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DURHAM – At a time when social unrest is present and many small businesses and individuals are being severely impacted by the effects of the COVID-19 pandemic, large banks are committing to investing in smaller minority deposit institutions (MDIs) in an effort to decrease the racial wealth gap and to help create a fair and inclusive society.
At the moment, M&F Bancorp, Inc. (“Company”) (OTC Pink: MFBP), parent company of M&F Bank, is the only minority bank to receive equity investments from the four largest banks in the U.S. M&F Bank, a wholly owned subsidiary of M&F Bancorp, Inc., intends to leverage this additional capital to grow its franchise and provide additional products and services to more efficiently serve its customers.
“We are excited and honored to receive these investments in recognition of the critical role that MDIs play in reducing the wealth gap among minorities and in underserved communities. This also acknowledges our deep and long-standing connection to the people and businesses of North Carolina who need us now more than ever as they begin to rebuild from the pandemic,” said James Sills, president and CEO of the Company and M&F Bank. “Strategic partnerships such as these are part of the effort to generate a more inclusive recovery for communities of color that have been disproportionately impacted by the pandemic.”
As part of its mission to be a community bank that serves the needs of its underserved communities, M&F Bank plans to utilize additional funds to implement new technology and automation, offer additional products and services including free access to a nationwide network of approximately 13,000 ATMs, produce a stronger branch network, produce more robust financial literacy programs and offer greater access to capital in urban communities.
During the fourth quarter of 2020 and first quarter of 2021, the Company received investments from the four largest banks in the U.S. including Bank of America, Wells Fargo, Citibank and JPMorgan Chase, totaling $18 million. These investments increase the total capital of the Company to over $40 million, affording M&F Bank the opportunity to further its goals of providing access to capital to small and medium-sized businesses and to more effectively serve underserved communities.
The Wells Fargo, CitiBank and JPMorgan Chase investments totaled $17.5 million in a series of private placements in which the Company issued an aggregate of 17,302 shares of Series D Non-Cumulative Perpetual Preferred Stock (“Series D Preferred Stock”) and 39,600 shares of common stock. Each share of Series D Preferred Stock has a stated value of $1,000.00, is redeemable after five years at the sole option of the Company, carries no voting rights other than those limited voting rights mandated by North Carolina law and has non-cumulative dividend rights that entitle the holder to share in any dividends declared and paid to common shareholders. This passive investment capital structure will allow M&F Bank to maintain its MDI status while ensuring its common shareholders still own the majority of the Company.
“These investments are a testament to the strength of the franchise, health and soundness of the Company and the communities we serve,” continued Sills.
