The consolidated credit union will be the third largest in Florida with 360,000 members and $3.2 billion in assets. The $1.6 billion Space Coast said its board of directors approved the merger on June 19, and the necessary supporting actions have been completed with the NCUA and the State of Florida Office of Financial Regulation. NCUA confirmed the merger was approved.
The resulting credit union will be Space Coast Credit Union, which will operate in the Eastern Financial market area as Eastern Financial Florida Credit Union, a division of Space Coast Credit Union, Melbourne, Fla.
Several months prior to the merger, Miramar, Fla.-based 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 NCUA placed troubled Eastern Financial into conservatorship on April 24. Space Coast took over operations on April 27, the same day it announced its intent to merge.
"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," said Tom Baldwin, executive vice president/chief financial officer at Space Coast.
"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," Baldwin said. The decision to merge was based on the answer to one simple question, Baldwin explained: Would acquiring Eastern Financial provide a long-term benefit to Space Coast's members? "We felt that the answer was yes,"