The $1.5 billion Arizona Federal Credit Union is taking another step toward retrenchment next year by closing eight Phoenix area branches, including in-store branches located in Wal-Mart facilities.
The state's second largest CU, troubled all year by large loan losses and on an NCUA watch list, said it will shutter the branches deemed less than profitable in a move impacting 50 employees.
The CU did not state how much it would save by the action described as regretful "but an appropriate step to ensure the long-term success of our credit union."
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The Jan. 30 closures, said Ron Westad, president/CEO, "continues our efforts to consolidate our branch
resources to meet the economic reality we all face, and helps to position us for future success."
Arizona Federal, which posted a $42 million net loss for the first nine months after losing $115 million in 2008, has struggled during 2009 to right its balance sheet by cutting payroll and taking other steps to reduce expenses.
Of the branches to close, six are in Wal-Marts with one in a Fry's grocery store and all "have limited service capacity," said a statement.
"The intention was to eventually replace them with free-standing facilities, but given the current
market conditions the credit union is no longer in a position to pursue that expansion," said the statement. "The eighth location was selected due to an expiring lease."
All employees displaced by the closures will be relocated to other branches or departments
within the organization, said the CU.
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