SchoolsFirst bets on branches as others retreat.
California’s largest credit union is opening seven new locations, underscoring a growing belief that physical branches still matter even as banking moves increasingly online.
For years, the banking industry largely agreed on one thing: the future would be digital. Mobile apps would replace routine branch visits, online account opening would reduce the need for face-to-face interactions, and physical locations would gradually fade into irrelevance.
SchoolsFirst Federal Credit Union appears to be making a different calculation.
The Tustin, Calif.-based institution, the largest credit union in California and the third-largest in the United States, announced this week that it is opening seven new branches across the state, expanding its footprint at a time when many financial institutions continue to reassess the role of physical banking locations.
The expansion includes newly opened branches in Burbank, Elk Grove, Ventura, Northridge and the Mid-City area of Los Angeles. Additional locations are scheduled to open later this year in Monrovia and Chula Vista.
The move will bring SchoolsFirst’s branch network to 73 locations statewide.
“Our focus is simple: serve school employees and their families well,” Jose Lara, the credit union’s president, said in a statement. “Our branches give members a place to get guidance from people who understand the financial realities school employees face, right in their own communities.”
The announcement comes as SchoolsFirst continues to grow. The credit union reported first-quarter earnings of $71.8 million, up from $44.7 million during the same period a year earlier, according to NCUA data. It serves nearly 1.6 million members and manages $36.7 billion in assets.
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Founded in 1934 by 126 school employees, SchoolsFirst has grown into one of the largest financial cooperatives in the country. Only Navy Federal Credit Union and State Employees’ Credit Union in North Carolina hold more assets among U.S. credit unions.
The branch expansion spans some of California’s largest and fastest-growing population centers, including the greater Los Angeles area, the Sacramento region, Ventura County and San Diego County. Together, the locations reflect the broad geographic reach of the school employees and families the institution serves.
While digital banking remains central to the industry, SchoolsFirst’s investment highlights a trend that has emerged in recent years: branches are not disappearing as quickly as many predicted.
The early wave of branch closures was driven by the rapid adoption of smartphones and online banking tools. Consumers increasingly deposited checks remotely, transferred funds electronically and paid bills through mobile apps. As transaction volumes declined inside branches, many institutions viewed their physical networks as expensive infrastructure supporting fewer routine interactions.
Yet the role of the branch has begun to evolve rather than vanish.
Instead of serving primarily as transaction centers, many branches now function as advisory hubs where consumers seek guidance on mortgages, retirement planning, lending decisions and other complex financial matters. Digital channels handle routine tasks, while branches provide personal interaction when financial decisions carry higher stakes.
Credit unions, in particular, have often emphasized the relationship aspect of banking as a competitive advantage against larger institutions and digital-only providers.
SchoolsFirst’s strategy appears to reflect that balance. Alongside its growing branch network, the credit union continues to promote digital banking options designed to give members flexibility in how they interact with the institution.
“As more school employees and their families look for trusted financial guidance, the credit union continues to invest in access and convenience,” the organization said in announcing the expansion.
The decision also arrives during a period of continued growth for the credit union sector’s largest institutions. While smaller credit unions have faced increasing pressure from technology costs, regulatory requirements and succession challenges, larger organizations have generally been better positioned to invest simultaneously in digital platforms and physical infrastructure.
For SchoolsFirst, the branch openings represent a significant commitment to that dual approach.
“Our branches give members a place to get guidance from people who understand the financial realities school employees face, right in their own communities.”
– Jose Lara
President
SchoolsFirst Federal Credit Union
Ken McCarthy is manager of marketing communications at Tyfone, where he monitors the credit union industry and contributes to conversations shaping its future. He previously covered credit unions and community banking for American Banker and S&P Global Market Intelligence. He holds a journalism degree from Point Park University and has more than 15 years of experience covering financial services. He is also the author of three literary fiction novels.
