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M&F Bank, North Carolina's oldest Black-owned bank, said Wednesday it will merge with South Carolina's Optus Bank in a move that will create the largest Black-owned bank in the country.
Why it matters: The merger will lead to big changes for M&F Bank, which was founded as Mechanics and Farmers Bank in 1907 and was a pillar of Durham's Black Wall Street.
- After the merger, the combined banks' headquarters will move to Columbia, S.C., and the M&F Bank name will eventually make way for Optus on its local branches in two years' time.
Driving the news: The merger will create a bank with around $1.3 billion in assets and 10 branch locations across North and South Carolina.
- Seven of those locations are currently M&F Bank branches in North Carolina.
- James Sills, M&F Bank's CEO, will become the chief executive of the combined banks. Sills told Axios he will remain in Durham and three of M&F Bank's directors will become directors at Optus.
State of play: M&F Bank has had its struggles over the years, and it was close to going under after the Great Recession.
- But in the wake of the George Floyd protests in 2020, the bank did experience a surge in assets, growing from $266 million in 2019 to $309 million in 2020, The News & Observer reported.
- It's continued to grow its assets since, with the bank reporting $518 million in assets in the first quarter.
- Sills told Axios in an interview that a lot of its growth has come from creating relationships with small businesses through the Paycheck Protection Program and maintaining them in the years since.
What they're saying: "We view it as strategic," Sills said of the merger. "It allows us to continue the mission of M&F Bank, but at a greater scale."
- For instance, he said, the largest amount the bank will now be able to loan will grow from around $11 million to nearly $25 million.
- That will give the bank more leeway to lend to businesses, nonprofits and affordable housing developments in North Carolina, he said.
