Photo courtesy of msn.com

By David L. Snelling

In a move that would create an estimated $1.27 billion in combined assets, two Black-owned banks in the Southern Regional area have decided to merge in an effort to serve more communities and operate with a greater scale and effectiveness.

According to a press release, South Carolina-based Minority Depository Institution (MDI) Optus Bank and North Carolina-based MDI Mechanics and Farmers Bank announced a merger that would bring together more than 220 years of combined banking experience and create a financial institution with 10 locations across the two states.

The historic merger will unite two of the nation’s longest-standing Minority Depository Institutions.

Optus was founded in 1921 as an MDI in Columbia, South Carolina and M&F was founded in 1907 as an MDI in Durham, North Carolina.

Optus Financial Corporation, based in Columbia, South Carolina, is the parent company of Optus Bank.

M&F Bancorp, Inc. is the parent company of M&F Bank.

According to the terms of the agreement, MFBP will merge with and into Optus, and M&F Bank will merge with and into Optus Bank.

The transaction of the merger is expected to exceed $105 million.

Supporters say the transformative partnership brings together two mission-driven financial institutions with a shared commitment to expanding access to capital, advancing economic opportunity, and strengthening underserved communities.

The combined organization will build upon a legacy of community development, wealth creation, and economic empowerment that has impacted generations across the Carolinas.

The merger comes at a time when Optus Bank is preparing to celebrate 105 years of Banking on Communities in October.

Founded in 1921 as Victory Savings Bank, Optus has evolved into one of the nation’s leading MDIs and certified Community Development Financial Institutions, dedicated to expanding access to credit, capital and financial services.

M&F Bank, founded in 1907, has a longstanding history of empowering individuals, families, and businesses throughout North Carolina and is widely recognized as one of the nation’s oldest and most respected African American-owned financial institutions.

Upon completion of the transaction, the combined institution will operate 10 locations across North Carolina and South Carolina and will have approximately $1.27 billion in total assets as of March 2027.

MFBP President and Chief Executive Officer James H. Sills III will serve as CEO of both the combined holding company and bank.

Optus Chairman Paul Mitchell will continue as chairman of both entities.

“This partnership with M&F Bank represents a defining moment, not only for our organizations but for mission-driven banking in America,” Mitchell said. “M&F Bank has a proud legacy of supporting entrepreneurship, fostering generational wealth, and expanding access to capital in underserved communities. Together, we will create a stronger institution with greater scale, enhanced capability.”

Walter Davis, CertusBank’s former Chief Executive Officer who oversaw and developed the strategic direction that helped grow the organization into a $2 billion financial institution, said the merger is a blockbuster which can enrich the Black community.

“More consolidation has been needed for a while because economies of scale are important. In order to be really profitable, you have to have those economies of scale these days in banking,” Davis told The Root.

OneUnited Bank, the largest Black-owned financial institution in the U.S., which is headquartered in Boston and has branches in Miami and Los Angeles, was part of a merger in 2001 with Founders National Bank of Los Angeles.

The majority owners of Founders National were NBA Hall of Famer and businessman Earvin “Magic” Johnson, musician Janet Jackson, and former Motown Records President Jheryl Busby.

Terri Williams, owner of OneUnited Bank, told the South Florida Times that the merger between Optus Bank and MDI Mechanics and Farmers Bank, is a good thing.

“It really shows what a difference Black-owned banks make in the community they serve,” she said. “Two banks decided that they were better off together than apart.”

Williams, whose bank serves customers in all 50 states through digital banking, said some people get the impression that Black-owned banks compete against each other when it’s far from the truth.

“We are supportive of each other and I think the merger brings two institutions together to better serve the community,” she said. “We are thrilled for them and the community.”

Williams said OneUnited Bank has one of the largest customer populations in the nation and the growth is overwhelming.

“Our focus is serving a national footprint,” she said. “Some banks serve a local footprint but ours is a national one, which is a strategy that works for us.”