WestStar buys Southwest Capital, building $3.8B New Mexico bank
What's the deal? El Paso, Texas-based WestStar Bank has agreed to acquire Albuquerque-based Southwest Capital BankDealroom has a profile for this one. Try Dealroom →, expanding its New Mexico footprint from one branch to seven. The combined lender will hold $3.8 billion in assets, roughly $3.3 billion in deposits, and $2.9 billion in loans. Financial terms were not disclosed.
Why now? The deal gives Southwest Capital a landing spot after a 2024 proposed acquisition by U.S. Eagle Federal Credit UnionDealroom has a profile for this one. Try Dealroom → collapsed. That transaction was canceled after failing to win regulatory approval, U.S. Eagle's then-chief executive officer, Marsha Majors, told Credit Union TimesDealroom has a profile for this one. Try Dealroom → in July 2025. U.S. Eagle posted a $20.5 million loss in last year's second quarter.
What changes? Until now, WestStar had just one New Mexico branch, in Las Cruces. Buying Southwest Capital gives it a foothold in Albuquerque, the state's largest city, plus branches farther north — adding roughly $500 million in assets. Southwest Capital chief executive officer Chez Steel will become the combined bank's New Mexico president.
What's the endgame? WestStar's executive chair, Rick Francis, said the two banks share "remarkably similar values" and a belief that "locally guided community banks continue to play a vital role in helping businesses, families and communities thrive." The banks said the deal is expected to preserve local leadership and decision-making.
Steel said the priority was finding a partner that "respected our history, shared our values and was committed to relationship banking." The transaction is set to close in the first quarter of 2027.
The signal: The tie-up reflects continued consolidation among US community banks, with well-run regional lenders absorbing local rivals to expand across state lines — sometimes rescuing targets whose earlier deals fell through.
Image credit: Mr.TinDC
