MCALLEN, RGV – Rio Financial Services, Inc., the parent company of Rio Bank, is purchasing Elsa State Bank & Trust Company, bank officials have confirmed.

Both are local banks. Rio Bank has eight locations in Hidalgo and Cameron counties and is headquartered in McAllen. Its president and CEO is Ford Sasser. Elsa State Bank has six locations in Starr and Hidalgo counties and is headquartered in Rio Grande City. Its president and CEO is Cesar Gonzalez.

Once the merger is complete Elsa State Bank will be known as Rio Bank. Assets of the two banks combined are roughly $550 million.

Attorney Marcus Barrera, a board member of Rio Bank, announced the news at a McAllen Economic Development Corporation meeting on Thursday. “I would just like to announce that Rio Bank is purchasing Elsa State Bank and barring any regulatory issues it should be completed in the next 60 to 90 days,” Barrera said. There was much applause.

Craig Lewis, executive vice president and cashier at Rio Bank, confirmed the merger in an exclusive interview with the Rio Grande Guardian.

“This deal has been negotiated back and forth over a period of time. Yesterday, both boards agreed on the deal, with a letter of intent and all that good stuff. We signed off on it,” Lewis said.

“It will take a few weeks with the attorneys and the investment banker putting in a format. The regulators will come in, it is about a 60-day process for both banks.”

Lewis said he did not foresee any problems with bank regulators.

“Both of us have really good bank exams, both of us are financially making money, doing well, so we see no issues at all and we are hoping it will close mid- to late-August. It means we will merge as one bank. We would immediately do some things, such as change the name on their (Elsa State Bank) signs. The actual merging of the two banks together, you are looking, potentially at the end of February (2019), when we would be on the same system and doing that type of stuff.”

Lewis pointed out that banks get regulated by different agencies.

“In our case we get regulated by the state banking commission and also the FDIC. Banks cannot publicly publish their bank ratings because obviously, a bank, if it was not in good shape would bring some public concern. I can assure you that both of our banks have good ratings. I cannot specifically tell you what but that should not be any issue in the process of approving this transaction.”

Asked if the two banks are local institutions, Lewis said: Absolutely: “We have eight locations and they have six locations. Theirs are in Starr and Hidalgo counties, Ours are in Hidalgo and Cameron counties.  That is the beauty of the deal – all the banks are all down here, all in the same market.”

Lewis said Elsa State Bank will change its name to Rio Bank the day after the merger is approved and the transition is completed. “Our bank assets are about $350 million, theirs are about $200 million. So, asset size, when we merge the two banks, we will be about $550 million.”

Following the close of the transaction, the combined market presence is expected to total approximately $340 million in loans, approximately $477 million in deposits, and approximately $550 million in total assets, with 14 full-service branches from Brownsville to Roma, the two banks stated, in a news release.

“We are excited to be expanding our footprint in the Valley,” said Sasser, president of Rio Bank. “Elsa State Bank & Trust has offices in Rio Grande City, Roma, Edinburg, and the Edcouch-Elsa area. These markets we have not been serving in the past but look forward to becoming a part of these communities.”

Glenn Bell, chairman of Elsa State Bank & Trust, said: “Our customers and employees will like the idea of merging with another locally-owned bank in the Valley. Rio shares the same values and culture as Elsa State Bank & Trust Company.”

SunTrust Robinson Humphrey acted as financial adviser to Rio Bank, and the law firm of Langley & Banack, Inc., acted as legal adviser. Commerce Street Capital, LLC, acted as financial adviser to Elsa, and the law firm of Fenimore, Kay, Harrison & Ford, LLP acted as its legal adviser.

Here is Rio Bank’s official history:

Rio Bank opened its doors for business in February of 1985. It began as a retail oriented bank primarily catering to consumers for both deposit and loan business. In 1995, the bank opened its second banking center in North McAllen. The original ownership and management has changed since that time as well as the focus and direction of the bank. In late April of 1999, the bank had a change in management.

Ford Sasser

Ford Sasser, President and CEO, came to the bank in late April of 1999. Mr. Sasser made significant changes in lending personnel while at the same time outlined a new vision and direction for the bank. Rio Bank has become a more commercial oriented bank. New products and services continue to be introduced.

In 2002, the bank opened two new banking centers. The first was in San Juan and the second in Palmview. Because of the change in strategy that began in 1999, coupled with the additional offices, the bank has seen significant growth in its total assets.

In 2005, the bank opened a new banking center in Brownsville and in 2009 opened a new banking center in Weslaco.

Rio Bank is located in communities along the Mexican border in deep South Texas. Many of the bank’s customers are from Mexico. The McAllen, Mission, Edinburg Metropolitan Statistical Area (MSA) is one of the fastest growing MSA in the United States, and the Brownsville economy is also fast growing.

Rio Bank thanks you for the opportunity to tell our story. We are excited about what is going on at our bank and welcome the opportunity for you to become part of our growing family.

The bank has eight locations. The main office, and original location, is on 23rd Street, just north of Pecan in McAllen. The second location is at Nolana and McColl in North East McAllen. The third location is in San Juan on Hwy 495 between I Road and Raul Longoria Road. The fourth location is in Palmview on Bentsen Palm Drive and Hwy 495. The fifth location is in Brownsville at Old Highway 77. The sixth location is in South McAllen on Jackson and McColl and the seventh location is in Weslaco at Westgate and Pike. The eighth location is in Harlingen at Stuart Place Rd and Expressway 83.

Here is Elsa State Bank’s bio:

Cesar Gonzalez

A strong part of the community for over 70 years, the ownership of Elsa State Bank has been passed down the same family through generations. Initially, we were primarily focused on promoting the livelihoods of farmers through agricultural loans. As the needs of the community evolved, we began offering additional products and services for businesses and consumers. Yet, Elsa State Bank still operates with the same timeless dedication to customer service. This approach has allowed us to be successful while creating long-lasting ties to the people and businesses we serve.

Editor’s Note: The original story, published May 17, 2018, has been updated with information from a joint news release issued by Rio Bank and Elsa State Bank & Trust Company.