The $299 million State Employees Credit Union has agreed tomerge with its competitor $408 million First Florida Credit Union. If approved by members andregulators, the combined institution would rank among the state'stop 20 cooperatives in the Sunshine State, with more than $700million in assets, 15 branches and nearly 60,000 members.

While the Jacksonville, Fla.-based credit unions in a preparedstatement said both institutions are financially healthy, SECU hashad financial challenges over the past five years, according to areview of its NCUA financial performance reports.

“These are two financially healthy institutions with similarassets coming together to expand our branch footprint in keymarkets throughout the state,” said Chris Boivin, a spokespersonfor the management team planning the merger and SECU's vicepresident of communications and business development. “Our productsand services will also be expanded, and we will be able to focus oninnovations that enhance the overall member experience.”

Although SECU reported a net worth of 20% last year, compared toa peer average of 10%, its total loans fell from $142 million in2009 to $73 million in 2013. Additionally, NCUA financialperformance reports show the credit union's loan income droppedfrom $7.6 million in 2009 to $3.6 million in 2013.

SECU's investment income also declined from $3.5 million to $1.8million during that same five-year period, though its fee incomeincreased from $1.2 million to $1.7 million, NCUA financialperformance reports show.

Fee income wasn't enough to keep SECU's net income fromplummeting, sinking from $2.8 million in 2009 to $94,116 in 2011.The credit union posted net losses of $357,617 in 2012 and $179,746in 2013, NCUA financial reports show.

Read more: SECU CEO says credit union in good, solidshape …

Nonetheless, Paul E. Numbers Jr., SECU's president/CEO, toldCU Times his credit union is in “good, solid shape,”financially.

“Our net income has kind of bounced along the bottom line, butwe have made a lot of infrastructure enhancements over the lastseveral years, including a core system conversion, and of course,we've been paying NCUA their just dues,” said Paul E. Numbers Jr.,SECU's president/CEO. “Financially, we are in good, solid shape. Wehave been adding some products and services and we have enhancedour relationships with our members over the last several years.Things are on the upswing.”

Numbers said the merger will strengthen both credit unions anddeliver the products and services members want from their creditunion.

First Florida CU posted a net worth of 13% last year, above thepeer average of 10%, and increased its total loans from $183million in 2009 to $205 million in 2013, according to NCUAfinancial performance reports.

First Florida CU's loan income fell, however, from $12.5 millionin 2009 to $9.5 million in 2013, and so did its investment incomefrom $5.2 million $2.8 million in the same years. The cooperative'sfee revenue increased from $6 million to $6.7 million over the lastfive years.

In addition, First Florida's net income jumped from $2.5 millionin 2009 to $3.1 million in 2013, NCUA financial performance reportsshow.

If the merger is approved by state and federal regulators and bySECU members at a June meeting, the consolidation is expected to becompleted by July, according to credit unions' joint statement.

Post merger, Brent E. Lister will continue as FFCU's CEOoverseeing strategic direction, and Numbers will serve as CEOoverseeing operations, according to the credit unions' jointstatement.

The board of directors from each credit union will combine toform a single new governing board.

SECU was founded in 1937 by nine state employees who eachinvested $5, according to its website, and was originally namedState Board of Health Employees Credit Union. In 1982, theDepartment of Correction Credit Union merged into the State Boardof Health Employee CU and the cooperative changed its name to FirstFlorida Public Employees Credit Union. In 1988, the cooperativechanged its name to SECU.