MELBOURNE, Fla. – Space Coast CU announced this afternoon that NCUA and state regulators have approved the spin-off of its two Jacksonville branches to Alive CU, a continuation of its efforts to shed assets acquired in the 2009 acquisition of giant failure Eastern Financial Florida CU.
Under the unusual deal, Alive, the former Blue Cross/Blue Shield credit union known till last month as Healthcare’s Cooperative CU, will assume the branches and membership at the two locations. The spin-off would transfer SCCU’s two Duval facilities along with their assets, loans, and ATMs in the area, as well as 3,000 members who live in Duval, Nassau, Clay, and Bradford counties to Alive following an affirmative membership vote. In addition, Alive plans to retain all existing staff at these locations at the time of the transition.
The deal is similar to one piloted last December when Space Coast spun off six branches and 16,000 membership accounts it acquired in the Eastern Financial deal to MidFlorida CU.
Douglas Samuels, president of the $3 billion credit union, said that the spin-off is the result of Space Coast’s evaluation of the credit union’s ability to serve the members in the Jacksonville area in the manner that they deserve to be served. “When we acquired Eastern Financial Florida Credit Union in 2009, we acquired the current branch structure as well as the members. 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,” he said. “ We could not achieve the “springboard” effect we need to justify further investment in this area.”
Space Coast acquired Eastern Financial, the one-time $2.4 billion credit union, in 2009 after bad investments and poor member business lending caused its collapse. It was the biggest failure in credit union history.