RALEIGH, N.C.—Civic FCU's embattled CEO, Dwayne Naylor, will retire in January as the $4-billion institution continues to grapple with the operational and financial fallout from its troubled June merger with Local Government Federal Credit Union, Business North Carolina reported.
The credit union said Chief Financial Officer Dave D’Annunzio will succeed Naylor, who is set to retire Jan. 16 after more than four decades in the credit union industry.
The leadership change comes as Civic faces deepening losses and deteriorating asset quality following what members widely described as a chaotic conversion. As CUToday.info reported Dec. 1, Civic posted a $75-million net loss over the first nine months of the year, including a $42-million loss in the most recent quarter alone. Loan performance has also weakened sharply, with $211 million in loans—nearly 7% of the $3.09 billion portfolio—at least 60 days delinquent as of Sept. 30.
Business North Carolina reported that the June 3 conversion of more than 400,000 Local Government FCU accounts triggered an estimated 500,000 member complaints tied to undelivered debit and credit cards, inaccurate credit-score reporting, and extended customer-service wait times that sometimes exceeded three hours. The disruption also drove a 10% drop in membership, from about 405,000 at the end of March to roughly 366,000 by late September.
Naylor and Civic’s board have maintained that much of the breakdown stemmed from flawed data received from State Employees’ Credit Union, which previously provided back-office support to Local Government. Civic leaders said tens of thousands of member addresses and other key data fields were inaccurate, forcing the credit union to spend more than $1 million to overnight replacement cards and resolve identity-authentication problems.
Civic had been largely digital institution after years of operating alongside LGFCU, which itself had relied on SECU for core processing and branch access. Civic quickly expanded physical locations across North Carolina ahead of the conversion after member feedback underscored the need for in-person service, Business North Carolina noted.
Despite the financial strain, Civic has said it remains well capitalized, with a net-worth ratio above 8%, and has increased frontline staffing while restructuring collections operations.