL in 2023 sought to bolster nonwhite-owned banks, Optus and M&F were among 16 institutions from which it borrowed $78 million.

Two Historic Black-Owned Banks Announced That They Are No Longer Looking to Compete With Each Other and Instead Decided to Pursue a $1.27 Billion Merger and Bring Both Companies Together! 🏦💰📈

“Together, we will create a stronger institution with greater scale, enhanced capabilities, and an expanded capacity to advance economic mobility throughout the Carolinas and beyond,” Mitchell said in a statement Wednesday.

Once the transaction closes, Mitchell will serve as the chair of the combined holding company and bank. James Sills III, CEO and president of M&F’s holding company, will serve as CEO of the combined bank and holding company.

“M&F Bank was founded on the belief that every community deserves a financial institution that understands and serves its unique needs. That principle has guided us for more than a century and led us to this partnership with Optus,” Sills said in a statement Wednesday. “We share a common mission, aligned values, and a steadfast commitment to our customers and communities. This Transaction enables us to honor our legacy while providing enhanced resources and capabilities to those we serve.”

As part of the deal, M&F holding company shareholders will receive up to $53.30 per common share in cash, with $46.57 per share payable at closing and another $6.73 per share possible if certain outstanding shares of preferred stock are repurchased within a year of the transaction’s completion.

The deal would make a combined Optus and M&F the nation’s largest Black-owned bank, the institutions said Wednesday. Optus counted $785.2 million in assets as of the end of the first quarter, while M&F counted $517.5 million.

M&F, founded in 1907, has eight locations. Optus, which launched in 1921 as Victory Savings Bank in 1921, has two. Their combination will leave one less Black-owned bank in the U.S.; there are now 22, according to Optus.

Source: Axios; Optus Financial Corporation & M&F Bancorp Merger Announcement