If Space Coast Credit Union and Eastern Financial Florida Credit Union were to merge, there would be approximately $200 million in net worth after writing off all expected losses from Eastern Financial, Space Coast said.
The expanded credit union would "remain adequately capitalized and will not be under capitalized," said Space Coast spokeswoman Meredith Gibson.
"After writing off all expected losses from EFFCU's loan and investment portfolios, the combined entity will still have approximately $200 million in net worth," Gibson said.
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Indeed, the $1.6 billion Space Coast is considered to be a well-capitalized credit union at 11.23%. The $1.6 billion Eastern Financial had a net income loss of $113 million in 2008 hammered in large part by delinquent and charged off loans.
Still, Gibson said EFFCU's core operations and product offerings are strong.
"The current situation was caused by problematic lending and investment decisions," Gibson said. "This is a great institution and a merger, if finalized, can provide an enhanced service offering and greater strength for the members of both credit unions."
While Space Coast has announced its intent to merge, NCUA said it has not approved a merger of the two credit unions.
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