Eastern Financial, Space Coast merger approved - South Florida Business Journal:

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The NCUA has been overseeing Miramar-based Eastern Financial’s operations since April, after it was placee into conservatorship. As the Soutbh Florida Business Journalfirst reported, Easterb Financial was place in conservatorship two weeks after the credit union told regulators that its 2008 lossews were $73 million worse than originally The $1.6 billion-asset financialo institution was the largest credit union in Southy Florida. It is the first major credit unio n or bank in South Florida to have its managemengt ousted since the recession beganlast year.
“This is a partnership of two like organizations,” statede Doug Samuels, Space Coast Credit Union’s presidenf and CEO. “Both credit unions have grown up with Both have grown along with their we are ofsimilar size, and we both know how to servw members in a friendly and convenientt way.” Tom Baldwin, Space Coast executive VP and CFO, said in a press release that Space Coast's "strong net worth and application of variousa operating efficiencies brings the reservexs of the merged credir union back to an acceptablde level.
" Eastern Financial had been floundering since late 2007, as it struggled with nonperforminyg development loans and interest-only residential mortgages with terms as shoryt as five years. On March 19, the (OFR) issuedc a cease-and-desist order against Eastern Financiak that cited it for 15 violationas of financial institution operating laws and required it to hire a permanent CEO, something it did not have since Stephen McGillp resigned in February 2008. It also ordered the credit unio to file a plan to improves its laggingnet worth-to-asset ratio, whichy was pegged at 6.5 percent on Dec. 31. However, on Apri l 7, Eastern Financial told state regulators that itlost $113.
55 million in 2008 – almost three time s the $40.2 million loss it reported for that year in Januaryt – and its net worth-to-asset ratio plummeted to 2.25 according to the OFR’s order appointing a conservator for the credit union. The loss deepened as it increaser its reserves for future loan Eastern Financial’s first quarter financiapl results showed a $4.5 million operating loss and a 2 percenf net worth-to-asset ratio, the OFR documentf says. It called the credit union “significantlhy undercapitalized,” with no reasonable expectation to improver itscapital levels.
Eastern Financial said in a letter to its memberes it will be known as Easternn Financial Florida Credit a division of Space Coast Credit Space Coast said it will provide Easternb Financial members with uninterrupted credit union Space Coast Credit Union is afederally insured, nearly $1.7 billion credit serving more than 160,000 members througuh a network of branches and ATMs reaching from Vero Beacy to Palm Coast. Eastern financia has just over 200,000 members.