Optus Bank, M&F Bank strike merger deal to create largest African American-owned bank

Optus Financial and M&F Bancorp said Tuesday they signed a definitive merger agreement that would combine Optus Bank and M&F Bank into the largest African American-owned financial institution in the U.S. The deal, expected to close in the fourth quarter of 2026, values M&F at more than $105 million and would create a 10-branch bank with about $1.27 billion in assets.

Why it matters: - The combined bank would become the largest African American-owned financial institution in the United States. - The deal joins two long-standing Minority Depository Institutions and Community Development Financial Institutions with a shared focus on access to capital and economic opportunity. - The merger is designed to expand lending, community investment, small business support and affordable housing finance across the Carolinas.

What happened: - Optus Financial Corporation, parent of Optus Bank in Columbia, South Carolina, and M&F Bancorp, parent of Mechanics & Farmers Bank in Durham, North Carolina, announced a definitive merger agreement on July 22, 2026. - Under the agreement, M&F Bancorp will merge into Optus, and M&F Bank will merge into Optus Bank. - The combined organization is expected to operate 10 locations across North and South Carolina. - Total assets are expected to be about $1.27 billion as of March 31, 2026.

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. - James H. Sills III, president and CEO of M&F Bancorp and M&F Bank, will become CEO of the combined holding company and bank. - Paul Mitchell, chairman of Optus and Optus Bank, will remain chairman of both entities. - The boards of both companies unanimously approved the transaction. - Closing is expected in the fourth quarter of 2026, pending shareholder approval and regulatory approvals.

Between the lines: - The merger signals further consolidation among mission-driven banks at a time when scale matters for technology, lending capacity and regulatory costs. - Optus and M&F are leaning on their histories, not just their balance sheets, to position the combined bank as a broader platform for economic mobility. - The deal also reinforces the continued role of MDIs in serving communities that have long faced barriers to credit and financial services.

What's next: - Optus and M&F will seek shareholder and regulatory approvals before closing. - If approved, the combined bank will keep operating as an MDI and CDFI. - The companies expect the merged institution to support more small businesses, affordable housing and community development initiatives after the transaction closes.

The bottom line: - The merger would create a larger, better-capitalized Black-owned bank with deeper reach across the Carolinas and a bigger platform for community lending.