Safe and Sound

KERN

BAKERSFIELD, CA
4
Star Rating
Founded in 1949, KERN is an NCUA-insured credit union based in BAKERSFIELD, CA. As of December 31, 2017, the credit union held assets of $244.7 million.

With 56 full-time employees, the credit union holds loans and leases worth $204.2 million. Its 19,407 members currently have $209.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, KERN exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for members when a credit union is struggling financially. It follows then that an institution's level of capital is a crucial measurement of its financial fortitude. From a safety and soundness perspective, the higher the capital, the better.

KERN racked up 16 out of a possible 30 points on our test to measure capital adequacy, better than the national average of 15.65.

KERN's capitalization ratio of 16.00 percent in our test puts it right in line with the average for all credit unions.

Asset Quality Score

This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

Having a large number of these types of assets could eventually require a credit union to use capital to absorb losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, diminishing earnings and elevating the risk of a failure in the future.

KERN scored 40 out of a possible 40 points on Bankrate's test of asset quality, above the national average of 38.09.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. A credit union can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the credit union better able to withstand economic shocks. However, credit unions that are losing money have less ability to do those things.

KERN scored 8 out of a possible 30 on Bankrate's earnings test, lower than the national average of 10.11.

One sign that KERN is beating its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.