Optus Bank and M&F Bank plan merger to create largest African American-owned bank

Optus Financial and M&F Bancorp have agreed to merge their banks in a deal expected to close in Q4 2026, creating the largest African American-owned financial institution in the U.S. The combined bank would have about $1.27 billion in assets, 10 locations and a broader platform for lending, small-business support and community investment across the Carolinas.

Why it matters: - The combination would create the largest African American-owned financial institution in the United States. - The merged bank is designed to expand access to credit, capital and financial services in underserved communities. - The deal would give the combined institution more scale to support small businesses, affordable housing and community development. - The transaction comes as mission-driven banks face growing pressure to grow while preserving community ties.

What happened: - Optus Financial Corporation, the parent of Optus Bank, and M&F Bancorp, the parent of Mechanics & Farmers Bank, announced a definitive merger agreement. - M&F Bancorp will merge into Optus, and Mechanics & Farmers Bank will merge into Optus Bank. - The companies announced the deal on July 22, 2026. - The transaction was unanimously approved by both boards of directors.

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. - 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 total transaction value is expected to exceed $105 million. - The combined institution is expected to have about $1.27 billion in total 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 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 transaction is subject to shareholder approval and regulatory approvals. - Closing is expected in the fourth quarter of 2026. - 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: - Optus Bank is approaching its 105th anniversary in October. - 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. - Both banks are federally designated Minority Depository Institutions and certified Community Development Financial Institutions. - The deal pairs two long-standing institutions with deep ties to African American banking and community development. - The merged bank would preserve a relationship-based service model while adding more resources and capabilities. - The partnership signals continued consolidation among MDIs as banks look to expand reach and mission impact.

What's next: - M&F Bancorp shareholders still must approve the deal. - Regulators still must clear the transaction. - The companies expect to close in the fourth quarter of 2026. - The combined bank plans to keep focusing on financial inclusion, economic opportunity and community investment across the Carolinas. - The merger is expected to support innovative banking products and stronger lending capacity after closing.

The bottom line: - If completed, the merger would unite two of the country’s oldest Black-owned banks into a larger platform with more scale, capital and reach.