LIVE OAK, Texas-Years ago Randolph-Brooks FCU rerolled calculator tapes and used the other side.

While that old savings trick is nearly as obsolete as the machines themselves, the simple philosophy of not wasting resources runs deep through the $3.6-billion credit union and is fueling its record expansion.

The 32-branch credit union is adding almost five locations per year, loan growth is up 25% over last year, deposits are 19% higher, and membership has increased by 11% - and it just received a Crystal Performance Award from Raddon Financial Group. CEO Randy Smith believes now is the right time to grow.

The CEO acknowledges that the credit union is being aggressive in a down market, and it has the money to do it. "We spend a lot more time on growing the business," Smith shared. "While others say the economy is bad and they can't make any loans, we have teams of people that go door to door, to ballgames, churches, and factories and beat the bushes for business. Our numbers over the last couple years tell a great story. This year we have broken every growth record we ever set."

The credit union's longstanding policy of thrift is driving the expansion, Smith pointed out. But there are "thousands of things that make us a very efficient credit union," he reminded. Some of the more noteworthy are a videoconferencing system that centralizes loan officers, "kaizen" events that quickly drive out waste (see related stories), a teller queuing system that reduces member wait time and staff paperwork, and technology that soon will allow members to scan checks and make deposits from any web-enabled phone.

All of those process improvements have added up to millions of dollars in savings. But what may be the most important cost-savings move is conducted by the CEO himself. Smith sits down with groups of new hires and explains the credit union difference and the importance of managing the CU's money to maximize member returns. "New employees spend a day with me," Smith said. "We have breakfast, and we talk about the credit union's history and our philosophy."

That weaves thrift into the fabric of the credit union, which Smith stressed CUs have to do to make any efficiency program perform at a high level. "Throughout our credit union there is an attitude that it's our members' money and you don't waste it," he said.

ROA at 1.24%

Looking at the statistics, branch expansion has lifted RBFCU's operating expense ratio to 3.06%, Smith said. But return on assets was running at 1.24% year to date near year-end 2009. The CU's capital ratio exceeds 12% and its loan rates lead the market, Smith noted. At press time auto loans up to 66 months were 3.7% and a 30-year fixed-rate mortgage stood at 4.8%. A one-year CD paid 1.61% APY, and a two-year 2.02%.

The credit union's cost-cutting emphasis began many years ago, according to the CEO, when it was first formed to serve the armed forces. "The military always teaches you to do more with less, and do things better, faster, and cheaper," said Smith, recalling that the credit union often got hand-me-down furniture from the Air Force. "I think we were the original green credit union, because we recycled everything the Air Force didn't want."

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