M&F Bank shareholders OK merger deal with Optus

MECHANICS & FARMERS BANK

Shareholders of Durham-based Mechanics & Farmers Bank approved the company's merger with Columbia, South Carolina-based Optus Bank, which creates the largest Black-owned bank in the United States.

Mechanics & Farmers Bank is moving forward with a merger that will make it the nation’s largest Black-owned bank.

Shareholders of Durham-based M&F Bancorp Inc. last week voted to approve a July proposal to merge with Columbia, South Carolina-based Optus Financial Corporation, the parent company of Optus Bank and Optus Merger Sub Inc., a subsidiary of Optus. Under terms of the agreement, outstanding shares of M&F common stock will be converted into the right to receive $53.30 in cash at closing. 

The cash payment was increased to include the previous contingent cash payment of $6.73 per share since M&F’s preferred stock has been repurchased.

“Today marks an important milestone for M&F and for the communities we have served for more than a century,” James Sills III, M&F’s president and CEO said in a statement. “Together with Optus, we will form the largest African American-owned financial institution in the United States, positioned to expand access to capital and economic opportunity across the Carolinas.” 

The merger makes the company the nation’s largest Black-owned financial services institution with $1.27 billion in total assets as of March 31. Under terms of the deal, which is expected to exceed $105 million, Mechanics & Farmers’ eight branches will operate under its current name for two years before transitioning to Optus. M&F’s Charlotte branch is on Beatties Ford Road in Historic West End. 
Sills will continue as CEO of the combined company, while Optus chairman Paul Mitchell keeps his title. 

Greensboro-based Triad Business Bank made an unsolicited proposal last month to merge with M&F, but its board of directors continued to recommend the Optus deal to shareholders. 
Closing the merger is subject to regulatory approvals, and the merger is expected to close by year’s end.

“We are grateful to our shareholders for their strong support of the Optus merger,” said James Stewart, M&F Bancorp’s chairman. “[The] vote reflects our shareholders’ confidence that this combination is the best outcome for M&F, and our Board thanks them for their careful consideration throughout this process.”

M&F, founded in 1907, was a mainstay of Durham’s Black Wall Street and eventually opened branches in North Carolina’s largest cities during a time when white-controlled financial institutions didn’t invest in Black communities. 

Optus, founded in 1921 as Victory Savings Bank, is one of the nation’s leading minority depository institutions and a certified community development financial institution. 

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