Safe and Sound

KERN

BAKERSFIELD, CA
4
Star Rating
Started in 1949, KERN is an NCUA-insured credit union based in BAKERSFIELD, CA. As of June 30, 2017, the credit union held assets of $244.8 million.

With 58 full-time employees, the credit union holds loans and leases worth $202.6 million. KERN's 19,211 members currently have $211.5 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, KERN exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three important criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is key. It acts as a cushion against losses and as protection for members when a credit union is experiencing economic trouble. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, KERN racked up 16 out of a possible 30 points, above the national average of 15.26.

KERN had a capitalization ratio of 12.00 percent in our test, worse than the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these kinds of assets may eventually require a credit union to use capital to cover losses, diminishing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in diminished earnings and potentially more risk of a failure in the future.

KERN scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 38.15.

KERN's ratio of problem assets was 3.00 percent in our test, less than the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. Earnings may be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, likely making the credit union better prepared to withstand financial trouble. Credit unions that are losing money, however, have less ability to do those things.

KERN did below-average on Bankrate's earnings test, achieving a score of 2 out of a possible 30.

KERN had an earnings ratio of 1.00 percent in our test, equal to the average for all credit unions, suggesting that it's right in line with its peers in this area.

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.