Members of the financially troubled Safeway Los Angeles Federal Credit Union in Norwalk, Calif., decided this week to merge with the $746 million Xceed Financial Credit Union in El Segundo, Calif.
Of the 600 Safeway members who voted Tuesday, nearly 80% voted to approve the merger, which will go into effect Dec. 31 when Safeway LAFCU’s branch in Norwalk will become an Xceed Financial Center, Xceed Financial said.
The merger also was recently approved by NCUA. Both credit unions are chartered as workplace credit unions with membership open to employees of their Select Employer Group partners.
Twenty-one of Safeway’s 24 employees have been offered positions with Xceed, the credit union said. The remaining employees are planning to retire by year’s end.
Safeway LAFCU has been struggling financially over the past five years. The credit union has lost $6 million since 2008, according to financial reports filed with the NCUA. Records show the credit union’s loan income has dropped to $1.4 million in 2011 from $2.5 million in 2008. What’s more, Safeway’s total assets have declined from $65 million in 2008 to $55 million this year.
However, Xceed said in its merger announcement released Tuesday that “while Safeway LAFCU is financially sound, its Board of Directors had been searching for some time for a strategic partner, since greatly expanded regulatory requirements and technological changes have made the long term viability of the credit union increasingly difficult.”
“By combining forces, we will gain efficiencies that better position us to serve all of our members and meet the needs of employer groups,” said Safeway LAFCU’s president/CEO David Holmes, who will join Xceed Financial’s management team following the merger. “Partnering with Xceed provides an opportunity for Safeway LAFCU to preserve its SEG/workplace legacy while allowing our members to benefit from a much larger, comprehensive line-up of financial products and services.”
Teresa Y. Freeborn, Xceed Financial’s president/CEO said the merger is a perfect fit because both credit unions share a focus on serving SEGs.
“It’s also ideal since it will increase Xceed Financial’s membership by almost 20% and offer outstanding opportunities for us to grow by sharing our comprehensive range of financial products and services with these new members,” Freeborn said. Safeway LAFCU has 9,946 members, according to NCUA records.