Optus Bank hasn't grown the way CEO Dominik Mjartan expected it to when he joined the company seven years ago. It's grown differently, and more rapidly, than anyone might have imagined.
The South Carolina-based bank, one of about 20 Black-owned banks in the country, was on "life support" in 2017, Mjartan said. Now, Optus has increased its assets by more than 1,000%, raised over $100 million of equity and chipped its way to a profitable business plan.
So Mjartan is stepping down.
"There have been so many moments… over the last year where I thought, 'This is the time,'" Mjartan said.
Seven years into a five-year plan, he felt comfortable enough with the amount of money the $600 million-asset bank was bringing in, along with its funding base, to step away from his day-to-day leadership role, though he will continue as vice chairman of the bank's board.
Mjartan, who is white, said he also wanted to make way for a pipeline of diverse talent the bank has hired in recent years.
Benita Lefft, who joined Optus in 2022 as chief operating officer,
"It was an inflection point maybe a year and a half ago," Mjartan said. "I thought, 'I could be in the way of further success.'"
Less than a decade ago, any success seemed a long way off.
When the financial crisis erupted in 2008, minority depository institutions were hit hard. The number of Black-owned banks in the U.S. has roughly been cut in half since the Great Recession — a time when the systemic disparities that impact the communities those banks serve were exacerbated.
Mjartan was tapped to rescue the bank by Chairman Paul Mitchell. At the time, Mitchell was keeping the bank going with a group of investors. It had lost some $12 million in nine years.
"Some would have walked away because [the bank] had so many non-performing assets. It didn't really make sense to put capital in it," Mjartan said. "They said, 'Look, this is not just an asset. This is not just a business or business value proposition. We can start a Black-owned bank cheaper than we can save this one.' But they were invested."
Mitchell and the investor group wanted to save the legacy of an almost-century-old bank and its nearly 250 Black shareholders, Mjartan said.
Before stepping up to head the bank, Mjartan, who immigrated to the U.S. from then-Czechoslovakia as a teenager in 1990, had been leading a community financial depository institution in Arkansas. When he joined Optus as CEO, he invested significant capital himself, becoming the third-largest shareholder.
In 2017, South Carolina Community Bank, as Optus was known at the time, was losing some $150,000 a month. It was hemorrhaging deposits, and at times it had non-performing loans that totaled four times its total capital. The bank had been hit with a consent order in 2010 that limited its lending window to $500,000 and capped the rates it could pay depositors.
Mjartan said when he arrived, he tried to trim costs by cutting off the coffee machine and paying for staff birthday cakes out of his own pocket. He quickly realized that some of his initial pitches to tackle the bank's withering capital, falling deposits and non-performing assets would be impossible to implement.
For example, Mjartan initially thought he could bring in equity and liquidity from the people Optus was trying to serve.
A common misconception about minority depository institutions is that they can function with the same business model as traditional community banks, said Nicole Elam, president and CEO of the National Bankers Association, which supports the sector.
"If you're sitting in a community that is [low- and moderate income] with persistent poverty, you're not going to be able to get the deposits that you need," Elam said. "You have to have a unique and innovative community banking model where you're going to big banks and big corporations — you're going to Wall Street — to get those deposits so you can bring them back and do lending."
Mjartan, who now serves with Elam on the board of National Bankers Association, said Optus quickly separated the liability and asset sides of its strategy. Its lending was and still is focused on historically underserved borrowers, who accounted for 97% of the bank's loans in 2023. But the
In 2017, Mjartan was tapping friends and family to deposit their funds at the bank, he recalled. He called people from his nationwide CDFI network to ask if they would sell him loans that were generating income. The bank's board took turns pumping in capital in tranches.
The Federal Deposit Insurance Corp. lifted its consent order in 2018, and the bank turned a profit for the first time in years.
Then, not so slowly, it boomed.
Starting in 2020, MDIs, including Black-owned banks, started getting more opportunities from pandemic-related government relief programs. There was also increasing corporate investment in diversity and inclusion following the murder of George Floyd, Elam said.
"Those two big things really helped [MDI] banks address the historic undercapitalization that would have taken many of them out," Elam said. "When you look historically around when bank closures are happening, particularly amongst minority and Black banks, those closures have been around an economic downturn. This was the first time that you saw… .an infusion of capital into our banks."
Since the start of the Covid-19 pandemic, Optus has reeled in hundreds of millions in deposits from
Optus went from 500 customers, mostly in South Carolina, to 2,000 across the country amid the pandemic. Now, it has more than 5,000.
Black-owned banks have seen massive growth in the last four years, according to FDIC data, but Optus has expanded at an even steeper rate than most of its peers under Mjartan's leadership.
"He has definitely experienced explosive growth that outpaces the sector," Elam said. "And I think they've been able to do it because of his hyperfocus on capital and his hyperfocus on getting deposits from outside."
Mjartan said one of his proudest recent moments came when the bank was able to pay dividends for the first time since 2006, totaling nearly $10 million. Optus' capital was at half that level when he arrived in 2017.
As Mjartan transitions away from spearheading Optus, he said his work helping MDIs isn't done. He'll stay involved with the bank, and in South Carolina, but he also wants to eventually go bigger.
"I would like to help other banks refine their mission foothold, like Optus Bank did, and really scale them exponentially," Mjartan said. "My bucket-list item, or early-onset midlife crisis, instead of buying a sports car, I'd like to probably buy another bank. ... Find that next platform for that change and really build a bank for America that serves all the people."
