M&F Bank lands $80M investment through federal program – will expand lending, improve tech

DURHAM – The parent company of the second-oldest African American-owned bank in the United States has a new infusion of capital from the U.S. Treasury in exchange for company stock.

M&F Bancorp, the parent company of M&F Bank, exchanged 80,000 shares of Series E Preferred Stock with the U.S. Treasury through the Emergency Capital Investment Program for $80 million in capital.

The financial institution announced the investment and the deal in a statement, which was shared with WRAL TechWire.

Following the deal, the company’s capital on hand now exceeds $119 million, according to James H. Sills, III, M&F Bank’s president and CEO.

“This investment is a testament to the strength of the M&F Bank franchise, the health and soundness of the Company and its abilities to positively impact disadvantaged communities within its markets,” said Sills, in the statement. “This investment will allow us to build on our recent successes by providing even more ways for us to support small businesses in our community.”

In a podcast recorded earlier this year, Sills told WRAL TechWire columnist Donald Thompson that the bank has been profitable for 113 of the 115 years that it has been in business and discussed the racial wealth gap that persists in the United States.

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Transformational capital

According to the statement, the new infusion of capital will be “transformational” because it enables the bank to implement technology enhancements and provide additional lending capacity.

The bank operates in Durham, Raleigh, Greensboro, Winston-Salem, and Charlotte, according to the statement, and provides capital to small- and medium-sized businesses in local communities, focusing on underserved populations.

That includes those “disproportionately impacted by the economic effects of the COVID-19 pandemic,” according to the statement.

The program through which M&F will receive the investment was established by the Consolidated Appropriations Act of 2021 and enabled a total of $9 billion in capital to be invested directly in community development financial institutions (CDFIs).

Stock involved in the deal will not have payable dividends during the first two years, but following that initial period, noncumulative dividends will be payable at a rate between 0.5% and 2.0% following a determination based on the bank’s annual qualified lending amount.