Two minority banks plan to merge in $105 million deal
- Key insight: Two Black-owned banks in the Carolinas have agreed to combine in a cash-and-stock deal worth more than $105 million.
- What’s at stake: The merger between Optus Financial and M&F Bancorp will create a bank with larger scale at a time when many Black banks are confronting technology and other challenges.
- Forward look: The transaction is expected to close during the fourth quarter of this year.
Two minority depository banks in the Carolinas have agreed to merge in a deal that’s set to create the one of the largest Black banks in the United States, based on combined asset size.
Optus Financial in Columbia, South Carolina, plans to pay more than $105 million in cash and stock to buy M&F Bancorp in Durham, North Carolina, the companies announced Wednesday. M&F and its banking arm, M&F Bank, will merge into Optus and its banking arm, Optus Bank, resulting in an entity with $1.27 billion of assets. The merged company will operate under the Optus name.
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In an email, M&F President and CEO James Sills III said the combined institution will become “the second-largest African American-owned financial institution in the United States” and the largest privately held one.
The deal brings together two of the oldest Black-owned banks in the U.S. It will also result in further consolidation in a segment of the U.S. banking sector that’s already extremely slim. As of March 31, 2026, there were 17 Black-owned banks across the country, a number that has dwindled from 32 in 2006, according to data from the Federal Deposit Insurance Corp.
The combined organization will continue its legacy banks’ status as a mission-driven bank and will maintain the designation as a community development financial institution, the banks said.
M&F’s Sills will become CEO of Optus Financial and Optus Bank. Paul Mitchell, chairman of Optus and Optus Bank, will continue in his current role.
“This partnership with M&F Bank represents a defining moment, not only for our organizations, but for mission-driven banking in America,” Mitchell said Wednesday in a press release. “Together, we will create a stronger institution with greater scale, enhanced capabilities, and an expanded capacity to advance economic mobility throughout the Carolinas and beyond.”
Post-acquisition, Optus will operate 10 branches, including eight in North Carolina that currently operate as M&F Bank branches. The deal is expected to close during the fourth quarter of 2026, pending approval by regulators and M&F shareholders, according to the banks.
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As of March 31, Optus had about $785 million of assets, while M&F had about $518 million, according to the banks’ most recent call reports.
Nicole Elam, president of the National Bankers Association, which represents minority depository banks across the country, expressed optimism about the pending combination.
“Both M&F and Optus have long histories of expanding access to capital and creating economic opportunity in underserved communities,” Elam told American Banker in an email. “If completed, this partnership will demonstrate how mission-driven institutions can build to a greater scale while remaining focused on their core mission of serving their communities.”
Minority banks continue to face pressure in the form of rising technology costs,
“Our focus is ensuring mission-driven banks remain strong, competitive, and able to serve their communities for generations to come,” Elam added.
The two merging banks did not say if Benita Lefft, president of Optus Bank, will have a role with the combined company post-acquisition. Two years ago, Lefft succeeded Dominik Mjartan, who had been president and CEO since 2017 and
The banks also did not say how the board of directors would be structured after the deal closes. The transaction has already been approved by the boards of both companies, the release said.
The number of Black-owned banks has been dwindling for years, due to a mix of industry consolidation and financial hardships. Black banks have historically struggled to obtain enough capital to fund loans. But after civil unrest that rolled across the country in 2020 after George Floyd’s murder, some Black banks, including both Optus and M&F, received
Two of the most recent M&A deals between Black-owned or -operated banks took place in 2021 and 2022. In 2021,
A year later, Carver Financial in Georgia
