Kinecta to add almost $1B in assets with Xceed merger
Xceed Financial Credit Union in El Segundo, Calif., has agreed to merge into Kinecta Federal Credit Union in Manhattan Beach, Calif.
The combined entity will have roughly $6 billion in assets, 33 branches and 300,000 members, according to a press release on Thursday. That would make it the 35th largest credit union in the U.S. and eighth biggest in California based on asset size, the press release said.
The deal would also give the $4.9 billion-asset Kinecta, which currently only has locations in California, a physical presence on the East Coast. Xceed has branches in New York and New Jersey.
“This merger will be great news for members of both credit unions,” Keith Sultemeier, president and CEO of Kinecta, said in the press release. “Xceed has a solid branch network, especially in the Rochester area of New York, which will enhance access for Kinecta’s east coast members, and provide a fantastic platform for growth. The cultural fit is also excellent.”
Sultemeier will serve as CEO of the combined credit union. Teresa Freeborn, president and CEO of Xceed, will take over as president. The Kinecta board will expand from its current seven directors to nine by adding two board members from Xceed.
The move is a homecoming of sorts for Freeborn, who was SVP of marketing and communications at Kinecta before taking the helm at Xceed. She oversaw rebranding efforts at both credit unions, transforming Hughes Aircraft Employees FCU into Kinecta and later Xerox FCU to the current Xceed brand.
The deal still needs approval from the $902 million-asset Xceed’s members and regulators but is expected to be completed by the end of the first quarter.
Kinecta lost roughly $366,000 in the first quarter, compared with earning about $8.5 million for the same period a year earlier, according to call report data from the National Credit Union Administration. It recorded about $4 million in loan-loss provisions, up about 10% from the prior year.
Its field of membership is open to certain select-employee groups and some zip codes in the Los Angeles metro area, Anaheim, Lancaster, Rialto and Santa Ana.
Xceed lost about $1.4 million in the first quarter, compared with earning more than $773,000 for the same period a year earlier, according to NCUA call report data. Its provision rose about 31%, to $515,000, year over year.