✔ The SAFE Board and CEO have finally been required to tell SAFE member-owners what a great deal this merger is for them! Hope as you read the synopsis you will fully appreciate who "them" is...
✅ The official text of the highly limited ['this ain't all of it folks!] can be found here: https://www.regulations.gov/docket/NCUA-2026-1552 [click on "Documents", then download "Supporting/Related materials"] The disclosure is from SAFE CEO Faye Nabhani.
😎 But to save you a little time, here is a succinct summary from one of our [in]famous blog commenters !!!
- 🖕A total of $14.56 million in payments to executives that were triggered by this merger. No worries, they're only paying out 33 basis points of the members capital to executives.
- 🖕The exec payouts equate to about half of the amount of the interest paid to SAFE members so far this year. Instead of paying execs, how about better rates and make the home grants 3 or 4 million instead of $500,000. Cool member benefit - for all 60 out of the 245,000 members lucky enough to get it.
- 🖕The stated, quantified benefits to SAFE members are $7.4 million, spread across 245,000 members, or just over one-half of the amount being paid to 5 executives. I repeat: 245,000 owners get $7.4 million, 5 execs get $14.56 million.
- 🖕 Interesting approach to tack on a vote for donations to community partners. That shouldn't be legal to add this vote. If it is, clever little PR move to distract and act like they can't afford to do it themselves.
- 🖕Payouts to the community and execs, but no reserve distribution to members. The stated reason is because SAFE's capital is not higher than Boeing's. That's backward logic. SAFE's capital is $177 million in EXCESS of what's required to be considered WELL capitalized. But no, they can't afford these benefits unless they merge, and now that they're merging to where the continuing credit union will have an even more extreme excess capital position, they refuse to let member owners have any of their money.
- 🖕Carefully worded language about the retention bonus payments through the "post-merger transition." The translation of that: Faye is leaving in 18 months. The divisions and departments will report into their functional heads. SAFE will be gobbled up, Sacramento job losses wlll be local control? LOL?
- 🖕2nd place payout winners? SAFE directors. Boeing reports their execs spend 6 hours a month doing their work. 2 lucky winners get the same job and go from zero pay to $125,000 a year or $400 an hour. Those two directors voted for and strongly recommend this merger. Hmm.. nothing to see here. (and no, being a director of a CU seven times larger doesn't not mean it's seven times more work, or seven times harder)
As they say down South: "Well, Bless your heart!" [link] 😎 DON'T MISS THE FURTHER COMMENTS BELOW!!!!!
😎 DON'T MISS THE FURTHER COMMENTS BELOW!!!!!
Od-y-ous, entirely a Trojan !!!!!!
Beware of false prophets, who come to you in sheep’s clothing, but inwardly they are ravenous wolves. You will know them by their fruits...
ReplyDeleteSAFE Members,
ReplyDeleteWe Get:
"Access to BECU’s Member Advantage Program – a free relationship-based program that rewards members with premium interest rates and higher yields on select accounts"
Sounds great, right?
Today's rates for Boeing's special program compared to SAFE...
6 mo CD, SAFE: 2.25%, Boeing: 1.98%
24 mo CD, SAFE: 2.90%, Boeing: 2.23%
36 mo CD, SAFE: 3.00%, Boeing; 1.93%
48 mo CD, SAFE: 3.05%, Boeing, 1.69%
Checking...
SAFE; 3% interest up to $3,000, = $90 a year in interest paid to member.
Boeing; 3% up to $500, .10% after that = $17.50 paid to member.
Boeing's special program doesn't apply to loans (but maybe it should)
New Car SAFE: 5.19%, Boeing, 5.89%
Used Car SAFE: 5.29%, Boeing, 6.19%
Credit Cards..
SAFE; 5/3/1 Cash back, 15.29% rate
Boeing, 1.5% Cash back, 16.49% rate
HELOC; SAFE 6.75%; Boeing 6.99%
The list could go on.
SAFE members, in Boeing's words, this is our "reward"
One of the benefits state benefits for SAFE Members:
ReplyDelete"More access to lending — helping members, small businesses, and local communities thrive"
Let's explore that. Through 1Q:
* SAFE had a 79.8% LTS ratio, below the national average of 82.2%.
*SAFE had YOY growth of loans of 3%, vs. 9% for CA Credit unions.
*SAFE has no debt on their balance sheet, and abundant, and in fact excess capital.
*Boeing has $220 in borrowings (FHLB debt) to finance their lending and growth. (probably because with such low deposit rates, they aren't raising enough deposits to fund loans, but another matter).
*SAFE's loss ratio is .31, almost half of the national average of .60. Clean portfolio. Kudos. SAFE has certainly not hit a risk appetite limit. Don't need Boeing capital to fund SAFE losses.
But in a nutshell, SAFE has plenty of room to lend, no debt and excess capital, which could be used to fund higher loan growth and responsibly take more risk for the benefit of members.
Makes one wonder - what access to lending will SAFE members get that they don't already have? Do they need access to lending?
There is mention of also helping small businesses thrive. Maybe that?
Well, SAFE grew MBL 6%, while Boeing's MBL dropped 7% in the same period. SAFE already seems committed to serving small businesses.
Anyone else find it odd that the CEO was the only exec where there was reference to future employment? Interesting the benefits are part of the calculation when it's being sold her total comp would do down, especially since it's being represented as a pre-merger benefit. Full transparency would be to compare the CEO's base and bonus only before and after the merger.
ReplyDeleteSo big retention payment part for the execs through the post-merger transition period. Then what?
Only reference to ongoing employment is for the CEO. So no mention of future employment, but no mention of severance payouts, either. The new organization doesn't need two CFO's CTO, COO's, etc.
AFTER the post-merger transition date, and an exec's job is eliminated with severance in the business-as-usual operating state, it's not part of this required disclosure, even if is ultimately triggered by or a consequence of this merger.
Should SAFE members be informed about whether aside from the CEO, their execs will have representation at Boeing after the merger? And if they don't, don't members have a right to know the expense associated with those transitions?
So let's add some context to another stated financial benefit...
ReplyDelete"Lower Fees: The combination is expected to create opportunities to reduce or eliminate certain member fees, including monthly account service fees and select NSF fees. These enhancements are projected to generate approximately $6.9 million in member savings in 2027, benefiting more than 74,000 SAFE members and reinforcing our commitment to delivering greater value and affordability for members over the long term"
Consider these NCUA reported metrics as of June, 2026.
*Yield on avg. loans: SAFE = 4.96%; Boeing 5.90%
*COF to Avg. Assets: SAFE = 1.28%; Boeing 1.02%
*Fee $$ too Avg. Assets = SAFE = 1.40%, Boeing .69%
*Net Int. Marg. / AA = SAFE = 2.95%; Boeing 3.85%
Takeaways:
1.) Boeing has way lower fees to average assets, and that if SAFE adopted Boeing's fee structure, those SAFE members who incur fees will save money. A fact not in dispute.
2) But isn't there always more to the story. Look how much higher Boeing charges for loans rates (5.90% yield vs. 4.96% for SAFE. This is YTD thru June, so past history, but this validates what we on rates posted TODAY.
3) SAFE's cost of deposits is 1.28% vs. 1.02% for Boeing, which also reflects what we see in current deposit rates.
4) Taken together, SAFE charges less for loans and pays more for deposits. This shows up in the net interest margin to average assets, which is the yield on loans minus the amount paid for deposits. 2.95% for SAFE, 3.85% for Boeing. Simple summary - in the process of taking deposits and making loans, which is the whole reason CU's exist, Boeing makes way more profit of their members than SAFE does.
5) Think about the Boeing numbers and underlying strategy. Very low fee income - nice optic, feels good, etc. But they obviously make up for it in higher loan rates and lower deposit rates. That's for profit mentality. If fee income drops, gotta make up for it in rates / margin to keep ROA up. The 6.9 million in fee savings is real, but we're not being told how much we're going to pay in the form of higher loan rates and lower deposit rates. It's surely a net negative.
6.) Take it a step further.. it's being sold that 74,000 members will benefit from lower fees. 6.9 million in total, which is 93% of the stated quantified benefits of the merger for members (6.9 in fees, 500K in grants) Sounds great, right?
7) SAFE also reports to the NCUA that 53.6% of the members are borrowers. All 245,000 members have at least a share accounts, so among the member-base, all are "savers" and over half are "borrowers."
8) This means over half the members will get higher borrowing rates, all members will get lower deposit rates, all to pay for the 74,000, or less than one-third of the members that incur fees, which BTW, incur costs for the organization.
CU's need net income, and you get it on both net interest income and fee income. Fee savings are being sold here, but the other part of the story isn't being told. Look at the objective, reported data by the NCUA, as well as the current rates, and ask yourself how much more you have to pay in order to save fees on your own, or to save fees for others.
Lingo translator for normal folks!
DeleteHELOC = home equity line of credit loan
LTS = ratio of loans to shares
YOY = year over year comparison
FHLB = Federal Home Loan Bank, govt backed lender
MBL = member business loans
CFO's CTO, COO's = Chief finance/tech/operatios officer
NSF = non-sufficient funds fee
COF - cost of funds
BS = "A Winning Combination"
Every SAFE member can become a member of BECU without giving up the ownership and control of their own CU - https://www.becu.org/open-credit-union-account-online#AmIEligible
ReplyDeleteNot to mention giving up the $400+ million in cash reserves that SAFE members own... @ $1600's worth of reserves per SAFE member... or @$6,400 bucks for a family of four..
Join BECU today... best benefit of direct membership? YOU SAVE $400 million !!!
"
DeleteEvery SAFE member can become a member of BECU without giving up the ownership and control of their own CU"
and the "executives" all know this yet they sell the members out ... turncoats!