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

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

“These are two financially healthy institutions with similar assets coming together to expand our branch footprint in key markets throughout the state,” said Chris Boivin, a spokesperson for the management team planning the merger and SECU's vice president of communications and business development. “Our products and services will also be expanded, and we will be able to focus on innovations that enhance the overall member experience.”

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

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

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

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

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

“Our net income has kind of bounced along the bottom line, but we have made a lot of infrastructure enhancements over the last several 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. We have been adding some products and services and we have enhanced our relationships with our members over the last several years. Things are on the upswing.”

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

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

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

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

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

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

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

SECU was founded in 1937 by nine state employees who each invested $5, according to its website, and was originally named State Board of Health Employees Credit Union. In 1982, the Department of Correction Credit Union merged into the State Board of Health Employee CU and the cooperative changed its name to First Florida Public Employees Credit Union. In 1988, the cooperative changed its name to SECU.