M&F Bank receive investments from other large U.S. banks to help close the racial wealth gap

M&F Bank (OTCMKTS: MFBP) has received equity investments from four of the largest U.S. banks, which will help the bank grow its franchise and serve its underserved customers better.

Between late last year and early 2021, Wells Fargo, CitiBank, JPMorgan Chase, and Bank of America all made equity investments in M&F Banks, totaling $18 million. The company issued an aggregate of 17,302 shares of Series D Non-Cumulative Perpetual Preferred Stock and 39,600 shares of common stock. A share of the Series D Preferred Stock has a stated value of $1,000.00 and is redeemable after five years at the Company’s sole option. No voting rights are giving except the limited voting rights mandated by the North Carolina law. It also has non-cumulative dividend rights that give the holder an entitlement to share in any dividends declared and paid to common shareholders.

The total capital of the company now stands at $40 million, thanks to the investment. In a release, M&F Bank said it will use the funds to implement new technology and automation so that it can offer its customers additional products including free access its more than 13,000 ATM networks across America. It also said it will use the funds to create a stronger branch network and make capital more accessible to the communities it serves.

The bank’s CEO, James Sills in a statement said the bank is excited about the investments as MDIs have a crucial role to play in closing the current racial wealth gap. “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 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,” Sills said.

“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,” he added.

Founded in 1907 in North Carolina, M&F Bank is the second-oldest minority-owned bank in the United States. The bank had more than $309 million in assets, as of December 31, 2020. Its mission is to promote personal and community development by making capital accessible to small and medium-sized businesses in local communities.

Sills said the investments represent the “strength of the franchise, health and soundness of the Company and communities” they serve.