A little over two months since being placed in conservatorship,Eastern Financial Florida Credit Union will merge into Space CoastCredit Union.

The consolidated credit union will be the third largest inFlorida with 360,000 members and $3.2 billion in assets. The $1.6billion Space Coast said its board of directors approved the mergeron June 19, and the necessary supporting actions have beencompleted with the NCUA and the State of Florida Office ofFinancial 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 EasternFinancial Florida Credit Union, a division of Space Coast CreditUnion, Melbourne, Fla.

Several months prior to the merger, Miramar, Fla.-based EasternFinancial's net worth had been depleted, primarily as a result ofproblems associated with several large commercial loans andinvestments, Space Coast said. The NCUA placed troubled EasternFinancial into conservatorship on April 24. Space Coast took overoperations on April 27, the same day it announced its intent tomerge.

“The core membership was active, new members continued to joinand there was strong use of their checking and debit cardofferings, but the low net worth restricted their ability to lendto members.
This made it difficult for Eastern Financial to work its way out ofthe negative financial position,” said Tom Baldwin, executive vicepresident/chief financial officer at Space Coast.

“We carefully evaluated Eastern Financial's operation prior tosubmitting the application to merge, and we expect to remainadequately capitalized at the time of the merger,” Baldwin said.The decision to merge was based on the answer to one simplequestion, Baldwin explained: Would acquiring Eastern Financialprovide a long-term benefit to Space Coast's members? “We felt thatthe answer was yes,”

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