Optus Bank and M&F Bank plan merger to create largest African American owned bank

Optus Financial Corporation and M&F Bancorp have agreed to merge two long-standing Minority Depository Institutions, creating what they say will be the largest African American owned financial institution in the U.S. The deal is expected to close in the fourth quarter of 2026, pending shareholder and regulatory approvals.

Why it matters: - The combined Optus Bank and M&F Bank would form the largest African American owned financial institution in the United States. - The merger is designed to expand access to capital, support small business growth, finance affordable housing and increase community investment across the Carolinas. - The transaction would unite two mission-driven Minority Depository Institutions with more than 220 years of combined banking experience.

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

The details: - MFBP shareholders are expected to receive up to $53.30 per common share in cash. - The consideration includes $46.57 per share paid at closing and up to $6.73 per share tied to the repurchase of certain MFBP preferred shares within 12 months after closing. - The transaction value is expected to exceed $105.0 million. - The combined institution is expected to have about $1.27 billion in total assets as of March 31, 2026. - The merged bank will operate 10 locations across North and South Carolina. - James H. Sills III, president and CEO of MFBP, will become 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. - Optus Bank will mark its 105th anniversary of “Banking on Communities” in October. - Performance Trust Capital Partners advised Optus, with Nelson Mullins Riley & Scarborough as legal counsel. - Piper Sandler advised MFBP, with Brooks, Pierce, McLendon, Humphrey & Leonard as legal counsel.

Between the lines: - The merger reflects a broader push to preserve and scale mission-driven banks as the industry consolidates. - Combining complementary footprints and community relationships could give the new institution more reach without abandoning its relationship-based model. - The deal also signals confidence that MDI and CDFI banks can grow while keeping a community development focus.

What's next: - MFBP shareholders still need to approve the deal. - Regulators must also sign off before the transaction can close. - If approved, the combined bank will continue operating as an MDI and CDFI focused on financial inclusion and economic opportunity. - The parties expect closing in the fourth quarter of 2026.

The bottom line: - Optus and M&F are betting that scale can strengthen, not dilute, their community mission. If the deal closes, the new bank will be a major force in Black-owned banking and underserved-market lending.