The $75 million REALTORS Federal Credit Union, launched three years ago as the nation’s first virtual credit union, is being merged into the $2.2 billion Northwest Federal Credit Union of Herndon, Va.
The credit union has lost money since it was opened in the spring of 2009.
Northwest FCU will gain a major springboard into reaching the nation’s 1 million Realtors, said Jane Pannier, who was hired two years ago to take the helm of the online credit union based in Rockville, Md.
Pannier, who has been general counsel of REALTORS before taking over as CEO, said that as a division of Northwest, delivery of services to its members, including shared branching, will continue and be expanded.
“This really is a win-win opportunity for us,” Pannier said.
REALTORS FCU members are slated to vote online and in person on the Northwest merger plan at a May 18 meeting coinciding with the mid-year meeting in Washington of the National Association of REALTORS, which got the credit union going with a founding grant of $10 million.
The consolidation has been in the works since last fall with help from an unidentified consulting firm, the credit unions said.
REALTORS currently has7,800 members “which is not bad for a startup credit union,” Pannier said, suggesting not many large credit unions could post that kind of member advance.
REALTORS lost $2.6 million in 2010, $2 million in 2011 and $414,000 in the first quarter and has a net worth ratio of 6%.
Pannier said early losses were not unexpected and maintained the fledgling credit union has performed satisfactorily as a startup.
As an office-less virtual entity, REALTORS was the creation of its first CEO, Thomas Glatt Sr., a California consultant and former CEO of the old Continental Airlines-linked credit union in Phoenix which has since merged.
Pannier said once member and regulatory approval is cleared the merger is planned to take effect in August. Pannier is expected to join Northwest in an executive capacity with the REALTORS division.
“We certainly hope she does,” said Greg Gibson, chief financial/operating officer of Northwest.