The holding company that owns First National Bank of Santa Fe has agreed to a merger that will make the company a wholly-owned subsidiary of El Paso-based Strategic Growth Bancorp Inc., which recently expanded operations into Albuquerque.
SGB also owns Bank of the Rio Grande, which is based in Las Cruces and opened an Albuquerque location this year.
Terms of the transaction were not disclosed. Regulatory approval of the merger is expected early next year.
First National Bank will continue to do business under its own name and will continue to operate its 11 locations in Santa Fe, Albuquerque, Los Alamos and Denver. All employees will keep their jobs, according to bank officials.
First National Bank president Gregory J. Ellena, who is also chairman of its holding company, New Mexico Banquest Corp., said the transaction will be transparent to First National’s 20,000 customers. Over time, the resources of Strategic Growth Bancorp and the economies of scale that come with the merger will allow the bank to offer more services, he said.
The transaction includes New Mexico Banquest’s insurance and financial management companies.
New Mexico Banquest is owned by 50 individuals and families and by its employees, through an employee stock ownership plan that was established in 1995, Ellena said.
According to Federal Deposit Insurance Corp. data, First National is better capitalized and more solvent than the average of all other New Mexico independent banks. Ellena described the transaction as “based on opportunity and not necessity. We’ve been profitable in every month through the entire recessionary and recovery period.”
He described the deal as “a highly voluntary and attractive transaction” for shareholders, employees and customers.
“In this business and at our size in particular, more scale is better,” Ellena said in an interview. “This allows us to do more things, like invest in new technology, hire new people and compete more effectively” with the large national banks.
Kenneth S. McCormick, Strategic Growth Bancorp managing director for New Mexico operations, said the acquisition furthers the SGB strategy of bringing collaborating banks under a single umbrella to improve service, create new products and share common costs and infrastructure for all of the banks in the SGB portfolio.
SBG is buying Mile High Banks of Longmont, Colo. All of SGB’s banks operate independently but cooperate with each other when appropriate, McCormick said.
First National Bank of Santa Fe was chartered in 1870. Its June filing with the Federal Deposit Insurance Corp. shows the bank has assets of $755 million, deposits of $672 million and profit of $3.2 million.