New Mexico's first bank, the First National Bank of Santa Fe, was organized in 1870. After the turn of the century, banking establishments expanded rapidly in the state, mainly because of growth in the livestock industry. In 2002, there were 61 insured banks headquartered in New Mexico, with total assets of $18 billion. Thirty-seven of these banks were state-chartered.
New Mexico's banks had low funding costs in 2002. Residential real estate was showing signs of stress that year, however, as home foreclosure rates were high. Despite the low nationwide commercial real estate (CRE) sector, insured banks in New Mexico had their highest level of CRE exposure on record in 2002. That year, New Mexico's per capita bankruptcy rates were at a 30-year high.