Business
African American-owned Mechanics and Farmers Bank re-brands to M&F Bank
M&F is categorized as an African American bank because more than half of its shareholders are African American. Its 10-person board consists entirely of African Americans as well, but Sills said the bank plans to diversify its board as well as its customer base.
M&F owes about US$12 million to the U.S. Treasury stemming from federal stimulus money it received in 2009 under the Troubled Asset Relief Program, or TARP. But Sills said the bank hopes to raise new capital at the end of this year or the beginning of 2016 to repay that money.
The bank is currently paying 2 percent interest but the interest rate jumps to 9 percent in October 2018, “so it behooves us to pay that money back quickly,” Sills said.
Given that M&F’s total assets have remained flat in recent years, it needs to show investors that it has a solid growth strategy, Sills said. That strategy includes not only diversifying its customer base but also a recent expansion into home mortgages.
“The bank has traditionally not offered mortgages,” Sills said. “We have a very small portfolio of mortgages.”
Sills most recently was the state of Delaware’s chief information officer and secretary of the Department of Technology. He also was chief operating officer of First Tuskegee Bank, president and CEO of Memphis First Community Bank and executive vice president at MBNA America Bank.
“I view myself as a change agent,” he said. “I have done a turnaround of a bank. I have done a startup of a bank. I have worked in a bank that was growing very rapidly, I am bringing a couple different skills sets and experiences to this institution.”
Shares of M&F, which is thinly traded, closed Tuesday at US$5. The stock is up 5 percent this year.
