Roswell-based Pioneer Bank has agreed to sell three of its branches in El Paso, Texas, to a relative newcomer to that market which is looking to grow.
Western Heritage Bank, chartered in Las Cruces and having about $114.8 million in assets, will acquire the branches and about $35 million in deposits from Pioneer, while the two banking companies will partner in loans in Texas.
The transaction, expected to be completed in June pending regulatory approval, will enable Pioneer to concentrate its resources in southern New Mexico, bank officers announced.
“We made a decision to focus our financial and human resources on providing superior banking services in southern New Mexico, and that was the primary reason for selling the three branches in El Paso,” said Pioneer Chief Executive Officer Stephen Puntch.
He and Christopher Palmer, president of the bank, said that Pioneer initially had sought a buyer for one of the branches but that discussions eventually turned into selling all of the El Paso branches to Western Heritage.
Pioneer has been making mortgage loans in El Paso since 1978, they said, and opened a branch in the Texas city in 2006. Two other branches were started in 2012.
While selling its El Paso deposits, Pioneer plans to act as a partner with Western Heritage in lending operations.
“They are buying the loans from us,” explained Palmer, “but, simultaneously with that, they will sell back a piece of those to us so that our balances of loans are going to be $30 million at the end of the transaction. Right now, it is about $37 million. So we’ll continue to be invested in El Paso, but Western Heritage will be the lead bank and the face to the customer, and we will just share in those lending opportunities.”
Western Heritage Chief Executive Officer Greg Cory said that the arrangement will allow Pioneer to continue its lending relationships.
“They have some existing loan relationships that they will still want to invest in,” Cory said. “Banks routinely, when they have large commercial loan relationships, will participate with other banks. That way the banks can lend more money than the banks’ legal lending limits.”
Cory said Western Heritage, founded in 1931 and with New Mexico locations in Las Cruces and Deming, has been operating in El Paso since September.
“Western Heritage believes there is great growth and opportunity in the El Paso marketplace,” Cory said, “and we are looking forward to taking advantage of this acquisition in order to maximize that.”
Cory added that Western Heritage is committed to keeping the Pioneer branches open, and officers from both companies said that all 30 Pioneer employees in El Paso, which includes tellers, mortgage loan processors and a market president, will be offered positions with Western Heritage.
“We are offering all of their employees positions with our bank,” confirmed Cory. “That was part of our contract negotiations.”
Cory described Western Heritage as a “true community bank,” which he said is similar to Pioneer, and executives from both banking companies said the expectation is that the transition for customers will be smooth.
“I don’t think the customers even in El Paso will perceive any difference in service,” said Puntch. “It will just be a different name on the branches.”
Pioneer Bank was founded in 1901 and has $817.6 million in assets.
Besides locations in Roswell, Pioneer also operates branches in Alamogordo, Hobbs, Carlsbad, Ruidoso and Las Cruces and has mortgage operations in Glenwood, Colorado, and Midland, Texas.
Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 310, or at email@example.com.