The $112 million Alive Credit Union and the $3.2 billion Space Coast Credit Union announced they have received regulatory approval from the State of Florida Office of Financial Regulation and the NCUA for a spinoff agreement in which Alive would assume Space Coast’s Jacksonville-area assets.
The announcement follows a spinoff of Space Coast’s Tampa Bay area assets to MIDFLORIDA Credit Union that was effective on July 1.
The deal must be approved by a vote of Jacksonville-area SCCU members, who will receive a ballot package in the mail. Votes will be cast by mail or at a special meeting to be held in the Jacksonville area later in August.
Douglas Samuels, SCCU’s president/CEO, said the spinoff decision came after Melbourne-based SCCU determined it was unable to efficiently serve members picked up in the 2009 acquisition of Eastern Financial Florida Credit Union.
“The membership in this area is greatly valued by the credit union, but the delivery structure is insufficient, preventing the ability to achieve any market scale from which to grow,” Samuels said. “We could not achieve the ‘springboard’ effect we need to justify further investment in this area.”
SCCU has already closed one branch in the Jacksonville market and didn’t want to further diminish service to members, Samuels said. A local credit union that could expand and improve service to those members was the best alternative.
The spin-off would transfer SCCU’s two Duval branches along with their assets, loans, and ATMs in the area, as well as any SCCU members who live in Duval, Nassau, Clay and Bradford counties. In addition, Alive said it plans to retain all existing Jacksonville-area employees at the time of the transition.
The Jacksonville-based Alive completed a rebranding from its previous name of Healthcare’s Cooperative Credit Union in June.
If approved by the member vote, the spinoff would be effective Sept. 30.
Space Coast has made strides financially after its acquisition of the failing Eastern Financial Florida Credit Union in July 2009 dropped its net worth from 11.23% to 5.98%. It reported more than $30 million annualized net profit and 8.86% net worth as of June 30, 2012.
The Melbourne, Fla.-based Space Coast’s suit against Wall Street bankers is still ongoing. The credit union sued the banks for fraud after losing $100 million from collateralized debt obligations that were sold to Eastern Financial Florida.
In July, Space Coast was dropped from a suit filed by the $302 million Sperry Associates Federal Credit Union over loan participation losses the Garden Park, N.Y.-based credit union suffered from Eastern Financial.