Asset Quality Score
In this test, Bankrate tries to estimate the impact of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.
Having lots of these types of assets may eventually require a credit union to use capital to absorb losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, decreasing earnings and increasing the chances of a future failure.
On Bankrate's test of asset quality, KERN SCHOOLS scored 40 out of a possible 40 points, better than the national average of 38.15 points.
A below-average ratio of troubled assets of 2.00 percent in our test was potentially indicative of greater financial strength than other credit unions.