The $1.2 billion Kern Schools Federal Credit Union of Bakersfield, Calif., declared 2011 its best year for financial performance since 2007.
The CU said its net income was $22.4 million for 2011, an improvement of more than $35 million from 2010. According to its financial performance report, the CU had a net loss of $12.8 million in 2010.
Kern Schools attributes its rise in net income to an operating expense reduction of more than $6 million in 2010 as well as to a loan delinquency turnaround. The CU’s financial performance report states that total delinquent loans fell from $19.7 million in December 2010 to $17.2 million in December 2011, a decrease of 12.4%.
“We were able to reach this goal through the support and coordinated efforts of our team members, company management and board of directors,” said Steve Renock, president/CEO for Kern Schools FCU. “We also want to thank our 155,000 credit union members for their continued support and confidence.”
The CU also reported a capital ratio improvement from 4.31% in June 2010 to 7.73% in December 2011.
“We made a lot of very tough decisions in 2010,” Kern Schools FCU Executive Vice President/CFO Matthew Davidson said. “As a result, we are now much healthier and able to efficiently serve our members better, especially by offering loans at historically low rates.”
Renock added the CU’s improvements in defaulted loan activity and overall financial performance indicate a gradual recovery in Bakersfield’s economy.
The CU plans to implement mobile banking in the second quarter of 2012, he said.
“We are hopeful that this kind of progress will continue in 2012 based on increased lending activity, improved services to our members and the maintenance of our position as the largest member-owned financial institution in Kern County,” Renock said.
In May 2011, Kern Schools FCU upgraded its core system to Fiserv Inc.’s XP2 core processing platform and came under fire by some of its members, who said they had difficulty accessing their accounts and reaching service representatives for help.