GRAY, Tenn.–One week after the death of its CEO, 11 employees of Appalachian Community FCU here were laid off as part of a “restructuring.”
As CUToday.info reported here, in January CEO Ron Scott was found dead shortly after announcing he would be resigning in order to move west and be closer to his and his wife’s aging mothers. He had been CEO of the $234-million credit union for more than eight years.
At the time of the resignation announcement, a spokesperson for the credit union told the Johnson City Press there would be no comment on whether the credit union was the target of any audit, investigation or administrative sanctions by federal authorities.
Now, following the layoffs, which reduced the credit union’s headcount to 73, interim CEO Kelly Smith said in an emailed statement to the Johnson City Press that the credit union began planning changes in late 2018 to “realign with core credit union activities and to reach staffing levels in line with peer credit unions — both regionally and nationally.”
“We appreciate the talent and hard work of the entire ACFCU team, including those who have left us,” Smith said in the statement to the newspaper. “These decisions are never easy. We owe it to our membership to operate as efficiently as possible, however, and this is one of several steps we will take in 2019 to improve in this area.”
The credit union declined to say what sorts of structural changes it was making.
The Net Income
Appalachian Community FCU reported net income of $540,173 at year-end 2018, with $13.8 million in loans 30-179 days delinquent and charge-offs of $2.75 million for the year. It finished the year with 8.7% net worth.
ACFCU reported $2.2 million in net income at year-end 2017.
According to the Johnson City Press, Washington County Sheriff’s Office Investigator Jeff Miller told the publication Scott’s death remains under investigation, and more information should be released to the public after an autopsy is completed.
The credit union’s chairman, Royden Russell, posted a letter on the ACFCU website that read, “I can reassure you that ours is a stable and strong financial institution. I simply wanted to make you aware of these changes and emphasize that your level of service will not change.”