The $1.4 billion Alloya Corporate FCU's 2012 net income ofnearly $6 million is about twice what the Warrenville, Ill.-basedinstitution budgeted.

How did President/CEO Chuck Furbee and his team do it,particularly in an era of low investment rates and little loandemand?

“We adjusted things on the fly,” Furbee told Credit UnionTimes on Friday. “Some parts of the operation weren't veryefficient, and weren't contributing to income so we changedthat.”

A key strategy was outsourcing to vendors. Alloya tappedthe Duluth, Ga.-based VSoft to take over its item processing andthe Naperville, Ill.-based WorkNet to provide IT services to thecorporate and its members. Such outsourcing helped reducedAlloya's salary and benefit costs from $24.7 million in 2011 to alittle less than $17 million in 2012.

Alloya once counted 1,800 members as Members United, emergingfrom its recapitalization drive with around 1,000.

The size difference is apparent in the balance sheet, especiallyin its positive effect on interest expense: 2012 required only $4.5million worth of dividends payouts, compared to $28 million in2011, according to the corporate's latest financial reports.

“We maintained our dividend rates, but we had fewer people topay out,” Furbee said.

That successfully balanced a big reduction in investment income,which fell drastically to $6.5 million as of year-end 2012, downfrom nearly $40 million the year before. Legacy asset investmentsand their higher earning yields were removed from the books whenAlloya emerged from conservatorship, causing the drop.

Furbee said Alloya had budgeted for an even larger interestincome drop than experienced, but the delay in shuttering U.S.Central resulted in Alloya keeping some relatively high-yieldingcertificates longer than anticipated.

Much of the income windfall went into capital. Alloya reported a1.7% retained earnings ratio, far higher than NCUA requirements.Nearly $26 million worth of retained earnings combined with nearly$70 million in perpetual contributed capital and some non-perpetualcapital leaves Alloya with nearly $103 million in total capital tocushion against $1.5 billion in moving daily average netassets.

Furbee said Alloya's merger with the $1.5 billion Central Corporate CU ofSouthfield, Mich., is still proceeding as planned. The NCUA isstill reviewing the request, but Furbee said he expects the federalregulator will approve it as soon as this quarter.

Upon a successful vote by CenCorp members, Furbee said, he willreturn to retirement, and CenCorp President/CEO Bill Walby willlead the merged entity, which will retain the Alloya name.

Furbee said Alloya plans to grow both through mergers andorganically, and said he thinks the corporate will bewell-positioned to expand as time passes, rates rise and liquiditydemands increase.

Members that recapitalized Alloya are also satisfied with thenew corporate: Furbee said a November member service surveyrevealed members ranked Alloya a 4.5 for overall service on a 1 to5 scale, with 5 being the highest ranking.

Alloya's December 2012 financial reports are available for thepublic to review on its website.