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

Optus Financial Corporation and M&F Bancorp have signed a definitive merger agreement that would combine two of the nation’s oldest African American-owned minority depository institutions. The deal would create the largest African American-owned financial institution in the U.S. and is targeted 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 a bigger platform to expand access to capital, support small business growth, finance affordable housing and invest in underserved communities across the Carolinas. - The deal pairs 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 into Optus Financial Corporation, and Mechanics & Farmers Bank will merge into Optus Bank. - The transaction is expected to be one of the most significant MDI combinations in recent years. - The boards of directors of both companies unanimously approved the transaction.

The details: - MFBP 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 outstanding MFBP preferred shares before closing or within 12 months after closing. - The aggregate transaction value is expected to exceed $105.0 million. - The combined institution will operate 10 locations across North and South Carolina. - The combined bank would have approximately $1.27 billion in total assets as of March 31, 2026. - James H. Sills III, president and CEO of MFBP, will become CEO of both the combined holding company and the combined bank. - Paul Mitchell, chairman of Optus and Optus Bank, will remain chairman of both entities. - Optus Bank is based in Columbia, South Carolina, and was founded in 1921 as Victory Savings Bank. - M&F Bank is based in Durham, North Carolina, and was founded in 1907. - 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 banks are federally designated Minority Depository Institutions and certified Community Development Financial Institutions. - The combined organization is expected to continue as a mission-driven MDI and CDFI focused on financial inclusion and economic opportunity.

Between the lines: - The deal reflects a broader push among mission-driven community banks to gain scale while preserving local relationships and their original missions. - Optus is approaching its 105th anniversary in October, and the merger gives the bank a way to mark that milestone with a larger regional footprint. - The combination also signals that community-development lending remains a strategic focus for institutions serving Black communities in the Carolinas.

What's next: - The transaction still needs approval from MFBP shareholders and required regulatory approvals. - Closing is expected in the fourth quarter of 2026. - Performance Trust Capital Partners advised Optus, and Nelson Mullins Riley & Scarborough served as legal counsel. - Piper Sandler advised MFBP, and Brooks, Pierce, McLendon, Humphrey & Leonard served as legal counsel.