Texas State Bankshares in Harlingen has agreed to buy Border Capital Group in McAllen in a merger of South Texas lenders.
The $162 million-asset Border Capital Bank will merge into Texas State's bank subsidiary, the $175 million-asset Texas Regional Bank, the companies announced Thursday. The sale price was not disclosed.
Border Capital Chairman Mark Richards will join the Texas State board of directors following the merger. It is expected to close in the fourth quarter, pending regulatory approvals.
Both banks have four branches in the Rio Grande area.
"This merger will build on the momentum of Texas Regional Bank while blending the trust services and operational efficiencies of Border Capital Bank," said Michael Scaief, Texas Regional Bank's chairman, in the news release.
Texas Regional Bank began operations in 2010 when an investment group acquired the $18 million-asset Falfurrias State Bank. The bank has since moved its headquarters from Falfurrias to Harlingen and added branches in Brownsville and McAllen.
Last month, the Federal Reserve Board terminated a written agreement with Border Capital that had required the bank to raise its capital levels. Border had a Tier 1 leverage ratio of 14.28% and total risk-based capital of 21.48% as of March 31, according to the Federal Deposit Insurance Corp.
Following the merger, the combined banks "will have one of the strongest capital ratios of any bank operating in the Rio Grande Valley and will provide customers with increased credit capacity and more locations and services," said Richards in the release.