Credit Union of Southern California and LA Financial Credit Union have announced a merger that would result in an institution with roughly $4 billion of assets and nearly 180,000 members.

Members of the $556 million-asset LA Financial CU, which is headquartered in Arcadia, will vote on the proposed merger by Jan. 22.

The credit unions did not say when they expect the deal to close nor who would lead the combined institution.

In a post on its website, LA Financial told its members the deal provides an opportunity for it to “preserve its service legacy” while allowing its members to benefit from a larger, more comprehensive portfolio of financial products and services. Members would also gain access to 21 additional branches, the credit union said.

The combined organization will keep the Credit Union of Southern California name. LA Financial’s Lake Havasu City branch will be named Havasu Community Credit Union, a division of CU SoCal.

The $3.4 billion-asset CU of SoCal in Anaheim has completed a few mergers in recent years including, most recently, its deal with Pacific Transportation Federal Credit Union last year.

The deal is the latest in a string of transactions announced in 2024 involving two large credit unions.

Among the most notable was the $12 billion-asset Digital Federal Credit Union and the $16.7 billion-asset First Tech Federal Credit Union unveiling plans to combine in a deal that is believed to be the largest credit union merger ever announced.

Peter Duffy, a nationally-known credit union advisor, said that – as he predicted five years ago –  the average asset size of a merged credit union has begun to accelerate as large credit unions turn to peers.

That is driven by various market realities and will continue into 2025 and beyond, Duffy told Tyfone.

Among the drivers are the fact that $1 billion is not close to the economy of scale enjoyed by other market participants including banks and fintechs, he said.

“This reality allows those lenders with scale to match or beat market on what they pay on deposits to customers and members while still generating a materially better ROA,” Duffy said. “The income advantage is used to fund technology, branches, marketing and other consumer-centric efforts.”

Credit Union of Southern California earned roughly $29.6 million through the third quarter of 2024, a 25% increase from a year earlier, according to call report data from the National Credit Union Administration.

Founded in 1954 as Whittier Area Schools Federal Credit Union, CU SoCal is open to anyone who lives, works, worships, or attends school in Los Angeles, Orange, Riverside and San Bernardino counties.

LA Financial Credit Union earned $572,000 through the third quarter of 2024, a 54% decrease compared to a year earlier.

The NCUA approved 49 mergers in the third quarter, up from 46 consolidations in the second quarter and 26 mergers in Q1, according to the agency’s Merger Activity and Insurance Report.

“Your trust and loyalty brought us to this significant opportunity, which we approach with humility and excitement. With strengthened resources, we aim to serve you even better today and well into the future with this partnership.”

 – Gail LeGros
Chairperson
LA Financial CU