Texas bank looks to grow in NM by buying Albuquerque lender

• Key insight: By acquiring Southwest Capital, WestStar is poised to expand its footprint in New Mexico from one branch to seven.
• Supporting data: The combined bank will have about $3.8 billion in assets.
• Expert quote: "We are excited about what we can build together and what it can mean for the future of community banking across the region." — WestStar CEO L. Frederick "Rick" Francis

Few things are more American than heading west for new opportunities, and that's exactly what a community bank in Texas is doing.

WestStar Bank, an El Paso-based bank with $3.3 billion of assets, has reached a deal to acquire the $500 million-asset Southwest Capital Bank in Albuquerque, New Mexico. 

The merger will significantly grow WestStar's footprint. The bank currently has 13 branches in Texas, but only one in New Mexico. By acquiring Southwest Capital, it stands to gain six new locations in the Land of Enchantment.

"We are excited about what we can build together and what it can mean for the future of community banking across the region," WestStar CEO L. Frederick "Rick" Francis said in a statement.

The two lenders did not disclose the financial terms of the deal. Assuming regulators and shareholders give the green light, the merger is expected to close in the first quarter of 2027.

The combined bank, which will operate under the WestStar name, will have about $3.8 billion of assets, $2.9 billion of loans and $3.3 billion of deposits.

For customers at both lenders, WestStar said, things will remain "business as usual." The Texas bank said it plans to leave Southwest Capital's managers in place, in order to "preserve local leadership and decision making."

"We share remarkably similar values," Francis said of the two lenders. "Both institutions were shaped by generations of bankers, business owners and families who believed their communities deserved a bank that understood them."

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Both banks have deep roots in their states. Southwest Capital — originally the Las Vegas Savings Bank — was founded in Las Vegas, New Mexico, in 1890. WestStar traces its origins back to the First National Bank of Fabens, which began in Fabens, Texas, in 1920.

"That shared history and approach to banking made Southwest Capital Bank a natural fit for WestStar," Francis said. "Just as important, we share a vision for the future and a belief that locally guided community banks continue to play a vital role in helping businesses, families and communities thrive."

The proposed merger would be only the second in WestStar's history. The first was in 2016, when the bank acquired First National Bank, also based in El Paso.

Southwest Capital's CEO, Chez Steel, reflected on his bank's almost 136-year history as he celebrated the beginning of its next chapter.

"As we considered how best to position our clients, team members and communities for the future, it was important to find a partner that respected our history, shared our values and was committed to relationship banking," Steel said in a statement. "We found that partner in WestStar."

Steel is slated to continue working at the combined bank, serving as its New Mexico market president.

The WestStar-Southwest deal is not the only bank merger deal in the region this month. Earlier in September, First National Bank of Omaha announced that it was acquiring the Denver-based InBankshares, which has four branches in New Mexico. That same week, Oklahoma's Bank7 said its bid to acquire a controlling stake in Santa Fe-based Century Financial Services had prevailed.