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A fight over the future of a historic Black bank moved into full public view on Thursday.
Triad Business Bank confirmed it is Party A in the proxy papers of M&F Bancorp in Durham.
Triad also published an open letter to shareholders and to the board of directors.
The letter landed one week after shareholders declined to approve a separate deal with Optus.
It also landed one day before a Friday deadline the board set for new proposals.
Major Takeaways
- Shareholders did not approve the Optus agreement on October 7, and the meeting returns on October 20.
- Triad offers $53.50 in cash at closing for up to one share in four.
- Shareholders who stay would receive 1.25 shares of M&F Bancorp for each share held.
- The Triad plan keeps the M&F name, the 1907 charter and the Durham home office.
- Triad says the board decided against its plan on October 14 without a conversation.
Why This Black Bank Matters Far Beyond Durham
Mechanics and Farmers Bank was organized in 1907 under a charter from the State of North Carolina.
The bank itself says nine pioneers founded it as successful and active community builders.
Those founders helped build a thriving business district in Durham known as Black Wall Street.
At that time Black families had few options for business loans or home financing.
They also had few safe options to deposit money and earn interest.
So the Black community created its own bank, in the words of the bank history.
The stated mission remains a commitment to personal and community development.
That history explains why a corporate vote in Durham draws attention across Black America.
Black banks have long turned deposits into loans for churches, shops and families.
When a Black bank loses its name or charter, a community loses more than signage.
It can lose a lender that knows its borrowers and its neighborhoods by experience.
It can also lose an institution built when exclusion from finance was open and legal.
What Triad Put on the Table for Shareholders
Triad says it has made four written proposals to the board since August 6.
The latest plan, called Proposal Four, was delivered on October 8.
Each shareholder could elect cash or remain an owner in the combined company.
The cash option pays $53.50 per share in full at closing.
That cash is fixed and does not depend on anything after closing, Triad says.
The cash election covers up to 25 percent of the outstanding shares.
If more shareholders choose cash, that pool would be shared on a prorated basis.
A shareholder who stays would receive 1.25 shares of M&F Bancorp per share.
Under the plan, M&F Bancorp survives and owns both banks.
Each bank keeps its own charter under that structure.
M&F Bank keeps its name, its 1907 charter and its Durham home office.
Triad says the holding company board would hold a majority of African American directors.
That majority would be written into the charter and the bylaws of the company.
The bank would continue as a minority depository institution under federal policy.
Employees of both banks would continue serving customers, Triad says.
The plan includes a community lending program built through the Durham charter.
That program would work with historically Black colleges and with faith based institutions.
It would serve business owners and entrepreneurs along the interstate corridor.
Triad says the combined company would hold about one billion dollars in assets at closing.
It also cites about 107 million dollars in tangible common equity on that basis.
The company would seek a Nasdaq listing within twelve to eighteen months of closing.
How the Triad Offer Compares With the Optus Deal
The existing Optus agreement would pay up to $46.57 at closing per share.
A further $6.73 would come only if certain preferred stock is redeemed in time.
That condition means the added money could arrive within twelve months or not at all.
Triad says its cash tops the Optus maximum by twenty cents per share.
Under Optus, M&F Bank would merge into Optus Bank, according to the letter.
It would continue for two years as a division of Optus Bank.
Triad argues that its structure changes no charter and needs no such merger step.
The two plans therefore present owners with a real choice about identity and control.
One path sells every share for cash and ends ownership in the Durham institution.
The other path pays some owners in cash and lets the rest remain owners.
Families who held shares for generations face both a financial and a cultural decision.
What the Board Said and What Happens Next
Triad says the board reviewed Proposal Four with independent legal and financial advisers.
On October 14 the board unanimously called it neither superior nor likely to become superior.
Triad says that decision came without any conversation with Triad about the proposal.
The board also said it will review no proposal received after Friday at 5 p.m.
That deadline falls today, Friday, October 16, in the eastern time zone.
Triad asks the board to disclose the proposal terms to shareholders by that deadline.
It also asks the board to meet with Triad before the meeting returns on Tuesday.
The shareholder meeting reconvenes on October 20 after the October 7 adjournment.
Proposal Four stays open through October 20 and through any further adjournment, Triad says.
If shareholders again decline the Optus deal, Triad promises to come to Durham on October 21.
It says it will bring a draft agreement and keep its proposal unchanged.
If shareholders approve the Optus deal, Triad says it will wish M&F well.
Readers should note that Proposal Four is a nonbinding indication of interest for now.
M&F remains bound by its merger agreement with Optus Financial Corporation.
No outcome is assured, and any deal would need shareholder and regulatory approvals.
Those approvals include the FDIC, state bank regulators and the Federal Reserve.
For Black Durham, the stakes reach beyond a single vote or a single price.
The question is who will control a bank built in 1907 to open doors.
The answer begins on Tuesday, when owners who paused this month decide again.
Read more in our News coverage and explore Black history coverage from Urban City Podcast.
