WestStar Bank has agreed to acquire Albuquerque-based Southwest Capital Bank in a deal that will grow the El Paso, Texas-based buyer’s footprint from one New Mexico branch to seven.
The transaction, set to close in the first quarter of 2027, will create a lender with $3.8 billion in assets, roughly $3.3 billion in deposits and $2.9 billion in loans, the banks said Wednesday. Financial terms of the deal were not disclosed.
In a statement, WestStar’s executive chair, Rick Francis, noted the banks have “remarkably similar values.”
“Both institutions were shaped by generations of bankers, business owners and families who believed their communities deserved a bank that understood them,” 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 deal also gives Southwest Capital a landing spot after a 2024 proposed acquisition by U.S. Eagle Federal Credit Union collapsed.
“Southwest Capital Bank is very profitable. [U.S. Eagle is] not. They’re having trouble,” the New Mexico bank’s CEO, Chez Steel, told the Albuquerque Journal in July 2025.
U.S. Eagle posted a $20.5 million loss during last year’s second quarter, Credit Union Times reported.
“The business lending portfolio is not performing as we’d hoped it would, as impacted by the economic after-effects of the [COVID-19] pandemic,” U.S. Eagle’s then-CEO, Marsha Majors, told the publication. Majors retired in January.
Majors told Credit Union Times in July 2025 the Southwest Capital acquisition was canceled after it failed to receive regulatory approval.
Under the tie-up with WestStar, Steel will become the combined bank’s New Mexico president.
“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 Wednesday. “We found that partner in WestStar.”
Until now, WestStar counted just one branch in New Mexico – in Las Cruces. Buying Southwest Capital will give the Texas bank a foothold in the state’s largest city, Albuquerque, as well as a handful of branches farther north. The deal will also boost WestStar’s asset total by roughly $500 million.
The transaction “is expected to preserve local leadership and decision making,” the banks said.
“Our people continue to be our most valuable asset,” Francis said. “We are excited about what we can build together and what it can mean for the future of community banking across the region.”
The combination will give Southwest Capital access to WestStar’s “expanded capabilities in commercial banking, treasury management, wealth management, title services [and] digital banking,” the banks said, noting that “clients and team members will receive information well in advance of any changes that affect them.”
