Optus Bank and M&F Bank agree to merger

Optus Financial Corporation and M&F Bancorp have signed a definitive merger agreement that will combine Optus Bank and M&F Bank into what they say will be the largest African American owned financial institution in the U.S. The deal, expected to close in the fourth quarter of 2026, would create a $1.27 billion asset institution with 10 branches across North and South Carolina.

Why it matters: - The merger would combine two long-running Minority Depository Institutions and create a larger platform for lending, community development and financial access in the Carolinas. - The combined institution is expected to become the largest African American owned financial institution in the United States. - The deal is designed to expand capital access, support small business growth and finance affordable housing.

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. - MFBP will merge with and into Optus, and M&F Bank will merge with and into Optus Bank. - The transaction is expected to close in the fourth quarter of 2026, pending shareholder and regulatory approvals.

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 up to $6.73 per share tied to the repurchase of certain MFBP preferred stock within 12 months after closing. - The aggregate transaction value is expected to exceed $105 million. - The combined company will have about $1.27 billion in assets as of March 31, 2026. - The combined bank will operate 10 locations across North and South Carolina. - James H. Sills III, president and CEO of MFBP, is set to become CEO of the combined holding company and bank. - Paul Mitchell, chairman of Optus and Optus Bank, will remain chairman of both entities. - Optus 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. - Performance Trust Capital Partners advised Optus, with Nelson Mullins Riley & Scarborough LLP as legal counsel. - Piper Sandler & Co. advised MFBP, with Brooks, Pierce, McLendon, Humphrey & Leonard, LLP as legal counsel. - The companies said the combination will preserve their relationship-based service model while expanding innovative banking solutions and community investment.

Between the lines: - The transaction reflects continued consolidation among mission-driven banks, especially MDIs with overlapping community development goals. - The leadership structure suggests continuity, with MFBP's CEO taking the top operating role and Optus's chairman staying in place. - The deal also gives the combined bank greater scale at a time when access to capital and small-business lending remain central issues in underserved communities.

What's next: - MFBP shareholders still need to approve the transaction. - Regulators must also sign off before the merger can close. - If completed, the combined institution plans to continue operating as an MDI and CDFI focused on financial inclusion and economic opportunity. - The companies expect the merger to support community development, generational wealth creation and broader economic mobility across the Carolinas and beyond.