Schools Financial Credit Union in Sacramento, Calif., will merge into SchoolsFirst Federal Credit Union in Santa Ana, Calif.
The combined organization will have roughly $17 billion in assets, more than 60 branches, and over 300 credit union ATMs in California and 30,000 fee-free CO-OP ATMs nationwide. Bill Cheney, president and CEO of SchoolsFirst, said that merger talks began after he and Tim Marriott, CEO of Schools Financial, exchanged ideas each had for expanding their respective services in the Golden State.
Schools Financial serves all of California through a state charter while SchoolsFirst has a trade charter.
“We were both looking at how to expand and serve educators throughout California,” Marriott said. “After hearing Bill’s plan, I thought it should be discussed if we could serve educators better together. We saw clear benefits for our members, and by combining we can carry out that vision of providing financial benefits along with offering our members more convenience.”
The deal is the latest strategic merger that has brought two large credit unions together. Inspirus Credit Union in Tukwila, Wash., and Gesa Credit Union in Richland, Wash., announced in December they were
“The mindset is, ‘We know we can’t outspend Chase or B of A, but as a combined organization we can differentiate and be more competitive in our targeted areas,'"said Hui, whose firm works with the credit unions involved in this merger and both Gesa and Inspirus.
Hui noted in the past 18 months several credit unions have been buying banks, which he said along with the Gesa-Inspirus and SchoolsFirst-Schools Financial mergers indicate people are “thinking outside the box.”
“Credit unions are looking at other ways to develop, and this opens the door for boards to consider all options,” Hui said. “They don’t have to be like banks, but they can use some of the same tools banks use to be future-ready and more relevant to their members.”
The $15.2 billion-asset SchoolsFirst was founded in 1934 as Orange County Teachers Credit Union to serve school employees and their families. It currently serves more than 860,000 members via 50 branches throughout Southern California. It is the largest credit union in California and the largest in the country serving the educational community.
The $1.9 billion-asset Schools Financial Credit Union was formed in 1933. Today, it has more than 150,000 members through its 11 branches in the Sacramento area.
Cheney will lead the combined credit union, according to a press release on Tuesday that announced the deal. Marriott told Credit Union Journal that he will work with Cheney on the executive leadership team in a role that will be defined “in the near future.”
The next steps will be to obtain approvals from federal and state regulators, according to Cheney and Marriott.
“SchoolsFirst will take the lead on the process with NCUA,” Cheney said. “Schools Financial has started the process with the Department of Business Oversight, which is the regulator in California.”
After approvals are secured, a vote by members of Schools Financial will be scheduled. Marriott said he expects the Schools Financial membership to vote in favor of the merger.
If all approvals are received, Cheney noted both CUs use Symitar for their core processing, which will make the technical side of combining the two organizations go faster.
Cheney said the hope is to complete the merger this year.
“We have a plan to do this, but given the new
