Merger Proposal: Credit Union Born at UCLA Hopes for Bay-Area Base
University CU plans to acquire Chabot FCU by the end of the year.
A small San Francisco Bay area credit union told members Thursday that its board will be seeking their vote on their proposal to be acquired by University Credit Union of Los Angeles.
If approved, Chabot Federal Credit Union of Dublin, Calif. ($73.9 million in assets, 1,653 members) said it expects it will become part of University Credit Union of Los Angeles ($920.1 million in assets, 44,131 members) by year’s end. It would bring University CU’s assets close to the $1 billion mark as it turns 70 years old this year.
Chabot FCU was formed in 1962 and is open to employees, students and alumni of Chabot College, Las Positas College, the Chabot Las Positas Community College District, the City of Hayward and several select employers in Dublin, Calif., 35 miles east of San Francisco.
Last year Chabot FCU’s net income fell 87% to $47,737, or 0.07% of average assets. In this year’s first half, it lost $31,289, or -0.09% ROA, compared with 0.17% ROA in the first half of 2020. Its net worth ratio was 14.67% on June 30, down from 15.99% a year earlier.
A news release from the two credit unions said Chabot FCU began searching for a prospective partner in 2020.
Chabot FCU President/CEO Christine Petro said University CU was chosen because of its dedication to members, its breadth of traditional and electronic services, and its historical success serving college communities.
“We hope to combine our resources with a credit union that mirrors our long history of helping people achieve their financial goals,” Petro said. “This proposed merger will allow us to maximize our efficiencies, enabling us to enhance products and delivery channels to our members, while retaining our entire team, our programs and services, and our existing location.”
Chabot FCU members can vote on the merger by Sept. 14.
The University Credit Union of Los Angeles has three locations in the Los Angeles area. Membership is open to all students, employees and employees of any university or school of higher learning in southern California, and any school in the University of California system.
The credit unions’ news release said the merger “is significant for its expansion of financial services and support to university and college campus communities across the state of California.”
University CU said it plans to use the Chabot FCU office as its northern California base, serving not only Chabot FCU members with ties to Chabot and Las Positas Colleges, but also University CU’s current members with ties to Saint Mary’s College, Santa Clara University and UC Davis.
“We are proud and excited to have CFCU join us in this marquis partnership,” University CU President/CEO Dr. David Tuyo II said. “The combined entity will enable our team to provide more accessibility to a suite of comprehensive financial services for all members, as we unite to ensure that university and college communities are fully supported in all areas of financial concern.”
University CU’s net income was $1.9 million in the first half of 2021, up 1.5% from the first half of 2020. ROA was 0.42% in this year’s first half, down 5 basis points from a year earlier. Its net worth ratio was 7.7% on June 30, down from 8.13% a year earlier.