The $1.2 billion Kern Schools Federal Credit Union of Bakersfield, Calif.,declared 2011 its best year for financial performance since2007.

The CU said its net income was $22.4 million for 2011, animprovement of more than $35 million from 2010. According to itsfinancial performance report, the CU had a net loss of $12.8million in 2010.

Kern Schools attributes its rise in net income to an operatingexpense reduction of more than $6 million in 2010 as well as to aloan delinquency turnaround. The CU's financial performance reportstates that total delinquent loans fell from $19.7 million inDecember 2010 to $17.2 million in December 2011, a decrease of12.4%.

“We were able to reach this goal through the support andcoordinated efforts of our team members, company management andboard of directors,” said Steve Renock, president/CEO for KernSchools FCU. “We also want to thank our 155,000 credit unionmembers for their continued support and confidence.”

The CU also reported a capital ratio improvement from 4.31% inJune 2010 to 7.73% in December 2011.

“We made a lot of very tough decisions in 2010,” Kern SchoolsFCU Executive Vice President/CFO Matthew Davidson said. “As aresult, we are now much healthier and able to efficiently serve ourmembers better, especially by offering loans at historically lowrates.”

Renock added the CU's improvements in defaulted loan activityand overall financial performance indicate a gradual recovery inBakersfield's economy.

The CU plans to implement mobile banking in the second quarterof 2012, he said.

“We are hopeful that this kind of progress will continue in 2012based on increased lending activity, improved services to ourmembers and the maintenance of our position as the largestmember-owned financial institution in Kern County,” Renocksaid.

In May 2011, Kern Schools FCU upgraded its core system to FiservInc.'s XP2 core processing platform and came under fire by some of its members, who said they haddifficulty accessing their accounts and reaching servicerepresentatives for help.