The $112 million Alive Credit Union and the $3.2 billion SpaceCoast Credit Union announced they have received regulatory approvalfrom the State of Florida Office of Financial Regulation and theNCUA for a spinoff agreement in which Alive would assume SpaceCoast's Jacksonville-area assets.

The announcement follows a spinoff of Space Coast's Tampa Bay area assets toMIDFLORIDA Credit Union that was effective on July 1.

The deal must be approved by a vote of Jacksonville-area SCCUmembers, who will receive a ballot package in the mail. Votes will be cast by mail or at a special meeting to be held inthe Jacksonville area later in August.

Douglas Samuels, SCCU's president/CEO, said the spinoff decisioncame after Melbourne-based SCCU determined it was unable toefficiently serve members picked up in the 2009 acquisition ofEastern Financial Florida Credit Union.

“The membership in this area is greatly valued by the creditunion, but the delivery structure is insufficient, preventing theability to achieve any market scale from which to grow,” Samuelssaid. “We could not achieve the 'springboard' effect we needto justify further investment in this area.”

SCCU has already closed one branch in the Jacksonville marketand didn't want to further diminish service to members, Samuelssaid. A local credit union that could expand and improveservice to those members was the best alternative.

The spin-off would transfer SCCU's two Duval branches along withtheir assets, loans, and ATMs in the area, as well as any SCCUmembers who live in Duval, Nassau, Clay and Bradfordcounties. In addition, Alive said it plans to retain allexisting Jacksonville-area employees at the time of thetransition.

The Jacksonville-based Alive completed a rebranding from its previous name of Healthcare's CooperativeCredit Union in June.

If approved by the member vote, the spinoff would be effectiveSept. 30.

Space Coast has made strides financially after its acquisitionof the failing Eastern Financial Florida Credit Union in July 2009dropped 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 June30, 2012.

The Melbourne, Fla.-based Space Coast's suit against Wall Street bankers is still ongoing. The creditunion sued the banks for fraud after losing $100 million fromcollateralized debt obligations that were sold to Eastern FinancialFlorida.

In July, Space Coast was dropped from a suit filed by the $302 million Sperry AssociatesFederal Credit Union over loan participation losses the GardenPark, N.Y.-based credit union suffered from Eastern Financial.