How 2020 turned into a record growth year for Durham's Black-owned M&F Bank

  • In Business
  • 2021-03-27 12:00:00Z
  • By Raleigh News and Observer

George Floyd's death last year led to a national reckoning about the role racial discrimination plays in the U.S. It also catalyzed a burgeoning movement to invest in Black institutions.

The force of that movement led to a serious transfer of money, from hundreds of millions of dollars being donated to Historically Black Colleges and Universities to small, Black-owned businesses selling out their inventory in a matter of days.

One of those beneficiaries was Durham-based M&F Bank, the second-oldest Black-owned bank in the country.

"Believe it or not, 2020 was our best year from an asset growth standpoint," M&F Bank CEO James Sills said in an interview.

More people decided to open up accounts at the bank, Sills said. Businesses transferred millions of dollars into the bank, and the country's four largest banks all decided to invest in M&F as part of a larger movement to support minority financial institutions.

All together, Bank of America, Wells Fargo, Citibank and JPMorgan Chase invested $18 million into M&F Bank, in exchange for shares of the company. M&F says the investment is structured in a way that maintains its Minority Depository Institutions status and ensures the company's existing shareholders still own a majority of the bank.

That infusion of capital - along with a large increase in deposits - took the small bank's total assets to more than $309 million in 2020.

The News & Observer talked over the phone with Sills about the past year and how it will take advantage of its growth.

Editor's Note: This conversation has been edited and condensed for space and clarity.

Q. What does the investments from Bank of America, Wells Fargo, Citibank and JPMorgan Chase mean for M&F?

Sills: It's very significant to have the four largest banks invest in a minority depository institution. We're the only institution at the moment that has received investments from the four largest banks. So that's a testament to the strength of our bank, the health of the bank, and the soundness of the institution.

We need to develop these types of strategic partnerships to really better serve the community, because these banks have some unbelievable resources that they're also willing to share with us. So it's actually going to position our bank to be a better bank over time. One example: Wells Fargo is allowing all of our customers to use their ATMs nationwide.

James Sill, CEO of M&F Bank
James Sill, CEO of M&F Bank  

Q. What investments do you plan to make with the money?

Sills: A lot of the banks, when they've completed their due diligence, they asked the question, "What do you plan to do with the money?" We've told them that we're planning to invest in technology and automation.

So we plan to invest in technology that would help us make our lending operation more efficient, integrate more digital capabilities, so we can process online applications without a lot of human intervention and more volume, so we can better serve the community and just be faster.

We also want to refurbish our branches. If you ever went into our branch in downtown Durham, it's been completely renovated. I want to do the same thing with all of our branch locations.

But the greatest thing that we want to do, is we want to provide more capital to businesses out in the communities that we serve.

M&F Bank has branch locations in five cities across the state, including two in Durham. The branch pictured is located on Durham-Chapel Hill Boulevard in Durham.
M&F Bank has branch locations in five cities across the state, including two in Durham. The branch pictured is located on Durham-Chapel Hill Boulevard in Durham.  

Q. The past year was incredibly trying, but one thing that stood out in the wake of George Floyd's death was that more people wanted to support Black institutions. So even though it was a terrible situation, did it help bring more interest to M&F?

Sills: Even though we went through all the social unrest and the pandemic and the political campaign last year, the bank actually had a very good year. Our Total Assets increased by 16% or by $44 million. Our total loans went up by 3%, and our net income went up by 5%. It was actually a very good year, even though it was a really challenging year for our customers in all the communities that we serve.

But we're riding a wave of momentum now, and it's exhilarating that all of these companies - local companies, nonprofits, national corporations - want to have a relationship with the local bank. So our mission and all that we're doing is resonating with people out in the community and consumers and businesses. They're saying, by putting in a deposit into M&F Bank, I see how those deposits are being leveraged into loans or access to capital to small- and medium-sized businesses.

Q. You've said in the past that M&F Bank has an age problem, and that it has struggled to attract millennials as customers. Did that change at all last year?

Sills: We opened up approximately 2,700 accounts last year. And it was from all age ranges. But one of the statistics that I'm really proud to tell is about 600 to 650 of those accounts were from small- and medium-sized businesses, and they are a lot younger than some of our other consumers.

Q. It was well documented that minority firms had a hard time accessing Paycheck Protection Program loans during the pandemic, especially at larger banks. Was M&F able to help many businesses through that program?

Sills: Our participation in the PPP program really resonated with a lot of different members of the community. We made last year about $16 million in PPP loans. We saved about 1,400 jobs and we made those loans in 16 different cities in North Carolina.

When the PPP program was announced, we were getting inundated with all kinds of calls from customers, but also non-customers throughout the state. And we were picking up the phone.

A lot of the other larger institutions, their process was more online because of volume, and there's nothing wrong with that. But people in general, especially small businesses that did not have a bookkeeper or CPA, they really needed some hand-holding to get them through the process, and that's what we were able to provide.

Q. You work with many minority-owned businesses. How are your customers faring during the pandemic?

Sills: We did see a number of businesses have reduced revenue and temporarily shutter their business, and generally speaking they have not yet recovered. They're really trying to work with a bank like ours to figure out, how do we recover once we're back to normal. How do we get those earnings or that revenue back to where it was prior to the pandemic? We did work with a lot of borrowers. But, generally speaking, they were still paying us in accordance with the terms of their note.

Nationwide, there's a statistic out there that 40% of minority businesses have either closed or are temporary closed at the moment. I would say most of our customers are more temporarily set back than permanently.

Q. The economy just received a huge fiscal stimulus from the federal government and the vaccine roll out seems to be picking up speed. Do you expect the economy to have a strong recovery in the coming months?

Sills: I am cautiously optimistic. I think you'll see the economy pick up in the third and fourth quarter of this year.

Q. How can M&F be part of that recovery?

Sills: We're in the loan business, and we want to make good quality loans to everybody in the community. There is a lot of hand-holding that we have to do. We will ask them similar questions that you are asking me. How are you positioning your business in 2021? What are you expecting to happen for the latter part of the year? You really want to sit down with that borrower to kind of figure out what's going on.

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to


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