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

Optus Financial Corporation and M&F Bancorp have signed a definitive merger agreement that would combine two of the country’s oldest minority depository institutions. The deal would create the largest African American owned financial institution in the U.S. and is expected to close in the fourth quarter of 2026.

Why it matters: - The merger would create the largest African American owned financial institution in the United States. - The combined bank would have more scale to lend, support small businesses, finance affordable housing and invest in community development across the Carolinas. - The deal brings together 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, and M&F Bank will merge with and into Optus Bank. - The transaction has been unanimously approved by the boards of directors of both companies. - Closing is expected in the fourth quarter of 2026, pending shareholder approval and required regulatory approvals.

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 up to $6.73 per share tied to the repurchase of certain outstanding preferred shares 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 bank had about $1.27 billion in total assets as of March 31, 2026. - James H. Sills III, president and CEO of M&F Bancorp and M&F Bank, 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 transaction pairs two institutions with deep community ties and similar missions, which may make integration easier than a typical bank merger. - Optus is approaching its 105th anniversary this October, while M&F Bank traces its roots to 1907. - The combined bank plans to keep operating as a mission-driven MDI and CDFI, signaling continuity rather than a major strategic pivot.

What's next: - M&F Bancorp shareholders still must approve the deal. - Bank regulators still must sign off before closing. - If completed, the combined company will look to expand financial inclusion and community investment throughout the Carolinas and beyond.

The bottom line: - This is a rare merger of two long-standing Black-owned banks that could create a larger, better-capitalized platform for community lending and economic mobility.