Optus Bank, M&F Bank agree to merge in $105 million deal

Optus Financial and M&F Bancorp have signed a definitive merger agreement that would combine two of the country’s longest-standing Minority Depository Institutions. If approved, the deal would create the largest African American owned financial institution in the U.S. and close in the fourth quarter of 2026.

Why it matters: - The deal would combine two mission-driven banks with more than 220 years of banking experience and deepen their reach in underserved communities. - The merged institution would become the largest African American owned financial institution in the United States. - The combination is designed to expand access to capital, support small business growth, finance affordable housing and strengthen community development 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 Financial Corporation, and M&F Bank will merge with and into Optus Bank. - The transaction has been unanimously approved by both boards of directors. - Closing is expected in the fourth quarter of 2026, subject to shareholder and regulatory approvals.

The details: - M&F Bancorp shareholders are expected to receive up to $53.30 per common share in cash. - The payout includes $46.57 per share at closing and up to $6.73 per share if certain preferred shares are repurchased before closing or within 12 months after closing. - The aggregate transaction value is expected to exceed $105 million. - The combined company would operate 10 locations across North and South Carolina. - The combined institution 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. - Performance Trust Capital Partners advised Optus, with Nelson Mullins Riley & Scarborough as legal counsel. - Piper Sandler advised M&F Bancorp, with Brooks, Pierce, McLendon, Humphrey & Leonard as legal counsel.

Between the lines: - The merger brings together two of the nation’s oldest Minority Depository Institutions, signaling continued consolidation among mission-driven banks. - Optus is nearing its 105th anniversary this October, while M&F Bank traces its roots to 1907, giving the combined institution a long history tied to Black banking and community investment. - The announcement frames scale as a way to preserve legacy while expanding lending capacity and service offerings.

What's next: - M&F Bancorp shareholders still must approve the deal. - Federal and other required regulatory approvals are still needed. - If the transaction closes as planned, the combined bank will continue operating as an MDI and CDFI focused on financial inclusion and economic opportunity.

The bottom line: - If completed, the merger would create a larger platform for Black-owned community banking in the Carolinas and beyond, with more scale to lend, invest and serve underserved markets.