For Five Star Credit Union, it all comes down to the gross income. So much so, it has received a Raddon Crystal Performance Award six of the last seven years, and one of the biggest reasons for the success is the credit union is good at making money.

CEO Bob Steensma said that while Five Star pays attention to operational efficiencies, it’s the top line that makes the credit union perform so well, taking ROA to about 1.5 percent last year.

“We are very strong from a gross income standpoint,” said Steensma. “We don’t do it by expense control. Many in our industry feel if you can control expenses, that will make you more efficient and therefore successful. But the expense-driven model is really driven by economies of scale, and we feel that does not work best for us.”

The $388-million Five Star has 15 branches serving members in Alabama and Georgia.

“While we don’t staff our branches heavily, our expenses are simply higher than many due to the large number of offices for our asset size,” Steensma said.

It costs the credit union 68 cents to make a dollar, and Steensma re-emphasized that it is the CU’s income—primarily checking income from overdraft fees—that is driving that performance. Read the full article at CU Today