The M&F bank merger stays on track after M&F Bancorp shareholders backed its proposed sale to Optus Financial, leaving the $105 million transaction awaiting regulatory review. Preliminary results showed nearly 74% of shares entitled to vote supported the deal, which the banks still expect to close by the end of this year.
The vote rebuffed another effort to change M&F’s future. Triad Business Bank had argued that its alternative proposal offered shareholders a better outcome and would preserve M&F’s name, charter and minority depository institution status.
Bank Merger Stays on Track Pending Reviews
M&F, based in Durham, North Carolina, is set to be acquired by Optus, based in Columbia, South Carolina. The companies said the all-cash transaction would create the largest Black-owned bank in the country by total assets, with roughly $1.3 billion. If completed, the acquisition would also reduce the number of Black-owned banks in the United States to 16.
M&F first scheduled the vote for Oct. 7, postponed it until Oct. 20, and later adjourned it again until Wednesday. It said the delays gave shareholders time to consider Triad’s counterproposal.
James Sills III, M&F’s president and CEO, called the vote an important milestone for the $503.5 million-asset bank, founded in 1907. He said the combination would be positioned to expand access to capital and economic opportunity across the Carolinas.
Regulatory Decisions Remain Ahead
Shareholder approval does not complete the transaction. M&F disclosures say Optus and M&F still need approval or non-objections from four regulators: the Federal Reserve, the Federal Deposit Insurance Corp., the North Carolina Commissioner of Banks and the South Carolina Board of Financial Institutions. M&F has said applications were filed with each.
Regulatory review is also a live issue for other financial institutions. Readers can compare this pending merger with a banking access dispute involving a separate institution. That story concerns a challenge over a Federal Reserve master account, rather than this acquisition.
Triad said Thursday it was grateful to shareholders, employees and customers who considered its proposals, and added that it respected their decision. The Greensboro, North Carolina-based bank had said its latest proposal was superior to the Optus deal accepted by M&F in July.
Triad’s plan would have kept M&F’s name and charter and called for a majority-African-American board. M&F’s board, with financial and legal advisers, considered the unsolicited proposals and continued to recommend Optus. It said it did not intend to comment further on Triad’s offers.
Offer Terms and Leadership Plans
The Optus agreement calls for M&F shareholders to receive up to $53.30 per common share in cash. The initial payment is $46.57 per share. A further $6.73 may be payable later, depending on whether M&F successfully redeems certain preferred stock before or within 12 months of the acquisition.
Triad’s alternative would have left M&F shareholders with a little less than half of the combined company’s shares. It projected tangible book value per share would rise from $29.87 at closing to between $44.52 and $49.50 five years later.
The size of the planned combination places the vote in a broader community banking conversation. Financial Tech Times readers can also review reporting on community banking programs and on bank lending conditions. Those articles address separate subjects and do not describe the M&F transaction.
If the deal closes, Sills is set to become CEO of Optus Financial and Optus Bank. Paul Mitchell, Optus Financial’s chairman, is expected to continue in his current role. The companies have not said whether Benita Lefft, president of Optus Bank, will have a role after the acquisition.
Optus had about $764 million of assets as of June 30, while Liberty Bank & Trust had $1.1 billion as of that date, according to the Federal Deposit Insurance Corp. The source report identified Liberty as the largest Black-owned bank at that point. Whether the merger stays on schedule depends on four regulatory reviews.
