Nearly $15 Million in Payouts to 5 Execs Part of Proposed Merger Between SAFE, BECU; Benefits to Members are Outlined

SACRAMENTO, Calif.–A new statement to members of SAFE Credit Unionhere reveals that as part of its plan to merge with Seattle-based BECU, based 750 miles north in Seattle, five executives will receive more than $14-million in benefits, there will be no direct payout to members, and it is applying to the state regulator to allow it to complete the combination even if a majority of members don’t vote in favor, as state law requires.

If the combination is completed, it will create a mega-credit union on the country’s west coast of approximately $35 billion in assets. The proposed merger has already received regulatory approval. Should it be approved, the credit unions said they plan for the merger to close on Jan. 1, 2007. 

The two credit unions first announced plans to merge in November 2025. A member information page can be found here. Member voting is to begin Aug. 31.

As of mid-year, SAFE CU, founded in 1940, had $4.417 billion in assets and 246,000 members. SAFE CU reported $21.39 million in net income as of mid-year, with net worth of 10.82%.  The $29.62-billion BECU, which was founded in 1935 and which has 1.59 million members, had $86.1 million in net income at mid-year, with net worth of 12.57%. 

Some Pushback on Proposal

As the CU Daily has been reporting, there has been some pushback to the merger plan, and comments posted on some credit union industry blogs have questioned the benefit to members vs. the benefits to members of SAFE CU’s management (see below). 

But as also reported below, SAFE CU has provided a list of benefits it says the merger will provide members.

As the CU Daily has been reporting, a retired physician and SAFE CU member, Dr. Scott Rose, has been publicly fighting the merger, including reaching out to local media and meeting with elected officials. At one point, Rose was involved in a disputed version over what took place at SAFE CU’s annual meeting. Among Rose’s arguments is that approximately $350 million in SAFE member equity is being transferred to BECU without any direct compensation to SAFE members. 

Rose and SAFE CU President and CEO Faye Nabhani have met to discuss the merger on two separate occasions. 

As the CU Daily reported here, Nabhani had earlier told the Sacramento Bee the proposed merger is not an “efficiency play” and instead The intention is to grow in California. The intention is to make this an even stronger area and region.”

‘Meaningful New Benefits Cited’

In a letter to members from Nabhani and SAFE CU Chair Martha Lofgren, members are urged to vote in favor of the combination as it will offer “meaningful new benefits for our members, create additional opportunities for employees, and strengthen the support we provide in the communities we proudly serve. This combination allows us to expand our impact while continuing the personal service, local commitment, and trusted relationships thatmatter so much to our members.”

The letter says the SAFE board investigated other options, including remaining independent and “exploring other partnerships, always with our members in mind,” before deciding the merger with BECU was its best option.

In urging members to vote, SAFE said, “There is another meaningful way your vote can make a difference. In keeping with SAFE’s long-standing commitment to supporting local nonprofits and community organizations, weare donating $250,000 among four community partners. In addition to voting on the SAFE and BECU combination, you will have the opportunity to choose one of four organizations supporting education, financial wellness, affordable housing, or workforce development. Amounts will be awarded based on thetotal percentage of votes each community partner receives.”

What Merger Will Provide

According to SAFE, the merger will provide:

• More value for members through fewer fees, more opportunities to save, and access to “programs designed to help members at important moments in their lives.”
• More support for first-time homebuyers, including grants of up to$8,000 for eligible members, funded by an initial $500,000 commitmentfrom BECU and SAFE upon completion of the merger
• More opportunities to save on loans — including automatic loanrepricing for eligible members as credit profiles improve, with no application or refinance required
• Access to BECU’s Member Advantage Program – a “free relationship-based program that rewards members with premium interest rates andhigher yields on select accounts.”
• More access to lending — helping members, small businesses, and local communities thrive.
• More convenience and access. “Members deserve banking that is simple,convenient, and accessible. With greater scale and resources, we caninvest more in branches, digital tools, and product improvements that make it easier for members to bank when, where, and how they want.”
• A stronger future for members. “This combination is not just about growth—it is about having the strength to keep investing in what members need most. Together, SAFE and BECU will be better positionedto enhance digital services, strengthen fraud protection and cybersecurity, and continue delivering the personal service members know and trust.”
• * Greater community impact. “SAFE has a proud tradition of givingback to the communities we serve. This combination will allow that impactto grow. In addition to SAFE’s ongoing local giving, BECU and SAFEhave announced an initial $1 million investment in philanthropic initiatives important to SAFE members and the Sacramento region. Together, that means an expected annual community investment of $1.5 million to support education, workforce development, affordable housing, financial education, and programs that strengthen our communities.”
• A continued commitment to people. All SAFE employees will becomeBECU employees, with access to expanded career opportunities as part ofa growing credit union. Nabhani said she will remain as Market Presidentfor Greater Sacramento, “with the other SAFE executives continuingwith the combined organization to ensure a smooth transition and theservice you expect.”

SAFE CU said its current headquarters in Folsom, Calif. will become a regional headquarters for the combined credit union. 

Financial Arrangements

Noting that for more than a decade it has provided supplemental executive retirement plans (SERPs) for its senior leaders, SAFE said those same also have pre-existing retention agreements with change-in-control provisions that are triggered upon completion of the merger.

“SAFE and BECU believe that retaining SAFE’s senior leadership is critical toensuring a smooth transition and continued service for members, employees,and the Sacramento community,” the credit union said. “To support continuityand align with BECU’s pay-for-performance philosophy – which will be theprevailing standard going forward – each executive’s pre-existing retention agreement with change-in-control provisions and (ii) SERP will be terminatedand then paid out via a new retention structure tied to continued employmentthrough the post-merger transition period following the completion of the merger.”

It said the board has also approved a one-time $50,000 bonus for each of the executives listed below in “recognition of the extraordinary effort and scopeof work required leading up to the signing of the merger agreement.”

Execs Receiving Benefits

According to SAFE CU’s disclosure to members, executive who are to receive merger-related financial benefits the following. For each of the individuals SAFE said SERP and change-in-control agreements were established prior to, and independent of, the proposed merger, and because BECU does not offeran equivalent program, existing agreements will be terminated and values will be paid out as a retention agreement tied to continued employment through the post-merger transition period.

President and CEO Faye Nabhani

• For the SERP portion of the agreement, Nabhani will be eligible for threeseparate post-close payments up to $1,075 million each, totaling up to$3.225 million.
• For the retention portion of the agreement, Ms. Nabhani will be eligible for three separate post-close payments up to $361,000 each, totaling up to$1,083 million
• A one-time $50,000 bonus, as described above.
• Upon closing of the proposed merger, Nabhani has agreed to be employed by the continuing credit Union in the position of Market President for the Greater Sacramento Region. Upon employment by BECU after closing,  Nabhani’s total future annual compensation, including base salary, incentive opportunities, and employer retirement contributions, is expected to decreaseby approximately $504,710.

EVP/COO Tiffani Vargas

• For the SERP portion of the agreement, Vargas will be eligible for threeseparate post-close payments up to $925,073 each, totaling up to $2,775,219.
• For the retention portion of the agreement, Vargas will be eligible for three separate post-close payments up to $240,000 each, totaling up to $720,000.
• A one-time $50,000 bonus.

EVP/CFO Alexis Fitzpatrick

• For the SERP portion of the agreement, Fitzpatrick will be eligible for threeseparate post-close payments up to $698,520 each, totaling up to$2,095,560.
• For the retention portion of the agreement, Fitzpatrick will be eligible for three separate post-close payments up to $207,603 each, totaling up to$622,809.
• A one-time $50,000 bonus, as described above.

EVP/CTO Michael McCarthy

• For the SERP portion of the agreement, McCarthy will be eligible for threeseparate post-close payments up to $471,232 each, totaling up to $1,413,696.
• For the retention portion of the agreement, McCarthy will be eligible for three separate post-close payments up to $208,000 each, totaling up to $624,000.
• A one-time $50,000 bonus.

EVP/Chief HR Officer Colleen Nerius

• For the SERP portion of the agreement, Nerius will be eligible for threeseparate post-close payments up to $396,797 each, totaling up to $1,190,391.
• For the retention portion of the agreement, Nerius will be eligible for threeseparate post-close payments up to $185,631 each, totaling up to $556,893.
• A one-time $50,000 bonus, as described above.

The payout to the five executives totals more than $14.5 million. 

Appeal to State Regulator on Member Vote

Under California law, a merger requires an affirmative vote by a majority of SAFE Credit Union’s 246,000 members. But there is a way around that requirement, which SAFE CU says it intends to pursue. Under California Financial Code Section 15201(b), a credit union’s board may apply to the California Commissioner of Financial Institutions “for approval of a merger inaccordance with a plan of merger approved by a majority of the board ofdirectors of each credit union that is a party to the merger, even thoughless than a majority of the outstanding members of a disappearing creditunion has voted to approve the merger.”

SAFE CU said it intends to pursue that path.

“…This is to advise you that the Board of Directors will make an application under California Financial Code Section 15201(b) for approval of the Merger in the event that a majority of all members of SAFE do not vote to approve the Merger, in person at the meeting, or by mail-in or online ballot,” SAFE said in its statement to members.

SAFE said it will host a special meeting on the merger on Oct. 27, which is also the deadline for members to cast ballots. 

‘Financial Farce’

In a blog post, Chip Filson, the former NCUA director of Examination and Insurance and co-founder of Callahan & Associates, wrote, “This pretense of 60days of instant democracy by a board that has had no contested election in recent  memory just compounds this financial farce.

“If there was ever a case for the credit union community in California and beyond to stand up for the member’s rights and due process this is it,” Filson continued. “Or, at a minimum publish the names of the vendors and advisors who devised this coop travesty  and withdraw any further business.

“If this perversion of everything credit unions represent  in cooperative purpose were to succeed, California will become the next happy hunting ground for every financial predator,” Filson wrote.

The Future Board

As part of the combination, SAFE said two of its directors will join the BECU board, “providing local perspectives and support as the combined organization continues to represent SAFE members’ interests and Sacramento’s community priorities.

“Upon appointment at closing, they will be eligible to receive a stipend of $125,000 annually for services rendered to the Continuing Credit Union,” SAFE added. 

The Balance Sheet

One person who reviewed SAFE CU’s balance sheet shared these observations:

• 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 California credit unions.
• SAFE has no debt on its balance sheet, and abundant and perhaps even xcess capital.
• SAFE’s loss ratio is .31, almost half of the national average of .60. “SAFE has certainly not hit a risk appetite limit,” the person said. “(SAFE doesn’t) need BECU capital to fund SAFE losses.”
• SAFE CU grew member business lending 6% over the same period during which MBL declined 7% at BECU.

The person said the question they have is what access to lending will SAFE CU members get that they don’t already have?

Additional Reactions

Among the other comments being made in response to the proposed merger:

On his blog, Chip Filson also wrote, “SAFE’s  leadership  does not want to even try to get the majority of members to vote because that would require a public PR campaign and open dialogue.   That would give members and the community a chance to learn the full facts of what this sellout will cost them.

Instead, SAFE’s leaders. the CEO and Board,  intend to rely on the printed ballot vote in a multi-page mailing in which members are asked to approve-no contrary information presented.

“SAFE does not want to do the responsible and hard work to get their owner’s  attention and support to win a majority vote. They are hoping their self-serving one side only mailing will cause members to auto-check the yes box.  They want to keep public debate to a minimum and not raise any attention or discussion of the harmful consequences caused by this divestiture of local leadership on the future Sacramento, California’s capital city.”

Another Person’s Take

Separately, in a response attributed to an “analyst” who is not identified on the blog of former SECU CEO Jim Blaine, the following statements are made:

• “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 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 of 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 will 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)”

SAFE Vs. BECU on Pricing

In an anonymous post on Blaine’s blog posted on Aug. 26, someone wrote:

“SAFE Members, 

We 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.’”