Meeting the state's economic doldrums head-on, the $460 million First Credit Union is closing five Arizona branches next month in a move reflecting both declining activity and a shift in consumer preference for online services.
First CU, located in Chandler, a south Phoenix suburb, numbers among large CUs in the state that continue to struggle with large loan losses, high delinquencies and unemployment among members. The CU lost $13.3 million last year on top of $11.7 million in 2008.
"We felt now was a good time to go through a retooling and a consolidation considering changes taking place in the market with online tellers, ATMs, mobile branching and shared branching taking on new importance," explained Lori Gallegos, executive vice president/chief operating officer.
Branches to be closed March 17 include one each in Flagstaff and Tucson and three more in metro Phoenix. They include one each in central Phoenix, Mesa and Scottsdale.
All of the branches she said have seen lower member usage making it necessary to reallocate resources. She said the CU is open to any other credit unions interested in buying the properties.
While the Chandler area has a diversified economic base, problems continued during 2009 though "there are no huge pockets" of chargeoffs, she said.
First CU serves a high-tech member base with employees of Motorola and Intel plants. Closing of the five branches will leave First CU with eight branches in Arizona.