Safe and Sound

KERN SCHOOLS

Bakersfield, CA
4
Star Rating
Founded in 1940, KERN SCHOOLS is an NCUA-insured credit union based in Bakersfield, CA. The credit union holds $1.49 billion in assets, according to June 30, 2017, regulatory filings.

Thanks to the work of 361 full-time employees, the credit union currently holds loans and leases worth $1.01 billion. KERN SCHOOLS's 148,298 members currently have $1.33 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, KERN SCHOOLS exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three major criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is valuable. It acts as a bulwark against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

KERN SCHOOLS fell short of the national average of 15.26 on our test to measure the adequacy of a credit union's capital, scoring 10 out of a possible 30 points.

KERN SCHOOLS appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 10.00 percent in our test, below the average for all credit unions.

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.

Earnings score

A credit union's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the credit union, increasing its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in tough times. Conversely, losses diminish a credit union's ability to do those things.

KERN SCHOOLS received above-average marks on Bankrate's earnings test, achieving a score of 18 out of a possible 30.

One sign that the credit union is outperforming its peers in this area was its earnings ratio of 10.00 percent in our test, better than the average for all credit unions.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.