The board of directors of Space Coast Credit Union approved the merger with Eastern Financial Florida Credit Union during a special meeting held on June 19, Space Coast announced late Tuesday evening.
The necessary supporting actions have been completed with NCUA and the State of Florida Office of Financial Regulation, Space Coast said. The consolidated credit union will be the third largest in Florida with over 360,000 members, approximately $3.2 billion in assets, and a network of over 60 branches and 145 ATM locations throughout the state.
Several months prior to the merger, Eastern Financial's net worth had been depleted, primarily as a result of problems associated with several large commercial loans and investments, Space Coast said.
"The core membership was active, new members continued to join, and there was strong use of their checking and debit card offerings, but the low net worth restricted their ability to lend to members. This made it difficult for Eastern Financial to work its way out of the negative financial position," stated Tom Baldwin, executive vice president and CFO at Space Coast.
In comparison, Baldwin said SCCU's strong net worth and the application of various operating efficiencies brings the reserves of the merged credit union back to an acceptable level.
"We carefully evaluated Eastern Financial's operation prior to submitting the application to merge, and we expect to remain adequately capitalized at the time of the merger. The decision to merge was based on the answer to one simple question: Would acquiring Eastern Financial provide a long-term benefit to SCCU's members? We felt that the answer was 'yes,' as we had the net worth to work through the short term, and the operating efficiencies to ensure that the combined entity would be stronger in the long term than staying as we were."