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

Optus Financial and M&F Bancorp have signed a definitive merger agreement that would combine two longtime 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 Q4 2026, pending shareholder and regulatory approvals.

Why it matters: - The merger would create the largest African American owned financial institution in the United States. - The combined bank would expand access to capital, small-business credit, affordable housing finance and community development across the Carolinas. - The deal adds scale to two mission-driven Minority Depository Institutions with long histories in underserved markets.

What happened: - Optus Financial Corporation, parent of Optus Bank, and M&F Bancorp, parent of Mechanics & Farmers Bank, signed a definitive merger agreement. - M&F Bancorp will merge into Optus Financial, and M&F Bank will merge into Optus Bank. - The announcement was made July 22, 2026, in Columbia, South Carolina. - The transaction is expected to close in the fourth quarter of 2026.

The details: - M&F Bancorp shareholders are expected to receive up to $53.30 per common share in cash. - The upfront payment is $46.57 per share at closing. - An additional $6.73 per share is contingent on the repurchase of certain outstanding M&F Bancorp preferred shares before closing or within 12 months after closing. - The aggregate transaction value is expected to exceed $105.0 million. - The combined institution would operate 10 locations across North and South Carolina. - The combined company 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 both the combined holding company and the combined bank. - Paul Mitchell, chairman of Optus and Optus Bank, will continue as chairman of both entities. - The boards of both companies unanimously approved the transaction. - The deal still needs approval from M&F Bancorp shareholders and regulators.

Between the lines: - The combination pairs two institutions with more than 220 years of combined banking experience. - Optus Bank is approaching its 105th anniversary this October. - Optus Bank 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. - Both institutions are federally designated Minority Depository Institutions and certified Community Development Financial Institutions. - Optus Bank is South Carolina’s only African American owned bank. - M&F Bank is described as the nation’s second oldest African American owned financial institution. - The partnership is designed to preserve each bank’s legacy while increasing scale and capability.

What's next: - The companies must secure shareholder approval from M&F Bancorp and required regulatory approvals. - Closing is anticipated in the fourth quarter of 2026. - After closing, the combined bank will continue operating as a mission-driven MDI and CDFI focused on financial inclusion and economic opportunity. - The institutions said the merger should strengthen innovative banking solutions and community investment.

The bottom line: - Optus and M&F are betting that combining two historic Black-owned banks will create a larger platform for lending, development and community impact without losing their relationship-based model.