M&F Bancorp Shareholders Approve $105 Million Cash Sale to Optus
M&F Bancorp shareholders backed the $105 million all-cash sale to Optus Financial, rejecting Triad's rival pitch. Terms, regulators and next steps.
Shareholders of M&F Bancorp, the Durham, North Carolina, parent of a Black-owned bank founded in 1907, have voted to sell the company to Optus Financial of Columbia, South Carolina, in a $105 million all-cash deal. Preliminary results from Wednesday’s vote show nearly 74% of the shares eligible to vote were cast in favor, M&F said.
The vote turns back a campaign by Triad Business Bank of Greensboro to derail the sale, American Banker reported. The deal still needs regulators to sign off. If it closes, the combined bank would be the largest Black-owned bank in the U.S. by assets, and the country would be left with 16 Black-owned banks.
What M&F shareholders get from Optus
Holders of M&F common stock can receive up to $53.30 a share, all in cash. The first payment at closing is $46.57 a share. A second payment of $6.73 a share depends on whether M&F redeems certain preferred stock before the acquisition or within 12 months after it. If that redemption does not happen, the second payment may not come.
M&F has $503.5 million in assets. Optus had about $764 million as of June 30, according to the Federal Deposit Insurance Corp. Together they would hold roughly $1.3 billion. Liberty Bank & Trust in New Orleans, currently the largest Black-owned bank, reported $1.1 billion as of June 30, FDIC figures show.
Three adjournments and a rival offer
The shareholder meeting was first set for Oct. 7. M&F pushed it to Oct. 20 and then again to this week, saying owners needed time to weigh a counterproposal from Triad.
Triad, a $536 million-asset bank that is not Black-owned, published a report last week arguing its plan was better. Under its offer, M&F would have kept its name, its charter and its status as a minority depository institution, and the charter would have required a majority African-American board. M&F shareholders would have ended up with a little under half of the combined company’s stock. Triad projected tangible book value per share of $29.87 at closing, rising to between $44.52 and $49.50 five years later.
Triad also faulted M&F for not lending out more of its capital and for paying its board and management bonuses worth a combined $2.6 million earlier this year. Its main point: a sale to Optus ends the 119-year-old M&F as an independent bank.
M&F’s board, working with financial and legal advisers, reviewed what it called “unsolicited proposals” from Triad and kept recommending the Optus deal. The company said it does not plan to comment further on Triad. In a statement Thursday, Triad thanked shareholders, employees and customers who considered its proposals and said, “We respect their decision.”
What it means for customers and employees
After the acquisition, Optus plans to run 10 branches. Eight of them are in North Carolina and are now operated by M&F, so M&F customers there would bank with Optus. M&F grew up on Parrish Street in Durham, a commercial strip once called “Black Wall Street.”
James Sills III, M&F’s president and CEO, will become CEO of both Optus Financial and Optus Bank. Paul Mitchell stays on as chairman of Optus Financial and its bank. The banks have not said whether Benita Lefft, president of Optus Bank, will have a job at the combined company. Lefft took over two years ago from Dominik Mjartan, who had led Optus since 2017. Optus was founded in 1999.
Sills called the vote “an important milestone” and said the merged bank would be positioned to widen access to capital across the Carolinas.
What happens next
Four regulators must approve the deal or decline to object: the Federal Reserve, the FDIC, the North Carolina Commissioner of Banks and the South Carolina Board of Financial Institutions. Both banks have filed applications with each of them, according to M&F’s disclosures. The companies said they still expect the deal to close by the end of this year.
Source: American Banker
