Rio Bank will grow by about $200 million in assets when it merges with Elsa State Bank & Trust, an agreement likely to be finalized in August.
The board of directors of both Rio and Elsa State banks unanimously approved the merger, according to a news release announcing the proposition.
The transaction still has to clear regulatory hurdles, but the deal is likely to close in mid-to-late August, according to Rio Bank Executive Vice President Craig Lewis.
Talks about merging began in 2015, according to Lewis, but the boards officially committed to signing a letter of intent on Wednesday.
Currently, Rio Bank has about $350 million in assets, and with the acquisition is expected to grow to $550 million.
The Elsa-based bank also owns branches in Edinburg, Weslaco, Edcouch, Rio Grande City and Roma with ATMs in Mercedes, San Carlos and San Isidro.
“We’re both in the Rio Grande Valley,” Lewis said about both banks, “And all of their locations are where we are not.”
Rio Bank runs nine branches located in McAllen, Brownsville, Weslaco, Harlingen, San Juan and Palmview, but none in Starr County or in the Delta area. Rio Bank will own 14 branches once the transaction is finalized.
“All of the (new) locations work out really good,” Lewis said.
Rio Bank belongs to the Allpoints ATM network, which allows customers to withdraw cash without paying surcharges at several locations throughout the country including at Walgreens and Costco.
Rio Bank also stands to benefit from Elsa State Bank’s agricultural lending program, according to Lewis, who said the banks share a similar community banking philosophy and will benefit one another.
“Our customers and employees will like the idea of merging with another locally owned bank in the Valley,” Elsa State Bank Chairman Glenn Bell said. “Rio shares the same values and culture as Elsa State Bank & Trust Company.”
The merger will result in approximately $350 million in loans and $477 million in deposits for the combined company, according to the news release.
Once approved, “money is paid to Elsa State Bank shareholders, and the two banks become one under Rio Bank,” Lewis said.
Rio Bank aims to retain Elsa State Bank employees, Lewis said.
“We plan on continuing the same quality customer service that they’re used to,” Lewis said.