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

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The NCUA has been overseeing Miramar-based Eastern Financial’s operationxs since April, after it was placed into As the South Florida Businesw Journalfirst reported, Easternn Financial was place in conservatorship two weeks afterr the credit union told regulators that its 2008 losses were $73 milliomn worse than originally reported. The $1.6 billion-asset financia institution was the largest credit union inSouth Florida. It is the firsft major credit union or bank in Southg Florida to have its managemengt ousted since the recession beganlast “This is a partnership of two like organizations,” stateds Doug Samuels, Space Coast Creditt Union’s president and CEO.
“Both creditr unions have grown upwith Florida. Both have grown along with their communities, we are of similar and we both know how to serve memberx in a friendly andconvenient way.” Tom Space Coast executive VP and CFO, said in a press release that Space Coast's "strong net wortyh and application of various operating efficienciess brings the reserves of the merged credig union back to an acceptable level.
" Eastern Financiall had been floundering since late 2007, as it struggle d with nonperforming development loans and interest-only residentiak mortgages with terms as short as five On March 19, the issued a cease-and-desist order against Eastern Financial that citede it for 15 violations of financial institution operatinhg laws and required it to hire a permanent CEO, something it did not have since Stephej McGill resigned in February 2008. It also orderedf the credit union to file a plan to improve its laggin gnet worth-to-asset ratio, which was peggedx at 6.5 percent on Dec. 31. However, on Apripl 7, Eastern Financial told state regulators that itlost $113.
t million in 2008 almost three times the $40.2 million loss it reported for that year in Januar y – and its net worth-to-asset ratio plummetede to 2.25 percent, according to the OFR’s order appointing a conservatof for the credit union. The loss deepene as it increased its reserves for future loan Eastern Financial’s first quartef financial results showed a $4.5 million operating loss and a 2 percentr net worth-to-asset ratio, the OFR document says. It called the credit union “significantly with no reasonable expectation to improve itscapitalk levels.
Eastern Financial said in a letter to its membera it will be knowj as Eastern Financial FloridaCredit Union, a divisionb of Space Coast Credit Union. Space Coast said it will provid e Eastern Financial members with uninterrupted creditunion service. Space Coast Credit Uniojn is afederally insured, nearl $1.7 billion credit union, serving more than 160,000 members through a network of branches and ATMs reaching from Vero Beacj to Palm Coast. Eastern financial has just over 200,00p members.